If you were the CEO of Carnival Cruise Lines, which owns Princess Cruises, what would you do? MGMT 12 e , Ch 5 What Would You Do? Carnival Corporation \&x Me Headquarters, Miama, Flonida, USA. The first siga came Fehruary lst, the last wight of a two-werk: Asian cnube, ending in Yolkohama, Japan. A public address announeement from the eaptain of the Diamond Princess cnuise ship informed the 3,711 passengers and crew that a paosenger who left the crube nine dass earlier was sick with the coeonanirus infecting tens of thousands of people in China. While somse pacsengers volantanly isolated themselves in their cabins, Japanese authouties waited 72 hours before officially quarantining passengers in their mooms. The first day of the quarantine, 10 passengers tested pasitwe for the coronainus. Four days later, it was 16. Thirteen days later, 4.54 passengers had contmacted the vinus. When the quarantine was lifted 15 days later, 621 people had bees infected. Eight passengers subecquently died. The enuise industry is experienced at dealing with coenmunicahke diseses like the noruinus that caused 371 people for esample, to fall ill with voeniting, diarrhea, and low-grade fever ou the Caribinan Priness. But the deadly coronasnas was something new and unknown foe the enaise industry and the rest of the workd. China reported the coronavirus to the Woeld Health Organization (WHO) on December 31 st and began quarantining parts of the eity of Wuhan that first week of January. By the time the Diamond Princess was quanantined in Yolkohama, Japan, 24,000 Chinese were infected. A mouth later, $0 , 000 + Chinese were infected and nearly 3,000 had died. Preliminary estimates put the global cononainas death nate between 1.4 percent and 2 percent, hut later estimates put the death rate at 0.65 , which is sis times hagher than the 0.1 percent death rate for most seasonal flus, hut less than the 2 percent death nate of the 1918 fhu that kalled 50 million people around the wodld. The cononasinas is also much more infectious, wath cach person with the cononainas sprearling it to 2.2 people versias somene with seasonal flu who infects 1.3 perple. Trwel restrictions soon followed, with airlines eaneeling flights to and from Chana, South Korea, Italy, and lran. Gonernments around the workd restricted travel froen hewily infected locatsons, and monitored and triched international tranelers wath potential exposure or elevated temperabures. Glohal coeponations restricted intenational travel, with some, like Amawn, canceling all travel until the end of April, hyy which time bopefully we have a better sense of the virus, its spread and impact." Google and Facehook canceled annual conferences that dinw thousunds of teeh industry personel from across the world. With most of Chinas majoe cities in quanantine and most of its factories dosed, companies wamed investors of the negative impuct on their husinesses. Steve Proberb, president and chief eaecutive of the Toy Association Ine.

1. If you were the CEO of Carnival Cruise Lines, which owns Princess Cruises, what would you
do?
MGMT 12 e , Ch 5 What Would You Do? Carnival Corporation &x Me Headquarters, Miama,
Flonida, USA. The first siga came Fehruary lst, the last wight of a two-werk: Asian cnube,
ending in Yolkohama, Japan. A public address announeement from the eaptain of the Diamond
Princess cnuise ship informed the 3,711 passengers and crew that a paosenger who left the crube
nine dass earlier was sick with the coeonanirus infecting tens of thousands of people in China.
While somse pacsengers volantanly isolated themselves in their cabins, Japanese authouties
waited 72 hours before officially quarantining passengers in their mooms. The first day of the
quarantine, 10 passengers tested pasitwe for the coronainus. Four days later, it was 16. Thirteen
days later, 4.54 passengers had contmacted the vinus. When the quarantine was lifted 15 days
later, 621 people had bees infected. Eight passengers subecquently died. The enuise industry is
experienced at dealing with coenmunicahke diseses like the noruinus that caused 371 people for
esample, to fall ill with voeniting, diarrhea, and low-grade fever ou the Caribinan Priness. But
the deadly coronasnas was something new and unknown foe the enaise industry and the rest of
the workd. China reported the coronavirus to the Woeld Health Organization (WHO) on
December 31 st and began quarantining parts of the eity of Wuhan that first week of January. By
the time the Diamond Princess was quanantined in Yolkohama, Japan, 24,000 Chinese were
infected. A mouth later, $0 , 000 + Chinese were infected and nearly 3,000 had died. Preliminary
estimates put the global cononainas death nate between 1.4 percent and 2 percent, hut later
estimates put the death rate at 0.65 , which is sis times hagher than the 0.1 percent death rate for
most seasonal flus, hut less than the 2 percent death nate of the 1918 fhu that kalled 50 million
people around the wodld. The cononasinas is also much more infectious, wath cach person with
the cononainas sprearling it to 2.2 people versias somene with seasonal flu who infects 1.3
perple. Trwel restrictions soon followed, with airlines eaneeling flights to and from Chana, South
Korea, Italy, and lran. Gonernments around the workd restricted travel froen hewily infected
locatsons, and monitored and triched international tranelers wath potential exposure or elevated
temperabures. Glohal coeponations restricted intenational travel, with some, like Amawn,
canceling all travel until the end of April, hyy which time bopefully we have a better sense of the
virus, its spread and impact." Google and Facehook canceled annual conferences that dinw
thousunds of teeh industry personel from across the world. With most of Chinas majoe cities in
quanantine and most of its factories dosed, companies wamed investors of the negative impuct
on their husinesses. Steve Proberb, president and chief eaecutive of the Toy Association Ine., a
trade group representing the toy indastry that relies on China for $s percent of its manufacturing,
suid, "This is going to put some companies out of buadness if it goes on too long." Demand for
Aslan trwel dropped 75 pereent, with a potential decline of $100 billion in lost airine revenue
Costa Cinaises cancelled four Asian crukes, while Royal Carbbean canceled 18. It is too late to
fix what happened on the Diamond Prinees, but we need to leam froen cur mistakes and plan for
the nest coronavinus outbeeak. While we have estahlished policies, peocedures, rules, and
regulations to follow when dealing with sorovinus infestations. Diamond Priness pussengers
complained that passengers with fesers were not tested for dass, that food continued to be served
at buftets sevenal days after the captain's announeement, and that brawe, derlicated crew
members charged with delivering food, towels and hedsheets to quanantined passengers" still
shared rooms with infected crew members. One crew member sasd, -What s the point of
isolation? We are stuck in a bor which is already contaminated." We need to ereate new standing

2. plans, new procedures, nules and regulations that can minimate the rkak of coeonainus spreading
nest time theres an outhreak. What changes shoukd be made? How can we better protect our
pacsengers and crew froen the coronuvinas? Think of all the different ways that pasengers and
crew members interact on a ship, the regalarly schedaled actwities for paosengers (shows, cnafts,
games, swimming, eating) and how thooe thangs coukd he modified or changed if coronavines is
detected. Now, what shoukd we do with the Diamond Princess cruise ship? She cost $00 million
in 2004 and would likely cost $1 ballion or more today to replace. But who would want to boak
passage on the Diamond Princess after 621 of its passengers were infected with the corcnavirus?
Should the Diamond Princesa be disinfected and pat back to sea Like we do with ships infected
with the norovinas? If so, we need a plan to make that happen. What would that look Like? Or ,
should we rename it and completely renowate lits design and interior at a potential coot of $125
million to $200 million? What decision criteria should gude us as we choooe between these
options? Finally, what steps do we need to take in the short-term that will help us survie
financially over the next year? Do we follow the lead of our competators and cancel our Asian
eruises? If so, bow loog? What do we do with those ships and their crews? And heyond impreved
samitation and medical peocedures, what steps can we take to assuage the long-term coscens that
people have about taking cnaises? Poss Klein, a professor who studies the enaise industry, said, -
Cruise compankes have never seen this before and just don't know what to do. For the enuise
lines and the industry, a lot of these decisions are based on eenomics. They are asking
themselves, 'How do we get by spending the least amoumt of money and losing the least amoumt
of money? If you were the CEO of Camival Cruise Lines, which owns Princess Cruises, what
would you do?