Cruise ship disaster industry impact

The Costa Concordia cruise ship disaster has captured headlines around the world. We turned to our Zintro experts for an assessment of the event and how it may affect the industry.

Simon Beechinor, an expert in shipping and logistics, says that it is possible that in the short term the industry might see a few cancelled cruises, as a knee-jerk reaction to the incident. “In the medium term there will be no negative commercial impact. The shipping industry will certainly learn from this incident as it does from all incidents, large and small. There are well established procedures for disseminating information arising from incidents throughout the world’s fleets,” he says. “However, before one can intelligently comment on the regulatory responses that might be made, it will be necessary to examine what happened, how and why. It will be necessary to understand what procedural or technical issues gave rise to the incident and these details will take a little time to be gathered.”

Elements of the incident that are demonstrated to have been caused through human error or negligence will be quickly learned and absorbed by the industry, Beechinor says. If the incident arose largely because individuals deliberately departed from or ignored established operating procedures and existing safe practice, then it is hard to regulate for such a dereliction of duty.

But, Beechinor thinks that procedural regulations might be introduced to mitigate the effect of any design defect on existing vessels, subject to their age and operating circumstances. If the incident is attributed to structural or design issues, then any new regulations required will be included in the design and fabrication of future new vessels. It is unlikely that significant design issues will or can be absorbed by existing vessels and the industry may well need older vessels reach the end of their operational lives before risks associated with those designs are eliminated.”

Eric Ingrand, a social media expert in the travel industry, thinks that that the entire cruise industry will be impacted by the Costa disaster, especially in Europe, but what this means in terms bookings number by region, by brands, is hard to predict. “Consumers can easily forget the images of the cruise ship on its side and go back to taking cruises, just like people do when there is a plane crash,” Ingrand says.

“If cruise lines were regularly condemned for getting too close to shore, they would probably abandoned theses maneuvers. I live on the French Riviera, and I have seen cruise ships closer than the 300 meter limit. Countries may be forced to make collaborative decisions to force cruise lines to be stricter with navigation rules,” Ingrand says.

Ingrand says that safety procedures need to be updated because cruise ships are like small floating cities. “I believe this accident will impact all the European cruise line business in 2012. Cruise lines will need to communicate changes and security procedure updates to reassure families and seniors who represents the vast majority of European customers,” he says.

However even with this accident, cruise ships are still a secure way to travel. “It will be a challenge for the cruise industry to promote this idea. Costa management needs to go online and apologize and provide an explanation. It will be interesting to watch the post crisis management in the press, on social media, and online,” says Ingrand. “Costa and the Carnival Group should now think about how to get back in control and reassure all the customers that have booked a cruise after the accident. If they do not, the consumer will tackle this subject online and then it will be out there.

Douglas Scattergood, master mariner in command of the Nautical Institute, thinks that the failures in this case will result in huge financial losses for Costa Cruises in cancelled bookings, and this may also affect other cruise Lines. “Carnival Corporation, the owner of Costa and nine other cruise lines, has already started a review of practices and procedures for all of its cruise lines. Apart from damage control, this review is long overdue as safety procedures might sometimes suffer due to complacency and enthusiasm among the crew,” says Scattergood. “The facts may show in the Costa case that safeguards such as Bridge Team Management (BTM) were not being practiced. BTM is a procedure where the master and watch-keeping officers manage the safe navigation of the vessel. It was instituted to prevent just such occasions and minimize such drastic failure of judgment. The loss of life here is concerning, and should be a warning to all seafarers of the results that complacency can have.”