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Carnival's $300 Million Announcement: The Right Steps, the Right Timing?April 22, 2013 By: Susan Young
|All photos by Susan J. Young|
Carnival Cruise Lines said last week that it will spend $300 million to upgrade mechanical systems and provide back-up generators for its ships. It's also creating a new safety and reliability review board to monitor the line’s operational performance.
The goal is to avoid problems similar to what the company experienced with Carnival Triumph and, to a much lesser extent, with several other ships recently. The line's approach is detailed here.
Travel Agent talked with several travel industry executives as well as a crisis communications/accident investigation expert about Carnival's announcement.
Are the steps enough? Is the timing right? Will this ease public concerns – and enhance bookings?
“There is usually concern by consumers when multiple incidents happen with the same brand or company,” says Dwain Wall, senior vice president and general manager, CruiseOne (www.cruiseonfranchise.com) and Cruises Inc. (www.sellcruises.com).
Those showing the most concern are typically first-time cruisers who don’t understand the rarity of these occurrences. "Carnival’s commitment to new enhancements and additional safety measures is a great step in easing the minds of consumers and a positive selling point," Wall says.
Michelle Fee, CEO of Cruise Planners (www.cruiseplanners.com), says the travel industry as a whole needs to communicate is that cruising is safe. “We - as advocates of the industry - must continue to be positive and upbeat when speaking to the public,” she says.
It’s a good step that Carnival has publically stated they are investing millions of dollars into their hardware, says Fee, who adds that agents must use statistics and facts to show cruising is and continues to be the safest mode of travel.
“Unfortunately, it’s scrutinized so closely by the media because all incidences must be reported, even if someone scrapes their knee,” she says. “Other largely traveled places, such as Vegas, do not have these same stipulations. Bad incidences happen there every day. You just don’t hear about them.”
Carnival began its own operational investigation of the Carnival Triumph incident immediately after it happened. Internally, the line has been very comprehensive in reviewing and evaluating its operating procedures, existing ship hardware and potential mechanical fixes.
Clearly, a thorough review takes time. And the line's investment for any fixes is sizable.
Still, some wish the line's response of last week - with many positive operational steps - had come just a bit earlier to help ease consumer consumer concerns, better maintain the industry's safety reputation and avoid critical commentary from government officials.
Among them is Agnes Huff, Ph.D., president of Agnes Huff Communications Group (www.ahuffgroup.com), Los Angeles, a transportation crisis management and response expert, who says some consumers might perceive that "only when government scrutiny was imminent and public sentiment at an all time low, did they choose to act."
Will the announcement help the public's perception? Will it move the needle toward a more positive outlook for Carnival?
Fee says her agents report that past cruisers emphatically state that these incidences earlier this year will not stop them from booking a future cruise. “Do we know the extent of the damage to a non-cruiser?” she asks. “Probably not. My guess is it’s just ‘wait and see.’”
That said, she notes that Cruise Planners’ current bookings don’t reveal any signs of a slowdown. “People are still cruising, and yes, even on Carnival,” Fee says.
From Wall's perspective, “yes, people will appreciate the fact that Carnival recognized that action needed to be taken," but again notes that it's the first timers - those making up much of Carnival’s target market - who need extra assurances that a cruise vacation is a safe choice.
“Carnival's new operational program is just a starting point to try to regain public confidence,” says Huff. She says it's a process that will take time. That effort's success will ultimately depend on Carnival's ability to concretely demonstrate to the public that it has learned from the past and is doing everything possible to prepare for and prevent future incidents or accidents, Huff notes.
“It has to be a massive strategic communications and implementation campaign to slowly build back their credibility publicly, so they can stop being the butt of late night jokes,” says Huff.
When asked whether the announcement will move the "public perception needle" toward a more fair assessment of Carnival, Chris Owen, a former travel agent and now a cruise writer (www.chriscruises.net and @OrlandoChris on Twitter), emphatically says: “Yes. It should. I sincerely believe that Carnival has raised its own bar on safety to the point where they will probably end up with the safest ships in the ocean."
While he acknowledges the line is not saying that just yet, he believes that's where it's headed. "Regardless of what is actually going on behind the scenes, documentable evidence supports the notion that they have a list of ‘no sail' events that if one of [those] happens, the ships, fleet-wide, do not go out to sea," Owen says.
He points to a situation with Carnival Dream not long ago, when Carnival held the ship in St. Maarten due to a problem with an emergency back-up generator, and ultimately ended the cruise early. Reportedly, “maritime authorities had no problem with them sailing without a fully-functioning back-up generator,” Owen said, "But they [Carnival] did and didn't sail."
Will you use the latest Carnival program in agent training or consumer literature?
Wall and Fee say they'll ensure their agents are aware of the changes, but the information won’t be included in consumer literature. “When we market to consumers we would rather not complicate the positive selling approach," Fee stresses.
Margie Jordan, CEO, Jordan Executive Travel (www.jets-inc.com), Jacksonville, FL, also won't use the information in her consumer literature. “Clients are weary of hearing about the Carnival cruise incidents,” she believes, but she'll share enhancements with any customers who express an interest in sailing on Carnival.
Earlier this year, Jordan posted a question on her Facebook page, asking: “Have these incidents changed your mind about cruising or cruising specifically with Carnival? Very few said they wouldn't sail with Carnival again. Carnival fans said the incidents hadn't changed their perspective of the line's safety. And overall, Jordan's responders said they felt cruising was safe.
Accidents can become a catalyst for change. Is Carnival's response enough, not enough or just right?
“It’s a great start,” emphasizes Fee. “I’m not sure what is the right amount but the fact that they are making changes and moving forward is a good thing.”
She says that it’s important to remember that anytime something bad happens it affects the entire industry, as non-cruisers typically have no idea what the differences are between cruise brands. She urges agents to stay positive and focus on getting out the message about the safety of cruising.
Owen says the entire situation definitely can be a catalyst for change. It reminds him of the hotel fires in the early 20th century; those resulted in strict regulations and operating procedures for hotels. Positive steps within the maritime industry were also taken after the Titanic accident and even after the Costa Concordia accident.
The Carnival Triumph engine room fire, fortunately, did not cause any major injuries or loss of life, nor did smaller, often different issues on other ships. Yet, while these incidents proved to be a huge inconvenience to passengers, the media frenzy and guest social networking messaging publicly morphed into concerns over safety issues.
"I understand that," Owen says. "I also firmly believe that Carnival and other major cruise lines, have made and will continue to make safety a top priority."
When Owen was a travel agent, he thought that if a ship were to sink, it would be the end of the industry and his job would be gone. But today he says, things have changed.
Owen says the cruise industry has effectively "rallied to take concrete steps that will ensure future safety that goes beyond what studies and experts say they should do."
Cruise Lines International Association (www.cruising.org) member lines have undertaken fleetwide operational reviews and quickly made changes in policies and operating procedures following the Costa Concordia accident, for example.
Carnival's operational procedures and practices are being heavily scrutinized by the U.S. Congress, the U.S. National Transportation Safety Board and the U.S. Coast Guard. Huff has dealt first-hand with federal investigators in past transportation accidents.
She believes the newly announced Carnival improvement program could definitely help the line during Congressional and other government hearings if Carnival comes across with a sincere effort to solve the problems.
On the flip side, she adds that the inevitable questions from investigators and members of Congress have the potential to focus on any potential negligence or inefficiencies in operational management.
When the investigative hearings are over, "Carnival will need to win customers back one at a time," Huff says, noting it's critical for the line to continue to demonstrate both sincerity and dedication to resolving the prior problems."
In addition, “all the rest of the cruise lines will also be under scrutiny,” Huff says. “Hopefully, they are all reviewing their crisis plans, operational safety programs, and putting necessary resources in place for the benefit of the safety of the travelling public.”
Addressing those points, Wall truly believes Carnival has been responsive in dealing with the obstacles faced; he cites their immediate action to ensure all ships will undergo rigorous inspection. He also credits the line with working closely with travel agency groups to provide information and tools to assist travel agents.
"This new $300 million investment covers not only mechanics, but also creates an external review board to provide further insight," he also emphasizes. "If successful, this type of investment will be seen across the board.”
From Jordan’s perspective: “Are the improvements enough? That's tough [to know]. Only time will tell.”