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Caribbean 'open for business and going strong': Carnival Corp.

Hurricane veterans Micky Arison, left, and Arnold Donald put the impact of this season's storms into perspective Hurricane veterans Micky Arison, left, and Arnold Donald put the impact of this season's storms into perspective

'The Caribbean is open for business and going strong,' Arnold Donald, president and CEO of Carnival Corp. & plc, stressed to the financial community on Tuesday.

Five destinations were heavily damaged by hurricanes—St. Martin/St. Maarten, St. Thomas, San Juan, Dominica and Tortola (plus, Grand Turk was pummeled)—but there are plenty of alternatives across this large region, and ships still are able to operate appealing itineraries, Donald said.

An estimated 7% to 9% of cruise ports in the broader Caribbean have been severely impacted at some point by hurricanes this season. However, more than 40 ports are currently fully operational.

'We have not seen a lot of cancellations, like 1% right now, so things are positive,' the Carnival chief told analysts. Though bookings slowed when Harvey, Irma and Maria were active, and many travel agents based in Florida and Texas were offline during the worst of the storms, Carnival's fourth quarter was already heavily booked so it's not anticipated discounts will be needed.

Market demand going forward depends a lot on how media handle the situation. Donald said it's up to Carnival to get the message out that cruises are operating and many places weren't impacted, or are bouncing back. Social media reports from the ships and destinations are helping.

'Things are righting pretty quickly,' Donald said, noting that a [competitor's] ship has already returned to Key West following Hurricane Marie's flooding.

Donald himself was in Nassau last Friday, where cruises have been calling regularly, and he visited St. Maaarten a few days after Irma.

'The people there are very resilient. They're focused on getting up and running,' the Carnival chief said. He noted that after Hurricane Luis years ago, it took three months to get power back on St. Maarten. This time, some districts had power within a few days. Donald indicated a Carnival-owned zip-line adventure there will be 'running by December, for sure,' and beach-type tours probably sooner than that.

Donald, a native of New Orleans, has been through hurricanes, as has Carnival chairman Micky Arison, and both fielded a stream of analysts' questions.

They stressed things are different now than in 2005 when Hurricane Katrina decimated New Orleans. One analyst recalled how the company initially estimated a 3-cent per share impact back then but the financial repercussions continued in 2006.

One thing that's changed, according to Donald: 'We're working much harder at creating demand while also going in [to wave season] with much more demand.' Also, 'embarkation ports were disproportionately affected' back then.

'With Katrina, we lost a key homeport,' Arison said. New Orleans was unavailable for a long time. Now, the homeport of San Juan may be impacted but Carnival positions just one Fantasy-class ship, Carnival Fascination, there, and its cruises are canceled for a couple weeks.

'New Orleans was out for a couple years,' Arison said.

He also cited how, following Hurricane Harvey's flooding of Houston this season, three Carnival cruise ships were able to sail full from Galveston the following week.

'It's a totally different situation thus far,' as Arison put it.

As for the impact on drive markets in Florida and Texas, Carnival has not detected any extended slowdown. South Florida is 'back in business,' and the power is back on in Naples and Tampa, as well as Key West, the city most impacted by Maria.

During Tuesday's earnings call, Arison added: 'I'm extremely proud of how the industry is reacting to these hurricanes. Not just Carnival but Royal Caribbean and NCL. Everyone is falling all over themselves to see how we can help.'

Posted 26 September 2017

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Anne Kalosh

US editor of Seatrade Cruise Review and Seatrade Cruise News

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