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Cruise industry leaders re-emphasize safety in pitching floating vacations

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POSTED March 21, 2012 6:53 p.m.

MIAMI (AP) — Cruise industry leaders on Tuesday gathered for their first annual convention since the Costa Concordia disaster, driving home their commitment to safety and expressing confidence that the resulting lull in business is only temporary.

The Concordia accident, in which 32 people died when the ship ran aground in January off the coast of Italy, cast a long shadow over this year's Cruise Shipping Miami conference. The annual meeting draws thousands of people who work in the cruise and travel industries in more than 100 countries.

Costa's parent company, Carnival Corp., the world's largest cruise operator, said booking trends are running behind last year, leading it last week to slash 2012 profit forecasts nearly in half. Miami-based Carnival's brands also include Princess Cruises, Holland America Line and Cunard Line.

"As everyone here well knows, the Concordia incident has focused considerable attention on our industry," Carnival Corp. vice chairman and COO Howard Frank said in his keynote address. "While most of this attention has been negative, and we are clearly seeing some setbacks in the short term, we have faced similar setbacks in the past, and in each case we have shown tremendous resiliency in bouncing back."

Frank, who is also chairman of the Cruise Lines International Association trade group, said that in the aftermath of Concordia, despite the industry's good safety record, cruise lines are re-emphasizing passenger and crew safety, implementing "a comprehensive, top-to-bottom review of our shipboard safety and emergency response procedures." That will include improved emergency muster training for all passengers prior to departure.

Other high-profile incidents also have dinged the industry in first two months of the new year. Late last month, another Costa ship —the Allegra — caught fire and lost power, leaving passengers without working toilets, running water or air conditioning for three days. An outbreak of norovirus on ships on Princess and Royal Caribbean lines and the robbery of 22 Carnival passengers on a bus tour in Puerto Vallarta, Mexico, added to the parade of bad news.

Still, industry leaders said with 14 new ships coming online in 2012 and the continued trend toward globalization, they expect to see a record number of people taking cruise vacations this year.

The trade group is expecting 17.2 million passengers across its 26 member lines this year, up 5 percent from 2011. International business is up — about 68 percent of the passengers will be from North America, compared with 74 percent two years ago. In addition to the new ships this year, 10 more will debut between 2013 and 2015.

Still only about 3 percent of the people in the United States have ever taken a cruise, creating "abundant prospects for growth," said Christine Duffy, president of the industry trade group.

Gerald Cahill, president and CEO of Carnival Cruise Lines, lamented that the Concordia tragedy came at a time when the industry was expected to further recover from the recession and get more people onboard without offering deep discounts. He said the company stopped all of its marketing after the accident but has now resumed, leading to an uptick in bookings.

"My perception was, most of our guests recognize — especially those who have been a cruise before — that the cruise industry provides a very safe vacation," Cahill said. "I do think there were some people who aren't as familiar with the industry, who were scared off by a lot of the media. There certainly was constant attention, and it did affect our business, no question about it.

"I think the industry will weather this in the United States," he said. "I don't think we'll get back as much pricing probably as we otherwise would have had this not occurred, but I think we move into future years we'll continue to get stronger."

Vicky Garcia, executive vice president of Cruise Planners/American Express, a network of more than 800 travel agents, said bookings for the remainder of the year have remained strong, even though it's likely some would-be first-time cruisers were scared off by the Concordia accident and the other negative stories.

"We don't know what we missed out on in terms of first-time cruisers that may not have called," Garcia said. "Those who we were in the process of dealing with didn't change (their plans)."

Prior to the Concordia accident, the Cruise Lines International Association counted 28 fatalities on its member lines from 2002 to 2011, 22 of which were crew members. During that period, cruise ships carried 223 million passengers and crew.

"All the surveys we've done say people see this as an isolated incident and they will continue to cruise," said Daniel J. Hanrahan, president and CEO of Celebrity Cruises.

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