S1: If you close your eyes and picture the absurd delights of a cruise ship, you’ll probably picture a boat that looks a lot like the Costa Jelly’s Yoza. It’s got a humanoid robot that greets guests when they get onboard. On Italian night, the waiters in one of the ship’s restaurants do this coordinated dance routine while bringing you food. But this week, the passengers on the Delhi’s Yoza said the boat felt less like a luxury cruise and more like Noah’s Ark. That’s because this ship was the final Carnival cruise to disembark its passengers. They’d gotten aboard months ago. Pre-pandemic. By the time they got off, cruise ships like theirs had become notorious viral hotspots. No one on the Delezio so was infected. The company just had trouble finding a place to let passengers off. Some reportedly wanted to stay. Wait. The coronavirus out together on the high seas. I didn’t realize cruise ships were still in the water.
S2: Yes, that’s correct.
S3: Austin Car’s been reporting on Carnival for Bloomberg BusinessWeek.
S2: We were sort of surprised ourselves that so many ships were in the water and they were trying to get back to port. The CDC issued a no sale advisory on March 8th so that, you know, godwit about a month and a half or more ago, and when I when I asked Carnival, I said, you know, guys, I don’t understand why. Why didn’t you? After that advisory, not just get all your ships home immediately and their chief communications officer simply just told me, he said, look, the advisor is not an edict. In other words, they were under no legal obligation to follow that advisory.
S1: Eventually, the impact of the Corona virus was brutal enough that companies like Carnival decided to shut themselves down.
S4: This morning, cruise lines in crisis, one of the hardest hit.
S1: More than 800 passengers and crew tested positive for this virus.
S2: And there’s still a lot that experts don’t understand about this virus.
S4: But we’re seeing the industry’s value sinking dramatically on Wall Street. Cruise lines this morning sailing into uncharted waters.
S1: Austin Carr has been trying to figure out why it took so many weeks for a cruise company like Carnival, the largest in the world to act.
S2: They argue that they were they were simply a microcosm of what the rest of the world was dealing with. In other words, just think about if you’re in New York or perhaps in Italy or one of these other or in China or one of the other high profile areas that have been impacted by this disease or this virus. There was sort of this slow motion realization of, you know, whether or not this issue would actually impact you directly. And Carnival is simply saying we were dealing with that same issue. And it’s just even more complicated because we were at sea while dealing with the issues. That’s their argument.
S5: We just have to leave it up to readers, whether that that sort of passes the smell test today on the show. The crisis, a Carnival cruise from the inside as passengers and crew members got sick. What did the bosses know and when did they know it? I’m Mary Harris. You’re listening to what next. Stick with us.
S3: So you focused a lot of your reporting on two Carnival cruises in particular and what happened with them. The Diamond Princess and the Grand Princess. The Diamond Princess experienced an outbreak of Kogut, 19, while touring Asia in February, and a month later, the Grand Princess experienced its own outbreak. Off the coast of California, between the Diamond Princess and the Grand Princess. As you said, eight hundred and fifty people tested positive for this coronavirus. Both ships you describe this kind of incubation pure hid this moment, which could be a few hours or a few days where people on the ship, including the people in charge, seemed to realize something was going wrong. But it took a while for the systems to kind of click into place. Can you tell that story a little bit?
S2: Of course. So let’s rewind the clock to early February. It’s February 1st, 2020. You’re aboard the Diamond Princess for all your listeners. Put yourself in these passenger shoes. You’re on this cruise. You’re sailing around in Asia, you’re stopping in Hong Kong and Taiwan. You’re sort of aware of the news, but you mostly think of it as a China based issue. It hasn’t become a global event yet as it is today. And you’re on this this massive cruise ship. And it has, you know, many decks. It has freshwater pools. It has Sondos, it has restaurants and bars. And you can play bingo. I mean, this is a floating vacation. And on February 1st in the evening, at some point, a carnival vendor emails an alert saying that a former passengers who had disembarked in Hong Kong had been treated for Cauvin, 19, in Hong Kong. Around the same time, Hong Kong health authorities issue a press release about the Cauvin 19 case, saying that there’s this case happening in Hong Kong and they’re looking into it. And here is the passenger who is on a cruise ship that had disembarked in Hong Kong.
S3: How does the ship respond?
S2: So that’s the big mystery right now, is Carnival says that they initially did not see that alert that they received from their vendor and also that they completely missed for whatever reason. Inexplicably, they just were not aware of the press release from the Hong Kong health officials. That was released February 1st. They said that around that time that it was released, a Carnival employee just completely randomly had heard about the issue from a news site and sort of scrambled all night. And then the next day to reach out to Carnival executives and get them aware of the situation. And they, in turn, started reaching out to Hong Kong health officials to try to get to the bottom of this and confirm that it was indeed a positive test case. So, again, you have this initial alert coming to Carnival directly, proactively on February 1st, which they miss. And it’s not until, according to Carnival, February 2nd at 7:00 p.m. or about, I think it was six forty four or so that they they say that they confirmed that this was a positive case of a former passenger. And then the question is, what do you do if you’re Carnival? You have the ship filled with thousands of passengers floating around Asia. And you have to decide when do we tell them for Carnival, it turns out that was 24 hours later on February 3rd, they come over the loudspeaker and the captain announces that, look, we’ve heard that there is a positive covered 19 case from a former passengers positive as he goes. Six days after, we’re gonna head back to Japan as fast as possible, and Doc, we’re going to engage in health screenings and get test kits aboard because there’s a chance that this disease might have spread around the ship.
S3: I just want to underline what you’re saying, because it’s so shocking to me, which is the official narrative from Carnival is whoops. Like we we missed the initial warning and we found out about it because an employee was looking at a news site.
S2: And then a couple days later, we tell the people on the ship from the time that that that initial alert was sent to Carnival about this Cauvin 19 case from the time that even that they discovered and found out it was positive from Carnival’s perspective on February 2nd. Passengers say that they were continuing to eat and drink at bars and buffets. They were hanging out in song as they were attending shows. They at one passenger, recalled attending an operatic performance called Bravo in sort of a large lounge on the ship with, you know, crowds of people, which, again, in terms of social distancing is quite risky. Essentially, living with ignorance is bliss. This was this was a vacation fun land aboard a ship and they were enjoying their vacation. This is a very communal experience. So the major consequence of not having addressing this issue earlier, even if it ended up they were overreacting, was further spreading this pandemic around the ship.
S3: It’s funny, the stories you’ve got from the passengers. They remind me of what it was like in New York City in mid-March where you were trying to decide, should I go into work? Should I get on the subway? But it just seemed like the stakes were so much higher and the things people were going to do were like go to a ukulele concerts or like get extra ice cream at the buffet. And so it just seems. Extra strange.
S2: So even so, one pastor I talked to, she described getting a temperature check from a Japanese health official in her cabin. And then she was completely free to go about the ship. She she walked up to one of the decks and in fact, came across a group, about 30 people drinking and playing mahjong together, which was for her really quite alarming. She just immediately thought, man, that’s a really easy way to pass an infection around. Now, once they actually got the tests back on February 5th and they realized that there were positive test cases, that’s when they initiated a strict quarantine. And everyone goes back to their cabins. They have to shelter in place. And that that is a very for a lot of these passengers, a horrendous experience where they’re stuck in these enclosed environments for weeks. And then they have to deal with getting off the ship and then getting back to the U.S. for the American passengers. And that that’s sort of the story of the the diamond princess, which at one point in February was the largest source of infections of Cova 19, anywhere outside of mainland China, which is really quite stunning. And then a month goes by and suddenly the same issue pops up for Carnival aboard the Grand Princess.
S3: Yeah. I mean, it’s funny to me that passengers were getting on a cruise ship in the first place at the end of February.
S2: Right. And that was one of the things I was curious about, because it’s so easy to do in retrospect is sort of to judge these passengers and say, why? Why did you get aboard the ship? If it was so risky at the same time, you know, I think of myself and at that point of still going to supermarkets or like the slow motion realization of how severe this crisis is. The other thing about these passengers is they spent a ton of money on these cruises. You know, oftentimes passengers defer to the company. And they assumed, well, if Carnival is still running the ship, they already had the diamond princess. One must assume that they can still do it safely if they’re still sailing. And I think that’s a lot of the assumptions that we’re going and into the grand princess that that led these passengers to still take these cruises, even though it was quite risky at that time.
S3: You know, there’s this funny disconnect in your reporting where the people you spoke with at Carnival insisted that their ships were really safe and and no different than any other kind of public setting, like maybe getting on a subway car. But then you spoke to people at the CDC who were like, no, no, this is a different situation.
S2: Yes. That that was one of the arguments or claims that. And I would say it is, you know, I want to be as fair and respectful as possible. But I would say that was one of the highly questionable claims that I heard from Carnival executives, including their CEO, Arnold Donald. I asked him about this. There was a CDC report even about this that said that there is a higher risk of infection aboard these ships. And when I asked Arnold Donelle about that, he essentially said the CDC conclusions are wrong. He said, quote, This has nothing to do with cruise ships. He said covered 19 spreads the same as it does in an airport terminal, a subway station, a restaurant, a theater, a stadium. And when I went back to the CDC about that, the head of the cruise ship task force, she just said that that was really misleading. You know, not only of these cruise ships, very much enclosed environments. In other words, you know, I can leave a subway, I can leave a supermarket, but I’m stuck on a ship. And these populations are also much older. They have elderly populations, sometimes with underlying conditions. There also have crew members who are, in addition to being lower paid, also sleep in communal quarters. They have bunk beds. They they share bathrooms, they often eat together and mess halls. So she was just saying that, look, this is our unique situations. This is a unique enclosed environment that is more risky, despite what Carnival executives are telling the public right now.
S3: Yeah. I mean, one of the things I learned from your reporting is that the CDC has a cruise ship task force, which just in its existence sort of it implies that these are a unique situation, potentially more dangerous.
S2: That’s correct. Look, I just have to stress how complicated it is. You have to realize how many different authorities and agencies are involved when it comes to disembarking passengers from a cruise ship. You not only have the CDC, but you have Border Patrol because it’s a customs issue. You have people coming in from international destinations. You have you have to make sure people’s passports are correct. You have local authorities who have to take these passengers safely off the boat and make sure they disembark safely, but also get them back home or even quarantine. They’ve had to use the military to drop off supplies on these ships, whether that’s test kits or personnel. And they’ve also had to rely on Air Force bases, I believe, to sort of quarantine these passengers after they left this ship. In other words, they did a quarantine on the ship, but then they had to go through just to double check another quarantine. Once they get off the ship.
S3: You also spoke to Arnold Donald, the CEO of Carnival. And I want to just spend a little bit of time talking about him like a lot of us. It sounds like he’s. Working from home, obviously, he’s managing a massive crisis for his company. How did he respond to what the CDC is saying, which is we need to shut this industry down?
S2: So first, yes, he he definitely is trying to deal with so many different pressures, whether that’s the pressures of passengers aboard these ships and trying to get them off safely. He’s dealing with the pressures of shareholders who, you know, you’ve seen that Carnival stock drop about 75 percent this year alone and the revenue essentially dry up after they’ve had to stop sailings. And then he’s also had to deal, you’re right, with the pressures of the CDC. However, I would just say that they were very both positive and upbeat to a surprising degree, but also very defensive. They very much repeated the same perspective that cruise ships are not unique when it comes to the spread of disease. And Arnold Donald talked specifically about how this Corona virus outbreak, Cauvin, 19, is a generational global event and it’s unprecedented. And he just kept saying really that you should not judge Carnival for the way they acted, you know, at least not differently than you might judge a municipality or a city like New York or Italy or China, that this was a very complicated situation and that people with 20/20 hindsight should not Monday morning quarterback.
S3: I was surprised, too, when you asked the CEO about health inspections on his ships because he seemed surprised by what they’d found. And he’s the guy leading the company.
S2: So we we had done a lot of data polling from the CDC and they actually have really amazing databases. So we pulled the data going back from 2016. We pulled it back for 10 years even. And, you know, just to be clear, since 2016, according to the CDC, Carnival Brands failed ship inspections, these sort of sanitation inspections about 3 percent of the time, whereas its closest rival, Royal Caribbean, failed them 1 percent. And so that’s a 3 3x worse percentage inspection rate than than Royal Caribbean that Carnival has. We know.
S3: And that seems pretty significant.
S2: It does. And that’s one of the reasons we wanted to ask him about that, whether or not this that not only between that data, but also the number of ships that have been impacted on Carnival brands, whether there was something more systemic at issue here. When I asked him this question, he was clearly he seemed caught off guard by it. I remember him saying that, you know, he reacted saying, why should we fail ship inspections? I remember him saying that in that tone. And he he was sort of gathering his thoughts. And he eventually settled on saying something like, you know, we do not have a record of, you know, in any shape or form of being unhealthy or guests on our ships being more ill than in other travel venues, period, which is obviously not not the case, to be honest. We did pull the data going back 10 years. And it also showed that Carnival consistently performed lower than Royal Caribbean Disney, which has sort of, you know, some would say the gold standard when it comes to cleanliness and Viking cruises. They did perform better than Norwegian Cruise, which is a much smaller cruise line operator than than Royal Caribbean and Carnival. But with that said, yeah, there’s no doubt that there are statistics from the CDC that show that they are not performing as well as some of these other operators out there.
S3: And you can’t say that the cruise industry wasn’t warned that cleanliness was an issue. I mean, four years before the Corona virus, they were having this these norovirus outbreaks on cruise lines, which is a gastrointestinal illness, which sounds terrible.
S2: Correct. You know, I remember Jan Jan Swarts, who’s the head of Princess, the Carnival brand, that that had had these many infected ships. I think she meant this in a positive light. But she said during her 20 years at Carnival, she’s been through, quote, many tours of crisis management, many tours of duty and crisis management, I think she said. And so, you know, on one end, that’s that’s good that she has that experience. On the other hand, it should also give you pause. Doesn’t that also mean she’s had to deal with many crises during her time at Carnival? And shouldn’t that have given her more perspective on how to deal with these issues, particularly when it comes to a pandemic?
S3: So interesting, the sort of reaction of, listen, we got this at this particular moment when cruise ships were really the early face of this outbreak.
S2: Yes. And that’s the sort of inherent contradiction that that I did keep hearing in these conversations, which I just had trouble reconciling, which was we are more prepared than perhaps any company to deal with these types of issues. At the same time, whenever I brought up sort of, you know, complications or challenges that they ran into during this this these these past couple of months, they would say, oh, we were actually just deferring to health officials and that, you know, and there’s no doubt that you know this. C or Japanese health officials when they were dealing with the diamond princess. They did not perform perfectly. That is one of the issues that readers are going to have to sort of determine whether or not Carnival is sort of speaking truthfully about whether or not they are the most prepared for this or were they just deferring appropriately to government officials on how to deal with these issues. And therefore, anything that’s at fault is mostly the government rather than Carnival. I think we should leave that up to readers to decide.
S1: Well, Carnival points the finger at public health officials. Its leadership is also eyeing allies in the Trump administration for help. Carnival’s chairman has got a relationship with President Trump that goes all the way back to the Celebrity Apprentice TV show. Carnival is a sponsor. They even had an Apprentice themed cruise at one point. But apparently Washington doesn’t have much of an appetite for bailing out the cruise industry right now.
S2: We did talk to Senator Richard Blumenthal about this issue. And he he was very vehement that this was a bipartisan issue, that there was a strong bipartisan opposition to a cruise industry bailout. And he just said that these cruise industries, companies for too long have flown under international flags. A lot of them are incorporated, whether in the Bahamas or in Panama, and they have abated or skirted taxes. And Senator Blumenthal had argued that, you know, these cruise industry players need to prove that they’re going to follow American norms and laws before they are the beneficiaries of some taxpayer bailout.
S3: But I was struck by how resilient cruising seems in your reporting. Like Arnold, Donald had taken over the company after a ship had sunk. People died and the captain abandoned the ship and he’d turned it around. And you talk to passengers who said, I love cruising and I still love cruising.
S2: Yes, I cruise. The cruise industry is arguably one of the most resilient industries out there just considering its history. I mean, if you go back you mentioned some of those historical facts about Carnival specifically. And let me just quickly go through those, you know, to 2012. Not that long ago, the Costa Concordia in calm seas crashed off the coast of Tuscany and sank, killing 32 people, including a child while being the captain abandoned ship. In 2013, there was a fire aboard the Carnival Triumph, another massive ship, and that left hundreds of guests stranded in the Gulf of Mexico without, you know, air conditioning or even working toilets. There were that severe plumbing issues. And then in 2017, you know, the Department of Justice finds Carnival $40 million, which was a record at the time for dumping oil, contaminated waste at sea and then falsifying records to cover up those issues. And as recently as 2019, there again in court for violating probation around that issue and continuing to dump oil contaminated waste at sea. And despite all these issues and even the ones that have happened in more recent months, the cruise industry had been doing great. Prior to this, you know, Arnold, since he became the CEO in 2000, 13, had seen their market cap roughly double. They made twenty point eight billion dollars in revenue last year, which in Panama. That’s where they pay their taxes. And the cruise industry has been doing well in all passengers I talked to. Nearly all said that they would cruise again, that they love Carnival specifically. Some of them said they just absolutely love Princess Cruises, even ones who had been on the ship and indeed been infected. I talked to one passenger, Jerry Goldman, who had from his time on one of the princess brand cruises, caught an infection of Cauvin, 19, and recovered. They still said that they would cruise on Princess again. They just love it. One of the things I should note that one of the passengers told me when I asked, they said, could you just help me understand? I just I just don’t quite understand how these passengers just uniformly really loved the cruise industry and want to continue cruising. And she just said, well, look, the travel industry and Carnival specifically is really good about giving you benefits, giving you little.
S3: She called them goodies because the more you cruise, the more benefits you get.
S2: Indeed. And I would say a lot of passengers did give Carnival credit for not only refunding all their their tickets costs as well as onboard purchases. They gave them free Internet as well as free alcohol and food on these impacted ships. They really wanted to stress that they have they want to give Carnival credit for that. And they also give them credit for offering free vouchers for future trips, which many said that they are looking forward to taking Carnival up on.
S6: Austin Carr. Thank you so much for joining me. Thank you for having me.
S5: Austin Carr is a reporter for Bloomberg BusinessWeek. He reported this story with Chris Palmieri and a team of reporters at Bloomberg. And the tape you heard from the Diamond Princess cruise ship that was recorded by Spencer Fehrenbacher. And that’s the show. What next is produced by Mary Wilson. Jason De Leon, Daniel Hewitt and Mara Silvers. One quick thing before I go. In our Tuesday show about the U.S. Senate races, I gave some listeners the impression that the Maine primary was already settled. And Senator Susan Collins, general election challenger, was going to be Sarah Gideon. Gideon is polling best among Democratic challengers, but Maine’s Democratic primary has not been held yet. And they’ve got ranked choice voting up there. So anything could happen. The Montana primary has not been held yet either. So get out there, learn about your local races and vote tomorrow. Lizzie O’Leary is going to be in your feed with an episode of What Next TBD. She’ll be talking to Tim Leahy about making covered 19 vaccine. All right. I’m Mary Harris. I’ll catch you back here on Monday.