Crisis for cruise industry as passengers cancel trips

Bookings for cruise holidays have dropped sharply in the wake of the terrorist attacks, leaving the industry facing a potential crisis just as it was embarking on a period of unprecedented expansion.

Up to 15 per cent of cruise passengers have cancelled trips and new bookings have dried up, a report for the market research company Mintel by the analyst Tony Peisley found. The collapse of demand comes after cruise operators committed nearly £13bn to building 49 liners over the next five years.

The bleak outlook has forced executives to discuss whether the delivery date for new ships should be delayed. The planned expansion, which will increase worldwide capacity by 52 per cent, is meant to cater for the increasing age and wealth of the global population.

In 1985 an Italian cruise liner, the Achille Lauro, was hijacked by members of the Palestine Liberation Front. One of the passengers, Leon Klinghoffer, a wheelchair-bound American Jew, was murdered.

Mr Peisley said the industry was not yet on the brink of crisis, but if there was another terrorist attack to rival those on 11 September, or an attack directly on a ship, then the industry would be in deep trouble. Mr Peisley said cruise ships had been considered too big and unwieldy to hijack. But in an era of suicide attacks, there was the risk of terrorists blowing up an entire vessel.

"Now if someone wants to take over a ship and blow it up with the passengers on board, that is hard to stop," he said.

"The industry has never been more vulnerable to a downturn in business," he said. "If we did have an attack on a ship, that would be a crisis. People wouldn't want to go on a ship at all. But if nothing terrible happens for the next six months, then the industry will get through."

King Edward VI Camp Hill Boys' School in Birmingham said yesterday that pupils had been withdrawn from a Voyages of Discovery cruise due to sail from Athens today after the travel company refused to drop Egypt and Syria from the itinerary.