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U.S. Coast Guard

Will latest fire on a cruise ship dampen bookings?

Gene Sloan
USA TODAY
  • This time%2C the ship never lost power
  • Both the U.S. Coast Guard and National Transportation Safety Board are involved in the investigation
  • Royal Caribbean flew Grandeur%27s 2%2C224 passengers back to Baltimore%2C where the ship is based
The fire-damaged exterior of Royal Caribbean's Grandeur of the Seas cruise ship is seen while docked in Freeport, Grand Bahama island, on May 27.

The second major fire on a cruise ship in four months once again has the industry facing questions about safety, even as it braces for another downturn in bookings.

Although no one was seriously injured in Monday's blaze aboard Royal Caribbean's Grandeur of the Seas, "the image of the entire industry suffers," says Christopher Muller, a professor and former dean of Boston University's School of Hospitality Administration. "With so many other vacation options, cruise leadership will need to work together to overcome perceptions of unsafe conditions."

As of late Tuesday, a Royal Caribbean spokeswoman still wasn't able to say what had caused the fire, which broke out in a mooring area at Grandeur's stern as it sailed toward CoCoCay, the line's private island in the Bahamas. The ship never lost power and was able to reach Freeport, Bahamas, about seven hours after the fire started.

"We are working closely with the various agencies that are looking into what happened, (and) until the investigation is complete, I won't have an update on the cause," Royal Caribbean spokeswoman Cynthia Martinez told USA TODAY.

Martinez also said she couldn't comment on whether the fire had spread beyond decks 3 and 4, as the company said on Monday, even though wire service photos appear to show damage to decks 5 and 6.

Both the U.S. Coast Guard and National Transportation Safety Board are involved in the investigation.

On Tuesday, Royal Caribbean flew most of Grandeur's 2,224 passengers back to Baltimore, where the ship is based, after canceling the rest of what was supposed to be a seven-night cruise. The trip began on Friday.

Passengers from the Royal Caribbean's Grandeur of the Seas cruise ship, which caught fire during its voyage from Baltimore to the Bahamas, leave a security checkpoint after arriving on a charter flight at Baltimore-Washington International Thurgood Marshall Airport on May 28.

The quick resolution to the crisis for passengers is one reason leisure analyst Matthew Jacob of ITG Investment Research expects the fallout on cruise bookings in coming days to be far less severe than what was seen in the wake of the February fire on the Carnival Triumph.

Jacob says pricing data collected by ITG shows Carnival has had to lower summer fares about 20%, on average, since the Triumph fire to make up for lost bookings. But he says the Triumph incident was unusually damaging to bookings because it dragged on for so many days after the ship lost power, resulting in an extended period of negative publicity. The Triumph fire also came during the peak cruise booking time between January and March.

The fire on Grandeur came during a less busy booking time, and "by the time this was reported (by media), Grandeur already was in a port with all passengers safe," limiting the negative attention, Jacob notes.

Still, some longtime industry watchers such as Cruise Week editor Mike Driscoll say it's too early to know the impact of the latest fire.

"We all guessed wrong with Triumph," Driscoll says, noting that he and others initially predicted only a modest impact on bookings — in keeping with a historical resilience of the industry. "Since (the January 2012 crash of) the Costa Concordia, the landscape has changed ... it's hard to predict these things nowadays."

The fires haven't been the only mishaps in recent months. A March sailing of the 3,646-passenger Carnival Dream came to an early end in St. Maarten after the failure of an emergency generator, punctuating a week that saw two other Carnival ships experience mechanical problems.

"It's becoming a morale issue" for the industry, Driscoll says. "This is the third situation to get worldwide press in less than five months, and that's just unprecedented."

While the industry has been resilient in the past, Boston University's Muller suspects the string of bad news could be causing "a slow bleeding from a thousand cuts" that could hurt the industry long term.

"So many people choose to take a cruise because of the perception of simplicity, value and safety," Muller says. "If you are 500 miles out at sea, you do not want to think it is going to catch on fire. In a land-based hotel, you can simply check out and move down the street, (and that's) not so easy on a ship."

Royal Caribbean says passengers on this week's aborted cruise will receive a full refund for the trip plus a voucher good for a future cruise.

Royal Caribbean late Monday also canceled a second Grandeur of the Seas sailing scheduled to begin on May 31, citing the need for repairs to the vessel, and the line didn't rule out more cancellations after it assesses the damage.

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