The Big Story Blog

How will consumers respond to cruise ship wreck?

Posted at 4:38 PM on January 17, 2012 by Paul Tosto

The CBC posted an interesting story this afternoon noting that the wreck of the Costa Concordia could not have come at a worse time for the cruise industry during its peak booking period.

It includes this fascinating piece of reporting on the economics of operating cruise ships explaining why any deep discounts in cruise fares may be short-lived

... even extensive discounting on fares may have few effects on the earnings of a highly profitable industry.

That's because the industry's profit doesn't come from fares, (cruise industry expert Ross) Klein said, as much as it does from onboard revenue, "from what people spend on going on tours, from onboard the ship at the bars, the casinos, the shops and so on."

"A cruise ship is earning in profit per passenger per day more than $50 just for onboard spending," Ross said.

Those profits have spurred a massive growth in the cruise line industry. The Italian tourism think tank Risposte Turismo estimated the number of cruise passengers globally has grown from half a million in the 1970s to 19 million in 2010.

About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.

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