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Carnival Tries to Mitigate Coronavirus Cruise Cancellations with Drink and Spa Credits

Faced with the possibility of cruise passengers jumping ship from coronavirus fears, Carnival Corporation (NYSE: CCL) announced on Monday it's offering up to a $200 credit toward various services to customers who don't cancel their reservations. The incentive is available to people with cruises booked between March 6 and May 31.

Image source: Carnival Corporation

Though Carnival stock was buoyed by a promise of help for the cruise industry by President Trump, cruise line bookings took a hit after multiple shipboard outbreaks of the novel coronavirus COVID-19. In one of the latest incidents, healthcare personnel identified 21 people aboard the vessel Grand Princess as symptomatic, including 11 passengers and 10 crew. The ship remained offshore near California until Monday, when the first of 2,421 passengers disembarked. All passengers without symptoms will be quarantined for 14 days at various military installations in California. The Grand Princess is operated by Princess Lines, a wholly owned subsidiary of Carnival.

Analysts predict continuing major cruise line booking and profit losses as long as new COVID-19 cases keep emerging. In a research note last Friday, Nomura Instinet predicted a minimum 10% plunge in cruise prices during 2020.

Faced with a potential wave of cancellations, Carnival is offering several different credit incentives, with amounts based on length of cruise: $100 for 3 to 4 days, $150 for 5 days, and $200 for 6 days or greater. Passengers can redeem credits for beverages, excursions, and spa services, while the company stressed it also continues offering its standard free buffets. At the same time, in an attempt to avoid fresh problems, the cruise line now scans all guests for fevers using a touch-free thermometer when they embark.

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Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.


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