10 Things You Should Know About The Cruise Industry
By admin | March 12th, 2011
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This guest post was contributed by Rose King.
From far away — or in a pretty brochure — cruise trips might seem like the perfect stress-free vacation. Sailing to stunning locales while eating specially prepared meals makes you feel like a millionaire, even if you’re not.
But from corporate irresponsibility to environmental pollution to hushing up crimes and pirate attacks, the cruise industry operates on a more complex level than the average customer realizes. It’s not all bad — the industry contributes a lot to the economy in terms of jobs and spending, but very little in taxes and moral example.
- The economy had little effect on the cruise industry: Americans may have cut back on spending during the recession, but they certainly didn’t stop cruising. A study conducted by the Cruise Lines International Association (CLIA) found that cruise lines generated $35.1 billion gross output in the U.S. in 2009, including spending done in the port cities. “Positive” numbers for 2010 were reported as well.
- Cruise lines barely pay any taxes: A report from Cruise Law News found that many top U.S. cruise lines become incorporated overseas to avoid paying U.S. taxes, even though the bulk of their business comes from the United States, and they depend heavily on U.S. services, like the United States Coast Guard’s protection. Here’s how much — or little — they get away with: since 2006, Carnival Corporation paid only 1.1% of its cumulative profits — $11.3 billion — in any kind of taxes, including federal, state, local and foreign taxes.
- Ships are registered in other countries to avoid U.S. labor and safety laws: Similarly, some cruise lines choose to register their ships in other countries to avoid meeting standards for U.S. labor and safety laws. Carnival has registered ships in Panama, while Royal Caribbean uses Liberia to circumvent these important laws and exploit foreign employees.
- It’s the fastest-growing segment of the travel industry: The cruise industry has grown 2,100 percent in the last 40 years, and it’s estimated that around 13.5 million people took a cruise in 2009 alone, and 1 million more projected to take a cruise in 2010. Those numbers make the cruise industry the fastest-growing segment of the entire travel industry.
- The cruise industry created over 300,000 jobs for the U.S.: All that money and business is doing some good. The CLIA found that the cruise industry was responsible for 313,998 jobs in the United States in 2009, paying out $14.23 billion in wages and salaries to employees.
- Royal Caribbean ignored Haiti: Royal Caribbean really tarnished its image during the crisis in post-earthquake Haiti in 2010. As Haitians recovered after the earthquake, Royal Caribbean continued to take partying passengers over to its private island of Labadee, which Cruise Law News reports is actually a sovereign Haitian island leased by the exiled dictator “Baby Doc” Duvalier. They kept the drinks and jet skis flowing, just 60 miles from Port-au-Prince, and passengers could actually see relief supplies being unloaded, though Royal Caribbean did nothing to help.
- Pirate attacks may be a cover for Russian terrorists: Commander Mark Gaouette (USNR-Ret). and maritime consultant to the Department of Homeland Security, and former Director of Security for Princess Cruises and Cunard Cruise Lines, authored a book in 2010 uncovering a lot of dirty secrets of the cruise industry, especially the dangers of on-board crime and pirate attacks. While the cruise industry often lets passengers think that pirates are a danger only to ships that sail through “pirate alley,” the truth is that some pirate groups are covers for terrorist organizations. Other scary revelations from the book involve cruise ship employees dumping bodies to cover up crimes, which would scare off future passengers and business.
- Cruises make big money for their top executives: Several of the cruise industry’s top executives and owners have made the Forbes 400 list, which highlights the richest people in America. And while this USA Today article notes that some of those men have seen drops in their Forbes rankings, their fortunes are still pretty staggering. In September 2010, Micky Arison — chairman and CEO of Carnival Corporation — was named 69th on the list, accumulating a net worth of $4.1 billion. Thomas Pritzker of Royal Caribbean was worth $1.6 billion, and Leon Black,, who controls Oceania Cruises, Norwegian Cruise Line and Regent Seven Seas Cruises, was worth $3.0 billion.
- Cruises generate lots of money for home-port cities: Cruises don’t just make money on-board and on their islands — they also generate serious money for home-port cities. The AAPA reported that a 2,000-passenger cruise ship with 950 crew members can earn a home-port city $322,700 in hotels, dining, local transportation and more.
- Royal Caribbean’s “Save The Waves” campaign was hypocritical: After the U.S. Coast Guard busted Royal Caribbean in the 1990s for dumping oil and chemicals into the ocean, the cruise line was fined $1 million. Royal Caribbean started a huge PR campaign called SaveTheWaves, encouraging passengers to throw their trash out responsibly, and pretending that they’d learned the same lesson. In fact, Royal Caribbean continues to be fined — up to $8 million — for dumping human waste, trash and oil into Alaskan waters and sewage into Florida’s Biscayne Bay.