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Carnival’s Still-Sinking Ship: Lessons in Crisis Management

By: Maggie Brandt | 02/02/2012

January's cruise ship catastrophe continues to garner quite a bit of media attention. Since Carnival's Costa Concordia ran aground and sunk on January 13, every major news source has been gathering stories aboutwho is to blame, how such a tragic accident could occur with today's sailing technology, how rescue teams have stopped searching the wreckage. Yet what has perhaps gathered the most negative attention has been Carnival's response to the shipwrecked survivors.

To apologize for the accident and to help passengers recoup their losses on a tragically-shortened vacation, Carnival has reimbursed the cost of the cruise, as well as the cost of traveling to and from the ship, and any medical expenses incurred because of the accident. In addition, they've offered another compensation that many called a PR blunder - a 30 percent discount on a future Carnival cruise. People found this very insulting and insensitive - after all, how many shipwrecked survivors would be quick to jump onboard another ship, especially one operated by the same cruise line? Others cited the 30 percent discount as insultingly insignificant, commenting that they could find a better deal through Groupon and discount travel websites. The fact that the discount was actually given to those travelers who had to cancel their upcoming cruises on the Concordia, not the shipwreck survivors, didn't matter. It was just one more story, while misunderstood, that added to Carnival's negative news coverage.

Yes, Carnival is in hot water, and hopefully companies across the world are learning some valuable tips from this tragic accident and the ensuing PR nightmare. Here are some of the communication implications we've recovered from the shipwreck:

• We have said it before in crisis management discussions - good corporate apologies must be timely, sincere and able to be delivered. While the 30 percent cruise discount component of Carnival's apology was misconstrued and poorly received, Carnival may be onto something. The discount is meant to encourage travelers to return as customers, giving Carnival the opportunity to deliver a (hopefully) drama-free trip that rebuilds customer loyalty. In the midst of a crisis or worse, a serious mess-up on a company's part, regaining customer loyalty is a critical part of the recovery plan, especially in today's social media world where bad customer experiences spread like fire.
• Mistakes, especially those made by international companies, are long-remembered. Authorities say that the half-submerged Concordia will likely remain a part of the Giglio coast scenery for the better part of this year, serving as a constant example of Carnival's failure and a heart-breaking reminder to those who were onboard. Likewise, when major brands experience major crises, their mistakes will be remembered long after the corporate apology, and companies should be prepared to deal with both the short-term and long-term ramifications of their mistakes.
• Employees may not always act in the best interest of their employer. For example, the Concordia hit a reef and capsized because the captain reportedly sailed the ship beyond the designated route. It is sad but true, executives behave badly (think Enron). However, companies should prepare for external crises as well as those created internally. Leadership can help their employees act within the standards of the company by providing thorough job training, defining appropriate responses to on-the-job issues, reviewing crisis management plans and creating opportunities for open dialogue to answer employee questions and provide clarifications to policies.

Carnival is in a tough position, and the negative press surrounding this issue will continue to overshadow any positive steps Carnival does take to make amends. It will be interesting to watch how this company recovers in the coming months, and whether they will see a dramatic decrease in travel bookings on their other ships as a result.

What do you think of Carnival's response? What other lessons have you learned from this incident?

Posted in Issues and Crisis Management