Can Carnival Right Ship After #cruisefromhell?

Triumph Disaster May Force Change From 'Fun Ship' Positioning

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"Never again." That's how a commercial for Carnival Cruises ends, with a woman and her husband staring blissfully onto sea, recalling an earlier vacation horror in which they were attacked by a bear.

Now, it's Carnival that's perceived as the vacation horror -- the hashtag #cruisefromhell actually trended on Twitter last week -- following a fire that crippled the Triumph, forcing stranded passengers to endure days without air conditioning, fresh food and working toilets.

Some fun, huh? Carnival spent $61 million last year advertising its "fun" positioning via Arnold Worldwide, according to Kantar Media figures, second only to Royal Caribbean's $82 million. "Carnival is the baseline," or one of the cheapest cruise lines, said Mark Gelfuso, general manager of online travel agency Cruise Brothers. "That's what makes it popular."

But experts predict Carnival will be forced to make a sea change in its marketing. "Carnival has no choice," said Bob Levinstein, CEO of online cruise-travel agency Cruise Competes. "It definitely has to review its marketing plan."

Reached last week hours before the stricken ship reached port, Carnival spokeswoman Joyce Oliva said there were no immediate plans to reassure customers about Carnival in advertising. "Right now, that is not our concern or is something on our radar," Ms. Oliva said. "I can't tell you "Yes, we're going to do this, or no, we're going to do that.'"

According to the American Association of Port Authorities, the cruise industry is a $38 billion business in the U.S., and has grown an average of 7.2% a year since 1980, according to the Cruise Lines Industry Association. The number of cruise-ship passengers increased to 17.2 million last year from 14.8 million in 2010.

Carnival owns most of that business with a 21.2% market share for the Carnival brand and a 48.4% share overall including Carnival-owned lines such as Princess, Costa, Holland America, P&O, Cunard and Seabourn, according to website Cruise Market Watch. Royal Caribbean has a 23.3% share, 16.4% of it from the flagship brand. Norwegian Cruise Lines holds a 7.6% share.

Cruising is a volume play. According to Cruise Market Watch, the average passenger spends $1,728 for a weeklong trip, including ticket, onboard expenses, shore excursions and gambling. But the cruise line spends an average of $1,543 per passenger during that same time period, including fuel, operating costs, payroll, food and more. That's only a $185 profit per passenger on a seven-day cruise.

Will Carnival's issues with the Triumph be a boon for Royal Caribbean or Norwegian? It's hard to tell. Both lines' ad agencies -- JWT for Royal and The Martin Agency for Norwegian -- referred calls to the client. Neither company responded by press time.

"I don't expect the industry to address this," said Mr. Levinstein. "This is an important time of the season for cruise-line marketing, and a lot of lines have attractive promotions in the marketplace already."

In fact, many think the Triumph disaster won't affect Carnival all that much. Jay Herring, author of "The Truth About Cruise Ships," said: "The industry is bulletproof; it's recession-proof. People will continue to cruise. This is barely a blip on Carnival's radar."

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