As Costa Concordia death toll rises, Citi studies the bottom line

The negative PR surrounding the disaster, replete with haunting images, could hurt the cruise industry financially for longer than usual after such a calamity, the report says.


Rescuers temporarily halted their search mission on the Costa Concordia on Wednesday after the cruise liner shifted. So far, 11 passengers are confirmed dead and 28 remain missing.

Amid the news stories about the rescue efforts and the captain’s apparent recklessness and cowardice, public relations blogs and publications have covered the cruise ship and its parent company’s response to the disaster.

PRWeek‘s U.K. edition said that Carnival Cruises, which owns the Costa Concordia, brought in Burson-Marsteller to handle crisis PR, and Rooster PR, an agency in the U.K. and Ireland, handled press inquiries for the ship throughout the weekend.

According to PRNewser, company owners in Italy held two press conferences, and the CEO of Carnival Cruises responded from the United States.

Although it might sound crass given the loss of life, executives at the company are undoubtedly looking at the potential financial impact of the disaster—and, according to Citi, it will hurt not only Carnival’s bottom line but that of the entire cruise industry.

Usually, the fiscal damage of such an occurrence is short-term, lasting one or two quarters, explained a halted their search mission on the Costa Concordia on Wednesday after the cruise liner shifted. So far, 11 passengers are confirmed dead and 28 remain missing.

Amid the news stories about the rescue efforts and the captain’s apparent recklessness and cowardice, public relations blogs and publications have covered the cruise ship and its parent company’s response to the disaster.

PRWeek‘s U.K. edition said that Carnival Cruises, which owns the Costa Concordia, brought in Burson-Marsteller to handle crisis PR, and Rooster PR, an agency in the U.K. and Ireland, handled press inquiries for the ship throughout the weekend.

According to PRNewser, company owners in Italy held two press conferences, and the CEO of Carnival Cruises responded from the United States.

Although it might sound crass given the loss of life, executives at the company are undoubtedly looking at the potential financial impact of the disaster—and, according to Citi, it will hurt not only Carnival’s bottom line but that of the entire cruise industry.

Usually, the fiscal damage of such an occurrence is short-term, lasting one or two quarters, explained a note from Citi.

“However, we note the pictures and videos from the Costa tragedy are more graphic and widespread than past incidents and it occurred during the heavy booking period of Jan-March (Wave season). The media coverage could also be prolonged as the 100-year anniversary of the Titanic is in 3 months.”

The note didn’t put a number on the long-term impact. (Carnival’s stock price fell 13.65 percent in trading Tuesday.) It did, however, note a decrease in booking volume over the last couple of days, which it attributed not only to bad press but also to a cutback in advertising from cruise lines and travel agents (predating the Costa disaster).

The calamity could also shine a spotlight on safety issues in the cruise industry and, as is often noted after a widely publicized disaster, the need for companies to examine their crisis PR plans to make sure they’re prepared—especially in the age of social media when victims, not the news media, are on the front lines of sharing images and videos from a disaster, as was the case with the Costa.

(Image via http://officiel-blogueur.skyrock.comixzz1jp5IkCI2″>note from Citi.

“However, we note the pictures and videos from the Costa tragedy are more graphic and widespread than past incidents and it occurred during the heavy booking period of Jan-March (Wave season). The media coverage could also be prolonged as the 100-year anniversary of the Titanic is in 3 months.”

The note didn’t put a number on the long-term impact. (Carnival’s stock price fell 13.65 percent in trading Tuesday.) It did, however, note a decrease in booking volume over the last couple of days, which it attributed not only to bad press but also to a cutback in advertising from cruise lines and travel agents (predating the Costa disaster).

The calamity could also shine a spotlight on safety issues in the cruise industry and, as is often noted after a widely publicized disaster, the need for companies to examine their crisis PR plans to make sure they’re prepared—especially in the age of social media when victims, not the news media, are on the front lines of sharing images and videos from a disaster, as was the case with the Costa.

(Image via)

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