The public rarely hears about cruise ship accidents. In fact, other than reports of persons overboard, I can’t recall ever hearing about a cruise ship accident that resulted in the loss of lives. The Titanic is by far the most infamous, but its memory lives in another time and place, and its story has been romanticized and, to an extent, fictionalized by Hollywood.
Perhaps that’s what makes the Costa Concordia accident off the coast of Italy such a high-profile story. It’s hard to resist thinking about the Titanic, and it’s shocking to see such a large vessel capsized. And then there’s the drama surrounding the ship’s captain. But in today’s news-saturated world, we in the public — while intrigued and saddened by such news — can only internalize so many of the events reported by the media. And that means, with the exception of the ship’s passengers and the victims’ families, the public memory of Carnival’s Costa Concordia accident will fade as soon as media coverage wanes. As such, the cruise ship industry will not likely experience a drop in consumer demand that’s related to the accident.
If you don’t believe me, think about the effect that plane crashes have on the public. Commercial airline crashes — more common than cruise ship crashes, but still rare — hit the public hard (especially those who are about travel via airplane). But as shocking as such accidents are, people continue to buy plane tickets in droves. True, many have anxiety about flying, but delayed flights and bad customer service weigh on airline customers’ minds more than past airline accidents.
Instead, the effects of the accident will be felt mostly behind the scenes. The tragedy has, and will continue to, fuel debate across the largely unregulated cruise ship industry and between government regulators that will struggle to craft new regulations in coming months and years. According to a recent post by my colleague Rebecca Mallett, lawsuits, insurance premiums and deductibles, and other expenses will also impact Carnival’s bottom line, at least temporarily. Larger, ongoing concerns, such as weak demand driven by the turbulent economy in Europe and other regions, will also continue to plague the industry.
Barring any revelations of long-term, systematic negligence on the part of Carnival, Royal Caribbean, or other cruise ship companies (see this Reuters article about unreported/under-reported accidents), the industry’s public relations departments, lawyers, and leadership will bear the brunt of the financial effects of the accident.
The cruise-going public, on the other hand, will look to their wallets, and not to memories of accidents past, to decide whether to take a trip this year. Any failure on behalf of cruise ship companies to generate returns for shareholders can therefore be attributed to the companies themselves and not to the captain of the ill-fated Costa Concordia.
Photo courtesy of marcovdz, under a Creative Commons license.