(Editor Note: This is an excellent look at the Costa Concordia tragedy and industry response)
Even as more bodies were being pulled from the wreckage of the Costa Concordia, industry members grappled with the long-term impact and implications of last weekend’s accident and began assessing next steps.
Dramatic media images, frightening passenger stories and mounting deaths notwithstanding, industry members and observers said they expected any negative impact on cruise sales to be relatively short-lived.
They cited the cruise industry’s safety record, as well as the tendency for consumer attention to shift elsewhere once media coverage fades.
At the same time, they said, the accident does raise questions that will need to be addressed.
Time will help
Industry consultant Rod McLeod, who has held top executive spots at Royal Caribbean, Norwegian Cruise Line and Carnival Corp., was among those who did not anticipate any long-term impact on sales.
"What will happen, as we move farther from point of impact, is that people will put it in perspective and realize cruising is a very, very safe form of travel."
"Bad things happen to good companies," McLeod said. "The industry is safe, highly regulated but that doesn't rule out bad things happening just like in the airline business, hotel fires and so forth.”
“I would expect in the next two to three months this will be out of the consumer's mind," said McLeod.
"This was one bad catastrophic incident. Part of getting this behind the industry is really understanding that," he said.
Ship design at issue?
Early indications are that “significant human error” on the part of the Concordia’s captain may have been at fault in the shipwreck, Costa Cruises said in a statement about the accident, which at last count had claimed 11 lives.
But McLeod said that even though the captain is the focus of current investigations, the incident also raised questions about the ship itself that need to be addressed, especially since there are sister ships of the same design.
"They really have to look at if there was a major problem with the ship's design or construction. That would certainly impact that class of vessel built at Fincantieri (the Italian shipyard). You can't just throw (the captain) in the slammer and say it's over," he says.
‘Not supposed to happen’
"Let's go through a very studied impartial, international team to take a hard look at that – the quality of steel, integrity of design, integrity of the construction process.
"This is not supposed to happen," he said of the disaster. "This is one of the scenarios that goes into ship design.
“That doesn't mean the ship is unsinkable, but there are ways not to suffer what they suffered in terms of listing so quickly such as water tight doors and ballast between compartments to delay listing so you can get the lifeboats off properly."
McLeod said he would also like to know the track record of the captain and about the crew training programs.
Lifeboat drills lacking?
One industry observer who has sailed on more than 100 cruises said he has seen a decline in passenger safety measures.
“I am appalled at how lax the lifeboat drills have become, especially on some of the larger and more modern ships,” said travel PR specialist Richard Kahn. “Often they are now conducted in lounges, and the guests never get to see the lifeboats.
“In years past, all guests stood by their designated lifeboat and waited until the total roll call of all guests was completed.
“I was on one recent Norwegian Cruise Line sailing when no lifeboat drill was conducted," said Kahn, founder of KTCpr, in Rockville Centre, N.Y.
“The cruise lines need to get back to safety basics, no matter how inconvenient it is to the guests and crew. Lives may have been saved if the Costa Concordia did things correctly,” Kahn said.
Expect improvements
One likely outcome of the accident is improvement in basic safety procedures. “There will be some lessons learned and actions taken as a result of those lessons, once people take a hard look at what really occurred,” said Dwain Wall, senior vice president and general manager of CruiseOne and Cruises Inc.
“Usually following an incident like this, additional measures are taken to tighten the rules. I expect that things will become safer. Almost every time there’s been an accident in this industry, in any segment, we learn from it.
“We’ll get through this as an industry,” Wall added.
Bottom line impact
Financial recovery may be longer coming for Costa and its parent company Carnival Corp., whose stock price fell significantly in Europe yesterday and in New York today.
Carnival projected that, for the fiscal year ending Nov. 30, loss of use of the Concordia would cut earnings by $85 million to $90 million. The Concordia will be out of service at least for the rest of this fiscal year, if not longer, Carnival said.
Carnival said it anticipated other costs as well. The company’s combined deductible for insurance coverage is approximately $40 million.
Dori Saltzman and Nick Verrastro contributed to this report.
