THE INAUGURAL SAIL:AN INTRODUCTION TO THECRUISE INDUSTRY

SAILING THE SEAS ONBOARD A CRUISE SHIP, the days filled withluxury and pampering, perfect weather, glorious food, andimpeccable service ... it's a dream vacation. What could be betterthan lounging on the deck of a floating resort, soaking up the sun,indulging in whatever fits your mood?

That image is what sells cruises. But do the people sitting in thesun, sipping those margaritas, realize the environmental and socialcost of this indulgence? Are those passengers aware of the environmentalpractices of the cruise industry, of the lifestyle of theservers and staff aboard the ship, of the risks to safety and securitythat are part of everyday life on a cruise ship? The answer,unfortunately, is: likely not.

Most people who go on a cruise put anything that interfereswith their vacation out of their mind. They are unconcerned aboutthe pollution left in the ship's wake, or about employees working16 hours a day, 7 days a week, for 10 to 12 months straight, atincomes below minimum wage. Nor do they give a thought to therisk of illness from food or injury from an accident. This is the partof the cruise experience that's left out of the brochures. It's notpart of a cruise passenger's reality, but trust me, it exists.

IS THE CRUISE INDUSTRY SUSTAINABLE?

Cruise Ship Blues: The Underside of the Cruise Industry is guided bya simple question: is the cruise industry sustainable? The answer tothis question has many parts. For example, is the industry environmentallysustainable? In other words, does the cruise industry treatthe environment in such a way that leaves it undamaged? As well,the facts behind the hidden lifestyle of shipboard workers and thecruise industry's economic record cast doubt on whether theindustry is socially and morally sustainable. The answers to thesequestions, for many of us, are not encouraging. The fact is that thecruise industry has historically shown a disregard for the environment,for the welfare of its workers, and even for the well-being ofits paying passengers. That is the focus of this book.

AN INDUSTRY OVERVIEW

Cruise ship vacations are the fastest growing segment of leisuretravel. Since 1970 the number of people taking a cruise hasincreased by more than 1,000 percent. In North America theincrease has been fivefold-from 1.4 million to almost 7 millionpassengers-over the 20-year period from 1980 to 2000.Worldwide, more than 12 million passengers boarded cruise shipsin the year 2000.

This growth pattern is expected to continue. Passenger capacitywill increase by almost 50 percent from 2001 to 2005, between 8and 15 percent annually. In February 2002 the cruise industry hadon order 36 ships with more than 71,000 berths at a cost of $12.5billion.* By the end of 2002, 12 new ships will have been introducedwith accommodations for more than 20,000 additional passengers.In 2003 14 more ships will be added, with berths foranother 30,000 passengers. Expect a further 10 new ships withaccommodations for over 25,000 more passengers in 2004.

Between 2000 and 2006, the industry will have increased itscapacity by more than 100,000 beds. To put the scale of thisgrowth into vivid perspective, consider that in 1981 the NorthAmerican segment of the industry accommodated approximately41,000 passengers. By 2006 that number is expected to exceed260,000, according to the Cruise Line International Association(CLIA). Actual numbers are likely much higher since these figuresare based on two people per room; many rooms can accommodatethree or four passengers.

EXPANSION AND CONSOLIDATION

While the cruise industry's capacity is increasing, the number ofcompanies in the marketplace is shrinking. There are two reasonsfor this.

Bankruptcies
The cruise industry's expansion would be even greater if it werenot for seven cruise companies having ceased operations in 2000and 2001. In 2000 Premier Cruises, Commodore Cruise Line(including its premium Crown Cruise Line), Cape CanaveralCruise Line, and the World Cruise Company all filed for bankruptcy,eliminating more than 7,000 berths.

Both Marine Expeditions and Renaissance Cruises left passengersstranded when the companies unexpectedly filed for bankruptcyin 2001. The planned shutdown of American Classic Voyages inSeptember 2001 left few passengers stranded, but it took threecruise lines out of the water: America Hawaii Cruises, DeltaCoastal Voyages, and United States Line. That resulted in 9,000fewer available berths.

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

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

Takeovers and Mergers
Even greater than the impact of bankruptcies on the cruise industrylandscape is the effect of takeovers and mergers. Consolidationof the industry began in the late 1980s and continues today.Carnival Corporation, the parent company of Carnival CruiseLines, was the first to begin buying other cruise lines. The companywas established in 1972 with a single ship that accommodatedfewer than 1,000 passengers. Today, Carnival Corporation consistsof six cruise lines: Carnival Cruise Line, Holland America Line,Costa Cruises, Windstar Cruises, Seabourn Cruise Line, andCunard Line. In 2001 it operated 43 ships accommodating morethan 63,000 passengers-a 32-percent-plus share of the NorthAmerican market. At the end of 2001 Carnival Corporation had 15new ships on order (4 for 2002, 4 for 2003, 6 for 2004, and 1 for2005) that would add more than 34,500 passengers to its capacity.

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

P&O Princess, the next largest player, is a result of a spin-offby P&O of its cruise lines. P&O Cruises and Princess Cruiseswere the largest of the six cruise lines operated by P&O. In late2001 P&O Princess, which was still a relatively new company,became a target for takeover by both RCCL and CarnivalCorporation. A merger of P&O Princess and RCCL wasannounced in November 2001, but Carnival Corporation cameforward with a sweeter deal and foiled the arrangement. The matterwas put on hold until regulatory agencies in the UK and theUSA decided whether a merger with either company would beanti-competitive. P&O Princess operates six cruise lines-P&OCruises, Princess Cruises, Swan Hellenic Cruises, Aida Cruises,Seetours, and P&O Cruises Australia-which collectively havemore 30,000 berths. The company holds a market share ofapproximately 15 percent and has 7 ships on order, giving it anadditional 11,800 berths.

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

When discussing specific cruise lines within this book, I haveattempted to use the name that was in effect at the time. Thus, forexample, in incidents that occurred prior to the merger in 2000,Princess Cruises remains a separate entity from P&O Cruises; laterreferences are to P&O Princess. Royal Caribbean is variouslyreferred to as Royal Caribbean Cruise Line and Royal CaribbeanInternational.

BIGGER IS BETTER?

Not only are the cruise companies getting bigger, so are the ships.Cruise ships built in the 1970s and before typically accommodatedfewer than 1,000 passengers; most held in the range of 600 to700 passengers. What was considered a large ship back then wasone 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 Sovereignof the Seas, appeared in 1988, able to accommodate more than2,800 passengers. Mid-sized ships also grew larger, and by theearly 1990s most new ships had berths for between 1,200 and2,500 passengers.

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

Carnival Cruise Line launched the new wave of mega-ships in1997 with the introduction of the first Destiny-class ship. Theship was 101,000 tons-compared to the Sovereign of the Seas at73,000 tons-and accommodated 3,400 passengers. PrincessCruises 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 CaribbeanInternational. In 1999 it introduced the Voyager of the Seas, thefirst of several 143,000-ton Eagle-class ships. With accommodationsfor 3,840 passengers and 1,180 crew members, Eagle-classships can carry more than 5,000 people.

It is unsurprising that the sheer size of the new cruise shipsposes many problems, including increased concerns for passengersafety and security and for the environment. These will be discussedin more detail in Chapters 3 and 4.

ABOUT THIS BOOK

Contrary to most media and industry representations that presentpositive images of cruising and the cruise industry, the harshreality is that the cruise industry is neither environmentally norsocially sustainable. In addition, the industry has a history ofbeing misleading in its advertising and in the expectations it setsfor consumers. The less-than-positive side has been occasionallyidentified, but the industry's economic power-a combinedannual advertising budget of over $500 million-has been relativelysuccessful at keeping bad press to a minimum. A demonstrationof this power followed a 1978 story in the Sunday Timesthat reported American inspectors had found cockroaches andother filth in the galleys of the Queen Elizabeth 2 and sisterCunard Line ships. In retribution, Cunard Line withdrew$100,000 in advertising from both the Sunday Times and theLondon Times.

The industry attitude about the media was made clear at the2001 World Cruise Tourism Summit in Miami. In the sessionentitled "Cruise Industry in the Media," several industry executivesdiscussed the politics of media relations. Their view was thatthere are two types of media: good and bad. The "good media"say good things about the industry; the "bad media" print storiesabout the industry's underside. Several stories in the New YorkTimes written by Douglas Frantz were singled out as exemplars ofbad media; the articles discussed environmental assaults by theindustry, inadequate medical care on cruise ships, and the vulnerabilityof passenger and crew to sexual assaults.

The cruise lines' view was that the New York Times wanted totear down the industry and that its reporters systematicallysearched for data to support that purpose. Michael Crye, presidentof the International Council of Cruise Lines (ICCL)-theindustry's primary lobbyist in Washington-emphasized hispoint by distributing several media articles. Some purportedlyreported the ICCL's position accurately; others purportedly tookthe same information and presented it in a less than positive light.

The Underside
Cruise Ship Blues: The Underside of the Cruise Industry presentsa side of the cruise industry that is rarely discussed. The bookbegins with two chapters that follow from questions about truthin advertising. Chapter 1 discusses the nature of the industry'sadvertising and the expectations produced in consumers. Theadvertised ideal is juxtaposed against the reality. Chapter 2 takesa careful look at the myth of a cruise as an all-inclusive vacation.Most first-time passengers trust cruise-line advertising and happilyembark on their cruise expecting few to no expenses notcovered by the cruise fare. They are quickly surprised by themultitude of methods used to separate passengers from theirmoney.

Each of the next three chapters looks at issues regarding environmentaland social sustainability of the cruise industry. Chapter3 focuses on safety issues with an examination of the frequency ofaccidents and breakdowns at sea, and the implications these havefor passengers and for the environment. It also considers the securityof passengers, the problem of sexual assault, the incidence offood- and airborne illnesses, and inconsistencies in the quality ofmedical services.

Chapter 4 shifts attention to the cruise industry's environmentalrecord. The many cases of cruise lines polluting the seas haveresulted in a collective total of more than $50 million in finesbetween 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 communitiesto monitor and regulate the industry. While the industryrepresents itself as being environmentally friendly, there continueto be cases of pollution by oily bilge water and other harmfulemissions.

Chapter 5 completes consideration of the industry's social sustainabilityby looking at the situation of cruise ship workers. Manyare drawn from nonindustrialized countries; those workers whoare from industrialized countries are commonly officers or in managementpositions. This chapter discusses the nature of the work,rates of pay, and commonly found forms of oppression orexploitation.

Chapter 6 shifts attention to the cruise industry's attitudetoward its consumers. While the corporate image suggests concernfor 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 theinformation is critical for anyone who is thinking about taking acruise.

Chapter 7 takes a step back and considers what can be done --first proposing what could be done by the cruise industry, thenexamining the types of social and political action that individualscould direct at environmental and social issues. Given the industry'svulnerabilities, what are the prospects for successfully effectingchange? This final chapter considers both individual and collectiveaction.

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

As a sociologist, I was at first intrigued with the social life andsocial problems aboard cruise ships. Then, as I went on more andmore cruises, I began to uncover the underside of shipboard life,to document common issues or problems, and to explore ingreater depth some of the items that appeared in the media. Mytime aboard ships has afforded opportunities to meet and get toknow crew, staff, and onboard managers. As a consumer, Idemand honesty from providers of products and services; if I feelwhat is delivered is less than has been promised, the responsiblecompany is sure to know about it. Given this predisposition, it isunsurprising that I also gained alarming insight into corporateattitudes of cruise lines and the strategies they use in dealing withconsumers.

Overall, I have spent more than 300 days on cruise ships. Ihave sailed with all of the major cruise lines, traveling in both arange 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, and8 CRUISE SHIP BLUESreports; position papers and publications from industry organizationsand individual cruise lines; trade publications; and reportsand studies from environmental groups and labor organizations. Ihave also attended the industry's annual convention and tradeshow, the Seatrade Cruise Shipping Convention, gaining wideaccess after being granted a press pass.

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

What you are about to read may at times seem unbelievable. Atother times it may be depressing. Either way, the goal of this bookis to bring to the forefront information that has been kept undergroundand to provide the foundation for social and politicalaction and, ultimately, for needed change in an industry that has,for the most part, avoided close scrutiny.