CARNIVAL STRUCK BY $14M SQUALL

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With food poisoning one month and an engine room fire the next, Carnival Cruise Lines has hit rough seas recently. How well the world's largest cruise line sails through the storm remains to be seen.

Last week officials with the Miami-based line decided to cancel three additional seven-day sailings of the Celebration, the 1,800-passenger liner that foundered at sea 22 miles off the Bahamas after a fire knocked out all electricity and plumbing.

Sister ship Ecstasy then left port without its 2,600 passengers to retrieve the Celebration's passengers.

The fire follows a food poisoning incident in May that sent more than 100 passengers of Carnival's Fantasy to hospitals.

In what officials called a "worst case scenario," the fallout could amount to more than $14 million in lost bookings, refunds and free future trips to affected passengers. By June 20, Carnival stock had dropped 50› to $22.

The hit could have been worse for a competitor; Carnival has what are considered the industry's highest yields and fattest profit margins-last year at 21% (AA, March 6). The figures also allow the line to offer refunds and free cruises.

The company's lead marketing executive said there was little her office could do in reaction to the Celebration's debacle.

No existing ads have been pulled, and no reactionary ads are planned.

The line's upbeat TV ads from McFarland & Drier, Miami, use the theme line "If your friends could see you now." Spokeswoman Kathie Lee Gifford touts the ships' amenities, all-inclusive pricing and festive atmosphere. HMK, Boston, handles print ads.

"I don't know if in terms of advertising if there's anything we can do," said Vicki Freed, senior VP-sales and marketing. Many people outside of Florida and those not planning a cruise haven't heard of the ship's problem, she added. Any advertising message, either apologizing to customers or informing travel agents about future plans, would develop "top of mind awareness of the situation that many people are not aware of."

To make matters worse for the line's bottom line, Carnival executives canceled Celebration sailings scheduled for June 24 and July 1 and 8 to repair the vessel.

In another move, Carnival executives decided to cancel a week of press and travel industry events beginning July 1 introducing its newest liner, Imagination.

Instead, travelers scheduled for the Celebration cruise on July 1 will become the first to travel the Imagination, Ms. Freed said.

One cruise industry follower said the line has done about all it can, and ads would not be wise.

"It might be something they just want to forget about," said Bill Panoff, longtime industry executive and publisher of the Fort Lauderdale-based industry magazine Port Hole.

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