Cruise Ship Blues: The Underside of the Cruise Ship Industry (2 page)

The cruise industry’s expansion would be even greater if it were not for seven cruise companies having ceased operations in 2000 and 2001. In 2000 Premier Cruises, Commodore Cruise Line (including its premium Crown Cruise Line), Cape Canaveral Cruise Line, and the World Cruise Company all filed for bankruptcy, eliminating more than 7,000 berths.

Both Marine Expeditions and Renaissance Cruises left passengers stranded when the companies unexpectedly filed for bankruptcy in 2001. The planned shutdown of American Classic Voyages in September 2001 left few passengers stranded, but it took three cruise lines out of the water: America Hawaii Cruises, Delta Coastal Voyages, and United States Line. That resulted in

9,000 fewer available berths.

The cruise line bankruptcies had grave consequences for consumers. Many people lost money paid as deposits; some lost their entire fare. Passenger refund claims totaled more than $110 million against Renaissance Cruises alone.

Surprisingly, the failure of American Classic Voyages also left thousands of consumers high and dry. Many people had assumed that, like other carriers operating from US ports, American Classic Voyages had posted a $15-million bond as required by the US government’s Federal Maritime Commission. But after the company ceased operations, it came to light that because it had operated ships flagged in the USA, American Classic Voyages had been allowed to self-insure. As a result there was no bond and consumers were left with little recourse for refunds.

Takeovers and Mergers

Even greater than the impact of bankruptcies on the cruise industry landscape is the effect of takeovers and mergers. Consolidation of the industry began in the late 1980s and continues today. Carnival Corporation, the parent company of Carnival Cruise Lines, was the first to begin buying other cruise lines. The company was established in 1972 with a single ship that accommodated fewer than 1,000 passengers. Today, Carnival Corporation consists of six cruise lines: Carnival Cruise Line, Holland America Line, Costa Cruises, Windstar Cruises, Seabourn Cruise Line, and

Cunard Line. In 2001 it operated 43 ships accommodating more than 63,000 passengers — a 32-percent-plus share of the North American market. At the end of 2001 Carnival Corporation had 15 new ships on order (4 for 2002, 4 for 2003, 6 for 2004, and 1 for 2005) that would add more than 34,500 passengers to its capacity.

Carnival and three other major players in the cruise industry together control almost 90 percent of cruise ship capacity. The largest of the three is Royal Caribbean Cruises Limited (RCCL) with a 25-percent market share. RCCL operates two companies: Royal Caribbean International (previously named Royal Caribbean Cruise Line), which in 2001 operated 14 ships, and Celebrity Cruises, purchased in 1997 and operating 9 ships. RCCL plans to add 6 new ships by the end of 2004, raising its capacity from 47,300 to approximately 62,000 passengers.

P&O Princess, the next largest player, is a result of a spin-off by P&O of its cruise lines. P&O Cruises and Princess Cruises were the largest of the six cruise lines operated by P&O. In late 2001 P&O Princess, which was still a relatively new company, became a target for takeover by both RCCL and Carnival Corporation. A merger of P&O Princess and RCCL was announced in November 2001, but Carnival Corporation came forward with a sweeter deal and foiled the arrangement. The matter was put on hold until regulatory agencies in the uK and the uSA decided whether a merger with either company would be anti-competitive. P&O Princess operates six cruise lines — P&O Cruises, Princess Cruises, Swan Hellenic Cruises, Aida Cruises, Seetours, and P&O Cruises Australia — which collectively have more 30,000 berths. The company holds a market share of approximately 15 percent and has 7 ships on order, giving it an additional 11,800 berths.

The other major player is Malaysia-based Star Cruises. It expanded in 2000 with the purchase of Norwegian Cruise Line (NCL). After narrowly avoiding a takeover by Carnival Corporation, NCL had bought Majesty Cruise Line in 1997 and Orient Line in 1998. In 2001 the combined company operated three cruise lines — Star Cruises, Norwegian Cruise Line, and Orient Line — with 18 ships having a total of 30,000 berths. Two more ships accommodating a combined 2,000-plus passengers were added in late 2001. Star Cruises’ market share is about 15 percent.

When discussing specific cruise lines within this book, I have attempted to use the name that was in effect at the time. Thus, for example, in incidents that occurred prior to the merger in 2000, Princess Cruises remains a separate entity from P&O Cruises; later references are to P&O Princess. Royal Caribbean is variously referred to as Royal Caribbean Cruise Line and Royal Caribbean International.

BIGGER IS BETTER?

Not only are the cruise companies getting bigger, so are the ships. Cruise ships built in the 1970s and before typically accommodated fewer than 1,000 passengers; most held in the range of 600 to 700 passengers. What was considered a large ship back then was one that could accommodate twice that many passengers.

Then, in the 1980s, cruise lines began introducing megaships. The first of these, Royal Caribbean Cruise Line’s
Sovereign of the Seas,
appeared in 1988, able to accommodate more than 2,800 passengers. Mid-sized ships also grew larger, and by the early 1990s most new ships had berths for between 1,200 and 2,500 passengers.

People had wondered in the late 1980s whether cruise ships could ever get larger than the
Sovereign of the Seas
and its two sister ships. But it wasn’t long before new ships plied the waters, 50 to 100 percent larger in physical size and with a passenger capacity exceeding 3,800.

Carnival Cruise Line launched the new wave of mega-ships in 1997 with the introduction of the first Destiny-class ship. The ship was 101,000 tons — compared to the
Sovereign of the Seas
at

73,000 tons — and accommodated 3,400 passengers. Princess Cruises followed in its wake a year later with the
Grand Princess,
physically larger at 109,000 tons but accommodating a “mere” 2,600 passengers.

The largest ships afloat belong to Royal Caribbean International. In 1999 it introduced the
Voyager of the Seas,
the first of several 143,000-ton Eagle-class ships. With accommodations for 3,840 passengers and 1,180 crew members, Eagle-class ships can carry more than 5,000 people.

It is unsurprising that the sheer size of the new cruise ships poses many problems, including increased concerns for passenger safety and security and for the environment. These will be discussed in more detail in Chapters 3 and 4.

ABOUT THIS BOOK

Contrary to most media and industry representations that present positive images of cruising and the cruise industry, the harsh reality is that the cruise industry is neither environmentally nor socially sustainable. In addition, the industry has a history of being misleading in its advertising and in the expectations it sets for consumers. The less-than-positive side has been occasionally identified, but the industry’s economic power — a combined annual advertising budget of over $500 million — has been relatively successful at keeping bad press to a minimum. A demonstration of this power followed a 1978 story in the
Sunday Times
that reported American inspectors had found cockroaches and other filth in the galleys of the
Queen Elizabeth 2
and sister Cunard Line ships. In retribution, Cunard Line withdrew $100,000 in advertising from both the
Sunday Times
and the
London Times
.
³

The industry attitude about the media was made clear at the 2001 World Cruise Tourism Summit in Miami. In the session entitled “Cruise Industry in the Media,” several industry executives discussed the politics of media relations. Their view was that there are two types of media: good and bad. The “good media” say good things about the industry; the “bad media” print stories about the industry’s underside. Several stories in the
New York Times
written by Douglas Frantz were singled out as exemplars of bad media; the articles discussed environmental assaults by the industry, inadequate medical care on cruise ships, and the vulnerability of passenger and crew to sexual assaults.
⁴

The cruise lines’ view was that the
New York Times
wanted to tear down the industry and that its reporters systematically searched for data to support that purpose. Michael Crye, president of the International Council of Cruise Lines (ICCL) — the industry’s primary lobbyist in Washington — emphasized his point by distributing several media articles. Some purportedly reported the ICCL’s position accurately; others purportedly took the same information and presented it in a less than positive light.

The Underside

Cruise Ship Blues: The Underside of the Cruise Industry
presents a side of the cruise industry that is rarely discussed. The book begins with two chapters that follow from questions about truth in advertising. Chapter 1 discusses the nature of the industry’s advertising and the expectations produced in consumers. The advertised ideal is juxtaposed against the reality. Chapter 2 takes a careful look at the myth of a cruise as an all-inclusive vacation. Most first-time passengers trust cruise-line advertising and happily embark on their cruise expecting few to no expenses not covered by the cruise fare. They are quickly surprised by the multitude of methods used to separate passengers from their money.

Each of the next three chapters looks at issues regarding environmental and social sustainability of the cruise industry. Chapter 3 focuses on safety issues with an examination of the frequency of accidents and breakdowns at sea, and the implications these have for passengers and for the environment. It also considers the security of passengers, the problem of sexual assault, the incidence of food- and airborne illnesses, and inconsistencies in the quality of medical services.

Chapter 4 shifts attention to the cruise industry’s environmental record. The many cases of cruise lines polluting the seas have resulted in a collective total of more than $50 million in fines between January 1998 and May 2002. After a glimpse at history, this chapter takes an in-depth look at the nature of the problem, current industry practices, and efforts by coastal states and communities to monitor and regulate the industry. While the industry represents itself as being environmentally friendly, there continue to be cases of pollution by oily bilge water and other harmful emissions.

Chapter 5 completes consideration of the industry’s social sustainability by looking at the situation of cruise ship workers. Many are drawn from nonindustrialized countries; those workers who are from industrialized countries are commonly officers or in management positions. This chapter discusses the nature of the work, rates of pay, and commonly found forms of oppression or exploitation.

Chapter 6 shifts attention to the cruise industry’s attitude toward its consumers. While the corporate image suggests concern for customer satisfaction and a basic responsiveness to consumers, the fact is that the industry is often consumer unfriendly. This feature is given very little attention in the media, yet the information is critical for anyone who is thinking about taking a cruise.

Chapter 7 takes a step back and considers what can be done — first proposing what could be done by the cruise industry, then examining the types of social and political action that individuals could direct at environmental and social issues. Given the industry’s vulnerabilities, what are the prospects for successfully effecting change? This final chapter considers both individual and collective action.

Information Sources

The information within this book is drawn from a range of sources. The largest source is my experiences as a cruise passenger. I had taken several cruises as a youngster, and in 1992 naively took to cruising as a vacation choice. My experiences provide firsthand knowledge of the many facets of cruising and onboard life.

As a sociologist, I was at first intrigued with the social life and social problems aboard cruise ships. Then, as I went on more and more cruises, I began to uncover the underside of shipboard life, to document common issues or problems, and to explore in greater depth some of the items that appeared in the media. My time aboard ships has afforded opportunities to meet and get to know crew, staff, and onboard managers. As a consumer, I demand honesty from providers of products and services; if I feel what is delivered is less than has been promised, the responsible company is sure to know about it. Given this predisposition, it is unsurprising that I also gained alarming insight into corporate attitudes of cruise lines and the strategies they use in dealing with consumers.

Overall, I have spent more than 300 days on cruise ships. I have sailed with all of the major cruise lines, traveling in both a range of classes on ships and a range of classes of ships.

I’ve added print research to this body of firsthand experience, including media reports; government hearings, investigations, and reports; position papers and publications from industry organizations and individual cruise lines; trade publications; and reports and studies from environmental groups and labor organizations. I have also attended the industry’s annual convention and trade show, the Seatrade Cruise Shipping Convention, gaining wide access after being granted a press pass.

Where possible, the source of sensitive information is identified. In some cases, particularly those involving an employee who is vulnerable to retribution for honest sharing of information, the source remains confidential.