Week 5 Case Analysis: Labadee Decision
In January 2010, the island nation of Haiti was devastated by an earthquake.
Royal Caribbean International, a major cruise line, owns a private beach in Haiti, which is typically a port of call on several of their Caribbean cruise itineraries. The private port, known as Labadee, is about 80 miles away from Port au Prince. The beach was unaffected by the quake.
In the days following the earthquake, the company wrestled with several issues as they determined whether to continue to stop in Labadee or temporarily abandon the port of call.
Their objectives would be to 1) ensure guest satisfaction; 2) protect the brand; and 3) maximize profitability.
Some of the consequences they considered as they tried to determine whether the cruise line should continue to make a stop in Haiti in the midst of this crisis are as follows.
- Will cruise passengers be interested in relaxing on a beach when hundreds of thousands are homeless and hungry just 80 miles away? Could this impact new reservations or cause people to cancel? Based on research and consulting with others, you believe there will be minimal impact.
- Because the community near the beach depends financially on the cruise line for income, would suspending the stop in Haiti make the country worse off? Based on your analysis, there is a high likelihood that the area would be negatively impacted if the line pulled out of Labadee.
- How would the media respond? Would they get bad press for continuing to stop in Haiti and be perceived as profiting in the midst of this tragedy, or will the public perception be worse if they suspend sailing to Haiti during this crisis? You determine that there is a higher chance that the company would get bad press if the company suspended services than if they continued to include it on itineraries.
Using a risk profile such as the one below, define the uncertainties and make the recommendation for a decision for the Labadee Case.