Skift Take

Outside of the fire, Royal Caribbean has handled this accident in a way Carnival could learn from: It communicated clearly, took care of guests, and shared to investors what the fire would likely cost the line.

Royal Caribbean Cruises Ltd., the second U.S. cruise operator to cut short a voyage after a mishap at sea, said a fire this week on the company’s Grandeur of the Seas will reduce annual profit by 10 cents a share.

Repair to the ship will take about six weeks, the world’s second-largest cruise operator said today in a statement.

Royal Caribbean’s Grandeur of the Seas suffered a fire in an industrial area of the ship that required it to cut its trip short on May 27, according to the Miami-based company’s statement. Guests were flown back to Baltimore from the Bahamas, given a full refund of their fare and a 100 percent credit toward another sailing. Six future sailings were canceled.

“The extent of the financial impact was relatively high because the affected sailings were during the premium summer season,” Jason Liberty, the company’s chief financial officer, said in the statement.

The incident is the latest in a string of cruise-industry incidents including a fire on the Carnival Corp. ship Triumph in February that left 3,100 passengers at sea with limited food and toilet service. Earlier this year, Carnival, the world’s largest cruise operator, had to fly passengers back to the U.S. from St. Maarten after its Dream ship had a malfunction in its emergency generator.

The Washington-based Cruise Lines International Association trade group released a passenger bill of rights May 22, designed to calm customer concerns.

Royal Caribbean shares fell 1.7 percent to $35.10 at the close in New York. The stock has gained 3.2 percent this year.

Editors: Niamh Ring, Ben Livesey. To contact the reporter on this story: Christopher Palmeri in Los Angeles at [email protected]. To contact the editor responsible for this story: Anthony Palazzo at [email protected]. 


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Tags: accidents, royal caribbean

Photo credit: Damage on the Royal Caribbean ship Grandeur of the Seas is pictured as the ship is docked in Freeport. Stringer / Reuters

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