Formative Assessment # 3

Group 5

Ramento, Klariza Coleen S.

Ramos, Clarisse D.C.

Sanares, Carl Russel S.

Sanggalang, Justine Pearl S.

Santos, Ar-Z Aren R.

Santos, Clarisse D.C.

Submitted to:

Ms. Sunshine Sarmiento

February 16, 2023

1.

Title of the Article: Renowned Cruise Terminal Reimagined as Historical Spectacle

Link: https://www.spinitar.com/case-studies/case-study-long-beach-carnival-cruise-line-

terminal/

Author: Spinitar

Date: 2018

About: From the traditional and old facilities and system, they aimed to redesign and redeveloped

their cruise line to prevent problems and get the opportunity to expand by having a partnership

with Spinitar.

The Client

Carnival Cruise Line is one of ten leading cruise line brands operated by Carnival Corporation,

the world’s largest leisure travel company. The cruise line departs from both U.S. coasts, Canada,

Puerto Rico and Barbados, and has recently branched into international seas, embarking from

Australia to New Zealand, the Pacific Islands and Singapore.

Originated in 1972, Carnival Cruise Line embodies a “fun for all, all for fun!” spirit, offering

around-the-clock entertainment, musical performances, deck parties, casinos and a variety of

casual and elegant dining options across 26 American cruise ships. The Fortune 500 company

offers an all-inclusive, festive vacation experience-at-sea and shore.

The Project
 Prior to the project proposal, the Long Beach Carnival Cruise Terminal — the busiest cruise

terminal in North America — encompassed less than 40% of the geodesic dome it’s housed in.

The remainder of the dome was used for movie production. When the entire terminal became

available for expansion, Carnival Cruise Line saw an opportunity to enhance the cruise-goer

experience, while expanding into the space.

Carnival Cruise Line wanted their visitors to begin their vacation the moment they stepped into

the terminal. The company envisioned implementing wayfinding technology to navigate guests

through a land-to-sea storybook experience. To do this, the company decided to redesign and

redevelop the entire facility. The team had a strict timeline of less than 3 months to transform the

terminal into a party-like reception. Carnival Cruise Line collaborated with their primary design

consultants, Nautilus Entertainment Designs and gathered the best manufacturers and integrators

for the job.

Spinitar was selected as the project AV integrator due to their expertise in the field and solid

comprehension of what the project would entail. Carnival Cruise Line knew that the

implementation of a high quality, well functioning AV system was essential to the completion of

the project’s vision. Modern digital signage, audio, and display solutions would play a significant

role in the Carnival Cruise Line client-to-customer interaction.

The Solution

Spinitar coordinated directly with Carnival Cruise Line for implementation of all AV system

integrations. However, all contractors and partners were in constant communication due to the
immensity of the project and the overlap of scopes of work.The completion of one task was often

dependent on the work of another. All parties involved had to be on the same page and have a

comprehensive understanding of the overall vision for the project to be completed effectively and

efficiently.

To accommodate for the tight timeline, Spinitar set deadlines by working backwards from the

completion date. Risks were identified and addressed early on. This allowed the team to make

adjustments to the AV design and allot time toward troubleshooting any issues that arose

throughout the process.

AV systems were implemented throughout the terminal. Spinitar mounted LCD displays, video

content players, and digital signage, providing passengers with cruise line information and easy

navigation throughout the expanded terminal. The associated control systems for these wayfinding

technologies, along with a multi-zoned Bose® audio system and a multi-purposed live paging

system, were also integrated throughout the facility. AV systems were upgraded for security

scanning areas, check-in desks, waiting areas, restrooms, crew service areas, staff break/training

rooms, embark/debarkation platforms, and all executive offices.

The Results

The Carnival Cruise Line Terminal celebrated its grand reopening on February 10, 2018. The

newly renovated facility now features a live replica of the Spruce Goose and is lined with engaging

digital displays relaying historical fun facts about the plane. The Long Beach Cruise Terminal is
the first terminal to be redesigned with the intention of captivating customers with a storytelling

experience, and may be the beginning of a new Carnival staple.

Within the walls of the historic dome, Spinitar was able to implement an AV solution that

guides passengers from land to sea and back again in record time with the use of wayfinding

technology.

Due to the success of the project, Carnival Cruise Line and Spinitar are currently working

together on another AV project for the terminal. The company is in the process of further

enhancing the space with a large projection screen that will display historical clips of the Spruce

Goose.

2.

Title of the Article: Cruising in Crisis: How Carnival Is Riding Out the COVID-19 Storm

Link: https://hbswk.hbs.edu/item/cruising-in-crisis-how-carnival-is-riding-out-the-covid-19-

storm

Author: Michael Blanding

Date: June 16, 2021

About: The case study is connected with the global health crisis—the COVID 19 pandemic. The

company slashed expenses and capital finances, thus it gained multiple debts. The company

decided to cancel the trips of their ships and others were retired and sold.
 On February 1, 2020, a passenger who had been on Carnival’s Diamond Princess ship docked

in Japan tested positive for the COVID-19 virus. Soon afterward, 700 people on the ship contracted

the virus—the largest coronavirus outbreak outside of China at the time. Within weeks, 25 other

cruise ships reported infections.

By mid-March, Carnival, the largest cruise line in the world, suspended operations across the

globe. Yet it took weeks to get its 260,000 guests and 80,000 employees who were floating at sea

back to their homes in more than 130 countries.

The COVID-19 pandemic devastated service industries, including bars and restaurants,

retailers, and hotels, forcing many to close their doors for good. But while many service-oriented

companies were permitted to gradually reopen with precautions in place, the cruise industry had

to come to a screeching halt that lasted for more than a year—and it’s still unclear when many

ships will set sail again.

"THERE WAS A LOT AT STAKE, WITH $20 BILLION IN ANNUAL REVENUES AND

HUNDREDS OF THOUSANDS OF PASSENGERS TRANSPORTED EVERY YEAR.”

Compounding the challenge of losing customers has been the lack of government aid. Unlike

other companies that were able to stay afloat through pandemic-related government assistance,

most cruise ships are registered outside the US, including those run by Carnival’s American

subsidiary, so they weren’t eligible for loans.

 “There was a lot at stake, with $20 billion in annual revenues and hundreds of thousands of

passengers transported every year,” says Stuart Gilson, the Steven R. Fenster Professor of Business

Administration at Harvard Business School, who studied Carnival’s predicament. He points out

that in March 2020, Carnival's bonds were trading at around only 70 cents on the dollar, at which

point companies are often considered financially distressed.

“Indeed, early in the pandemic, with the financial markets in turmoil, Carnival reportedly

entered into discussions with a group of private equity and hedge fund investors—who typically

specialize in buying the debt of financially distressed companies—over a prospective $4 billion to

$6 billion debt investment in the company,” he says.

Carnival also faced a flurry of lawsuits from passengers alleging that the company didn’t do

enough to keep them safe.

Slashing expenses to weather rough seas

Remarkably, in spite of these hardships, Carnival has survived—and has even emerged

stronger—says Gilson, who chronicled the company’s travails in the new case study Carnival

Corporation: Cruising Through COVID-19, co-written with research associate Sarah Abbott. The

case highlights important lessons for any business that encounters an unexpected economic blow,

Gilson says.
 “There’s something that’s very distinctive about the economic shock we’ve just gone through,”

he says. “It’s remarkable how much cash public companies have been able to raise in the capital

markets in a very short period of time.”

“IT’S REALLY A CASE ABOUT CRISIS MANAGEMENT, ACCEPTING THE REALITY

OF THE SITUATION AND TAKING BIG ACTIONS RELATIVELY QUICKLY."

Carnival’s success has been due in part to investors’ faith in the company’s ability to right itself,

but corporate leaders also made some savvy business decisions to prepare for the long haul, Gilson

says.

“It’s really a case about crisis management,” Gilson says, “accepting the reality of the situation

and taking big actions relatively quickly.” Now, as the pandemic starts to wane and cruise

companies are hopeful that at least a limited number of ships can embark on trips this summer, the

company’s long-term success may depend on how much its customers feel safe going back into

the water.

When the company first shut down in March 2020, many cruise executives were hopeful that

governments would lift restrictions, and they would sail again by October 2020. Nevertheless, says

Gilson, CEO Arnold Donald prepared for an extended, indefinite lockdown. The company cut its

annual operating expenses by $1 billion, as well as its capital costs by hundreds of millions. While

some of those reductions came from laying off 820 people and furloughing an additional 537 for
up to six months, Carnival also restructured operations to make them more efficient, and sold off

older, less productive ships.

“Some of that weeding out of less-efficient capital may have happened eventually, but this

really accelerated that process,” Gilson says.

Shoring up cash until the pandemic ends

At the same time, Carnival moved aggressively to restructure its debt. “At a high level, the

reason companies become financially distressed is pretty straightforward—they don’t have enough

cash relative to what they owe their creditors,” says Gilson, whose research focuses on strategies

companies use to overcome financial challenges. “To get to a better place, you therefore either

have to find ways to generate more cash, or reduce or restructure your liabilities.”

In addition to aggressively cutting expenses, Carnival also negotiated with its existing creditors

to extend debt maturities, waive restrictive covenants, and exchange outstanding debt for new

common stock—all while raising over $10 billion in new debt and equity capital.

What accounts for investors’ willingness to fund a company that was in near-total lockdown,

and to do so on such a scale? According to Gilson, several factors could be responsible, including

the massive infusion of liquidity and confidence into capital markets that took place under the

Federal Reserve’s and US government’s various COVID-relief programs, a belief in the long-term

growth prospects of the cruise industry generally, and renewed confidence in Carnival’s own

prospects based on the financial discipline that management exhibited in responding to the
pandemic. And, unlike the uncertain prognosis following the 2008 global financial crisis, the

pandemic-related economic collapse appears to have an endgame, thanks to vaccines, which made

the prospect of a cruise industry rebound a question of “when” rather than “if.”

The future looks bright

Now with an estimated $8 billion in cash on hand, Carnival seems well poised to recover—

even if it takes some time before ships are sailing at regular rates again.

“That’s assuming, of course, some other challenge or crisis doesn’t arise,” Gilson warns. After

all, the cruise industry’s success depends on two factors: the inherent risks of international travel,

including political unrest and geographical calamities, and the loyalty of customers, 60 percent of

whom are repeat visitors. While no one can predict a global disaster, Carnival appears to be sailing

smoothly with its customer relationships, Gilson says.

“THE INDUSTRY CLEARLY BENEFITS FROM HAVING A LOYAL BASE OF

ENTHUSIASTIC REPEAT CUSTOMERS WHO LOVE THE CRUISING

EXPERIENCE."

When cruises were canceled last year, some 45 percent of customers opted for vouchers for a

future cruise in place of a refund, contributing to $2.4 billion in deposits. An independent survey

of cruise customers in May 2020 found that 67 percent were planning to rebook a cruise or travel

once restrictions lift—while only 2 percent said they’d never cruise again, the case says. Bookings
for later this year, the company recently reported, are “at the higher end of historic ranges.”

Company officials have said they need 50 percent occupancy on ships to break even.

All of that bodes well for Carnival and the survival of global cruising in general, which, in a

typical year, generates $45.6 billion and serves 30 million passengers. “The industry clearly

benefits from having a loyal base of enthusiastic repeat customers who love the cruising

experience,” Gilson says. “It’s a passion for them.”

3.

Title of the Article: A Sinking Ship: An Extensive Crisis Communications Case Study of Carnival

Cruise Lines

Link: https://web.archive.org/web/20200306055315id_/https://www.emerald.com/insight/conte

nt/doi/10.1108/MABR-09-2017-0025/full/pdf?title=the-impacts-of-deviations-from-standard-

daily-procedures-on-stock-performance-a-case-study-of-carnival-cruise-line

Author: Amanda Ryan Michelson

Date: May 2014

About: This Case study is all about the problem that Carnival Cruise faces and how it endures

different situations but fails to take appropriate actions for change.

This paper examines the problem that Carnival Cruise Lines (Carnival), a famous cruise ship

line for vacationing, continues to endure crisis situations yet fails to take the appropriate actions

for rectification.
 It is common knowledge within the public relations field that a crisis can make or break the

sustainability of a successful organization. It is for this reason that it is necessary for professionals

to analyze past events within a company’s history in order to improve its relationships with its

stakeholders to keep the business afloat.

This study focuses on three major incidents. The first one involves a fire in the Splendor’s

engine, which stranded the ship out at sea in November 2010. The second incident involves the

Costa Concordia that crashed off of the coast of Italy in January 2012. Lastly, the study discusses

an engine fire on the Triumph, which also resulted in a stranded ship out at sea.

The methodology used to explore Carnival includes heavy research into media publications

around the time of each crisis being studied as well as in-depth interviews with three key

professionals in the industry. The first expert is Colonel F. William Smullen, a crisis management

professor at Syracuse University and former Chief of Staff for Colin Powell. The second

professional is Donna Stein, who owns an investor relations firm. Lastly, the strategic

communications expert Michael Meath sheds light on Carnival’s crises from a management

perspective.

The combination of research and interviews that is used to expose the issues with Carnival’s

company brings a higher level of credibility to the study. Smullen, Stein, and Meath especially

provide valuable information because they possess experience in both practicing in the public

relations field and teaching the material as professors. Thus, they have the advantage of knowing
real-world experience from a first-hand perspective while also understanding how to best

communicate their knowledge to a novice audience.

The case study argues that the organization struggles to effectively communicate with

stakeholders both during and after each crisis. It examines the company’s methods for

communication, from in-person press conferences to social media usage. The evidence to support

this argument lies in the many negative articles published regarding each crisis.

Ultimately, one can conclude that the company is not as prepared as it should be to handle the

various crises that have happened over the years. Some of the key reasons for this include a lack

of strategic messaging, inconsistent decision- making processes, and an unclear management

structure. The study, however, also provides concrete ideas and recommendations to the company

to prevent these reoccurring issues from arising again.

4.

Title of the Article: Carnival Cruise Lines, Burnishing the Brand

Link: https://www.researchgate.net/profile/Robert-

Kwortnik/publication/238302682_Carnival_Cruise_Lines/links/569b9e7b08aeeea985a57038/Car

nival-Cruise-Lines.pdf?origin=publication_detail

Author: Robert J. Kwortnik jr.

Date: August 2006

About: This case investigates the difficulties of the aforementioned Brand management in

our hospitality industry and focuses on the brand management of the Carnival Cruise Line.

The case of Carnival Cruise Lines chronicles the company’s birth and development as it

redefined the leisure cruise industry. With a theme of “Fun Ships” and low pricing, Carnival

appealed to a diverse mar- ket. Under the pressure of increasing competition, Carnival was

challenged to refine its Fun Ships brand without damaging the considerable equity contained in

that brand. In particular, as cruise lines became less differentiated in the customers’ view, Carnival

sought to set itself apart with upgraded product fea- tures, service, and other guest amenities, as

well as a more sophisticated brand message.

This case study examines challenges associated with brand management in the hospitality

industry by focusing on the leisure cruise sector and the brand that dominates the seascape. Despite

Carnival Cruise Lines’ phenomenal growth and success, company executives have designed a

makeover for the brand to enhance brand equity—the worth of the brand due to cus- tomers’ brand

knowledge and the effect of this knowledge on brand marketing and customers’ assessment of

brand value.5 Modifying a successful brand, even if the changes are evolutionary, not revolution-

ary, carries the risk of brand confusion, as most any cue can communicate meaning about a brand.

5.

Title of the Article: Cruising through a pandemic: The impact of COVID-19 on intentions to

cruise.

Link: https://doi.org/10.1016/j.trip.2021.100328
Author: Jennifer Holand

Date: November 6, 2020

About: This study explores the impact of COVID-19 on willingness to cruise and attitudes towards

cruising for both cruisers and non-cruisers living in Australia and the United Kingdom.

The global coronavirus pandemic has devastated the cruise sector with widespread disruption

and cancellations affecting millions of cruise passengers. The cruise industry was negatively

affected due to the enclavic and confined environment onboard, the high infection rates among

both crew and passengers, and widespread negative media coverage. This study explores the

impact of COVID-19 on willingness to cruise and attitudes towards cruising for both cruisers and

non-cruisers living in Australia and the United Kingdom. Data analysis of respondents’ comments

was undertaken using both Leximancer text analytic software and manual content analysis.

Findings indicate country of residence has a significant influence on risk perceptions for a cruise

holiday and affects future intentions to cruise. Specific impacts for the cruise industry are discussed

and recommendations proposed for policy and practice.

6.

Title of the Article: The impacts of deviations from standard daily procedures on stock

performance - a case study of Carnival Cruise Line.

Link:

https://web.archive.org/web/20200306055315id_/https://www.emerald.com/insight/content/doi/1

0.1108/MABR-09p-2017-0025/full/pdf?title=the-impacts-of-deviations-from-standard-daily-

procedures-on-stock-performance-a-case-study-of-carnival-cruise-line
Author: Grace Wang, Qingcheng Zeng, Lawrence Cliff Ghoram

Date: March 14, 2018

About: The study compromise the economic activities and the market share of its subsidiaries. In

addition, the long-term and short-term shocks to the company performance in awakening deviating

events.

Purpose

In the USA, the cruise industry has generated more than $42bn in total economic activities,

involving over 356,000 jobs. The largest and most aggressive operator is acknowledged as

Carnival Cruise Line (CCL), with a 48.3 per cent market share including all subsidiary companies

in 2013. CCL has had a strong track record of reliability and high quality; however, within the past

decade, there have been several deviations from standard daily procedure that have altered the way

CCL does business. When trying to interpret changes in company performance, it is important to

include other factors that may have contributed to changes at the time of any given deviation.

Design/methodology/approach

The authors use time series empirical mode decomposition to visualize whether there are short-

or long-term shocks to company performance in the wake of deviating events. Besides, a thorough

analysis is carried out with multivariable linear regression to identify the factors that really impact

CCL’s performance.

Findings
 This case study shows the seasonal patterns of weather issues with the largest number of

hurricanes and tropical storms taking place during the third quarter of each year.

Originality/value

Empirical results will enhance understanding of the industry with regard to such events. It will

provide shareholders information and opinions to enhance their decision-making processes.

 References

Blanding, M. (2021, June 16). Cruising in Crisis: How Carnival Is Riding Out the COVID-19

Storm. Harvard Business School. https://hbswk.hbs.edu/item/cruising-in-crisis-how-carnival-is-

riding-out-the-covid-19-storm

Holland, J. S., Mazzarol, T., Soutar, G. N., Tapsall, S., & Elliott, W. A. (2021). Cruising through

a pandemic: The impact of COVID-19 on intentions to cruise. Transportation Research

Interdisciplinary Perspectives, 9, 100328. https://doi.org/10.1016/j.trip.2021.100328

Michelson, M. (2014 May )."A Sinking Ship: An Extensive Crisis Communications Case Study

of Carnival Cruise Lines" Syracuse University Honors Program Capstone Projects. 794.

Spinitar. (2018). Renowned Cruise Terminal Reimagined as Historical Spectacle.

https://www.spinitar.com/case-studies/case-study-long-beach-carnival-cruise-line-terminal/

Kwortnik, R. (2023, February 16). Carnival Cruise Lines.

https://www.researchgate.net/profile/Robert-

Kwortnik/publication/238302682_Carnival_Cruise_Lines/links/569b9e7b08aeeea985a57038/Car

nival-Cruise-Lines.pdf

Wang, G., Zeng, Q., & Ghoram, L. (2018, March 14). The Impacts of Deviations from standard

daily procedures on Stock performance-a Case Study of Carnival Cruise Line.

https://web.archive.org/web/20200306055315id_/https://www.emerald.com/insight/content/doi/1

0.1108/MABR-09-2017-0025/full/pdf?title=the-impacts-of-deviations-from-standard-daily-

procedures-on-stock-performance-a-case-study-of-carnival-cruise-line