Carnival Knew It Had a Virus Problem, But Kept the Party Going

floating testament to the viciousness of this new coronavirus. But they've also raised questions about corporate negligence and fleet safety and really it extends well beyond the cruise business. I think that's safe to say. Yeah, absolutely, Jason, I've been on a ship. I've done some stories about Carnival, talked with their CEO, Arnold Donald. You know, you go to one of these ships, they are massive, and you're talking about thousands of people that go on the ship for fun.

You know, it's a tourist attraction. There's also hundreds of people who were supporting them in terms of employees, So you have a lot of people in a relatively tie in small space, and that's why when something like a virus hits even just one or two people, it really goes through the ship pretty quickly. Well, and this story does such a nice job of detailing what happened, a very critical timeline that they dig into, but also where we are now, because by the way, there's still ships

at sea, and more importantly, maybe what happens next. Check it out, just try and social distance this. Carnival's crews executives knew earlier than most that they had a COVID nineteen problem. They kept the party going as long as possible, by Austin Carr and Chris Paulmary. The news when it reached the Grand Princess early on March fourth, barely registered

at first. In a letter slipped under passenger cabin doors, Grant Tarling, Carnival's chief medical officer, announced that the US Centers for Disease Control had begun investigating a small cluster of COVID nineteen cases in California that might have been linked to the ship. Up thirteen days after leaving San Francisco for Hawaii, the vessel would be skipping a scheduled stop in Mexico on its return voyage. And sailing back early to its Bay Area port. That day, passengers noticed

new hand sanitizer stations and crew members wearing gloves. But life on the Grand Princess, which advertises and one cabins, twenty restaurants and lounges, about a dozen shops, and four freshwater swimming pools, otherwise went on as normal. Guests prepared for a ukulele concert, played bridge at shared tables, and took line dancing classes. That night, Laurie Miller and her husband John attended True or Move, a show featuring an

MC in a cow costume. The following morning, John joined about two hundred other passengers in the ship's Broadway style theater for a lecture on Clint Eastwood movies. I'm surprised they're even letting this event happened, he whispered to a nearby friend. This is a big crowd. Around lunchtime on March fifth, the ship's captain, John Smith announced a quarantine over the ship's public address system. All two passengers needed

to go to their cabins to shelter in place. Lorie Miller was in the Da Vinci dining room eating chocolate peanut butter ice cream. Oh my god, she remembers, thinking this is real. Then she ordered more ice cream. Other passengers ambled to the ship's stores and dining areas too, to take advantage of the perks while they could. Everybody went to the buffet. Recall sixty one year old Debbie Loftus, who was traveling with her parents. I just thought, Oh crap,

the ukulele concert is going to be canceled. Crowds of elderly guests filed to their cabins through narrow hallways and down the stairs of the ship's seventeen decks. Sixty nine year old Karen Deaver tried an elevator, only to find it packed with fellow passengers. So much for social distancing,

she joked aloud. As the lockdown progressed, the ship became a fixture on cable news and social media around the world, live streamed by frustrated, scared passengers as if it were the Titanic of the TikTok Age of the first forty six crew and passengers who were tested to the virum of the first forty six crew and passengers who were tested for the virus twenty one were positive. President Trump

suggested they should be prevented from disembarking. At the time, the number of confirmed cases in the US was still low, and Trump implied that the vessel's caseload would make it look like the US was doing a poor job of handling the pandemic. I don't need to have the numbers double because of one ship, he said. But this wasn't Carnival's first outbreak nor its last. In February, another of its ocean liners, the Diamond Princess, accounted for more confirmed

COVID nineteen infections than any nation except for China. Since then, no cruise operator has been hit harder than Carnival. At least seven more of the company's ships at sea have become virus hotspots, resulting in more than fifteen hundred positive infections and at least thirty nine fatalities. Carnival notes that other cruise companies have been impacted. Carnival's ships have become a floating testament to the viciousness of the new coronavirus

and raised questions about corporate negligence and fleet safety. President and chief executive Officer Arnold Donald says his company's response was reasonable under the circumstances. This is a generational global event. It's unprecedented, he says. Nothing's perfect. Okay, they will say, wow, these things Carnival did great, these things twenty hindsight, they

could have done better. Donald says that if his company failed to prepare for the pandemic, it failed in the same way that many national and local governments failed and should be judged accordingly. Each ship is a many city, he says, and Carnival's response shouldn't be condemned before analyzing what New York did to deal with the crisis, what the Vice President's task force did, what the Italians, Chinese, South Koreans and Japanese did. We're a small part of

the real story. We're being pulled along by it. In the view of the c d C, however, Carnival helped fuel the crisis. Maybe that excuse flies after the Diamond Princess, or maybe after the Grand Princess, says Cindy Friedman, the experienced epidemiologist who leads the c d c's Cruise Ship task Force. I have a hard time believing they're just a victim of happenstance. While it would have been tough to get every one aboard the ships back to their

home ports without infecting more people. Friedman says several of the plagued Carnival ships didn't even begin their voyages until well after the company knew it was risky to do so. She says its actions created a huge strain on the country. Nobody should be going on cruise ships during this pandemic, full stop, she says. Donald and his team say they are making every effort to protect and treat their remaining passengers. The company has attempted to dock its fleet until the

pandemic subsides. All but about thirty two hundred passengers and crew are back on shore. Carnival's future is less clear. Australian police have launched a criminal probe into whether the company's Princess Cruise as subsidiary misled authorities about an outbreak aboard a ship docked in Sydney, and its Coast To Cruises subsidiary is facing multiple passenger lawsuits regarding its COVID nineteen response. Princess says it's cooperating with the investigation, while

Costa says we are prepared to vigorously defend ourselves. Carnival canceled all its cruises in mid March, and its share prices down seventy so far this year. It's executives speak about their next moves in militaristic terms. They're setting up situation rooms, cutting through the fog of war, countering the virus on the front lines, says John Paget, Carnival's chief Experience and Innovation officer. The cruise space is as bad as it gets. It's armageddon. One side effect of an

armageddon is to render the recent past faintly ridiculous. Last September in Brooklyn, Paget boarded another DOC ship to show off his company's new Medallion class badges. The electronic fobs were meant to double as abbin keys and credit cards, while also tracking passengers locations as they moved around the ship. The offering was part of a big digital overhaul to be introduced on at least six ships in twenty We're trying to eliminate guest friction, Paget said. Carnival's business had

experienced a remarkable turnaround after Donald became CEO. In Over the next five years, the company's market value roughly doubled to fifty one billion dollars in twenty seventeen, Donald invested in building a one hundred and eighty thousand ton mega cruiser called the Mardi Gras, Carnival's largest ship ever, which cost about one billion dollars and is supposed to begin sailing in twenty twenty with the sea's first on board

roller coaster. Before the COVID nineteen crisis began, the company's nine cruise brands employed one hundred and fifty thousand people. Carnival was founded in nineteen seventy two by Ted Harrison, an Israeli American who wanted to transform the image of the cruise industry from stuffy ultra luxury to a middle class splurge with a party atmosphere. Arison's first ship, also named Marti Gras, had only three hundred passengers and got stuck twenty minutes after leaving Miami on a soundbar, where

it remained for twenty eight hours. In the nineteen eighties and nineties, Arison's son, Mickey, bought up a string of competitors, took the company public, and made his family one of the wealthiest in America. By the turn of the century, Carnival owned thirty six percent of the North American market. Mickey Arison bought the Miami Heat and became friendly with

Donald Trump. Carnival sponsored the Apprentice more than once. After the Great Recession crippled the cruise business, Arison began to look like a less capable steward in Carnival's coast of Concordia crashed into a rock formation and sank in the calm waters off Tuscany, killing thirty two people, including a child,

while the captain abandoned ship. The following year, a fire in the engine room of the Carnival Triumph, now better known as the Poop Cruise, left hundreds of guests stranded in the Gulf of Mexico without air conditioning or working toilets for several days. During both the Tuscany crash and

the Poop Cruise, Arison was spotted at Heat Games. Arison was facing a shareholder revolt by the time he announced he was stepping down as CEO in favor of Donald, A board member and former Monsanto executive, Harrison remains Carnival's chairman.

Donald positioned himself as a reformer, set on improving coordination between the company's various management teams, but he didn't manage to clean up its record in twenty seventeen, the U. S Department of Justice find Carnival's Princess line a record forty million dollars for dumping oil contaminated waste at sea

and falsifying official discharge records to cover it up. Last June, Donald himself entered a guilty plea on behalf of Carnival for violating the terms of its settlement after authorities discovered that its ships kept on dumping even after the twenty seventeen ruling. We acknowledge the shortcomings, Donald told the Miami judge, I am here today to formulate a plan to fix them. He would head into twenty twenty committed, he said, to

changing the company's tendency to cut corners on safety. At eleven twelve p m. Japan Standard time on February first, more than a month after the outbreak on the Grand Princess, the Diamond Princess was skimming around Asia on a multi weeak cruise. One of its sanitation vendors, Walllam Group emailed an alert to the vessel's chief administration officer and a

guest service's inbox. A Walam representative said a passenger was being treated for COVID nineteen in Hong Kong would kindly inform the ship related parties and do the necessary disinfection. The alert read unfortunately and somewhat inexplicably. According to Roger Frizelle, Carnival's chief communications officer, nobody was monitoring those in boxes. He first says the messages hadn't been read for at least days, then later emails that actually unemployee had read

them much sooner. In Carnival's latest version of the timeline, which it revised repeatedly during various interviews over the past several weeks. Nancy Chung, a Hong Kong based director for the Princess Line, learned of the positive test a few hours later after seeing a report from now News TV about a hospitalized coronavirus patient who was understood to have traveled to Hong Kong on a cruise. Chung texted and executive in California who requested she connect Hong Kong health

officials with Tarling, the company's chief medical officer. According to screenshots of the messages viewed by Bloomberg business Week, the company says these messages show it acted promptly, but Carnival didn't tell passengers they might have been exposed to the virus until the evening of February third, about forty three hours after the initial alert from Wallam was sent. There are other inconsistencies that suggest Carnival wasn't entirely on the ball.

The Hong Kong Health Department put out a press release announcing the COVID nineteen case late on February one, and at eleven thirty three a m. On February second, Tarling sent an email to Hong Kong health authorities with the subject line confirmed coronavirus case that included the passenger's name, age, and ward location at Princess Margaret Hospital. But Carnival says

this was a mistake. The subject line should have had question mark question mark question mark because he was asking if it's confirmed, says for Zelle, the Carnival spokesman, adding that Tarling didn't get official confirmation until six pm on February two. Tarling says he didn't see the previous day's press release. A spokesman for the Hong Kong Health Department notes that in addition to the press release, it immediately informed the shipping agent in Hong Kong of the cruise concerned.

Another twenty four hours elapsed before Captain Gennaro Arma informed passengers and crew on the Diamond Princess of the COVID nineteen case. In his announcement at six thirty three pm on February three, he tried to project calm as the

ship cruised toward Yokohama, Japan. The guest hadn't reported feeling ill during his time on board, Armah said over the loudspeaker, but passengers should avoid close contact with anyone suffering respiratory illness, wash their hands for twenty seconds, and seek treatment from the ship's nurses if they had fever, chills, or a cough. Rest assured there will be no charge for this service. He said. Upon arrival in Yokohama that evening, Japanese health

officials started medical screenings. Arma added, the situation is under control and therefore there are no reasons for concerns. Even after Carnival became aware of the potential coronavirus case, passenger say staff tried to keep the fund going. Guests continued eating and drinking at buffets and bars, hanging out in saunas, and attending shows, including an operatic performance called Bravo Carnival distributed itineraries known as Princess Patter, guiding guests to trivia

contests and other group activities. On February third. They were encouraging us to mingle, says Gay Corter, who, after getting her temperature taken by a Japanese official the next day, went for a walk on deck and saw tables of as many as thirty people playing mah jong. A Carnival spokesman says the staff discontinued most scheduled activities on February fourth, Though Japanese officials didn't institute a ship wide quarantine requiring

passengers to stay in their cabins until February five. The president of Carnival's Princess Cruz's Division, Jan Swartz, says the company was deferring to Japanese health officials. She says the crew followed government guidelines delivering the passenger's food and prescription refills as the quarantine at Yokohama's port wore on. Carnival c e o'donald says he was aware of the situation, but didn't personally take control of the response efforts until

February five. We have a nice chain of command, He says, as it became a bigger issue, I'm dialing into the situation updates. It was an increasingly chaotic period for Carnival. Shortly before the Diamond Princess problem, there had been a coronavirus scare aboard one of its ships near Italy, and a second in mid February on another Carnival cruise in Asia.

Carnival says these were false alarms. Countries around the world began refusing to allow the company's boats to dock, fearing they had spread the virus, creating novel challenges for Donald and his team. It wasn't like there were protocols and that this was established. You're at sea, you're moving people around, and the rules are changing as you go, he says. He adds that by early March, when the virus hit the Grand Princess, Carnival had systems in place to take

better care of its guests. Some Grand Princess passengers had to fill out a questionnaire asking if they had recently been to China, though there were no questions about whether they had symptoms consistent with COVID nineteen. On March five, after the ship's crew canceled the ukulele concert and any further games of True or Move. The Grand Princess went into a holding pattern off the San Francisco coast while the White House and state and local officials figured out

what to do. Passengers were stuck in their cabins for almost two weeks as helicopters delivered provisions and test kits. The Grand Princess pulled into port on March nine in Oakland, California, where the CDC mostly took over. Like those aboard the Diamond Princess, the passengers endured an additional fourteen day quarantine after disembarking before being allowed to travel home. Between the Diamond Princess and Grand Princess, eight hundred and fifty people

tested positive for COVID nineteen and fourteen have died. More would follow from outbreaks on other ships. Asked why Carnival didn't act sooner to initiate stringent shipwide quarantines and why so many passengers reported being able to stroll about the ships following alerts of possibly deadly infections. Swartz says the

company was following the direction of health authorities. It's very easy and Monday morning, you know, hindsight to say what's the view of what should have been occurring, She says, we did our best to take care of people. Carnival executives say they're proud of how they served the customers aboard these cruises. They refunded everyone's tickets and on board purchases, provided free internet access during the corn teens, and assisted

with post cruise travel accommodations. Swartz, who notes she's had many tours of duty in crisis management during her twenty years at Carnival, says she expects the experience to make customers more likely to cruise with the company, not less. There are many loyal Princess guests who have told us that this is actually cemented Princess as their number one

vacation choice, she says. During Bloomberg Business Week's March seven phone interview with Schwartz, reports surface that four more people had died and at least one thirty eight passengers were sick aboard another Carnival ship, the Zandam, part of its Holland America line. Over the following days, the ship lingered near the coast of Fort Lauderdale, waiting for government permission

to dock at Port Everglades. Florida. Yadira Carza, who embarked on the Zandam for her honeymoon, says from the ship that she and her husband are terrified. The crew are sick and getting sicker. It's a matter of time before gets to us and we're infected, she says. For some people it will be the last trip of their lives. As of early April, Carnival still had passengers at sea, nearly a month after the CDC issued a March eighth

public advisory to defer all cruise ship travel worldwide. Spokesperson for Zell says Carnival wasn't under any legal obligation to follow the CDC's advice. The advisory is not an edict, he says. Donald and Schwartz say there's nothing they could have done to halt further infections in February, when they say the world still didn't grasp how much the virus was spreading outside China, but the US declared a public health emergency and restricted travel to China on January thirty one,

even as Carnival ships continued to sail around Asia. There were other early warnings. Paget, the Innovation chief, says that in January after he'd communicated with the manufacturer in Wuhan the origin of the pandemic about making batteries for the digital badge system. The leadership, including Arno Old Donald, all knew about the scale of the coronavirus outbreak. Paget says he became aware of the problem's magnitude on January. He remembers the exact date because it was the day before

Kobe Bryant died. The biggest thing about that, it's a learning I don't think I'll ever forget, and we shared it with Arnold when we were talking, is that we actually had insight into the global situation much earlier than most. Paget says. Carnival canceled cruises set to embark from England Chinese ports, but these measures don't appear to have altered anything for ships making mid cruise stops around Hong Kong

or other parts of Asia. Carnival executives also make the highly questionable assertion that cruise ships don't spread disease more easily than it would spread elsewhere. Nothing to do with cruise ships, Donald says. COVID nineteen spreads the same in an airport terminal, a subway station, a restaurant, a theater, a stadium. That's misleading, says Friedman from the CDC's Cruise

Ship Task Force. Her team has seen coronavirus infection rates approaching on two of Carnival's ships, she says, much higher than the spread in a supermarket or subway. Part of the problem, she says, is that cruises are often populated with people at greater than average risk for the disease. More than two thirds of the Zendam's passengers are older than sixty five, She says, crew members sleep in bunk

beds and usually share bathrooms. If these ships had stopped sailing, our large team could all be working on helping states and local public health authorities with their community outbreaks, she says. In apparent response to these discrepancies, Frizelle emails a BuzzFeed article reporting that multiple people had died from a COVID nineteen outbreak at a family burial service, his point being that virus is spread on Carnival ships just as they

do at funerals. Since the company has failed three percent of c d C ship health inspections, three times worse than rival Royal Caribbean Cruises, which fails one percent of inspections. In an inter view, these statistics seem to surprise Donald. What we fail health inspections? He says when asked about them.

After gathering his thoughts, he adds, I would say, though, that we do not have a record in any shape, form or fashion of being unhealthy of guests on our ships being more ill than another travel venues period, let alone other cruises. Why didn't Carnival simply dock every ship immediately after their initial crises? In effect, that's what people

have been trying to do. But what happened was ports close, airports close, borders close, and even now we have tens of thousands of crew on our ships that we can't get home. Donald says, it's not because we want them all on the ships. It's because things closed down and we couldn't get them off. As a publication, Carnival had two of its one dred ships still at sea. Donald, who's working remotely from his home in Florida, says he's

under constant stress from NonStop conference calls. The day go by so quickly, he says, sometimes it's hard to leave the bedroom because the call starts so early you haven't gotten dressed. Or showered yet, and then you're waiting for a break in the calls so you can do that. It's so crazy. Along with overseeing the fleet, he's been working the phones to raise money, including a fresh five d and seventy five million dollars in equity for a

bargain eight dollars a share. He says these funds will give Carnival enough liquidity to survive and extended pause in its operations. Obviously we're hurting, he says. If we don't bring capital in, we wouldn't have a company. Although Arison has spoken with Trump during the crisis, Carnival and its rivals were left out of a federal bailout of US businesses,

in part because they aren't legally speaking US businesses. Carnival paid seventy one million dollars in taxes on twenty point eight billion dollars in revenue last year to Panama, where it's technically incorporated. There was very strong bipart asan opposition to a cruise industry bailout, and there will continue to be, says Democratic Senator Richard Blumenthal of Connecticut. They have flown under international flags and abated or skirted taxes with a

record of predatory conduct. They need to prove that they're going to follow American norms and laws. Donald acknowledges that his company doesn't pay the i R S like a typical company. It's true that as a corporation, we don't pay income tax, he says, But he says Americans benefit from the port and harbor fees that Carnival pays in

accordance with the demands of the maritime industry. While the fleet is out of service, Paget is continuing to invest in technology upgrades, and Schwartz says she's working to dramatically improve our sanitation protocols. Donald says it will take some time for all the negative noise about cruising to go away, but there are indications people still want to cruise. On

that point, he may be right. According to a recent Carnival filing with the u S Securities and Exchange Commission, half of customers who sought cancelations between March second and March fifteenth for upcoming bookings opted to take credit for future cruises instead of a full refund. Almost all the passengers interviewed for this story say they'd cruise with the company again after all Carnival offered many of them free

vouchers for future trips. The more you travel with them, the more goodies they give you, says Quarter, a survivor of the Diamond Princess. It's like rats and cocaine. With Jonathan Levin, Michael Smith, and k O Nha.