10 things cruise lines will not tell you

10 things cruise lines won’t tell you

 

By Ian Salisbury

Edison at WSJ

1. “Our ships might sink, but we won’t.“

It’s been a tough couple of seasons for the cruise ship industry. First, the Costa Concordia, a 3,800-passenger ship operated by a unit of Carnival Corp., ran aground off the coast of Italy in January 2012. Thirty-two people were killed, while images of the abandoned ship, lying incongruously on its side. beside a picturesque beach town, flashed around the world.
Then, just as the industry seemed ready to put that disaster behind it, another struck. The Carnival Triumph had an engine-room fire that disabled the vessel in the Gulf of Mexico. While no one was injured, thousands of passengers were stranded several days without power, running water or working toilets. Again photos were everywhere, this time portraying what looked like a shantytown — the ship’s deck obscured by rows of makeshift bed-sheet tents. As a result, Carnival, the industry leader with about $15 billion in annual revenue, announced in April that it would spend $300 million over the next two to three years to improve fire safety and back-up power on its ships. (“Safety is our No. 1 priority,” says a spokesman.)

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Five things cruise lines won’t say

MarketWatch's Ian Salisbury looks at some of the things cruise lines won't tell you as you sail the ocean blue. Photo: AP

Will these incidents dent the cruise businesses’ prospects in the long term? Not likely, say experts like S&P Capital IQ stock analyst William Mack. This is, after all, the industry that bounced back from the sinking of the Titanic. While Mack has cut his 2013 profit forecast for Carnival, he still rates the stock a strong buy. “My broad assumption is that this is a one-year impact,” he says.
Cruise ships remain a hugely popular getaway option. More than 16 million people sailed in 2011, the latest date for which statistics are available, a figure that has roughly doubled during the past decade, according to the Cruise Lines International Association, a trade group. The association’s members count more than 200 ships and 325,000 beds, both of which are expected to grow steadily through 2015.
There’s lots to like: Cruises often include all your meals in the price, so it doesn’t require a lot of planning; and it’s relatively affordable compared with taking a multicity trip on your own. Plus, for cruising’s many fans, there’s just nothing like pulling out of port. “When the horn is blowing, and people are waving, you really feel like you’re on vacation,” says Heidi Allison, editor at large for All Things Cruise, a consumer-oriented travel website. “It’s really nice.”
2. “Feeling queasy? It might be more than seasickness.”
While Carnival was getting beaten up in the press over engine problems this February, smaller rival Royal Caribbean Cruises had its own snafu: 118 passengers aboard its ship Vision of the Seas came down with norovirus, a highly contagious stomach bug characterized by diarrhea and vomiting. (Royal Caribbean didn’t respond to requests for comment.)

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Analyst: Cruise ship industry will recover

For Carnival, the drawn-out saga of its disabled cruise ship Triumph has come to an end. But what will the long-term impact of Carnival’s disabled cruise ship be? PhoCusWright Senior Director of Research Douglas Quinby discusses on the News Hub. Photo: Getty Images

The Centers for Disease Control and Prevention, which tracks such outbreaks, warns on its website that close quarters and frequent passenger turnover appear to make ships (like prisons, dormitories and hospitals) particularly susceptible to outbreaks of the virus. One recommendation the CDC offers for passengers to stay healthy: Wash your hands often and drink lots of water. Cruise lines also are trying to keep a lid on outbreaks, with some now offering hand-sanitizer dispensers near the entrance to restaurants, pool areas and other shared spaces.
The CDC lists seven reported norovirus outbreaks so far this year — defined as incidents where more than 3% of passengers report symptoms. The agency estimates that in recent years cruise lines have accounted for about the same number of norovirus cases as schools and hospitals, and far fewer than long-term care facilities, the biggest site of infections.
The Cruise Lines International Association says the chance of a passenger getting caught up in an outbreak are an almost infinitesimal one in 3,700. Of course, with more than 10.3 million people setting sail last year, that still means a few thousand people are getting sick each year.
3. “We’ve got a drinking problem.”
As the abundance of phrases like “three sheets to the wind” (meaning very drunk) and “splice the main brace” (an order to drink, delivered by a commanding officer) suggests, drinking and sailing have long gone together. And they continue to do so today. “Cruising is vacation,” says Colleen McDaniel, managing editor of consumer site CruiseCritic.com. “People like to relax, try the drink of the day, sample some wines or enjoy some celebratory champagne.
While some small luxury cruise lines like Regent Seven Seas, Seabourn and Chrystal Cruises are essentially open bar, mass market lines treat booze as big business. Since on most cruise lines, food and some nonalcoholic beverages are included in the ticket price, it’s that much more urgent that they make some profit off the booze. Ships sell drinks with restaurant-style mark-ups or through all-you-can-drink packages. (Carnival’s Cheers program costs $42.95 a day, although they do cut people off after drink number 15.) When CruiseCritic polled readers in 2011, more than a fourth of respondents said they typically spend more than $200 on drinks per cruise. (The average cruise lasts seven days.)
The trouble with drinking on a ship, some say, is that many cruises have instituted policies that prohibit passengers from bringing aboard bottles (either from home or purchased ashore). That means passengers are stuck paying the ship’s prices. Royal Caribbean, for instance, does not allow guests to pack beer or liquor. While it does permit two bottles of wine per room, a $25 corkage fee applies for each bottle consumed in a public area. Experts say some passengers have responded to the policies by trying to sneak past them. But when contraband is found, typically when bags go through the security screener, it’s confiscated.
Royal Caribbean didn’t respond to requests for comment. The Cruise Lines International Association says such policies help crews make sure overzealous passengers don’t end up too drunk.
4 “Hire a tour guide, just not through us.”
Does a cruise need a destination? From touring historic ruins to hitting the links, going ashore can be a lot of fun—and most cruise lines will offer to facilitate dozens of different on-shore trips, tours and activities. But pros say booking excursions through cruise lines seriously inflates the price.
The reason: Tours are rarely ever run by cruise lines themselves. Instead, they cut deals with local operators, and raise prices so they can take a slice of the profits. Typically, those operators are perfectly willing to let people hire them directly, cutting out the middleman.
Cruise lines defend the mark ups, pointing out that many passengers don’t want to deal with the hassles of arranging last-minute plans in an unfamiliar locale. Carnival’s excursion program is a “turn-key operation” — one that’s ready to go with a metaphorical turn of the key — with “tickets delivered to guests’ staterooms and round-trip transportation provided between the excursion and the ship,” says a spokesman.
But critics say making your own arrangements is often easier than cruise lines let on. “They’re trying to scare you,” says Sun City West, Ariz., cruise planner Michael Berryhill. Local tour operators, happy for the extra business, often set up within sight of the docks where passengers disembark, he says. “I’ve seen it so many times. We get on the same motor coach, go to the same destination, and pay half the price.”
5. “We’ll find a way to hit you up.”
So you didn’t spring for the snorkeling, or that second planter’s punch. Think your cruise line is giving up on you? Not likely, say experts. Much like travelers stuck at an airport, passengers are a captive audience for all kinds of extras, from Internet service (up to 75 cents a minute on Carnival) to fountain sodas for the kids (unlimited refills are $4.50 a day on Royal Caribbean.)
Even meals have begun to come with surcharges, according to experts. While the main dining hall is still free, ships have been jumping on the foodie trend by creating smaller boutique restaurants. Thus, Norwegian’s specialty restaurants, which specialize in French, Brazilian and other cuisines, “provide refined choices” for an extra $15 to $75 per person, according to its website.
In all, such so-called ancillaries, including alcohol and excursions, typically amount to about one-fourth of the largest cruise lines’ overall revenue, according to S&P’s Mack. Of course, other industries use the same tactics. For context, that’s a slightly less than what movie theaters make selling popcorn and soda but more than luxury hotels earn on extras like room service, Mack estimates.
Cruise lines say most activities are still free and that surcharges ensure that extras used by only a small number of guests don’t push up ticket prices for everyone. Internet service, for instance, relies on satellite connections which are “significantly costlier” than land-based connections, according to Carnival. (Royal Caribbean and Norwegian didn’t respond to requests for comment.)
But charges can add up — catching some customers by surprise. “The first time cruiser usually finds a bill that’s a lot more than what they thought,” says Cranston, R.I.-based cruise planner Bob Newman. “It’s like a teenager getting their first credit card.”
6. “You need a Ph.D. to choose your cabin.”
Veteran cruisers say choosing the right cabin is an art. The architecture of ships — where space is limited and some rooms are inevitably near engines or public decks — means floor plans are complex. Carnival’s newest ship, the 3,600-plus-passenger Breeze, for instance, offers more than 30 categories of staterooms spread over nine decks. The dozens of options allow passengers to select rooms “based on what’s important to them,” according to the cruise line. But they can also be confusing. The options are “mindboggling,” says cruise planner Newman.
Like airlines, cruise lines use so-called yield-management software to track inventory, which means prices change depending on factors like demand. Pros say that means customers who book either early (some cruise lines have already published 2015 routes) or relatively late (typically in the final few weeks before departure) can score deals. But those who wait until the last minute may get stuck with a less desirable room.
Another strategy is to go for a “guarantee.” Despite the safe-sounding name, this actually involves a gamble. Cruisers who select this option are guaranteed a room in a certain category but are not allowed to choose the precise location of the room. There are plusses. Guarantee passengers are most likely to be upgraded if that room category fills up. But it’s risky. You could end up with the worst room in the category. Some pros think yield-management software means the odds are getting longer. “It’s harder than it used to be” to get a good room this way, says Allison, of All Things Cruise.
One extra tip: Pros say that travelers generally like to be high up and on the outside of the ship — where it’s possible to enjoy great views. But those prone to seasickness should consider cheaper rooms on the inside — that is, with no windows facing the water. The reason: the lower, middle section of the ship is like a fulcrum, with the least amount of motion.
7. “Running late? See you later.”
Cruise lines typically allow cruisers to get some money back if they change their itinerary early enough, but as the departure day approaches, that total gets smaller and smaller. For instance, for cruises of seven days or longer, Carnival allows a full refund for cancellations 91 days before the departure date, but those canceling a month out must pay at least half the total fare, and within two weeks, passengers can claim nothing back. (AllThingsCruise offers a compilation of cruise cancellation policies).
Experts say one reason cruise lines are so strict is that unlike, say, airlines and hotels, they rely almost exclusively on vacationers, who tend to book weeks in advance, making it harder to fill slots in the final weeks before departure. “That’s the final mad dash to sell out the ship,” says cruise planner Berryhill. “They have to have some protections” against being stuck with unsold inventory. (Carnival says its policies are similar to those of many resorts and tour operators.)
Either way, experts say the strict policies can make travel insurance, typically priced at 4% to 7% of a cruise’s value, a good deal. All Things Cruise editor Allison also recommends planning to arrive in the cruise’s departure city a day early. That minimizes the risk of the worst-case scenario: missing the boat. Allison says that happened to her and her husband once after a snowstorm delayed their flight to the departure city, Acapulco. They ended up spending New Year’s Eve looking for a hotel room, then taking another flight to join the ship in the Panama Canal Zone. “It almost caused a divorce,” she jokes.
8. “There is still plenty of peril on the sea.”
It seems like something out of a movie: Four masked men armed with shot guns and pistols stick up a tour group of more than 60 cruise passengers and crew viewing a tropical waterfall, then make off into the bushes with money, watches, camera and jewelry. But that’s what happened last month in St. Lucia to passengers of Celebrity Eclipse, a ship owned by Royal Caribbean, according to reports in the media and the website of local police. In the end, no one was hurt. At least three suspects have been taken into custody. (Royal Caribbean didn’t respond to requests for comment.)
Danger can lurk onboard cruise ships too, according to critics, especially because of heavy drinking and the cut-loose atmosphere of some ships. Rates for sexual assault on cruise ships seem to be about 50% higher than on land, according to Ross Klein, a professor at Memorial University in Newfoundland, who studies the cruise industry.
The cruise industry says such reports are overblown. A spokesman for the Cruise Lines International Association directed questions about onboard crime to James Alan Fox, a Northeastern University criminologist whose research it has previously sponsored. Fox says that while he wasn’t familiar enough with Klein’s work to evaluate his specific findings, Fox told us that his own research suggests ships have lower crime rates than other popular tourist destinations like Las Vegas or Orlando. One reason is crowds, cameras and security staff. Another is cruising’s bourgeois demographics. “There are no high-crime areas on cruise ships,” he says.
9. “U.S. labor laws don’t always apply to us.”
The life of a sailor has always been tough. But many who study the cruising industry say passengers don’t always appreciate how hard those who serve their steaks, clean their rooms and keep the engines chugging have to work. At issue is the use of what those in the industry call “flags of convenience”: Ships that cater primarily to American cruisers are registered in other countries, essentially allowing cruise lines to take a pass on U.S. labor laws covering issues like green cards, minimum wages and overtime.
Roughly a fourth of cruise-line workers — to a large extent officers, medical staff and security — come from developed countries like the U.S., Italy and the U.K., according to a 2005 academic study. The rest of the crew, from cooks to “wipers” that clean the engines, hail from developing nations such as the Philippines, Indonesia and Honduras. These typically earn as little as $1,000 a month working 10-to-14-hour days, while at sea for stretches of up to a year, according to William Terry, a Clemson University professor who studies the industry. While cruise jobs typically pay far more than what these workers would earn at home, conditions take their toll. “Kids grow up not knowing their parents,” he says.
The cruise industry says workers are well taken care of. Crew members are provided room, board and medical care at no charge. While U.S. standards may not apply, work rules are maintained by the International Maritime Organization, overseen by the U.N., says the Cruise Lines Industry Association.
Both cruise lines and labor advocates are cheering a new set of rules — known as the Maritime Labor Convention — set to go into effect in August 2013. The Convention sets out minimum standards for everything from accommodations to how many hours a week seafarers can work, according to Douglas Stevenson, director of the Center for Seafarers’ Rights. The new maximum work week: 91 hours, according to his calculation. “It’s not an easy life,” he says.
10. “Don’t swim in our wake.”
Cruises like to advertise clear skies and pristine water. But environmental groups point out these floating cities, with their thousands of passengers and crew, leave behind a lot of waste, from sulfurous engine emissions that contribute to smog to so-called blackwater — essentially what goes down the toilet — which can spread disease and contribute to fish-killing algae growth.
A typical one-week voyage by a medium-sized vessel leaves behind 210,000 gallons of blackwater — enough fill about 10 backyard swimming pools, according to a recent study sponsored by non-profit advocacy group, Friends of the Earth. Of course, landlubbers flush the toilet too. But tight space on cruise ships often means waste treatment systems aren’t as effective at dealing with pollutants like ammonia, copper, zinc and “fecal coliform,” bacteria from feces, say critics. They “don’t measure up,” says the study’s author, Ross Klein.
The cruise industry says it goes out of its way to keep waters clean. In addition to following “rigorous” international standards, the Cruise Lines International Association members also follow a voluntary set of rules, which the group says are even stricter. These require all ships to treat all blackwater and discharge it at least four miles from shore.