1. Modern Crisis: Carnival
LECTURE 9
Modern Crisis: Carnival
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

2. Objectives
Understand the factors affecting perceptions of the owner and operator of the sunken Costa Concordia cruise ship (2012)
Discuss how such a crisis should be handled, in particular the role of the company’s leadership
Examine how non-marketing issues impact corporate identity and branding
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

3. Titanic 1912 Costa Concordia 2012
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

4. What happened? Twice the size of the Titanic
114,000 tons and 952 ft. long
3,200 passengers and 1,000 crew on board
Ran aground at night off the island of Giglio
Evacuation took several hours
32 people died
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

5. Carnival response
”This is a terrible tragedy and we are deeply saddened. Carnival Corporation & plc offers our sympathies and heartfelt condolences to all of the Costa Concordia guests, crew members and their families. We are working to fully understand the cause of what occurred.” January 14, 2012
Carnival, the shipowner, largely delegated responsibility for handling the crisis to its Italian subsidiary, Costa Crociere S.p.A.
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

6. Why did it happen?
Ship diverted from its scheduled course to sail closer to the island
Some said that the evacuation of the ship was a shambles
Some said that the ship’s captain left before many of the passengers
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

7. Who was responsible for the disaster?
Was it the operator of the ship – Costa?
Was it the parent company that ultimately owned Costa and the ship – Carnival?
Was it the captain? Why did he sail so close to the shore?
Was the real problem the slow evacuation of the ship? And why was it so slow?
And what should have been done in the aftermath – whether to help the victims or to stop it happening again?
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

8. Carnival’s communication strategy
Deduced from its actions:
Low media profile
Focus on strategic stakeholders – regulators, investors and customers
Supported customers but did not take responsibility for the disaster
Blamed the captain
Strengthened safety, avoiding it becoming a critical issue for the cruise industry
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

9. Investor reaction
January 16: share price fell 16% on the first day of trading in New York
March 6: share price retested its low in New York
By year end, share price stood higher than before the disaster
Usual pattern is a share price fall on news of a crisis, recouped over the next few months
Analysts expected bookings to recover
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

10. Public reaction Instant media and social frenzy Photogenic wreck
Carnival keeps a low profile – successfully
Benign political and regulatory response
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

11. Choice of Spokesperson
Experts urged: “Go to Italy, now!”
Carnival Chairman and CEO Micky Arison issued brief statements, then delegated to Pier Luigi Foschi of Costa
Wall Street Journal: “Where is Micky Arison?”(1)
“The unit’s management is best suited to handle the on-the-ground response” – Carnival
“Given that the ship was Italian, that it ran aground in Italian waters, subject to Italian jurisdiction, that the largest number of passengers was Italian, and that the local media spoke Italian, this was a smart move” – Keeping Shtum
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

12. A different view
Seitel on “Carnival’s Crisis Cruise” – see suggested reading
“The Silence of the CEO”
Arison, owner of the Miami Heat photographed with Bill Clinton at a basketball game, February 2010
“Pilloried” in social media?
“Tone deaf” offer to customers?
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

13. Name… Blame
The ship’s name, Exxon Valdez, ensured that disaster would forever be tied to Exxon
Does anyone know who owned Titanic?
And what is that company called today?
“A problem with one product can’t be hermetically sealed if the corporate name is used” – David Bernstein(2)
Maybe it’s time to take some corporate names off vulnerable assets and products?
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

14. Suitable cases for brand detox?
Berkshire Hathaway
Berkshire Hathaway Energy, Berkshire Hathaway Home Services
Carnival Corporation & plc
Carnival Cruise Lines
Volkswagen Group
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

15. Lessons of Costa Concordia
Customer confidence maintained by low profile, boosting safety and closing industry ranks
Impact on the group minimized
Local head of operations chosen as public face
In background, CEO focused on strategy
Carnival was sorry but did not take the blame
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)

16. Suggested reading Keeping Shtum, chapter 15
Fraser P. Seitel, The Practice of Public Relations, 12th edn., (Upper Saddle River, NJ: Pearson Education, 2013), chapter 17: Crisis Management
NOTES
Mike Esterl & Joann S. Lublin, ‘Carnival CEO Lies Low After Wreck,’ Wall Street Journal, January 23, 2012
David Bernstein, Company Image and Reality: A Critique of Corporate Communications, (Eastbourne, UK: Holt, Rinehart and Winston, 1986), 173
A course of lectures based on Steven Olivant, Keeping Shtum and Other Communication Strategies, (CreateSpace, 2016)