Cruise line bailouts -- your thoughts?

[dioxide45]

YES!

Fits my definition of "critical services" and helps small business.

It should be pointed out that there are thousands of small businesses out there that are dependant on the cruise industry, from taxi drivers, to cruise port shuttles. Also 82% of cruise bookings are made with a travel agent. Of course, a lot of these bookings are with the big guys (Costco, Expedia, Cruise.com, etc) but there are also thousands of small independant travel agents out there. These small businesses support the local communities in which they operate. Just not sure why one would be picking and choosing which small business is "critical" vs which is not when you compare restaurants to anything else.

**Full disclosure** My wife and I are both travel agents, though we don't rely on the industry for the bulk of our income.

 

[bnoble]

I’d rather bail out people than companies. If we are going to bail out an industry, this seems low on the list: not critical infrastructure, little to no US employment or investment. Yes there are indirect implications but support those directly if you want.

 

[CalGalTraveler]

The problem with giving loans to the cruise industry is that much of it won't recover so they will default causing the government money to be equivalent to a handout. We need to think like bankers. There will be a much smaller market who are willing to go on cruises given what happened with the ships during Corona so demand will be much smaller and too much capacity resulting in low/no profits. It won't bring back taxi drivers etc. at the same level. Many ships will end up like airplanes and will be docked to manage capacity.

 

[geekette]

It should be pointed out that there are thousands of small businesses out there that are dependant on the cruise industry, from taxi drivers, to cruise port shuttles. Also 82% of cruise bookings are made with a travel agent. Of course, a lot of these bookings are with the big guys (Costco, Expedia, Cruise.com, etc) but there are also thousands of small independant travel agents out there. These small businesses support the local communities in which they operate. Just not sure why one would be picking and choosing which small business is "critical" vs which is not when you compare restaurants to anything else.

**Full disclosure** My wife and I are both travel agents, though we don't rely on the industry for the bulk of our income.

Because everyone eats.

 

[T-Dot-Traveller]

While the cruise lines sail their ships under foreign flags, they do have large headquarter offices based in the US. US based customer support, US based onshore and port support. Thousands of tons of food is loaded onto ships every week, onshore workers, logistic, taxis, transportation, shuttles, pre and post cruise hotels. The industry extends far beyond the ships. All these employees that help support the cruise industry pay taxes.

While this isn't a reason that the US taxpayer should bail out the cruise industry, but there are the foreign ports. Many of which are somewhat poor that rely on the tourism in order to survive. So the cruise industry could easily be considered vital to them.

It should also be noted, that as far as I know, only two ships (both Princess) actually had confirmed cases on board. From reports of people onboard ships right before they stopped sailing, the ships were probably the cleanest place you could be. They were before too. The ships are kept meticulously clean, mainly because of fear of Norovirus outbreaks onboard. Norovirus is something else that is highly contagious, just not usually deadly.

I am pretty sure very few ships fly under the American Flag except the US Navy & Coast Guard .
My 89 year old father was an admiralty lawyer & I vaguely recall some of the requirements .

The main reason one would flag US is that only US Flag ships can go directly from a US port to another US port
Reasons you wouldn’t :
1) ship must be built in a USA shipyard - higher cost .
2 ) crew & captain must be USA - and likely unionized - which increases overhead
3) most trade is into or from a USA port to a foreign destination [ so doing 1 & 2 have no benefit to owner]
( Great Lakes / Mississippi etc River Tugs & Barges are internal exceptions] & there is likely some bringing Alaskan oil to USA refineries ( think Exxon Valdez example )

 

[LannyPC]

I have always been amazed by how the cruise industry has grown and why people pay so much money to go on cruises. Much more expensive than timeshares.

It's a matter of To each his own and Different strokes for different folks, but some people like the idea of having their rooms made up for them each day, having their meals made for them each day, and visiting different ports of call. You don't usually get that with timeshares.

But again, to each his own.

 

[geekette]

It's a matter of To each his own and Different strokes for different folks, but some people like the idea of having their rooms made up for them each day, having their meals made for them each day, and visiting different ports of call. You don't usually get that with timeshares.

But again, to each his own.

Yep. And other people want to go camping, make their own food over fire. Or book a hotel in the happening downtown of a major city to do it up. Some people use "vacation" to clean out the garage or visit family.

Something for everyone.

 

[dioxide45]

Because everyone eats.

They do, but they don't all eat out or have to eat out. Restaurants aren't necessarily critical like grocery stores are.

I am pretty sure very few ships fly under the American Flag except the US Navy & Coast Guard .
My 89 year old father was an admiralty lawyer & I vaguely recall some of the requirements .

The main reason one would flag US is that only US Flag ships can go directly from a US port to another US port
Reasons you wouldn’t :
1) ship must be built in a USA shipyard - higher cost .
2 ) crew & captain must be USA - and likely unionized - which increases overhead
3) most trade is into or from a USA port to a foreign destination [ so doing 1 & 2 have no benefit to owner]
( Great Lakes / Mississippi etc River Tugs & Barges are internal exceptions] & there is likely some bringing Alaskan oil to USA refineries ( think Exxon Valdez example )

I am only aware of one mainline cruise ship that is US flagged and that is Pride of America that sailes year round in the Hawaiian Islands for Norwegian Cruise Lines. Per Wikipedia, it was partially built in Mississippi and heavily subsidized with federal money. Though it looks like it was finished in Germany and got an exemption to fly the US flag.

 

[dioxide45]

I have always been amazed by how the cruise industry has grown and why people pay so much money to go on cruises. Much more expensive than timeshares.

Not sure they are much more expensive than timeshares. Given the cost of our Marriott weeks at about $1500 a week, my wife and I can usually go on one seven night cruise in the Caribbean, sometimes on a balcony. Shoot last year we went on the NCL Escape on a balcony for $1200. That includes food and tranportation. Of course if you add in the costs of excursions it gets more expensive, but not everyone sits around their timeshare the whole week and in a timeshare you have to pony up a bunch more cash for food.

Don't get me wrong, we love our timeshares but we also like to cruise and will continue to do so after they start sailing again.

 

[CalGalTraveler]

@dioxide45 No doubt. Cruises will still exist, and people will still be able to go and enjoy. I expect there will be some killer deals once this is all over.

I just don't believe they rank high on a bailout with public funds.

 

[Sea Six]

When I see a cruise line ad on TV, it always says "Cruise Registry PANAMA" Screw them

 

[geekette]

I am pretty sure very few ships fly under the American Flag except the US Navy & Coast Guard .
My 89 year old father was an admiralty lawyer & I vaguely recall some of the requirements .

The main reason one would flag US is that only US Flag ships can go directly from a US port to another US port
Reasons you wouldn’t :
1) ship must be built in a USA shipyard - higher cost .
2 ) crew & captain must be USA - and likely unionized - which increases overhead
3) most trade is into or from a USA port to a foreign destination [ so doing 1 & 2 have no benefit to owner]
( Great Lakes / Mississippi etc River Tugs & Barges are internal exceptions] & there is likely some bringing Alaskan oil to USA refineries ( think Exxon Valdez example )

This is something I love about Tug - education on matters I didn't know I was interested in until someone posts it.

 

[geekette]

For people that don't cook, restaurants are a necessity. Else they would have been completely shut down, but shut down orders just said no dine in.

In a bygone area, people did not generally dine out. In our country these days, people do, and frequently.

 

[isisdave]

Cruise lines are foreign-based mostly to avoid US labor laws and pay requirements. You could have a US-based line, but it would have to charge a lot more ... and so would not be competitive. Compare the cost of a 7-day cruise on Pride of America, or a US river cruise, to any other 7-day cruise.

I'm pretty sure they do pay taxes on their US income, and they sure create a lot of jobs for US workers at their headquarters, and for a zillion travel agents, all the food, fuel, and service suppliers, and those nice people who check you in at the cruise port, and the ones that haul your luggage around. Plus all those workers in ports worldwide, including every US embarkation point, every US port in Alaska and New England, California, Puerto Rico, and USVI. Taxis, Uber and Lyft. Bus lines. Hotels.

Alexa just told me there are 352 cruise ships in the world. They have limited use for other purposes, and are almost certainly purchased with leverage from banks, US and foreign. Big losses for those banks if the lines go bankrupt.

So it's not a black-and-white "not flying Stars n Stripes, too bad for you" question. Pretty grey, in my opinion.

 

[jjking42]

No bailouts for cruise lines !!

Sent from my iPhone using Tapatalk

 

[b2bailey]

They do, but they don't all eat out or have to eat out. Restaurants aren't necessarily critical like grocery stores are.


I am only aware of one mainline cruise ship that is US flagged and that is Pride of America that sailes year round in the Hawaiian Islands for Norwegian Cruise Lines. Per Wikipedia, it was partially built in Mississippi and heavily subsidized with federal money. Though it looks like it was finished in Germany and got an exemption to fly the US flag.

As was said elsewhere that ship's itinerary is US port to US port. So it is US flagged because it has to be.

 

[geist1223]

My opinion is the same as the airlines - firm no.

 

[AJCts411]

No bailout. End of the day, even via bankruptcy restructuring the cruise industry will recover. The debt that is resturcted, those losses will be borne by those who previously profited by supplying the industry. I think to say the cruise industry would disappear is not realistic. All those offices, people, small business, will be supplying the restructured industry.

 

[presley]

It's a really bad choice. The cruise lines can get creative like everyone else who is suffering and bail themselves out. I'd much rather see rents/mortgages get a couple free months across the board.

 

[geekette]

Restaurant bailouts - I don't recall the figure on how many millions of employees, but I think the figure was 4% of GDP. That's significant.

Regardless of what someone does for a living, I am on the side of bailing out the people first. They are in extreme stress, far more than any business. Without people, there is no business.

As I understand it, small businesses will be able to get loans to stay afloat and pay their workers. So long as they keep that payroll, these loans can (will?) be forgiven.

 

[WVBaker]

Coronavirus on the high seas: Why the U.S. can't touch cruise lines

In essence, cruise ships are a regulatory black hole. The cruise industry is insulated by ship registrations in foreign countries and shielded by a powerful lobby with sway in tourism-dependent U.S. states like Florida.

The cruise industry disproportionately counts Americans as customers but operates primarily in international waters and avoids tough scrutiny by registering ships mostly in small Caribbean countries with little incentive to enforce international treaties

"The Coronavirus can only survive in cold temperatures, so the Caribbean is a fantastic choice for your next cruise"
Sales managers from Norwegian Cruise Lines, among others.


Flags of convenience
Cruise lines typically register ships under so-called “flags of convenience,” in Panama, the Bahamas and other countries chosen for their low wages, cheap fees and lax regulations.

Some popular flags of convenience, like the Bahamas, have just one person in charge of inspecting ships that dock there.


Cruise lines exploit ports
Ross Klein, interim dean and professor in the School of Social Work at St. John's College in Newfoundland, Canada, said the IMO "sets international regulations that have no standing and no enforceability. The U.S. chooses not to pass laws. They don’t want to ruffle the flags of the cruise industry.”


A Japanese infectious diseases expert who was allowed onto the Diamond Princess, where more than 600 passengers were infected with the coronavirus, released a video on YouTube blasting the “chaotic” process to try to control the spread of the disease onboard the ship, conducted by people with no background in infection control.

Coronavirus on the high seas: Why the U.S. can't touch cruise lines

The coronavirus reveals the power of industry and holes in regulation.

www.politico.com

 

[Ski-Dad]

I am in Canada so my comments reflect what our government should do. We will need to allow many businesses to fail as the government cannot afford to bail out every business. We need to focus on people. There will be some businesses that will be bailed out as either part of our critical infrastructure or "too big to fail". Who do you chose to bailout? Answer: Those with the best lobbyists.

For those that think this is harsh:

1. I, like others, will have my retirement monies severely compromised by my damaged equity investements, and those investments will be further damaged if public companies are allowed to fail. Thats a risk you take in the equity market;
2. I am a partner in a professional service firm. Our business has suffered a 90% decline in revenue since mid March. We have cut all our staff back to 1/2 time working from home. Even with those cuts, we are bleeding cash every day. Our plan will carry us 10 to 12 weeks. After that we will likely collapse the business and move into salvage mode. I worry about the very good people who work for us that could be unemployed. I do not expect tax payers to bail us out; and
3. Ultimately it is small businesses like mine, your local tire shop/hair salon/indian restaurant, etc that are the real economy and pay far more in taxes than the cruise ship companies.

Let cruise ship companies fail. They contribute little to our economy. There will be a smaller cruise industry left standing to serve what is likely a reduced demand. It is not the role of government to prop up private business.

2 cents from a free market socialist.

 

[Talent312]

On the condition that Holland America refunds my cruise $$.
If they'll use the money for my refund, then yes.
..

 

[Ironwood]

I hope they are last on the list!

 

[jacknsara]

I am pretty sure very few ships fly under the American Flag except the US Navy & Coast Guard .
My 89 year old father was an admiralty lawyer & I vaguely recall some of the requirements .

The main reason one would flag US is that only US Flag ships can go directly from a US port to another US port
Reasons you wouldn’t :
1) ship must be built in a USA shipyard - higher cost .
2 ) crew & captain must be USA - and likely unionized - which increases overhead
3) most trade is into or from a USA port to a foreign destination [ so doing 1 & 2 have no benefit to owner]
( Great Lakes / Mississippi etc River Tugs & Barges are internal exceptions] & there is likely some bringing Alaskan oil to USA refineries ( think Exxon Valdez example )

Aloha,
I am pretty sure that Matson (MATX) ships are built and flagged in the USA. They are eligible under the Jones Act to go from US port to US port. They are the primary sea based shipping provider to Hawaii.
Jack