Carnival Cruise Lines
Fire Aboard a Stranded Cruise Ship
Agenda
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Carnival Cruise Lines Story
Cruise Line Industry
Trouble at Sea
Carnival Splendor
Fire and Circus Onboard
Media Response
Recommendations
Carnival Cruise Lines Story
History
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Founded in 1972 by Ted Arison
Has become largest cruise line in world
Rated most popular cruise line in 1987
More passengers than any other cruise line
1,400 voyages per year
22 ships
4 million passengers per year
Popular Cruise Destinations
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Bahamas
Caribbean
Mexican Riviera
Alaska
Hawaii
Europe
Bermuda
Mazatlan, Mexico
Carnival Corporation & Plc
• Dual headquarters in Miami, FL and London,
England
• Parent company for Carnival Cruise Lines,
Princess, Holland America, P & O
• Publicly traded as CCL on New York Stock
Exchange and CUK on London Stock Exchange
• Only corporation in the world included in both
S&P 500 and the FTSE 100 indices
Carnival Corporation & Plc
• Total passenger capacity of 191,464 and
serves about 8.5 Million guests annually
• Carnival Cruise Lines is the flagship brand and
accounts for 19% of Carnival Corporation
capacity, serving 4 million guests annually
• Total revenue of 14.5 billion in 2010
• EPS of $2.47 as of November 30, 2010
Cruise Line Industry
Cruise Line Industry
• Growing industry but still small in comparison
to wider global vacation market
• Industry competes for discretionary dollars
with other vacation types
• For consumers, vacation spending is third
priority after savings and living expenses
Industry Capacity
• Customers have increased 5.7% from 2005 to
2010
• In 2010, the global cruise industry marketed
capacity of 423,000 passenger cabins
• Carnival Corporation & Plc accounts for 44% of
this capacity
Growth Dynamics
• Industry identifies following growth factors:
– Exceptional value proposition
– Wide appeal
– Low market penetration
– Positive guest demographics
– High guest satisfaction rates
• These factors demonstrate high industry
growth potential
Trouble at Sea
Titanic All Over Again…
Sinking of Oceanos in 1991
Common Cruise Issues
• Tilting due to rough seas or sharp turns
– Carnival Ecstasy (Carnival Cruise Lines)
• Norovirus outbreaks
– ms Oosterdam (Holland America Line)
• Pirates
– Seabourn Spirit (Seabourn)
• Fires
– Star Princess (Princess Cruises)
Cruising Regulations
• Cruise ships must develop and practice
contingency plans to meet IMO and the U.S.
Coast Guard standards
– International Maritime Organization (IMO)
establishes international cruising standards
– U.S. Coast Guard examines all new cruise vessels
and thereafter inspects each ship quarterly
Carnival Splendor
Ship Details
• One of the largest vessels owned by Carnival
Cruise Lines
– 113,300 ton, 952 foot long ship, 13 passenger decks
– 1,503 guest staterooms can accommodate over 3,000
guests per voyage
• Registered in Panama
• Six diesel engines, three in the aft engine room
and the other three in the forward engine room
Carnival Splendor Sets Sail
• Departed Long Beach, California on Sunday,
November 7, 2010
• Weeklong cruise of the Mexican Riviera
– Stops in Puerto Vallarta, Mazatlan, and Cabo San
Lucas, Mexico.
• Scheduled to arrive back in Long Beach with
its 3,299 guests and 1,167 crew on Saturday,
November 13
Fire!
Fire!
• On Monday, November 8 around
6:00 a.m. a fire started in the aft
engine room
• Cruise Director instructed
passengers over public address
system to proceed to upper decks
and called it a “smoke fire”
• 200 miles south of San Diego
“Smoke Fire” Announcement
Cruise Director John Heald's Announcement to
Passengers
Fire Results
• Blaze extinguished by crew members and fire
suppression system
• Fire damaged electrical switchboard
• Prevented electrical transmission to
propulsion, communication, and other
operations systems
• Power could not be restored but auxiliary
generators were used for vital systems
Response to the Fire
• Crew communicated with U.S. Coast Guard
– By Monday afternoon, three cutters and a
helicopter were dispatched
• Mexican navy also responded with aircraft and
tugboats
• Cruise Director, John Heald, delivered
frequent updates to passengers about the
situation
Rescue Aid
• The U.S. Navy supplied the
ship on Tuesday with 70,000
pounds of bread, canned milk,
crab meat, and Spam
• Supplies were flow from North Island Naval
Station in Coronado and ferried by helicopter
from the USS Ronald Reagan, an aircraft
carrier diverted from nearby maneuvers
“Circus” Aboard the Splendor
• No electrical power
• No refrigerated or hot food
• No functioning toilets for about 16 hours
(restored Monday evening)
• No air conditioning
• No hot water
• Smells of rotting food and sewage
New Guest Accommodations
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Casinos closed
Swimming pools closed due to lack of filtration
Passenger cabins pitch black and stuffy
Passengers ate sandwiches, salads, and crab meat
How passengers overcame boredom:
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Live music
Scavenger hunts
Trivia contests
Card games
Free alcohol
Corporate Decisions
• "We've been in business for 35 years," said
CEO Gerry Cahill. "We've never had anything
like this happen before.“
• Objective: Get passengers safely to port
– Initial plan was to tow the Splendor to the
Mexican port of Ensenada
– Carnival changed the destination to San Diego
Media Response
Contact with Land
• The events on Monday and Tuesday occurred
outside of cellular phone service range
– Passengers were unable to personally update friends
and family of their safety
• Ship entered cell phone range on Wednesday,
November 10, 2010
– Passengers made personal cell phone calls and sent
pictures and text messages
– News outlets interviewed passengers aboard the ship
via cell phones
Passenger Interview
Phone Call with Passenger Aboard the Ship
Carnival & Social Media
• Carnival used Twitter and Facebook primarily
as push mechanisms to provide factual
updates about the cruise
• Cruise Director, John Heald, updated his blog
from the ship on Wednesday, November 10
– “The guests have been magnificent and have risen
to the obvious challenges and difficult conditions
onboard.” (johnhealdsblog.com)
Passengers & Social Media
• Passengers uploaded pictures and videos to
YouTube of their experiences
• The volume of social media about the
Splendor created significant buzz on the
Internet
“Spamcation”
• Media outlets used “Spam
cruise” and “Spamcation” as
taglines
• Carnival tweeted, “Despite
media reports to the contrary,
Carnival Splendor guests were
never served Spam!”
• Opportunistic individual sold
commemorative “Spamcation”
t-shirts upon ship’s arrival