It's hard to imagine what Micky Arison, Miami's Carnival Corp. CEO and one of Florida's richest billionaires, is thinking in the wake of the company-owned Costa Concordia shipwreck off the Italian coast.
For starters, Arison is offering his own prayers for the dead passengers, now numbering at least 11, and the 24 missing after the ship diverted from its computer-programmed course, hit a rock and partially capsized.
This disaster is unfolding in the peak booking season for Carnival in a weak economy that has already forced the company to discount many of its cruises.
(Carnival is not only one of Florida's biggest corporations but a big factor in Tampa Bay's tourism economy. The company operates a couple of cruise ships from Tampa's port, serving Caribbean and Mexican destinations, and driving traffic to the downtown Channelside District.)
So Arison is concerned about the financial hit Carnival will sustain. With U.S. stock markets closed Monday for the Martin Luther King Jr. holiday, Carnival shares Tuesday first reflected investor angst with a plunge of about 14 percent, trimming nearly $3 billion off the company's market value. J.P. Morgan analysts on Tuesday downgraded Carnival's stock, cutting their share price target on the stock to $30 from $38. It closed Tuesday at $29.60.
It's still early in this mess. Morgan Stanley analysts, citing a worst case scenario for Carnival of lower sales and higher fuel costs, suggests company shares could fall as much as 46 percent. Competitors may also suffer from Carnival's woe. Royal Caribbean shares were off Tuesday by nearly 4 percent.
Adding to the calamity, analysts say the wreck could turn out to be the biggest insured loss in maritime history, though Carnival is insured against a loss that could approach $1 billion.
That exposure does not include the possibility of an environmental disaster. Costa Concordia has more than 500,000 gallons of fuel aboard, and officials fear it might leak at the accident scene, off the Italian island of Giglio near Tuscany.
Arison has got to be fretting as well over the Carnival brand reputation. It will suffer not only from the 24/7-televised shipwreck but from the astonishing reports that the Costa Concordia's crew performed poorly during the evacuation. Then there is the already infamous captain who refused to stay with his ship. While the captain told authorities he would go back aboard, media reports say that he instead took a taxi to a hotel on the island. He has been placed under house arrest facing charges.
Arison is listening to or reading about the firsthand nightmare stories from Costa Concordia passengers, including tales from some Floridians, about a ship in distress seemingly run by the Marx Brothers.
All in all, not Arison's best day.
Still, companies like Carnival that suffer a high-profile disaster — think of airlines after plane crashes — can often bounce back quickly. In a world full of mishaps, people rationalize it won't happen again. Many who take cruises are veteran passengers unlikely to be deterred from their next trip.
In a difficult economy, cruises are still perceived as a bargain and exotic vacation. Especially if you like to eat.
My only advice? If you can't swim, then learn. And pay attention during lifeboat drills.
Contact Robert Trigaux at [email protected]