NEW YORK, NY -- (Marketwire) -- 01/19/12 -- Shares of cruise-line operators collapsed earlier this week as news of a capsized cruise ship owned by Carnival Corporation off the Italian coast raised concerns about how bookings and pricing would be affected during the peak sales season. Carnival Corporation said Monday the initial cost of the disaster was $85-95 million. The Paragon Report examines investing opportunities in the Cruise Line Industry and provides equity research on Carnival Corporation (NYSE: CCL) and Royal Caribbean Cruises Ltd. (NYSE: RCL). Access to the full company reports can be found at:
www.paragonreport.com/CCL
www.paragonreport.com/RCL
Greg Badishkanian of Citi Investment Research said that the accident could be an overhang on shares of Carnival and rival Royal Caribbean Cruises Ltd., as it took place during the cruise industry's busiest booking period of January through March, commonly known as "wave season". Meanwhile, Susquehanna Financial Group's Rachael Rothman argues that the bad press will probably "be a severe headwind to bookings in the months ahead," noting that wave season can make up close to about 35 percent of annual bookings.
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Carnival Corp's Costa Concordia hit rocks and pitched over off the picturesque Tuscan island of Giglio last Friday. The Associated Press notes that the situation was made worse by ship's captain Francesco Schettino's alleged "abandonment of the vessel shortly after while passengers were still seeking safety."
Carnival Corporation operates 101 ships with brands that include P&O, Cunard and Princess Cruises and accounts for close to half of the global cruise market. Royal Caribbean Cruises operated 40 ships at the start of 2011 under several brands that include Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises.
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