The Costa Concordia, The Caribbean & The Cruise Industry

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By David Jessop

News Americas, LONDON, England, Tues. Jan. 31, 2012: Caribbean Governments, tourist boards and hoteliers are no strangers to the difficulties of dealing with the cruise lines when it comes to issues that touch their loosely regulated but highly profitable industry.

They may therefore be less than surprised by the public response to some of the more worrying aspects of the January 13 capsizing of the Costa Concordia off the Italian coast with the loss of sixteen lives.

Although still to be the subject of a formal investigation and trial, it is already clear that the ship’s captain took the vessel too close to the small island of Giglio. As a consequence the ship, carrying around 4,000 passengers and crew, hit a submerged rock tearing a hole in its hull, causing it to capsize and the passengers having to abandon ship in chaotic circumstances.

Unusually for a maritime accident, within forty eight hours of the disaster, the vessel’s Italian operators Costa Crociere, one of a number of cruise companies owned by the Carnival Corporation, publicly blamed the ship’s captain and in doing so suggested that it was trying to place distance between itself, the individual concerned and perhaps any corporate responsibility it may have.

More recently, however, it has emerged that the story may be about more than the hard to explain actions of a rogue captain. It seems that the company may on previous occasions have urged or approved one or another of their captains to sail closer to the shore; that the captain reported the accident immediately to the company; that there was little in the way of a well considered or rehearsed evacuation plan; and that there may have been passengers or guests onboard above the number registered.

Subsequently, media reports have additionally alleged that those working for the company have taken to calling the survivors to see how they are; have offered compensation at the laughable level of a discount on another cruise; and the company may be protected by pages of legal disclaimers that all passengers must sign when booking a cruise.

These reports coincide with other coverage raising questions about cruise ship operations in relation to their onboard security, to hygiene, social responsibility and commercial practices, as well as to the manner in which such vessels are regulated and inspected and the sometimes difficult relationship they have with the countries at which they call.

In many respects the line concerned has demonstrated how not to manage a crisis, its reputation or corporate image. Its responses seem insensitive at least and seem to err towards being overly defensive.

For its part its parent, Carnival, a US$18 billion dollar business with annual income of around US$16 billion, has left the making of statements largely up to its subsidiary. Although Carnival’s Chairman, Mickey Arison, tweeted his sadness at the loss of life and has given, according to the Wall Street Journal, his ‘personal assurance’ that Carnival would ‘take care’ of passengers, crew and victims and will undertake a comprehensive audit of safety, there have been some media suggestions that the parent is trying to ensure distance between itself and its subsidiary over what has happened.

What all of this suggests is that the cruise industry requires much greater public scrutiny and accountability.

Cruising has developed rapidly into a billion dollar US-dominated industry with significant levels of Congressional support. Cruise lines now carry millions of visitors of all nationalities in an environment which is largely subject only to international maritime requirements and that of the nation of the ship’s registration.

What this raises is the difficult question of what would happen if such an accident, a related environmental catastrophe or, worse from a Caribbean reputational perspective, a cruise ship related terrorist event, were to happen in the region’s much cruised seas.

Events off the coast of Italy beg the question as to how well equipped Caribbean islands are to deal with any significant number of casualties in the event of a serious incident – the largest cruise ships carry up to 6,300 passengers – or what capabilities exist in the region and with the navies that sail its waters to respond rapidly and effectively in the unlikely event of a catastrophe.

There are also significant issues in terms of reputational risk to the region or individual islands to say nothing about the question of legal liability if any cruise company’s default position is to blame others or to remove itself commercially or legally from a jurisdiction.

These are matters together with others that remain unaddressed about the role of the cruise industry in the Caribbean.

The list of concerns is long. According to industry specialists it includes the manner in which the cruise companies play one destination off against another to reduce levels of taxation on cruise visitors; are less than keen on home porting, local employment or provisioning in the region; are active in a low key way to ensure their interests are protected locally; are permanently able to undercut the fixed costs, high levels of taxation and other constraints that the land based industry faces; are at times less than environmentally sympathetic; and have little interest in the impact they have on destinations, often landing large numbers of visitors for short periods of time.

To be clear this is not to suggest cruise ships do not have an important role in Caribbean tourism nor is it to take the position of those who oppose their business model or presence. Rather it is to suggest that the events off the coast of Italy point to a need for better regulation and proper understanding of the broader implications of cruising at a policy level in the Caribbean. It is also to argue for more thought and debate about finding new ways to better integrate cruise tourism into regional economic development in a sustainable manner.

Cruising is a hugely safe form of travel and brings much needed revenue to the Caribbean region.
However, events off the coast of Italy should be a wakeup call. They point to the need to recognise that a significant part of the Caribbean tourism product lies in the hands of a group of external entities that need to become more locally accountable and better integrated into the way in which the rest of the Caribbean’s premier industry, tourism, operates and thinks.

David Jessop is the Director of the Caribbean Council and can be contacted at Previous columns can be found at USA, LLC OnDeck