Are Risks a Factor in the Cruise Industry?

Throughout the summer, it seemed as if every week our newspapers reported some sort of incident on board a cruise ship. Fires, food poisoning outbreaks, groundings…the list goes on. But, aside from focusing on the actual incidents, we have to ask what kind of effect occurrences such as these have on the cruise companies individually and the cruise industry as a whole.

Perhaps the first question we should ask is how much of a loss is incurred due to each of these incidents, and how much of that loss is covered by insurance. Second, we need to inquire whether the losses are usually significant enough that analysts should factor in a discount for risks when looking at the cruise industry.

Although several of the major cruise lines can proudly point to high results achieved despite incidents of this sort occurring, it is hard to overlook statements in various company reports quoting dollar amounts lost due to incidents on-board ship and the lost days of revenue in the weeks following.

This is only an excerpt of Are Risks a Factor in the Cruise Industry?

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