NEW YORK -- The capsizing of the Costa Concordia could not have come at a worse time for the cruise industry -- right at the start of the peak booking season.
Even if passengers aren't scared away, the accident off Italy will cost hundreds of millions of dollars.
It's too early to tell exactly how much insurance firms will have to pay to cover the damage to the ship and loss of life, but analysts have estimated that claims could total at least $500 million. One went as far as to say the total bill for insurers could reach $1 billion.
"We would be surprised if any single player had more than 5%-10% of the risk," Numis analyst Nicholas Johnson wrote in a note. He said the risk is similar to that of the 2010 Deepwater Horizon oil spill, where no one company had more than 2 percent of the total insurance liability.
Costa's parent company, Carnival Corp. -- which operates 101 ships under several brands, including Carnival, Cunard, Holland America, Princess and Seabourn -- did not respond to requests for an interview about its insurance coverage. But the company, which uses Charleston as the home port for its 2,000-passenger ship Fantasy, is responsible for at least $40 million in insurance deductibles.
The capsizing comes at the start of a three-month period that is the busiest time of year for bookings, known in the industry as wave season. Sales now set the tone for the rest of the year, which could be affected if passengers are frightened by the chilling images of the stricken vessel.
Although the industry has been recovering from the recession, this incident could further hurt bookings.
"The publicity is just going to kill them," said Blake Fleetwood, president of Cook Travel. "They'll stay quiet for a week or two. Then Carnival will have a blitz of sales. So for the consumer, it's going to be a great time to buy a cruise."
Other cruise lines will follow, slashing prices, Fleetwood said. "The baby boomer crowd, which the cruise lines are counting on to fill their cabins, is going to be especially spooked by this incident," he added.
But some experts doubt the tragedy, which was rare, will scare travelers.
Stewart Chiron, chief executive of CruiseGuy.com, a cruise marketing company, thinks the only group turned off by the accident would be first-time cruisers who were already on the fence about booking. Roughly 19 million people took a cruise last year, he said, without incident.
"People understand that this is an accident," Chiron said. "I don't think there will even be a hiccup."