Philippines Evacuates 1 Million As Super Typhoon Goni Approaches
By Neil Jerome Morales (Reuters) – Officials have evacuated almost a million residents in the southern part of the Philippines’ main island of Luzon as a category 5 storm –...
By Christopher Palmeri (Bloomberg) Carnival, Royal Caribbean, and Norwegian Cruise Line all tumbled in Tuesday trading as Hurricane Irma threatened to do to the hub of the cruise industry what Harvey did to the nation’s oil and gas capital last week.
Hurricane Irma, a Category 5 storm, is on a path that could take it through the heart of the Caribbean, bringing winds of as high as 180 miles per hour to Puerto Rico, the Virgin Islands, and Haiti before making landfall this weekend in Florida. The Caribbean accounts for 35 percent of the cruise industry’s global, ocean-going capacity, and all three of the largest carriers are headquartered in Miami. Among the countries potentially hit by the storm is Cuba, a new and fast-growing market for U.S. cruises.
Cruise line operators are monitoring the storm, canceling voyages that haven’t left port and rerouting other ships to avoid stops at islands that may be affected. A seven-day cruise on the Carnival Glory that left Miami on Saturday, for example, has canceled stops in St. Thomas; San Juan, Puerto Rico; and the Turks and Caicos in favor of western Caribbean destinations such as Mexico and Belize. Irma is currently about 200 miles east of the island of Antigua.
Carnival shares fell 3.1 percent to $66.99 in New York, the worst performance this year. Royal Caribbean was down 4.2 percent at the close, and Norwegian slid 3.2 percent.
Hurricane Harvey caused widespread damage when it hit the Houston area Aug. 25, taking almost a fifth of U.S. oil refining capacity offline. Cruise lines redirected some voyages and kept some ships at sea to avoid that storm. The storm activity has contributed to a softening of demand for cruises in August, Morgan Stanley said in a note Tuesday.
The operators could cancel most if not all of this week’s Caribbean cruises, Instinet analyst Harry Curtis said in a research note. In a worst-case scenario, the hurricane could damage port infrastructure at many destinations. Earnings this quarter could be crimped as much as 10 cents a share for Royal Caribbean and 5 cents apiece for Carnival and Norwegian, Curtis said.
Royal Caribbean canceled two sailings to the Bahamas scheduled to depart Friday. The company is reimbursing passengers for their fares and giving them a 25 percent credit toward future bookings. More updates on cruise itinerary changes are expected Tuesday at 6 p.m. New York time, the company said.
Carnival, the world’s largest carrier, is also prepping its call center and support staff for a possible landfall in Florida.
“Fingers crossed for the storm to take a sharp right hand turn north,” Carnival spokeswoman Jennifer De La Cruz said in an email.
©2017 Bloomberg News
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