Make us your home page

At besieged Carnival, a CEO ponders what else can go wrong

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.

Let's try.

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]


Carnival Corp.

Headquarters: Miami

Cruise ships: 100

Cruise brands: Include Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn in North America; P&O Cruises and Cunard Line in the United Kingdom; AIDA in Germany; Costa Cruises in southern Europe; Iberocruceros in Spain; and P&O Cruises in Australia.

CEO: Micky Arison, billionaire, owner of Miami Heat NBA basketball franchise

Cruises from Tampa: Carnival Paradise and Carnival Legend ships.

Stock ticker symbol: CCL

At besieged Carnival, a CEO ponders what else can go wrong 01/17/12 [Last modified: Tuesday, January 17, 2012 11:08pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Black entrepreneur says city stiffing him on project after he endorsed Rick Baker


    ST. PETERSBURG — A prominent African-American resident says his endorsement of mayoral candidate Rick Baker has led city officials to freeze him out of a major construction project along the historic "Deuces" stretch of 22nd Street S.

  2. Sen. Nelson urges FEMA to examine high number of denied flood claims


    Sen. Bill Nelson urged FEMA on Tuesday to ensure fairness, proper oversight and transparency in processing Hurricane Irma aid following a report by the Palm Beach Post that 90 percent of Irma claims under the National Flood Insurance Program had been denied.

    Sen. Bill Nelson is calling for FEMA to ensure the flood claims process post-Hurricane Irma is fair and ethical following reports that 90 percent of claims under the National Flood Insurance Program were denied. | [Times file photo]
  3. Amazon expands in Tampa with Pop-Up shop in International Plaza


    TAMPA — A new retailer known largely for its online presence has popped up at International Plaza and Bay Street.

    Shoppers walk past the new Amazon kiosk Tuesday at the International Plaza in Tampa. The kiosk, which opened last month, offers shoppers an opportunity to touch and play with some of the products that Amazon offers.
[CHRIS URSO   |   Times]

  4. Study: Florida has fourth-most competitive tax code


    Florida's tax code is the fourth most competitive in the country, according to a study released Tuesday by nonprofit group Tax Foundation.

    Florida has the fourth-most competitive tax code, a study by the Tax Foundation said. Pictured is  Riley Holmes, III, H&R Block tax specialist, helping a client with their tax return in April. | [SCOTT KEELER, Times]
  5. Trigaux: On new Forbes 400 list of U.S. billionaires, 35 now call Florida their home

    Personal Finance

    The latest Forbes 400 richest people in America was unveiled Tuesday, with 35 billionaires on that list calling Florida home. That's actually down from 40 Florida billionaires listed last year when a full 10 percent listed declared they were Floridians by residence.

    Edward DeBartolo, Jr., shopping center developer and  former San Francisco 49ers Owner, posed with his bronze bust last year during the NFL Hall of Fame Enshrinement Ceremony in Canton, Ohio. DeBartolo remains the wealthiest person in Tampa Bay according to the Forbes 400 list released Tuesday. 
[Photo by Joe Robbins/Getty Images]