A Case Study in Effective Crisis Management:

Carnival Cruise Lines & The Crisis Aboard The Splendor

Tamara Stinson and Tiffany Bell November 29, 2011

About Carnival Cruise Lines

Theme: FUN FOR ALL. ALL FOR FUN. Mission Statement:

Carnival prides itself on delivering fun, memorable vacations to its guests by offering a broad range of quality cruises, which present outstanding value for the money.

Company Highlights:

Member of a group of six cruise lines that has been designated as "The World's Most Popular Cruise Lines Boasts a fleet of 23 "Fun Ships Offers cruise vacations which span from three to 16 days to The Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, Canada, New England, Europe and Bermuda

Carnival Cruise Lines Timeline

1970s

1972 Carnival purchases the Empress of Canada. 1972 The maiden voyage of Carnivals first ship, the TSS Mardi Gras, runs aground on sandbar outside the Port of Miami.

1980s

Carnival earns distinction as Most Popular Cruise Line in the World, carrying more passengers than any other. Carnival Cruise Lines undertakes its initial public offering on Wall Street, raising approximately $400 million to fuel future expansion; entity later becomes Carnival Corporation & PLC, a multi-line worldwide cruise conglomerate.

Carnival Cruise Timeline (contd)

1990s
1998 Introduces seventh Fantasy-class vessel, the Elation, the
first new cruise ship deployed on the West Coast.

The eighth and last in the Fantasy-class series, the Paradise,

enters service. Paradise was the only non-smoking cruise ship in the world.

1999 Debut of the 102,000-ton Carnival Triumph, the second

Destiny-class vessel.

Carnival Cruise Timeline (contd)

2000s
2010 A fire on Carnival Splendor at 6:30am PST on November 8
leaves the ship crippled.

2011 Carnival Magic, a 130,000-ton vessel, entered service in

May

2012* Carnival Breeze, a 130,000-ton vessel, currently

scheduled to enter service in the spring.

The Carnival Splendor

The Carnival Splendor Crisis

On the morning of Monday, November 8, 2010, there were
3,299 passengers and 1,167 crewmembers onboard.

At 6 a.m., a fire broke out in the engine room.

http://www.youtube.com/watch?v=OoAgMa1083Y

The ship was left adrift in the middle of the Pacific Ocean
about 44 miles off the coast of Mexico.

There was no electricity, air conditioning, water or hot food. There were no injuries or fatalities. Toilet service and cold water were restored Monday night.

Carnival Splendor Crisis (contd)

Food was airlifted to the ship before it was towed back to
port.

The captain & crew kept passengers aware of developments

via announcements over the loud speakers.

On Tuesday, November 9, 2010, the disabled ship was

towed to port by tugboats sent by the U.S. Coast Guard.

Overall, passengers remained calm. Passengers socialized with other passengers or entertained
themselves by playing card games.

Crisis Communication Theory & Crisis Response Strategy

In handling the crisis, Carnival used the Apologia crisis
communication theory

One of two crisis response strategies in the Rebuilding posture,

Apology, is also used

Carnival released the following statement to the media:

"We know this has been an extremely trying situation for our guests and we sincerely thank them for their patience. Conditions on board the ship are very challenging and we sincerely apologize for the discomfort and inconvenience our guests are currently enduring. The safety of our passengers and crew is our top priority and we are working to get our guests home as quickly as possible.

They also provided a hotline number for concerned family and

friends.

The Communication Plan

From the beginning, Carnival was forthcoming about what
was going on and how things were expected to progress.

Carnival provided passengers with spam and crabmeat

during the power outage.

Live music and free drinks were also provided. Even as the media firestorm ticked upward, the line sent out
a steady stream of alerts via Twitter and Facebook. It responded to all of Cruise Critic's e-mails and phone calls

Provided the media with copies of the makeshift dining

menu and access to a very busy Senior Cruise Director, John Heald.

The Communication Plan (contd)

John Heald kept the passengers and crew calm and
entertained with his great sense of humor by making funny announcements over the PA system throughout the day.
Beth Peeler Amen!!! We love John, he's the
reason I didn't lose it. :) November 18, 2010 at 3:15pm (via Facebook)

John also blogged about the crisis as it unfolded.

Business Continuity
Guests received a full refund and reimbursement for transportation
costs (flights and hotel stays) to get back home. The second of the two crisis response strategies in the Rebuilding posture, Compensation is illustrated here.

Passengers also received a complimentary future cruise equal to

the amount they paid for this voyage

The Splendors next cruise, scheduled to depart the following

Sunday evening, was cancelled.
Passengers scheduled for that cruise received a full refund
and a 25% discount on any future cruise.

Guests scheduled to cruise the Splendor through January 2011

were offered a full refund, the option to immediately schedule another voyage or to have their payments held for future travels.

Handling the Crisis

According to Oivid Mathisen, editor for Cruise Industry News (an
independent organization that has covered the cruise industry for the past 30 years), regarding Carnivals handling of the crisis:

Given the circumstances, theyre doing everything they should be

doing.

"This year some 300 ships will carry more than 18 million passengers,
and this has been the negative 'headline' for the industry where no one got hurt and the crew put the fire out quite rapidly," Mathisen observes. "This is a very safe industry."