Cruisin' takes a bruisin' in eye of PR storm

The string of incidents on Carnival ships in recent weeks once again has the cruise industry fighting for its reputation.

A year after the Costa Concordia disaster, "the (Carnival) brand is in a terrible place ... and (cruising) has now become perceived by many people as one of the most stressful vacation choices," says Christopher Muller, a professor and former dean of Boston University's School of Hospitality Administration.

Muller says widely reported problems with four Carnival ships over the past five weeks have left the line and the industry at a critical moment.

"It becomes a wounding by a thousand cuts," he says.

In the last week alone, two of Carnival's 24 ships have experienced technical problems that have affected the on-board experience. The 2,124-passenger Carnival Legend limped back into its home port of Tampa on Sunday at a reduced speed after the malfunction of one of its two propulsion units. It had to skip a call in Grand Cayman on Thursday. Just a day earlier, the 3,646-passenger Carnival Dream experienced a malfunction of an emergency backup generator while docked in St. Maarten. With repairs necessary, Carnival ended the cruise early and flew passengers home.

The widely covered incidents come just a month after an engine room fire left the 2,758-passenger Carnival Triumph dead in the water in the Gulf of Mexico. Passengers reported miserable conditions on the vessel as it was towed to Mobile, Ala.

A fourth Carnival ship, the 2,052-passenger Carnival Elation, also has experienced a problem with a propulsion unit in recent days, though its operation has not been affected.

The incidents once again have put executives at Carnival Corp., the parent company of both Carnival Cruise Lines and Costa Cruises, in the position of having to defend the company's safety practices.

"I want to emphatically state that all the ships in our fleet are safe," Carnival Corp. vice chairman Howard Frank told Wall Street analysts on Friday during a conference call to discuss first-quarter earnings.

Still, in the wake of the Triumph incident, Carnival launched a fleet-wide review of its fire safety programs and engine room redundancies, and Frank on Friday said it is likely to lead to millions of dollars in upgrades to vessels.

"We will make the changes necessary to provide even greater redundancies to our shipboard systems and, in the event of a loss of power, to increase the emergency generator power to provide a more effective level of comfort," Frank said.

That said, Frank also told analysts that a Carnival study of ship incidents over the past decade had found no disparity between its brands and those of other cruise companies. The cruise industry also maintains that it has an excellent long-term safety record, with Carnival alone carrying 4.5 million passengers per year on thousands of cruises without incident.

"The relative percentage of incidents for our cruise lines (versus competitors) is almost the same," Frank noted. "Unfortunately for us, the run the last year or so since the Concordia incidence has been a little bit higher. But if you go back beyond that, it was considerably lower. And by the way these are the same people that have been running the same ships all these years, (and) the ships haven't changed ... sadly, we've just been hit by a run here that has been very unfortunate."

A recent Harris poll suggests that America's trust in cruise lines dropped significantly in the wake of the Carnival Triumph fire. The survey of 2,230 U.S. adults, which took place between Feb. 19 and 21, found a 17% drop in a measurement of America's trust in Carnival Cruise Lines and somewhat smaller declines in trust for other lines including Royal Caribbean and Holland America.

Still, there already are signs the fallout from the recent incidents could be short-lived. Carnival Corp. chairman Micky Arison also told analysts on Friday that bookings at the Carnival brand, which declined by double digits in the days after the Triumph fire, already have rebounded significantly, thanks in part to price promotions. Frank said other brands in the Carnival Corp. portfolio, meanwhile, only have experienced a small "hiccup" in sales.

Such resilience is a hallmark of the cruise industry, which has experienced rough waters before with little long-term impact. Last year cruise bookings at many lines dropped sharply after the Costa Concordia incident, only to rebound fairly quickly after lines began offering deals.

"The American vacationing consumer wants a bargain, (and) price promotions work," notes Mike Driscoll, editor of Cruise Week. "The view seems to be, 'this won't happen to me' combined with 'here's a vacation I can afford.'"