This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cruise Ship Stocks Adrift As Carnival Offers Customers A Life Preserver

Stocks in this article: CCL NCLH RCL

James Dennin, Kapitall: With high profile cruises that have gone awry, Carnival is looking for ways to boost customer demand. 

It's nearly two years later, and they're still pulling Carnival's (CCL) Costa Concordia  out of the water. And you can bet your top dollar that patrons of the now infamous Triumph - the ship whose engine fire left customers without  air conditioning and bathrooms for days - want their money back. This of course came after another cruise in 2010 when a power outage forced operators to feed their customers with provisions from the US Navy.

Read more from Kapitall: Investing In Energy: 3 Utility Stocks Approaching Ex-Dividend Dates

My only question is this: who on earth is booking a berth on a cruise ship these days?

The answer is the Chinese. China has become the most valuable out-bound travel market in the world, and cruise ship developers are paying attention. Royal Caribbean (RCL) has added new routes in South East Asia, despite testy relations between cruise operators and some of the Chinese companies that own the boats. Local governments in China are also trying to get in on the action – putting $2 billion toward coastal infrastructure in Shanghai and Tianjin alone.

A single cruise ship can be one of the most lucrative investments in the world – some of them bring in hundreds of millions each year. But a luxury ship can also cost up to a billion dollars, meaning they need to be on the water for at least a few years before they can even turn a profit. And that's the problem plaguing one of the largest cruise providers, Carnival, which operated not one but three of the ships that experienced high profile breakdowns since 2010.

Understandably, Carnival had already gone into crisis mode. It downgraded its profit forecasts for the year. The company also lowered its cruise pricing by $81 million. Sensing that might not be enough, the company has also offered an extensive new rebate plan. While rebates are usually a marketing gimmick – people are unlikely to jump through many hoops just for a few bucks – Carnival is offering a 110% refund if customers are not fully satisfied.

So will Carnival's rebates help restore their customers' sea legs?

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs