COO Goldstein Sells Over $14,000,000 in Royal Caribbean Stock

Richard Fain Adam Goldstein Royal Caribbean CruisesRoyal Caribbean President and Chief Operating Officer (COO) Adam Goldstein (photo, to the right) sold 120,000 shares of his company's cruise stock on August 2 and 3, 2017.  The stock was sold at an average price of $118.21 for a total sale of $14,185,200.00, according to the SEC.  

This follows the sale of RCL stock by CEO Richard Fain earlier in the week, where he collected $24,406,075.98. Cruise executives Goldstein and Fain, who often sell big blocks of company stock in tandem like this, together sold over $38,500,000 in RCL stock last week. 

Following the sale, COO Goldstein still owns 191,252 shares of RCL stock, valued at $22,607,898.92. The sale was disclosed in a document filed with the SEC

After the sales last week, Mr. Goldstein and Mr. Fain now own over $134,000,000 of RCL stock.

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Photo credit: Royal Caribbean press center.

RCCL on Terrorism: Most Destinations Are Absolutely Safe

Adam GoldsteinRoyal Caribbean's Adam Goldstein was on FOX Business's @MorningsMaria yesterday. The FOX analysts questioned Mr. Goldstein after the terrorists' attack on the airport and subway in Belgium yesterday.  

Mr. Goldstein, the President and Chief Operating Officer of the cruise line, explained that his company makes a lot of effort into its security. Royal Caribbean's cruise ships call on approximately 500 ports annually. Like other companies, it makes judgments based on the security information it has received prior to calling on a port. Occasionally, it will decide that it is not in the best interests of the cruise line and its guests to go to a particular port, like the recent case of Bali which its Celebrity Solstice and Royal Caribbean Radiance of the Seas  avoided.

Most places Royal Caribbean sails to are "absolutely safe," Mr. Goldstein claims.

He said that after the terrorist attacks last year in Paris, there was a "brief" decline in business of a week or two from Northern Europe countries. He said the effect on his cruise line business was "de Royal Caribbean Jim Cramerminimis."  He does not expect anything different after this latest attack in Brussels.

The FOX News panel also questioned Mr. Goldstein on the effect of the Zika virus on bookings. He also downplayed the effect of this serious medical problem, which is believed to cause abnormally underdeveloped heads (microcephaly) in newborn children.

Mr. Goldstein said: "We are not aware that we ever saw any sort of impact on the business and it doesn't seem to be a conversation today."

This is an interesting perspective. Yesterday, another financial show on CNBC, Jim Cramer's MAD MONEY, suggested that although cruise lines deny that the Zika virus has affected their operations to date, it will severely impact cruising in the coming months

You can hear Mr. Goldstein below.

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Cruise Executive Goldstein Sells Royal Caribbean Stock for $8.9 Million

Richard Fain Adam Goldstein Royal Caribbean Cruises President and Chief Operating Officer (COO) Adam Goldstein sold 90,000 shares of the cruise line's stock today.

Mr. Goldstein sold the shares at $98.88 per share for a total value of $8,898,804.

Mr.Goldstein last sold RCL stock in July when he sold 4,184 shares at at $91.08 per share for a total value of $381,094.19.

At that time, he joined other cruise line executives dumping RCL stock. Royal Caribbean chairman Richard Fain sold 151,032 shares of his cruise line's stock for $13,650,151 at an average price of $90.40 a share. Royal Caribbean's General Counsel and Chief Compliance Officer Bradley Stein sold 2,402 shares of the company stock for for a total value of $218,748.70. These insider traders sold $14,249,993 of company stock last summer.

October 27, 2015 update: Royal Caribbean Chairman & CEO Richard Fain sold 80,516 shares yesterday. The Insider Trading Report said that the insider selling transaction was disclosed on October 26, 2015 to the Securities and Exchange Commission. The shares were sold at $98.80 per share for a total value of $7,955,335.00. Together, cruise executives Fain and Goldstein sold $16, 854,139 worth of Royal Caribbean stock yesterday and over $30,000,000. since July. 

According to the DFN, "following the completion of the transaction, the chief operating officer (Mr. Goldstein) now directly owns 253,153 shares in the company, valued at $25,031,768.64."

October 29, 2015 updateRoyal Caribbean's Vice President Harri U. Kulovaara reportedly sold 8,228 shares of RCL stock on October 27th at an average price of $100.32, for a total of $825,432.96.

Sell Out? Royal Caribbean Executives Sell Stock For Over $14,000,000 After Freedom of the Seas' Fire

Royal Caribbean Cruise StockYesterday, Royal Caribbean chairman Richard Fain sold 151,032 shares of his cruise line's stock for $13,650,151 at an average price of $90.40 a share. President and Chief Operating Officer Adam Goldstein sold 4,184 shares at at $91.08 per share for a total value of $381,094.19. Royal Caribbean's General Counsel and Chief Compliance Officer Bradley Stein sold 2,402 shares of the company stock for for a total value of $218,748.70.  In sum, these insider traders sold $14,249,993 of company stock.

A little over 10 days earlier Royal Caribbean's Freedom of the Seas burst into flames as the cruise ship approached Falmouth, Jamaica. The ship burned for one and one-half hours and destroyed all of the insulation around the exhaust stack from the bottom deck to the fifteen deck. Many passengers, crew members and maritime experts believe that the fire may have started due to the installation of a scrubber system on the cruise ship and the welding process to accomplish the work. Royal Caribbean is not saying, of course. 

The cruise lines has also been criticized for downplaying the fire, saying that it was just a "small fire" which was contained in the lower mechanical spaces and it was quickly extinguished, all patently false statements as we have demonstrated in video and photographs. To make matter worse, the cruise ship sailed onto the next port without a post-fire inspection by the flag state (Bahamas) or the classification society. This ship never should have sailed on without a rigorous inspection after the fire. The photographs clearly show that the ship sustained major damage. The photographs and first hand observations by the crew confirm that the fire destroyed the insulation around the exhaust stack and this presented a grave potential danger to the ship's passengers and crew. 

My opinion is that the Royal Caribbean cruise executives effectively misled the public about the fire in order to maintain the stock's improved performance. The company shares have rallied 46.38% in the past year. On July 31, 2015, the shares had rallied to one year high of $90.88 compared to a one year low on October 15, 2014 of $52.32.

If the executives had shut the ship down in Jamaica for the mandatory SOLAS inspection, this would have resulted in tens of millions of dollars spent by the company on lodging, airfare of all passengers back to Miami and cruise refunds to over 4,000 people which would have had a material negative effect on the company's stock.  Did the executives put their financial interests ahead of passenger and Royal Caribbbean Freedom of the Seas Firecrew safety? Absolutely they did, in my opinion. 

What do these executives really think about the stock value now that the fire is out and the cruise line has dodged, so far, a publicity fall-out?  One analyst said that "Mr. Richard’s trade could mean only one (thing): that he’s a pessimist when it comes to the Company’s prospects and its stock price."

Fain & company bamboozled the public with the "small fire" hoax. I suspect that the executives thought that it was time to cash out and put some more millions in their accounts before the truth comes out. 

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Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Bottom - Facebook

Cruise Executive Richard Fain Hits the Jackpot Again

According to the SEC, Royal Caribbean CEO Richard Fain (below right) sold 87,488 shares of his RCL stock at an average price of $76.41, for a total value of $6,684,958.08.

After the transaction, cruise executive Fain still owns 1,139,613 shares of his cruise line stock valued at approximately $87,077,829.33.

I wrote a similar article last December entitled Royal Caribbean Executive Cashes In Again about Royal Caribbean's Chief Operating Officer Adam Goldstein unloading 90,000 shares of Richard Fain Royal Caribbean cruise executive RCL stock. COO Goldstein sold a small portion of his RCL stock at an average price of $77.31 for $6,957,900.00. Following the the sale, he still owns 310,724 shares of his cruise stock, valued at approximately $24,022,072.

All of this is peanuts compared to the vast wealth of Carnival's Micky Arison who recently sold $433,700,000 worth of Carnival stock.

The cruise business is like running a crooked bootlegging business in the 1930's. There's no taxes to pay, the feds leave you alone, and the money rolls in by the boatloads. The profits are enormous. For the cruise executives, it must be liking hitting the jackpot every single night.

I curious to hear from the crew members of these two cruise lines regarding what they think these cruise executives have done to benefit the hard-working crew?

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Photo Credit: Flickr - United Way of Miami-Dade

Royal Caribbean Executive Cashes In Again

Adam Goldstein Royal CaribbeanI've written many articles about the rich-get-richer schemes of cruise executives: paying the crew members a pittance, making the crew work for 10-to-12 hours a day 6-to-8 months without a single day off, firing hundreds of office employees when the stock drops, and so forth and so on.

Well you can add this article to the list.

The Securities & Exchange Commission revealed that Royal Caribbean's Chief Operating Officer Adam Goldstein unloaded 90,000 shares of the company’s stock yesterday. Goldstein sold a small portion of his RCL stock at an average price of $77.31 for $6,957,900.00. Following the the sale, he still owns 310,724 shares of his cruise stock, valued at approximately $24,022,072. 

I last wrote about cruise executive Goldstein's stock sales this summer - The Rich Get Richer: Cruise Executive Goldstein Unloads $2,599,935.36 of Royal Caribbean Stock.

Goldstein caused an uproar in August when the cruise line announced that it was charging kids $10 to have breakfast with Shrek

Now you can understand where all those nickels and dimes go - into the cruise executives' pockets.

 

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Photo Credit: Royal Caribbean Press Center

Royal Caribbean to Charge Kids $10 To Have Breakfast With Shrek

An article by Cruise Critic titled No More Free Breakfasts caught my eye today.

Cruise Critic says that Royal Caribbean is adding a $10 surcharge for kids and parents to dine with the cruise line's DreamWorks characters at breakfast on the Oasis, Allure, Freedom, Liberty, Voyager, and Mariner of the Seas.

According to Cruise Critic, "character breakfasts" have been free since Royal Caribbean first launched them in 2010.

Dreamworks Character Royal CaribbeanHowever, starting September 1st, the cruise line will charge the fee to any passenger over 5 years old.

The first three comments on Cruise Critic summed up my thoughts perfectly:

"I'm glad my grandson was able to do the breakfast last year. RCCL is getting greedy."

"Disappointed with RCCL. More nickel and dimeing . . ." 

"Just another way to nickel and dime you . . ."

For a mom and dad and with 2 kids over  5 years old, the cruise line charge will come to $40 a day to have breakfast with Shrek (photographed with Adam Goldstein). 

It is particularly greedy for Royal Caribbean to nickel and dime their little guests considering that just last week we reported that cruise CEO's Fain and Goldstein have a combined net worth over $100,000,000 on their cruise line operations and are getting richer.

I'd be tempted to move up to Disney Cruise Line and have have my kids meet and greet Micky Mouse and Cinderella for free.

 

Note: The Royal Caribbean Blog first reported on the charge. 

Photo Credit: Royal Caribbean Press Center 

The Rich Get Richer: Cruise Executive Goldstein Unloads $2,599,935.36 of Royal Caribbean Stock

Media reports say that Royal Caribbean Cruises Chief Operating Officer (COO) Adam Goldstein sold 42,152 shares of his cruise company’s stock yesterday.

The shares were sold at an average price of $61.68 for $2,599,935.36.

COO Goldstein still owns 370,724 shares of Royal Caribbean stock, valued at $22,866,256.

Royal Caribbean announced its earnings results on Thursday. The cruise line reported revenue of $1.98 billion for the quarter. The company’s quarterly revenue was up 5.2%.  

Royal Caribbean We last reported on Mr. Goldstein in February when he sold 44,256 shares of Royal Caribbean stock at an average price of $52.96, for a total transaction of $2,343,797.76.  

What do the hard working crew members and the loyal shore-side cruise employees think of all of the money Mr. Goldstein is raking in? 

The cruise line pays a minimal salary to Royal Caribbean waiters and cabin attendants of only $50 a month; the cruise passengers pay tips to the waiters and stewards but the cruise line is scooping up much of the tips to pay other crew member's salaries. Employees like utility cleaners earn a pittance of around $550 a month (with no tips) working around 11-12 hours a day, every day of the month during contracts that are 6-8 months long.

In September of last year, Royal Caribbean fired over one-hundred employees in its corporate offices in order to increase profits. You can read about that here: Loyal to Royal? Royal Caribbean Axes 100 Jobs in Corporate Headquarters.

What's the saying? The rich get richer, the poor get poorer.

Reshuffling the Deck: Royal Caribbean Elevates CPA to Oversee New Risk Management Department

Effective Monday May 5, 2014, Royal Caribbean will create a new risk management department which will be managed by a certified public accountant, Tom Burke. Mr. Burke joined the cruise line in 2003 and most recently worked as the Vice President of Audit and Advisory Services. He was previously a manager at the accounting firm KPMG in Miami.

The creation of the new risk management department will require the reshuffling of a number of in-house lawyers and employees of the cruise line's crew medical department.

Claims handling and litigation matters are currently handled by the company's legal department managed by General Counsel Bradley Stein. With that responsibility being transferred to Mr. Burke Adam Goldstein President Royal Caribbean Cruisesnext week, the Associate Vice President of Litigation, Paul Hehir, will be assigned to the newly created risk management department. He will manage five in house lawyers, six crew claims adjusters, and four passenger claims adjusters.

Members of the crew medical department will also transition to the new risk management department. Vince Warger, Penny Shifrin, Dr. Fabio Acevedo and LaShawn Knight will move to risk management, as well as eight crew medical managers and coordinators.  A new team leader will be hired to supervise the medical group and report to Mr. Burke. 

Associate Vice President of Guest and Employee Legal Services,Tony Faso, will remain under Mr. Stein.

The new risk management department is the idea of Chief Operating Officer (COO) and President of Royal Caribbean Cruises, Ltd., Adam Goldstein (photo above right), who recently replaced Richard Fain (now Chairman) at the helm of the cruise line. 

We anticipate that this restructuring will have an impact on the medical treatment of crew members and the management of the legal claims asserted against the company by passengers and crew members. 

Over the recent years, we have watched Royal Caribbean make dramatic cost-cutting steps. In 2001, Royal Caribbean fired 500 employees. In 2008, it fired around 400 employees in its headquarters (including many senior female managers in its legal department). And last year, it terminated the employment of another 100 employees in its shore-side offices.

Officers in the Royal Caribbean fleet complained last year of job and cost cuts, additional work and lower compensation, while shipboard tip earners (cabin attendants and waiters) have complained that the cashless, pre-paid gratuity was really a scheme to divert tips from the guests into the cruise lines' coffers to defray the costs to the cruise line of paying the salaried ship employees.

We have most recently witnessed a renewed effort by the cruise line's crew medical department to refuse to authorize significant medical treatment, needed by sick crew members, in order to save money. Some of the cases are heart breaking, including the abandonment of ill crew members who need surgeries and ship employees stricken with cancer who have been sent home with no arrangements for chemotherapy.

The transfer of medical managers & coordinators responsible for providing medical treatment to ship employees, as well as the re-positioning of lawyers & adjusters responsible for crew injuries and medical claims, to a new department overseen by an accountant may signal an effort to further reduce costs.  

COO Goldstein's plans for his new risk management department specifically envision cost reduction. We predict that fewer benefits to the ill and injured crew members will be the net result.    

 

Photo Credit: Merco Press

Royal Caribbean: The Rich Get Richer, the Poor Get Poorer

Royal Caribbean Cruise Line CEO Adam GoldsteinRoyal Caribbean Cruises President and CEO Adam Goldstein sold 44,256 shares of Royal Caribbean stock yesterday.  Zolimax News reports that Mr. Goldstein sold his stock at an average price of $52.96, for a total transaction of $2,343,797.76.

After the sale, Mr. Goldstein's stocks total 358,804 shares, valued at approximately $19,002,260.

Royal Caribbean (RCL) has a 52-week low of $31.35 and a 52-week high of $53.42. 

We last reported on the cruise president's stock sales in October of last year when he sold 7,855 shares of RCL stock at an average price of $43.22, for a total value of $339,493.10. At that time, he reportedly owned 335,654 shares of Royal Caribbean stock, valued at approximately $14,506,966. 

It looks like the cruise executive's net worth has increased by over $7,000,000.

Royal Caribbean pays a salary to its waiters and cabin attendants of only $50 a month; the cruise passengers pay tips to the waiters and stewards but Royal Caribbean is scooping up much of the tips to pay other crew member's salaries. Employees like utility cleaners earn a pittance of around $550 a month (with no tips) working around 11-12 hours a day, every day of the month during contracts that are 6-8 months long. 

In September of last year, Royal Caribbean fired over one-hundred employees in its corporate offices in order to increase profits. You can read about that here: Loyal to Royal? Royal Caribbean Axes 100 Jobs in Corporate Headquarters.

 

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Photo Credit: Adam Goldstein - Cruise360 Vimeo

Are the Last 2 to 3 Years of Cruise Ship Mishaps An Anomaly or a Trend?

Adam Goldstein Royal CaribbeanThis weekend, the Royal Caribbean Blog (an unofficial Royal Caribbean fan website) quoted Royal Caribbean President and CEO Adam Goldstein saying that the "last two or three years" of cruise ship mishaps are just  an "anomaly."

Goldstein made his comments to CNBC's Simon Hobbs who excitedly told the television audience that there was a disconnect between what the non-cruising public thought about cruising and what cruise president Goldstein told him in an exclusive interview:

"I having been in this cruise business for over 25 years now," Goldstein says. "My frame of reference is two and a half decades of an extraordinarily safe of track record of great duration. Tremendous attention to detail and training that prepares the crew and the officers to do everything that they need to do from to delivering satisfaction to the guests to being extremely safe and environmentally responsible." 

'Extraordinary . . . tremendous . . . extremely . . . everything they need." This is classic cruise CEO gobbledygook by CEO Goldstein. Over-the-top hyperbole in response to softball questions by a cruise friendly interviewer.  

But does CEO Goldstein really want to go back to the "good old days" of cruising 20 to 25 years ago? 

I don't think so.

Was Royal Caribbean and the cruise industry "environmentally responsible" 20 years ago as Goldstein claims?

I don't think so either.

The 1990's were the decade when Royal Caribbean was the environment's absolute worst enemy. Thousands of garbage bags washed ashore on Miami Beach and tar fouled the sandy beaches of South Florida and the Bahamas, while Royal Caribbean dumped waste and emptied its oily bilges from cruise ships sailing the pristine waters here in Key Biscayne to Glacier Bay in Alaska and back.

The Coast Guard caught Royal Caribbean with its bilges open. Environmentalist-from-Miami U.S. Attorney General Janet Reno slammed the dirty cruise line. Royal Caribbean pled guilty to multiple felonies, including lying to the Coast Guard and the U.S. government. Before it was over, the U.S. Department of Justice fined the cruise line a record $27,000,000 and forced Royal Caribbean to admit that it was a corporate felon. 

Has the cruise industry make progress regarding environmental issues as Goldstein tells CNBC?

That's debatable. Just last week we reported on MSC Cruises caught throwing bags of garbage overboard into Brazilian waters. Just today MSC called itself the "Guardians of the Seas" but it won't Carnival Ecstasy Cruise Ship Firetalk about dumping garbage bags overboard.

But lets go back to 20 to 25 years ago, were there Carnival poop cruises back then?

Yes, and worse.

In 1995, the Carnival Tropicale, lost all power and families who brought their children aboard, couples honeymooning, and elderly citizens  bobbed around in the Gulf of Mexico, nauseated. The Carnival passengers endured the same disgusting circumstances as the Triumph.  Then a tropical storm, Roxanne, struck the ship. The cruise from hell turned into a ship of terror when the passenger thought that they were going to die. Carnival offered the traumatized passengers a $40 credit because the ship missed ports in Grand Caymans and Mexico.

Were there other fires and disasters back in the late 1980's and 1990's too? You bet.

Some of the most publicized incidents in the 1990's involved Carnival's Ecstasy (above right). It caught fire in 1996 and again in 1998 shortly after leaving the port of Miami. If the fire had occurred thirty minutes later there would have been no fire boats to extinguish the flames. Local news helicopters from Miami flew to the scene and filmed the burning ship.

The next year, the Carnival Tropicale, caught fire again and the ship was adrift again in the Gulf of Mexico with 1,700 passengers and crew members for two days after the fire disabled the engines. This Oceanos Sinkingincident received national attention, particularly after passengers complained that some crew members did not speak English well enough to provide safety instructions. The New York Times reported on the debacle in an article "Language Barrier Cited In Inquiry Into Ship Fire."

During the ensuing investigation, the captain of the Tropicale testified that he was concerned that the engine room would explode. He kept information about the raging fire from passengers because he worried they might panic and jump overboard, according to the St. Pete Times article "Cruise Captain Feared Panic."

The 1990's began with the captain's abandonment of the sinking Oceanos (right), which made my list as the number 1 worst cruise ship video of all time.  

The 1990's also saw the Chairman of the National Transportation Safety Board, Jim Hall, calling the cruise lines an "outlaw industry" which suffered from "bad actors." 

The difference between then and now is that the "good old days" of the 1990's did not have Twitter breaking embarrassing cruise news every day, or Facebook and YouTube hosting iPhone images and video of cruise ship disasters, or social media blogs, like this one, providing insight when cruise executives take you back to the past and try and pull the wool over your eyes.  

Royal Caribbean President Sells Stock

Adam Goldstein Royal CaribbeanNews sources report that Royal Caribbean President Adam Goldstein sold 7,855 shares of RCL stock on the open market in a transaction yesterday.

Goldstein's sold the stock at an average price of $43.22, for a total value of $339,493.10.

He reportedly now directly owns 335,654 shares of Royal Caribbean stock, valued at approximately $14,506,966.

Yesterday on our Facebook page, I suggested that at a price of $43 you should take your profit on RCL stock and run.

In July 2013, we reported that President Goldstein sold almost 19,000 shares of RCL stock worth over $700,000. This year Goldstein has sold over $1,000,000 of his company's stock. 

Two years ago, Goldstein sold over 40,000 shares between February 1 - 16, 2011 - for a total of over $1,900,000.

Royal Caribbean has not suffered the same severe problems as rival Carnival this year, but it has had its share of problems.  It suffered a major fire on the Grandeur of the Seas in May, and its subsidiary brand Pullmantur also a major fire on the Zenith cruise ship in June.

Just last month, Royal Caribbean cleaned house and terminated over 100 employees in its corporate offices in Miami as a cost saving measure. Read about that here: Loyal to Royal? Royal Caribbean Axes 100 Jobs in Corporate Headquarters.   

Royal Caribbean CEO on Fox News: Fires & Cruise Mishaps are "Extremely Rare"

The cruise industry's reputation is under siege.  

Cruise line presidents used to be able to appear on cable news business shows and trot out their new products and intineraries and pontificate at length without a hint of controversy.

But as you can see in this interview on FOX BUSINESS, Royal Caribbean Cruises CEO and President Adam Goldstein had to dodge and weave through what should have been a friendly interview by a FOX NEWS business reporter. It's hard to talk about the new cruise ships coming on line, when images of the stranded Triumph and the burned stern of the Grandeur of the Seas are playing as a back drop.

Cruise fires and mishaps are "extremely rare" cruise executive Goldstein says.     

Are you convinced?

 

"CNN Effect" Doesn't Stop Royal Caribbean CEO From Buying Nearly $1,000,000 in RCL Cruise Stock

Yesterday, I wrote a short article about Royal Caribbean President Adam Goldstein selling 2,181 shares of RCL cruise stock earlier this week at an average price of $36.80, for a total value of $80,260.80. Cruise executives buying and selling their company's own stock is interesting to me as an indicator into their true thoughts about the direction of their business' future.

That being said, an cruise executive's sale of only $80,000 worth of stock doesn't say much. $80,000 may pay the annual wages of a dozen RCL utility cleaners but it's pocket change for a cruise line president. Goldstein still owns 335,654 shares of the company’s stock worth over $12,350,000.   

But today Forbes reports that Royal Caribbean CEO Richard Fain purchased 26,800 shares of RCL stock which, at a price of $36.82 a share, turns out to be $985,776.

As Forbes writes: "company’s own top management tend to have the best inside view into the business, so when company officers make major buys, investors are wise to take notice."

RCL’s low point in its 52 week range is $24.16 per share. Its 52 week high is $38.62. 

So CEO Fain is buying near the top of the chart. Seems risky to me.

As we mentioned this week, research firms are split on RCL's stock. One analyst gave the stock a "sell" rating, nine analysts assigned a "hold" rating and ten issued a "buy" rating. RCL currently has a consensus rating of “hold” and a consensus target price of $40.21.

Royal Caribbean Cruise Richard Fain Travel Weekly quoted Fain at the cruise line's second-quarter earning call last week. He said that despite the “unrelenting pressure of a deluge of negative publicity” on the cruise industry, things are looking up. Mr. Fain said the company is overcoming what he called the "CNN effect” of negative media scrutiny on things like highly publicized cruise ship fires that have occurred this year.

Royal Caribbean suffered a serious fire to its Grandeur of the Seas. And just last month, it's subsidiary brand Pullmantur's Zenith suffered an engine room fire which disabled the ship which needed to be pulled by tugs to back to shore.  

Royal Caribbean is also suffering from the spill-over effect from the negative publicity caused by Carnival's Costa Concordia disaster and the Triumph's infamous "poop cruise," in addition to other Carnival cruise ship mishaps.   

Does Mr. Fain know something that the analysts and the public doesn't know? Or this really a big calculated bluff to prime the pump of positive thinking?

I am not too sure that I would bank on a more positive public perception of the cruise industry developing naturally. The "CNN effect" is real.  In my opinion, the images broadcast by CNN are a lot more persuasive and powerful than the positive musings of a hopeful cruise executive.  

Plus there's a couple of things to keep in mind. There are increasing cut backs in RCL officer and staff salaries and crew pay coupled with an increase in their responsibilities which are deteriorating morale on the ships. Some of the tips which formerly went to the RCL cabin attendants and waiters are being channeled away from the crew to the company's income stream and destroying the crew's attitude in the process. And the MLC will come onto effect next month, restricting crew member working excessive hours, which may increase RCL's costs, restrict the cruise line's historical exploitation of its crew, and push its profit margins down.

Royal Caribbean Grandeur of the SeasRCL's cost cutting measures helped it to squeeze out a profit this past quarter, but it was under $25 million on gross revenues of $1.88 billion. How much more can RCL cut from the already overworked and underpaid crew?

And no cruise executive pumping up a stock price would dare mention Senator Rockefeller's announcement last week that he intends to introduce legislation to take away the loopholes in the U.S. tax code which permits the cruise lines to avoid U.S. taxes on its foreign flagged cruise ships.

Are brighter days ahead for RCL and CEO Fain's newly acquired 26,800 shares?

Maybe. Maybe not. But one thing is certain. All it will take is for one cruise ship to suffer another engine room fire for the "CNN effect" to send the RCL stock price plummeting south.

July 31 2013 Update: Watch List News reports that Royal Caribbean Cruises' President  Adam Goldstein "dumped 16,717 shares of the stock on the open market in a transaction that occurred on Tuesday, July 30th. The stock was sold at an average price of $37.20, for a total value of $621,872.40."

 

Photo Credit:

Top: Royal Caribbean Press Center

Bottom: Janeeva Russell / The Freeport Times / AP

Royal Caribbean President Sells 2,181 Shares of Cruise Stock

RCL Adam Goldstein The Daily Political reports that Royal Caribbean President Adam Goldstein (left) unloaded 2,181 shares of RCL cruise stock yesterday at an average price of $36.80, for a total value of $80,260.80.

Goldstein still owns 335,654 shares of the company’s stock worth over $12,350,000. 

A number of research firms have recently commented on RCL's stock value. One analyst gave the stock a "sell" rating, nine analysts assigned a "hold" rating and ten issued a "buy" rating to the company’s stock. RCL currently has a consensus rating of “hold” and a consensus target price of $40.21.

The stock has a 52 week low of $24.16 and a 52 week high of $38.62. 

Royal Caribbean posted its quarterly earnings last week. The company had revenue of $1.88 billion for the quarter, with a profit of under $25,000,000.  

RCL Chairman Richard Fain (below right) said that a fire on the Royal Caribbean cruise ship Grandeur of the Seas, weak pricing in the Caribbean and itinerary disruptions in Asia affected earnings in the second quarter. 

RCL Chairman Richard FainThe cruise line's business model is predicated on its avoidance of U.S. taxes and regulations, such as minimum wage, overtime, and OHSA regulations. Royal Caribbean avoids taxes and many U.S. regulations by incorporating itself in Africa and incorporating its cruise ships in places like the Bahamas and Malta.

Royal Caribbean and its subsidiaries are currently exempt from U.S. corporate tax on U.S. source income from the international operation of cruise ships pursuant to Section 883 of the Internal Revenue Code.

Senator Rockefeller stated at a Senate hearing last week that he would introduce legislation to close loopholes in the federal tax code which permits foreign incorporated companies operating foreign flagged cruise ships to avoid paying their fair share of U.S. taxes.

If such legislation was enacted into law, the RCL stock value would plummet. 

July 21 2013 Update: Watch List News reports that Royal Caribbean Cruises' President Adam Goldstein "dumped 16,717 shares of the stock on the open market in a transaction that occurred on Tuesday, July 30th. The stock was sold at an average price of $37.20, for a total value of $621,872.40."

 

Photo Credits: Top - NBC News; Bottom - Examiner.com

"Most Wanted" for Cruise Ship Pollution: Royal Caribbean Chief Engineer Michael Psomadakis - But Is He Really The Only Culprit?

Do you know this former Royal Caribbean crew member?

He's on the U.S. Environmental Protection Agency (EPA)'s "Most Wanted" List. Here's the story:

In 1993, Michael Evangelos Psomadakis was the chief engineer aboard RCCL's Nordic Empress cruise ship which routinely discharged oil into the water. But the Nordic Empress was no island to itself.  RCCL's fleet of ships was regularly dumping pollutants from Biscayne Bay here in Miami to the pristine waters in Alaska.

The pollution was right outside of the cruise executives' offices at the port of Miami all of the way to Royal Caribbean Cruise Ship Pollution Alaska and back.  I can't imagine the abuse of the waters in Europe, Africa, and South America.

There were many Psomadakis's throughout the RCCL fleet of cruise ships.  

Psomadakis - like his employer Royal Caribbean - lied to the Coast Guard about the pollution. A big mistake. This was no Bush administration with its let's-trust-the-big-corporations-and-look-the-other-way mentality. The U.S. justice system, under the leadership of environmentalist Janet Reno, investigated Royal Caribbean and discovered that many RCCL cruise ships were dumping oil & chemicals throughout their routes. A nasty business. Ms. Reno caught the Royal Caribbean bad boys under the corporate leadership of CEO Richard Fain, who claimed to know nothing, with their proverbial pants down.   

Attorney General Reno slammed the cruise line, calling the cruise line "flim-flam" artists. She oversaw the imposition of penalties totaling $27,000,000 for engaging in a "fleet wide conspiracy . . . to save millions of dollars by dumping oily waste into the ocean," according to the the New York Times.

The case was prosecuted here in U.S. courts even though the cruise line claimed that the U.S. had no authority because the company was registered in Liberia and the cruise ship flew a flag of convenience in Liberia (and Liberia had already dismissed the case of course).

Psomadakis escaped FBI agents at a Miami hotel "simply by walking out another exit," as reported by the New York Times. He got away from the FBI and made it back to back to Greece all by himself?

At the end of the day, Royal Caribbean admitted it was a corporate felon, not only for the illegal discharges but for systematically lying to the Coast Guard and Attorney General's office for years. The New York Times article covered the story

If you are interested in what the environment would be like without the U.S. government regulating a renegade Liberian-incorporated-corporation like Royal Caribbean, take a read of the New York Times article here.   

The problem was that Royal Caribbean didn't change it's ways. After the first two million-dollar-fines, Royal Caribbean continued to illegally discharge oil, waste and fecal matter everywhere.  The illegal discharges even increased, reflecting the arrogance of the Liberian holier-than-thou corporation. The cruise line responded with a bogus marketing campaign claiming that it was an environmental steward Royal Caribbean Save the Waves - Cruise Ship Pollution of the seas.  It adopted a PR campaign that it was "Saving the Waves" (see photo) by encouraging its employees (and guests) not to throw any garbage overboard.

But while the crew members wore their "Save the Waves" buttons above deck and served passengers cocktails, Royal Caribbean engineers below the decks fabricated secret by-pass values to dump everything from raw sewage to chemicals used in the photography labs directly into the ocean.  Do you really believe that the cruise executives didn't know?

Fifteen years later, CEO Fain and President Goldstein are still at the helm of the cruise line. Fall guy Psomadakis is on the lam. Yeah, an engineer from Greece is the real culprit behind the wide spread fleet-wide dumping and defiance of the U.S government. 

The most recent news from this cruise lines?  Royal Caribbean will soon deliver us another ostentatious, Oasis-class, bunker-fuel burning, polluting, gigantic cruise ship, ordered by the least environmentally friendly, flim-flam cruise line in the industry.    

Royal Caribbean Delivers Cruel Blow to Widow of Beloved Captain Tore Myhra

The maritime lawyers here in Miami have been in a state of outrage following a recent decision from an appellate court in the Estate of Tore Myhra v. Royal Caribbean Cruises, Ltd., Case No. 10-15840 (11th Cir. Sept. 21, 2011).

This case addressed the issue of whether a cruise line could legally enforce a "forum selection clause" transferring the lawsuit to a court outside of the U.S., if the effect of the transfer were to limit the cruise line's liability for personal injury or death occurring on cruises.

There is a federal statute which clearly prohibits cruise lines from doing this. 46 U.S.C. section 30509(a) states that attempts to limit liability by contractual terms in cases where the cruise ship calls on a U.S. port are illegal and unenforceable.

In the Myhra v. Royal Caribbean case, a passenger contracted what is described as a bacterial infection on the Liberty of the Seas cruise ship which led to his death. His widow filed suit in Miami where all lawsuits against this cruise line are filed. But the cruise line moved to dismiss the case, citing terms buried deep in the the passenger ticket which specified the U.K. as the location for the lawsuit.

The lawyers for Mr. Myhra's widow argued that the fine print terms in the passenger ticket were not reasonably communicated to Mr. Myhra, and even if they were, because the U.K. adopted the Athens Convention limiting the liability of cruise lines to a maximum of $75,000 (even including death cases), this clause violated 46 U.S.C. section 30509(a).        

But the Eleventh Circuit held that 46 U.S.C. section 30509(a) was not violated. In a tortuously reasoned opinion, it held that because it was not the cruise line limiting its liability, but rather a foreign country (the U.K.) which provided limited damages, the transfer to the U.K. didn't violate 30509(a). This is a rather circuitous argument. After all, it was Royal Caribbean which inserted the U.K. into the ticket as the chosen forum. It did so because it knew that Britain would afford only limited damages to passengers in cases of injury and death.

The South Florida Lawyers blog covered the story. An anonymous reader commented that the decision was "more intellectual dishonesty from the 11th Circuit." Curiously, in a footnote to the decision, the court held that a different result might be reached if the passengers were a U.S. citizen who bought his ticket in the U.S., as opposed to a Brit who bought his ticket in Britain.

Tore Myhra - Royal Caribbean Cruises - Cruise ShipThe case will be remembered as a result-oriented decision where the xenophobic appellate court's priority was to send the case away from the U.S. based on whatever justification it could scrap together.

But there is more to the story. 

Mr. Myhra was not just an average passenger. He was the former Captain (i.e., Master) of several Royal Caribbean cruise ships. He mastered the Monarch of the Seas and was a captain of one of the cruise line's first cruise ships, the Song of America.

By all accounts, Captain Myhra was a skilled mariner, a dedicated Royal Caribbean employee and a well respected captain who was liked by his fellow officers and crew members on the cruise ships on which he served as Master.

In 1998, Captain Myhra bravely sailed the Monarch of the Seas into the harbor in St. Maarten in the middle of the night to bring a sick passenger ashore for emergency medical treatment. But while the cruise ship was sailing out under the command of another officer, the vessel went off course and ran across a reef. The ship sustained heavy damage to the hull and began to take on water. Captain Myhra took command of the ship and ground it to keep it from sinking.

In 1999, Captain Myhra resigned from Royal Caribbean. Even though he was not at the helm when the ship hit the reef, he took responsibility. Thereafter he began a successful camping business called Rose Farm Touring & Camping Park in England with his wife, Susan, and their daughter.

A decade later, Captain Myhra returned to a Royal Caribbean cruise ship not as the captain but as a passenger with his wife aboard the Liberty of the Seas. Captain Myhra was exposed to Legionnaires Disease along with another passenger due to the negligent manner that the cruise line maintained its water supplies.  Although infected, he was kept aboard the cruise ship until the end of the cruise, only to die in a public hospital the next day.

Captain Myhra ended his career with Royal Caribbean trying to help a sick passenger in the middle of the night by diverting the cruise into port for emergency medical care, but ended his life sickened on a Royal Caribbean ship as a passenger.   

But the irony and injustice does not stop there. Captain Myhra and his wife, Sue, a cruise ship purser herself on Royal Caribbean ships, were "Loyal-to-Royal" friends to the cruise line. They were part of the Royal Caribbean "family."  I'm sure CEO Richard Fain knew them both on a first name basis.

But when Master Myhra died due to exposure to Legionnaires Disease on the Royal Caribbean ship, the cruise line treated his widow and child shabbily.  

Royal Caribbean denied liability and tried to place the blame elsewhere. It could have stepped up to the plate and paid Ms. Myhra and her daughter a reasonable settlement and wished its friends and family members well.  But instead, it paid its defense lawyers in Miami a vast sum of money to try and kick the lawsuit, which Ms. Myhra was forced to file, out of the U.S.

In the end result today, Royal Caribbean beat its former captain's widow and child in a court of law. The appellate court pronounced that their lawsuit for the wrongful-death-by-Legionnaire's-Disease-on-a-Miami-based-cruise-ship is somehow not welcome here in Miami where Royal Caribbean is headquartered.

What a sad spectacle. 

Cruise line CEO Fain and President Adam Goldstein earned over $12,000,000 in 2010 while their cruise ships reduced costs across the fleet, including cost reductions due to fewer tests of its potable water on the Liberty of the Seas and other ships. Meanwhile Ms. Myhra is left to seek compensation in the U.K. for her dead husband and the dead father of her daughter.

After attorney fees and costs, the net compensation will turn into peanuts.

Royal Caribbean President's Email Blast Insults Crime Victims

Yesterday one of my clients, who I will call Jane Doe, contacted me after receiving an unsolicited email from the President of Royal Caribbean Cruises, Adam Goldstein.

The e-mail addressed her by her first name.  It seemed to be personalized to her.  It recognized her as a past customer and contained statements like:

"At Royal Caribbean International, the safety and security of our guests and crew is our highest priority. It is fundamental to our operations. Our maritime safety record over our 42-year history Royal Caribbean Cruises  - Adam Goldstein illustrates our commitment to the safety of the millions of guests and crew that sail on our ships."  

President Goldstein's email outraged Jane Doe.   You see, she had just returned home with her young daughter who had been raped on President Goldstein's cruise ship, the Allure of the Seas.  

Goldstein's unsolicited email to a rape victim's mom had nothing to do with the humiliating shipboard rape suffered by Jane Doe's daughter, one of many rapes of children on the Royal Caribbean fleet over the years.  Instead, it was part of this cruise line's media campaign to try and distance itself from the negative fall out following the deadly Costa Concordia disaster.

Royal Caribbean is the only cruise line making such public statements following the Concordia crash.  You can watch Royal Caribbean's slick video touting the safety of cruising here.  President Goldstein's blog is here.  "Safety is in our DNA."  "Cruising is the safest form of transportation."  "The safety and security of our guests is our highest priority."  Royal Caribbean covered all of the cruise industry's talking points in its video, the president's blog and its e-mail blast below.    

Of course, in truth, Goldstein's email was not a personalized message to Jane Doe.  He does not know her from the man in the moon, even though her daughter was raped on the cruise line's showpiece megaship and the biggest cruise ship in the world. 

Royal Caribbean spammed Goldstein's email to every single family who had sailed with them.  This was an intentional and reckless stunt, considering that hundreds of women and children have reportedly been sexually assaulted during Royal Caribbean cruises over the years.  Certainly, the cruise line knew that its former customers who are victims of crime, and whose names remain in its customer database, would feel salt being poured into their wounds upon reading Goldstein's email in their personal email accounts.      

Insensitive & thoughtless, if not outrageous?   Definitely.  But Goldstein is not thinking of his customer's feelings.  He is motivated by his cruise line's bottom line.  He wants to reassure his customers that it is safe to return to cruising, whether that is true or not. 

This is hardly the first time this has happened.

In 2006, one of my clients, Laurie Dishman (photo right), was brutally raped by a part time Royal Caribbean security guard with a Royal Caribbean Crime Victim Laurie Dishman prior record of sexually harassing passengers.   She retained us to represent her.  I sent a handful of letters to President Goldstein, asking for our client's medical records, her statement, and the name and address of the Royal Caribbean employee who raped Laurie.  We received nothing in response.  Goldstein ignored us.

The only things Laurie initially received from Royal Caribbean were unsolicited emails inviting Laurie to return for another "cruise of a lifetime" on a Royal Caribbean ship.  The emails continued for over a year.  Each email popping into her computer's email in-box took Laurie back to the scene of the crime and reactivated a sense of panic and stress.  It was only after a half dozen letters of protest from us, and a Congressional investigation into the crime initiated by Laurie's Congresswoman in 2007, that the cruise line scrubbed her from its marketing database.

We pleaded for Royal Caribbean to implement a system to remove a passenger's information from the company's marketing database whenever a passenger was raped, killed or lost a loved one overboard during a cruise.  Believe me, cruise vacationers don't want promotional brochures in their mail boxes after a family member has been raped or lost at sea.    

It looks like Royal Caribbean ignored that request too. 

President Goldstein's blog talks in grandiose terms about the Costa Concordia crash being a "defining moment" for the cruise industry.  He promises a renewed commitment to passenger safety.  Let's hope that's true. 

But when a cruise line president sends an e-mail blast to the mother of a child raped during a cruise, you wonder whether cruise line executives like Goldstein really get it.   

 

Photo credits:

Adam Goldstein - Royal Caribbean Flickr page

Laurie Dishman - Sacramento Bee

 

ROYAL CARIBBEAN EMAILS ADAM GOLDSTEIN'S LETTER TO MILLIONS OF CRUISE CUSTOMERS:

Dear XXX, 

All of us at Royal Caribbean International continue to extend our heartfelt sympathies to those affected by Carnival Corporation's recent tragic incident on the Costa Concordia. As a Crown & Anchor Society member and loyal Royal Caribbean guest, we know you may have some questions as the situation continues to unfold.

At Royal Caribbean International, the safety and security of our guests and crew is our highest priority. It is fundamental to our operations. Our maritime safety record over our 42-year history illustrates our commitment to the safety of the millions of guests and crew that sail on our ships. The measures we take in the interest of safety are many, often exceeding the regulatory requirements – these are all part of our ongoing commitment to innovation and continuous improvement in every aspect of our business.

To address some of your questions and concerns, here is a video that will provide an overview of safety onboard our ships; the training of our crew, officers and captains; and the many regulations that govern our practices. Click here to watch.

As a past cruiser, we know your friends and family may be asking about your own time at sea. We hope that you'll share this video along with your personal Royal Caribbean experiences with them, and reinforce that cruising continues to maintain the best safety record of any industry in travel.

Thank you for your continued support and we look forward to welcoming you aboard again soon on one of our ships sailing to 270 destinations worldwide.

Sincerely,

Adam Goldstein
President and CEO
Royal Caribbean International

The Royal Attitude

Over the years I have learned that the single most critical factor that drives clients to our office is not when a cruise passenger has been injured or inconvenienced.  Stuff happens, and most people understand that.  But when a cruise line treats passengers poorly after injuring or inconveniencing them, that's when our law firm's telephone begins to ring.

Over 75% of the cases in our office are against Royal Caribbean.  If a crew member from India or Trinidad calls us and complains that he or she were injured on a cruise ship and then dumped back home with no or poor medical care, nine times out of ten its a Royal Caribbean employee. 

Why do so many RCCL passengers and crew members sue Royal Caribbean?

The answer is what I call the Royal attitude.

Last month, the Royal attitude was on public display following the stranding of 145 passengers in San Juan when hurricane Irene was approaching. 

Unlike Carnival which contacted or at least tried to contact guests ahead of time to tell them the port authorities were requiring cruise ships to leave the port early, Royal Caribbean didn't do anything.  Carnival paid for over 300 guest's hotels and offered to fly them to the next port to meet the cruise ship.  But Royal Caribbean did not bother to have a representative at the airport or port to explain what was happening.

Its dismissive press release then added salt into the wound.

Even cruise fans were outraged.   The popular on line cruise community Cruise Critic posted hundreds of unflattering comments about Royal Caribbean's attitude.  Its editor even wrote an scathing editorial "Bad Weather Blunder: A Lesson in Cruise Crisis Control?"

The other popular cruise community Cruisemates wrote a blog criticizing Royal Caribbean entitled "Carnival 1 - Royal Caribbean 0."

Cruise blogger John Honeywell a/k/a Captain Greybeard, who writes cruise friendly pieces for the U.K.'s Mirror, added an article "How Hurricanes and Art Led to a Series of Right Royal Blunders."  Captain GreyBeard not only joined in the criticism of Royal Caribbean for stranding it guests but mocked cruise line president Adam Goldstein's decision to avoid the issue in his Nation of Why Not blog and instead write about employees delivering the "Wow factor" by finding a guest's passport on an airplane and driving it over to the port.  He also blasted Royal Caribbean for Obfuscation the delay and lack of transparency in responding to an inquiry about problems with the art vendors on the cruise ships. 

Greybeard characterized the cruise line's non-response to his inquiries as a "masterpiece of obfuscation." 

I feel your pain too Captain Greybeard.  I wrote about Royal Caribbean's skill at obfuscation last year in a blog: Royal Caribbean Press Statements And Other Gobbledygook.

Even when the cruise line changed course in response to the universal criticism and decided to offer a future cruise credit (only 30%) to the abandoned guests, it was unable to issue a clear or genuine apology - calling the incident just an out of norm fluke.   The cruise line then arranged for president Goldstein to be interviewed in the Miami Herald about his passion for running and playing ping pong.  I'm not kidding.  145 passengers stranded in a foreign port with a hurricane approaching and the cruise president is now talking about ping pong.

You can dismiss my criticisms as coming from a lawyer who sues this cruise line every week.  But when cruise fans like Cruise Critic, Cruisemates and even the affable Captain Greybeard start talkin smack about your cruise brand, Royal Caribbean may want to consider changing its attitude toward its customers.  

Royal Caribbean Executives Get Richer While Crew Members Get Poorer

In a proxy filing with the Securities and Exchange Commission, Royal Caribbean Cruises disclosed that its 2010 compensation paid to CEO Richard Fain (photo left) increased almost 60% to $8,600,000.  Royal Caribbean increased the compensation paid to the company's four other named executives from 18.5% to almost 50%.  The largest compensation increase of the four executives  went to Adam Goldstein (photo right), the president of Royal Caribbean International, whose total compensation increased to over $4,000,000. 

These increases were primarily incentive based, meaning that the executives met or exceeded Royal Caribbean Executives - Richard Fain - Adam Goldsteincertain financial goals for the corporation.

One of the company's goal we have been concerned with has been to reduce payments to ill and injured crew members.  In 2008, Royal Caribbean had over over 1,200 open medical files for ill and injured crew members around the world.  Due to certain cost cutting measures, by 2010 Royal Caribbean slashed the number of open crew medical files to around 400. 

In the process, the cruise line culled over 800 ill crew members from its medical department's responsibility.  In many instances, there was no legal basis to terminate the medical care.  In cases where the medical care was not arbitrarily terminated, the cruise line reduced the daily stipend for sick crew employees from $25 to $12 a day.  Needless to say, it is impossible for anyone to live on $12 for food and lodging a day.

These harsh cost cutting measures "saved" Royal Caribbean millions.  Given the fact that cruise executives Fain and Goldstein collected over $12,500,000 together last year, it looks like the money formerly spent on crew member medical benefits ended up in the executives' pockets.   

 

Photo credit:  Royal Caribbean International Flickr photostream

Royal Caribbean: In A Better Place?

CCN Travel has an interesting article this morning "Cruise Line Chief:  We're in a Better Place."  The cruise line's President Adam Goldstein talks about the "enormous excitement" generated by its two new mega cruise ships, the Oasis of the Seas which debuted last December and the Allure of the Seas which is now sailing from Europe to Fort Lauderdale and will arrive in South Florida later this week.

Royal Caribbean's Goldstein claims that the cruising experience on Oasis of the Seas has been so "universally positive" that he no longer hears criticism that the ship is "ugly," "obnoxious" and a "monstrosity."   But it is always interesting to contrast happy talk like this to the comments from Allure of the Seas - Adam Goldsteinreaders who complained about the mega ship as a "giant floating shopping mall with a captive audience," as well as "long lines, rude employees, and indifferent customer service." 

Although Royal Caribbean experienced a strong third quarter, its financial improvement came at a price to its own employees and crew members.  Over the past two years, the cruise line slashed employees from the company's payroll and terminated medical benefits for hundreds of injured and ill crew members. Royal Caribbean has also reduced the daily stipend for most ill and injured crew members from $25 a day to $12 - an amount that no one in the world can live on.  

In the process, the company's stock rose from a low of just under $6 a share to around $40. 

Not coincidentally, last week President Goldstein unloaded 30,899 shares of RCL stock for $1,200,000.  Not to be outdone, the cruise line's CEO, Richard Fain, pocketed $6,000,000 by selling 150,000 shares. 

Yes, Royal Caribbean's President Goldstein and CEO Fain are in a "better place." 

But their crew members certainly are not.  

 

Photo credit:   nationofwhynot? blog

The Cruise Industry's Reputation - A Sinking Image

Labadee - Haiti - Royal Caribbean - PR - public relationsThe cruise industry has an image problem.  Royal Caribbean is the main reason.

This year began with Royal Caribbean's business-as-usual approach to ferrying passengers back and forth to its "private destination" in Labadee (actually sovereign Haitian land leased from Baby Doc Duvalier).  While Haitians tried to dig out of the rubble and bury their dead following the devastating earthquake, Royal Caribbean passengers zip lined, jet skied, or sat drinking margaritas on the cruise line's private beach.

Royal Caribbean received widespread condemnation from advertising and PR experts nationwide. 

Newsweek magazine joined the ranks of those questioning Royal Caribbean's corporate morality in an article "Setting Sail on a Haitian Pleasure Cruise - the Moral and Economic Dilemmas of Royal Caribbean's Labadee Port."  On the same day, the widely respected non-profit organization, Center for Responsible Travel, issued a press release chastising Royal Caribbean for not doing enough. The non-profit group characterized the cruise line's move as "unsound" and a "colossal public relations faux pas."

This sentiment echoes the criticism by PR experts in Advertising Age's "Royal Caribbean Blasted for Continuing Stops in Haiti" where the consensus is that this was a "massive debacle" which may have long term damage to the Royal Caribbean "brand." 

The Feministing Blog admonished Royal Caribbean for taking advantage of the incredibly poor country of Haiti and urged its readers to consider going on a cruise line other than RoyalRoyal Caribbean - Labadee Debacle - Caribbean "or tell them that these practices are unacceptable."

Royal Caribbean's President Adam Goldstein told National Public Radio that the decision to continue to sail to Labadee was a "no-brainer," a flippant and indifferent remark reflecting, perhaps, the core values of the "Nation of Why Not?"  

But this nothing new for Royal Caribbean. It's just the latest debacle in a series of public relations blunders dating back over a decade.

In mid 1990's, the cruise industry's arrogance had reached a zenith.  The industry thought itself to be above the law.  Cruise ships routinely dumped everything overboard - from plastic garbage bags to crime scene evidence.  The cruise industry treated the sea like a garbage dump.  It treated crime victims like criminals.   

In the late 1990's, the U.S. Coast Guard caught Royal Caribbean engaged in the widespread Save the Waves - Bogus PR - Royal Caribbean Cruisesdumping of oil and chemicals.  The Justice Department responded by fining the cruise line $1,000,000.  In response, the cruise line went to its PR people who dreamed up a campaign of "Save the Waves."  The PR experts posed the cruise line as a leader in protecting the environment.  Royal Caribbean posted this mantra on signs all over its cruise ships.  All of the waiters, bar tenders, and cabin attendants had to wear "Save the Waves" badges touting the cruise line's commitment to protecting the seas on which it sailed. 

The problem, however, is that the cruise line didn't change its ways.  Royal Caribbean continued to illegally discharge oil, waste and fecal matter everywhere from the Caribbean to the pristine waters of Alaska.

The Feds caught Royal Caribbean dumping again.  And the U.S. government fined the cruise line again - this time $8,000,000 - and placed it on probation.  Did Royal Caribbean learn its lesson?  No, the illegal discharges increased.  While the crew members wore their "save the waves" buttons above deck while serving passengers cocktails, Royal Caribbean engineers below the decks fabricated secret by-pass values to dump everything from raw sewage to chemicals used in the photography labs directly into the ocean. Royal Caribbean cruise ship even dumped oil and sewage into the waters right outside of the executives' windows overlooking Biscayne Bay.

The U.S. Attorney General, Janet Reno, a Miami resident herself and an environmentalist as well, Royal Caribbean - Crime Scene? - Cover Up? - PRwas not amused. The discrepancy between how the cruise held itself out to the public as a green company versus its actual criminal conduct was not lost on the Attorney General.  By the time she was through, Royal Caribbean pled guilty to multiple felonies, received another whopping fine of $18,000,000, and agreed to a five year probation.

While Royal Caribbean was forced to clean up its act on the environmental front, it found itself embroiled in multiple lawsuits after women and children were sexually assaulted during cruises.  Its own guests accused it of hiding evidence and tampering with crimes scenes on the cruise ships.

Royal Caribbean went back to its PR consultants for a quick fix of the problem.  The result was a much publicized "zero tolerance" slogan where the cruise line promised to report all crimes to the FBI and to preserve evidence to be used against the perpetrators, who too often were crew members.  But like the "save the waves" marketing gimmick, the "zero tolerance" motto was just Cruise Industry Reputation - Mr. Clean - Sanitized Crime Scenes?another PR scheme.    

All too often, by the time the FBI arrived on the scene following a shipboard rape, all evidence was gone.  The cruise industry was often accused of sanitizing the cabins and steam cleaning the carpets. The destruction of evidence on cruise ships seemed so thorough that it appeared like a scene out of Pulp Fiction where hit men Vincent (John Travolta) and Jules (Samuel L. Jackson) call upon Mr. Wolf (Harvey Keitel) to oversee the meticulous clean up of their bloody car. 

In 2005, I was retained to represent the newlywed bride of George Smith IV, who disappeared from Royal Caribbean's Brilliance of the Seas under mysterious circumstances.  At this time, Royal Caribbean was an admitted corporate felon which had just come of probation for its environmental crimes and lies to the U.S. Coast Guard. 

The cruise line quickly labeled Mr. Smith's death to be an "accident."  But there was blood all over the awning below his cabin.  And when photographs of what many thought was a crime scene began appearing on cable news every night, the American public had doubts about what Royal Royal Caribbean - PR - Public Relations - Cover Up?Caribbean was saying.  For the next year, the cruise line fought a highly public PR battle in the press, pandering to their base of travel agents and cruise fans while attacking the grieving families. 

In the process, the cruise line's history of shipboard crimes came into focus.  The U.S. Congress convened five hearings from 2005 through 2009 into the issue of whether cruise ships were safe.  The debate focused almost exclusively on Royal Caribbean's history of sexual assaults, shipboard crimes and unexplained disappearances of passengers.

While Royal Caribbean decided to fight a very public battle in the press, behind the scenes other cruise lines cringed as the cruise industry's image sank further and further.  When things could not get any worse, the President of Royal Caribbean's main competitor, Carnival, entered the public relations nightmare.  President Dickinson publicly proclaimed that the death of young George Smith was a "non-event."  Not only did Carnival's President decide to state this publicly, he chose to do so at the cruise industry's annual "Sea Trade" convention in Miami Beach in front of hundreds of reporters - while sitting next to Royal Caribbean's President Adam Goldstein. 

Rather than distancing himself from such disrespectful comments, Mr. Goldstein sat smiling and was later photographed openly chuckling with Mr. Dickinson in front of the cruise delegates.  Royal Caribbean - PR - RCCL's Adam Goldstein - Public Relations - Carnival's Dickinson About what?  Who knows.  But the damage was done. The cruise industry's indifference and arrogance came through loud and clear. 

Over the past five years, if something outrageous happened on a cruise ship, chances are the ship carried a Royal Caribbean flag.  Child molestation, sexual assault, norovirus, employee theft, passenger and crew member over-boards - you name it, Royal Caribbean has it covered.  As I pointed out in Royal Caribbean Press Statements And Other Gobbledygook, the mantra of other Miami cruise lines is "only at Royal Caribbean could this happen."

In the next couple of weeks, we will report on some of the recent PR blunders by the cruise industry.  And chances are they will involve our friends at Royal Caribbean. 

 

Credits:

Haiti - earthquake     AP (via Mail OnLine)

Royal Caribbean cruise ship        The Consumerist    Don't miss reading "Royal Caribbean Caught Infiltrating Review Sites With Viral Marketing Team."

Cabin        MSNBC

Awning     CBS News

Royal Caribbean "Returns" to its Trademarked, Private Fantasy Island of LabadeeĀ® - While Haiti Suffers

Labadee Haiti Royal CaribbenaFollowing the devastation and destruction of Port of Prince, Royal Caribbean faced the potential public relations nightmare of sailing its mega cruise ships into its private resort of Labadee with thousands of affluent Americans partying and gorging themselves while over 100,000 Haitians lay dead and decaying in the streets and millions more already impoverished Haitians face hunger and hopelessness.     

The Guardian newspaper in the U.K. reported that Royal Caribbean's decision to go ahead with scheduled cruises into Labadee "divided passengers." One passenger commented on the popular Cruise Critic forum that he was "sickened" by the thought of frolicking in the Haitian port while other suffered:

"I just can't see myself sunning on the beach, playing in the water, eating a barbecue, and enjoying a cocktail while [in Port-au-Prince] there are tens of thousands of dead people being piled up on the streets, with the survivors stunned and looking for food and water . . .  It was hard enough to sit and eat a picnic lunch at Labadee before the quake, knowing how many Haitians were starving," said another. "I can't imagine having to choke down a burger there now.''

Another article "Cruise Ship Docks at Private Beach in Haiti for Barbeque and Water Sports" debates the appropriateness of all of this. The comments range from pointing out the "grotesqueness" of the spectacle of thousands of partying Americans in an idyllic beach to the nonchalant attitude - "life goes on . . . and as always, life is for the living."

There has always been an uneasy disconnect between the opulence of a cruise ship like Royal Caribbean's Independence of the Seas and a country as desperately impoverished as Haiti with a poverty rate of around 80 to 85 %.  Most Haitians are forced to survive on less than $2 a day.  The U.S. passengers on the Royal Caribbean cruise ship, on the other hand, spend more for the Labadee - Haiti - Inside the fence - isolated from povertycruise, drinks, casino chips, and excursions than most Haitians will see for decades.  In addition to the Independence, Royal Caribbean's Navigator, Freedom, Enchantment and Liberty of the Seas, as well as its subsidiary Celebrity Cruises' Solstice, will all call on Labadee this year. 

The disparity between the haves and the have-nots will become even more pronounced as the $1,400,000,000 (billion) Oasis of the Seas, which visited Labadee in December last year, will begin arriving every other week in Labadee starting in May.

The executives at Royal Caribbean know how to make a hard bargain with Caribbean islands which have little economic bargaining power. CEO Richard Fain cut a deal where for only $6 a passenger (paid by the passenger), Haiti turned over a 260 acre tropical waterfront paradise of Haitian sovereign land for Royal Caribbean to consider it "private property" bearing the trademarked name "Labadee®." Yes, that's right.  This is a name that Royal Caribbean trademarked  as a variation of the French slave owner Marquis de La'Badie who settled in Haiti in the 1600's.

Many years ago an article revealed the hypocrisy of this whole endeavor.  Entitled "Fantasy Island:  Royal Carribean Parcels Off a Piece of Haiti," the article explained that Royal Caribbean began docking in Haiti in January 1986 after the ruthless dictator Jean-Claude "Baby Doc" Duvalier leased the land to Royal Caribbean.  He thereafter fled to France and the country turned into chaos for the next decade. 

Cruise Ship - Party - Eat, Drink and Be MerryRoyal Caribbean's timing was perfect.

The article continues: "plagued by a ravaged economy, residual political unrest, and 7,000 unemployed soldiers, the Haitian government was willing to bargain . . . Royal Caribbean got dirt-cheap entry, minimal regulation, and tactful silence."  The Haitian government earns less than $30,000 a week from the Royal Caribbean cruise ships, but, as Haiti's minister of tourism said: "we need to start somewhere."  Haiti was desperate. Royal Caribbean was Haiti's only choice.

Many argue that for the past many years, Royal Caribbean has not promoted or invested in Haiti.  Instead, as the article explains, it "exploited an acquiescent government and dictated its own terms of entry."  Its plan was to sell U.S. customers on an imaginary paradise.

Travel agents took the cue from Royal Caribbean and marketed the port as a "private island."  The fact that it was no island at all, but part of the mainland of Haiti, didn't bother the travel agents or the cruise line.  And it worked.  Consider a cruise review a couple of years ago:

One of the best Private Island experiences you could ever wish for! Labadee has four beaches and facilities for lots of people! Labadee is owned and operated by Royal Caribbean for the exclusive use of it's own passengers only . . .  Royal Caribbean maintains a nice lunch area on the island.  Here you can graze at your heart's content,  The cuisine was hamburgers, hot dogs, Haiti - Earthquake - Disasterchicken, ribs, various salads, and deserts. No charge. It's all included in the cost of your cruise!

Even last week, the Miami Herald ran a headline, cluelessly referring to Royal Caribbean returning to the "island" of Labadee. But the pretense of an island is only half of the illusion. Not only did Royal Caribbean fail to promote Haiti, it didn't even refer to Labadee as being in Haiti.  Rather it referred to Labadee as part of Hispaniola (the island comprising the Dominican Republic and Haiti) to try and keep the image of Haiti's poverty, violence, and civil unrest away from its customers.  

Labadee might as well be an island, considering that Royal Caribbean hires armed guards to patrol the 10-12 foot fences which isolate the Haitians from the cruise line's "private island."  Royal Caribbean keeps the locals away from its passengers who are "happily ensconced on the shores of paradise" with no idea that just over the walls are shanty-towns, sweat shops, and hungry and impoverished Haitians. The money spent in the private paradise of Labadee doesn't spread far beyond the fences. The article points out that all of the food, drinks, and even the tropical fruits and vegetables all come from Miami.

So now after isolating itself physically, financially and figuratively from Haiti for the past 20 years, Royal Caribbean is trying to justify not disrupting its business while not seeming indifferent to a country it has been indifferent to for 20 years. It just spent big bucks ($50,000,000) building a new wharf - one of the few locations which can handle the new mega ship Oasis of the Seas - as well as the world's longest zip line and an alpine coaster.  Royal Caribbean is banking on bringing the Oasis' 6,000 captive passengers onto that new wharf and charging them for the new zip line ($65), or wave runners ($80) or para-sailing, etc.      

In the last few days, Royal Caribbean has made a big deal talking about offloading pallets of food for Haiti. Royal Caribbean's Independence of the Seas sailed with only 60 cases of food and water  last Friday according to the Royal Caribbean President's "Nation of Why Not?" blog. That's just four pallets. The blog has some photographs of the few pallets from the Independence of the Seas - four pallets of flour, tomato sauce, can goods, and water bottles. Four pallets?  Considering that on a typical seven-day cruise Labadee - Haiti - Royal Caribbean "Private Destination"the cruise ship's passengers consume over 100,000 pounds of food and 12,000 gallons of alcohol over the course of over a hundred thousand meals- the photograph of the meager provisions sitting on the dock dwarfed by the huge Independence of the Seas seems like a sick joke. 

Subsequent articles mention that other cruises have included up to 40 pallets of food, photographs of which no one has seen, but if true this still is a pittance given the enormous needs of the Haitian people and the huge capabilities of Royal Caribbean's cruise ships. 

Supporters of the cruise line point out that Royal Caribbean also pledged to donate a million dollars to Haiti over an unspecified period of time.  It talks about using the net profits collected from the passenger's monies spent in Labadee.  Whether this occurs over the course of 6 months or a year remains to be seen.  Now a million dollars is a lot of money to me and probably anyone reading this article, but it is peanuts for a cruise line like Royal Caribbean. 

Royal Caribbean collects around $6,000,000,000 (billion) a year.  And because it registered its business in Liberia and its cruise ships fly the foreign flags of Liberia or the Bahamas, it pays $0 in federal Income taxes. $0.     

Why only a million dollars?  That will accomplish little. Even Royal Caribbean's competitor Carnival promised to send $5 million to Haiti, and it has no relationship with Haiti.  The $6 a passenger deal which Royal Caribbean struck with the leaders of Haiti rips the Haitian people off.  $6 to go into a 260 acre private paradise?  Well established ports in Alaska collect $50 a passenger in head taxes just to step off of the cruise ship. 

Americans are generous people. For the next two years, Haiti should receive $100 a passenger.   With 6,000 passengers from the Oasis of the Seas alone coming into Labadee a week, the country could receive $600,000 a week Richard Fain - President Clinton - Adam Goldstein - Labadee - Before Disasterrather than the current pittance of $30,000.  Each  passenger can pay $50 and the cruise line can pay the other $50.

If the cruise line can collect $65 for a 2 minute zip line in Labadee for fun, it can sure as hell can pay $50 a passenger to Haiti to deal with the humanitarian crisis unfolding before its eyes.

$600,000 a week could begin accomplish something.

But instead the cruise line is talking peanuts.  And its PR people have created the illusion that the Royal Caribbean executives are in Haiti walking the streets and helping the people.  

Royal Caribbean's website shows a photograph of CEO Fain and President Goldstein (above) walking with President Clinton with the mountains of Haiti in the background, next to headlines:

"HUMANITARIAN AID TO HAITI."  

The photograph looks impressive; any photo shoot with a President is worth hanging on your wall.  But neither Mr. Fain nor Mr. Goldstein have traveled to Haiti since the disaster.  And the photograph has nothing to do with humanitarian aid.  It was actually taken last year before the earthquake when President Clinton was visiting Haiti on an official visit as the United Nations special envoy. 

This U.N. trip was covered by Jason Maloney, of the Pulitzer Center, who ironically enough commented on Royal Caribbean's historical reluctance to support or even acknowledge Haiti. The center explained that there are "political sensitivities surrounding the ownership of the resort."  It called Royal Caribbean Pulitzer Center - Labadee - Haiti - Richard Fain - President Clinton - Adam Goldstein - Before Earthquakeout on its claim that Labadee is a “private beach destination” or the company’s “private island.”  It also ran a photograph (left) of CEO Fain, President Clinton, and Royal Caribbean President Goldstein (in baseball cap and shorts) when Clinton was visiting the cruise line's "private destination." 

It seems rather shameful for Royal Caribbean to pull out a photo which has nothing to do with the "humanitarian" crisis for its own PR purposes.

Royal Caribbean has a net worth of $15,000,000,000.  It has a (tax free) annual income almost twice greater than Haiti's gross national product. 

So in this context - Royal Caribbean's highly publicized pledge of a a measly one million dollars, random pallets of food and water, and a misleading photograph of the cruise line executives with an ex-President are - - - pitiful. 

Royal Caribbean is proposing nothing meaningful to address the profound problems of this impoverished and exploited country.   

 

To help Haiti, text HAITI and a donation of $10 will go to the Red Cross.  As of this posting, Americans have donated over $19 million via texting for Haiti.  

 For other articles on this issue:

South Florida Business Journal (Kevin Gale)

The Guardian "The Haves & Have Nots in Haiti" (Gwyn Topam)

Sphere "Vacationing in Hell: Cruise Ships Land in Haiti" (Dave Thier)

"Cruise Ships in Haiti and Misdirected Moral Outrage" @thethirdestate

 

 Credits:

Haiti - earthquake     AP (via Mail OnLine)

Royal Caribbean cruise ship        thewe.cc 

Haiti - earthquake                             @CarelPedre via @Mashable

Independence of the Seas                 "Nation of Why Not?" blog

Royal Caribbean executives (top)       Royal Caribbean's website

Royal Caribbean executives (bottom)     Pulitzer Center

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Marketing "Sex at Sea" on Cruise Ships

Marketing sex on cruise ships has been around ever since the Love Boat television program which I watched in the 1970's. OK I admit it.  I had a crush on Julie McCoy - "Your Cruise Director" - as she introduced herself.  Her line in every show "Hi!  I'm your cruise director" - was too much for most young boys to handle.   

Selling the Sea - Carnival - Sex on Cruise ShipsThe show revolved around Princess Cruises' Pacific Princess cruise ship, whose passengers and crew had romantic interludes every week.  The show starred the ship's captain (Captain Stubing) who encouraged his passengers and crew members to hook up and, well, it was the 1970's and people didn't talk in public about such things - do whatever people do behind closed doors. 

But somewhere over the course of the last 30 years, marketing sex on cruises changed from the innocence of the Love Boat  to something a little less conventional - swinger parties, cougar parties, and who knows what.  

Selling sex became a fundamental part of the business of selling cruise tickets.  Former Carnival President Bob Dickinson wrote a book called "Selling the Sea." I bought a hard back copy on eBay for $2.75. Consider his view of the role of the Captain of the cruise ship, always on the prowl:

" .  .  .  we have observed that some captains, because of their social and sexual prowess, have contributed meaningfully to the revenue occupancy of the vessel.  Clearly, there are passengers who are drawn to the Captain's insignia and crisp white uniform.  Imagine being entertained in the Captain's quarters (often a two or three room spacious suite with leather sofas, a library, and a  stereo) with a polite wait staff pouring Dom Perignon and serving Beluga caviar!"

Cosmopolitan magazine and Royal Caribbean conducted a survey which was published in an article entitled "Sex at Sea."   58% of passengers were unable to wait more than 10 hours after embarkation "before dropping anchor in the sea of love."  With their traveling companions?  Or crew members?   

P & O Cruises - Sex - Marketing - Dianne BrimbleSeveral years ago P & O Cruises ran a sexually charged campaign showing bikini clad women oiled up and lying oh-so-promiscuously on their backs with the caption "Seamen Wanted." 

Now, I work in an office with only women, who find this type of advertising totally offensive. 

The cruise line is advertising sex to sell tickets, pure and simple.  The P & O Cruises marketing was particularly offensive, considering that  just a year earlier P & O passenger Dianne Brimble died after being given Ecstasy by a pack of men.  After it was over, she ended up naked, and dead, on the floor of the cruise ship.  

This is the problem with the come-aboard-and-have-sex approach to marketing.  Date rape drugs have entered the equation (I don't remember GHB or roofies on the Love Boat).  Crew members try and get involved. They have key cards and can get into the cabins at will.  After all, the Captain is doing it.  And when a rape occurs, cruise lines are notorious for covering up the crimes and destroying evidence.

Just today the popular blog CruiseLog on USA TODAY blasted the headline: Royal Caribbean Says Yes to Sexually-Charged Cougar Cruise.  The article began with the question: Is Royal Caribbean the new bad boy of the cruise industry?

The article commented on Carnival having second thoughts about associating itself with hosting "cougar cruises."  So Royal Caribbean decided to fill the marketing void by announcing that it will happily host what is being called the "Second International Cougar Cruise" to take place in May on Royal Caribbean's Mariner of the Seas.  Royal Caribbean's PR team even issued a press statement to USA Today to promote the sex charged cruise. 

Marketing a cougar sex cruise?  You bet, Royal Caribbean - Sex on Cruise Ships - Adam Goldsteinthis is right up RoyalCaribbean's alley.  

A couple of years ago, I remember seeing a publicity photo of Royal Caribbean advertising its new mattresses on its cruise ships.  There before my eyes was Royal Caribbean President Adam Goldstein.  He was wearing a Hugh Hefner robe, holding a martini in his hand, lying in bed in front of two sexy, skimpily clad women wearing the Royal Caribbean logo on their bikini tops.  Take a look to the left.  What do you see? 

Booze ... beds ... women ... sex  ...  welcome aboard!   

We have come a long way from Julie McCoy, the innocent cruise director of the Love Boat.  

Carnival's President marketed his product by touting how many women the Captain can conquer in his bachelor pad suite on the cruise ship.  And Royal Caribbean's President might as well as be in the Playboy Mansion surrounded by bunnies selling tickets.  

Seven Questions to Ask Royal Caribbean Executives Regarding Oasis of the Seas

Twitter Cruise - #oasisAt this moment, the Oasis of the Seas is sailing with newspaper reporters, travel writers, cruise bloggers, and other cruise enthusiasts.  They are tweeting their observations on Twitter under the hashtag #oasis.

One of the tweters is @johnnyjet who has a nice travel portal called JohnnyJet.com.  He posted a photograph of the Royal Caribbean executives (below) answering questions on the cruise ship.  He also asked the Twitter Kingdom for some "good" questions to ask the Royal Caribbean "execs." 

Here are my seven questions. They pertain to issues I am interested in - the environmental effects of a cruise ship this large, and the safety and security of its passengers and crew members:

Royal Caribbean - Twitter Cruise - Safety and Environmental Questions1.  Does the Oasis of the Seas discharge wastewater/sewage (whether treated or outside 3 miles of shore or not) during the cruises? 

2.  If not, where does the cruise ship offload its sewage and waste?  In the U.S.?  Or in a foreign port?  And specifically which foreign port?  Nassau? St. Thomas? Falmouth? or Cozumel? 

3.  What happens to the waste and chemicals once offloaded from the ship?

4.  The LA Times reported that for a period of 32 months, there were over 250 incidents of sexual assault, battery, and sexual harassment against guests and crew members on Royal Caribbean cruise ships.  In light of these problems, how many security guards are employed on the Oasis of the Seas?

5.  How many security guards are assigned to the seven "neighborhoods" on the cruise ship?  Are there security "sub-stations" in each of the neighborhoods?

6.  How many security guards patrol the neighborhoods from 10:00 p.m. to 4 a.m., a time period we Royal Caribbean - Oasis of the Seas - Twitter Cruisehave found when female passengers are at a higher risk of being assaulted?

7.  Saturday Night Live joked about the Oasis of the Seas being being bounty for pirates. Whereas the thought of a pirate attack in the Caribbean may be silly, a large cruise ship like this could be a target of a   terrorist group.  Does the ship have a sufficient number of security personnel to not only protect the passengers from shipboard crime, but deter and fight off a terrorist attack?

Thank you for answers to these questions!         

 

Credits    

Top Photo      @johnnyjet  

Bottom Photo     Royal Caribbean Cruises, Ltd., a Liberian Corporation (via CruiseCritic)

"Titanic Dreams" - Royal Caribbean Wins "Worst Cruise Line in the World" Award

A popular part of Cruise Law News is the monthly "Worst Cruise Line in the World" award.  This is a special award, reserved only for the cruise line which demonstrates the worst treatment of passengers, crew members, and the environment.  

And the Winner for October Is  . . .  Royal Caribbean Cruises.

A Little Background Info on Royal Caribbean Cruises

Miami based Royal Caribbean Cruises is the second largest cruise line in the world, consisting of four brands: Royal Caribbean International, Celebrity Cruises, and its luxury line - Azamara Royal Caribbean - Worst Cruise Line in the WorldCruises.  It also operates its Spanish Subsidiary - Pullmantour Cruises, where it sends its old cruise ships like the Zenith and the Sovereign of the Seas.  

Like other U.S. based cruise lines, Royal Caribbean registered its business overseas (Liberia) and flagged its cruise ships in foreign countries (Liberia, Bahamas) in order to avoid paying U.S. taxes.  Although it collects between $5 and $6 billion a year from U.S. tax-paying citizens, Royal Caribbean does not pay U.S. taxes by virtue of its foreign corporate citizenship.  Its crew members are 99% non-U.S. citizens.

A Multi-Billion Dollar Corporation Which Pays Its Crew Members Peanuts 

Royal Caribbean crew members who toil behind the scenes, like galley cleaners, earn around $550 while working 360 hours a month - that's about $1.50 an hour.  Yes, that's right - $1.50 an hour.  Royal Caribbean has a net worth of around $15 billion dollars, but pays its hardest working crew members $1.50 an hour. 

Royal Caribbean waiters, bartenders, and cabin attendants earn a salary of only $50 a month. That's $1.67 a day. The cruise line depends on its passengers to tip the crew members so that they can make a living.    

Royal Caribbean invests virtually nothing into its crew members by way of medical treatment or employment benefits.  It is always looking for ways to save money at the expense of its crew.  Royal Caribbean is struggling to finance its + $1,500,000,000 (yes that's 1.5 $billion) cruise ship, Oasis of the Seas.  Its inaugural cruise is in just two weeks but it cannot even sell enough tickets to make its first voyage profitable.  And Royal Caribbean is sweating bullets figuring out how it will finance the even more expensive cruise ship Allure of the Seas, which will be arriving next year.  

So how does Royal Caribbean plan to pay for its two + $3,000,000,000 "Monsters of the Seas?"

Lets-Screw-The-Crew-Members-First

Royal Caribbean started pinching pennies with its crew members when it realized that the economy was tanking.  Its stock fell from $45 a share to under $6 a share, and it became obvious that it could not meet its financial obligations for its new mega cruise ships it ordered several years earlier.  Long before Royal Caribbean turned its back on its most loyal passengers - its Diamond and Diamond Plus passengers - the cruise line targeted its crew members to try and suck money back into its business.

As I mentioned in a prior article "Cruise Ship Medical Care - Royal Caribbean Gives Their Crew Members the Royal Shaft,' Royal Caribbean has been giving the screws to its foreign crew members, particularly the men and women from the Caribbean islands. The cruise line slashed Crew Member Medical Treatmentthe daily amount it pays to its sick or injured crew members from $25 a day to only $12 a day.  Obviously, no one in the world can eat and pay rent and other living expenses - which is the cruise line's legal obligation - on a pittance of only $12 a day.  But this is what Royal Caribbean is doing, scrimping on every penny, to try and finance its new cruise ships. 

Another tactic Royal Caribbean used to save money was to adopt a strict policy of keeping its crew members out of the U.S. whenever they are injured or become sick.  Under the General Maritime Law, cruise lines like Royal Caribbean are obligated to provide prompt and adequate medical treatment to their ill crew members.  This is called the doctrine of "maintenance and cure," the oldest legal doctrine in the U.S. 

Royal Caribbean is based here in Miami, which is a good place to manage its crew members' medical needs.  But the cruise line adopted a policy of keeping the ship employees out of the U.S.  Royal Caribbean is the poster child of corporate malfeasance when it comes to abandoning its sick crew members in third world countries around the world.      

"Ms. Jones" - Royal Caribbean Sees What It Can Get Away With        

We have a crew member client, lets call her "Ms. Jones."  She is from Jamaica.  She is a twenty-five year old, hard working woman who, like many young people from Jamaica, sought a career and better life working on a cruise ship.  In April of this year she felt sick and went to the ship doctor on Royal Caribbean's Jewel of the Seas while the ship was in Europe.  The ship doctor did not take Ms. Jones seriously.  She continued to work.  April turned to May and May turned into June.  Finally she was referred from the cruise ships to a doctor ashore who eventually mis-diagnosed her condition as a neurological condition.    

Royal Caribbean - Crew Member Medical Care When medical conditions cannot be managed on the cruise ships, Royal Caribbean sends its ill crew members to, of all places, the Dominican Republic for treatment.  Why?  It's cheap.  No other reason.  To save money.  The Dominican Republic is an impoverished country, next to Haiti. It is certainly one of the last places you would think of for state-of-the-art medical treatment.  

Dumped in the Dominican Republic

The odds were stacked against Ms. Jones when she arrived in the capital, Santo Domingo. But the good news, initially, is that the doctors finally ordered blood tests and diagnosed that Ms. Smith did not have an orthopedic problem.

She had leukemia. 

This is not a good diagnosis and the diagnosis had been unreasonably delayed.  But the doctors at least had finally figured out what was ailing Ms. Jones.  They had a plan as of early July.  The doctors notified Royal Caribbean and requested permission to start Ms. Jones on the preferred drug for this type of leukemia, "Gleevac," and to consider her for bone marrow transplantation.

Neglected In Jamaica

So what did Royal Caribbean do?  Did they fly her quickly to Miami which has excellent board certified oncologists?  No. They sent Ms. Jones back to her village in Jamaica, a location which makes Santo Domingo look like a thriving metropolis. Royal Caribbean provided no medicine to treat her leukemia and no plans for bone marrow transplantation.  They did this to save money.  Ms. Jones found herself in Jamaica in a weakened and immunosuppressed condition with a malignancy.  Yet no "Gleevac."  No money.  No "sick" wages.    

Ms. Jones languished in Jamaica.  July turned into August.  And then August turned into Leukemia - Crew Member Medical TreatmentSeptember. No Gleevac.  No bone marrow transplantation.  No living expenses.  Her calls and emails to Royal Caribbean begging for assistance were ignored.    

Ms. Jones contacted us.  We immediately notified Royal Caribbean and demanded that Ms. Jones receive her Gleevac, her living expenses, and wages.  We insisted that she sent to Miami for evaluation.  In response, Royal Caribbean called our client directly, behind our back. We have seen Royal Caribbean do this before. They were caught, and they began scrambling. 

Royal Caribbean then wrote to us, claiming that Ms. Jones had received her medicine.  This was a big lie.  We pressed the issue and Royal Caribbean instructed us not to contact its "medical department."  We were left to deal with a low level "claims adjuster" whose only job is to deny claims -  like the insolent claims representative for the "Great Benefit" insurance company in John Grisham's Rainmaker who writes denial letter after denial letter to the mother of a child dying of leukemia. 

Crew Member Medical Treatment - Cancer We quickly by-passed the claims handler and wrote to and called the lawyers at the cruise line.  They informed us that because a lawsuit had not been filed, they would not talk with us.  So within one hour, I prepared a lawsuit and had a process server run over to the port to serve their General Counsel.  Still, they refused to discuss the situation. They continued to stall, lie and obfuscate.

Not a Single Gleevac Pill in the Entire Country

Finally, the truth became evident - not only had they failed to provide Ms. Jones with the life saving "Gleevac" but there was no such medicine in the entire country of Jamaica.  Finally, Royal Caribbean arranged for the medicine to be flown to Jamaica - over 5 months after Ms. Jones first went to the Royal Caribbean ship doctor.

Like most cancers, leukemia left untreated can advance to the "blast" stage, where the prognosis is not good.  And the chances of death increase exponentially. 

As of this late date, Ms. Jones remains in Jamaica.  She is still taking her Gleevac, as long as it Royal Caribbean Cruises - Worst Cruise lIne in the World lasts.  She is receiving only $12 a day to live on, always paid late. On Friday evening, Royal Caribbean finally agreed to permit Ms. Jones to come to the U.S. but it took her hiring a lawyer and filing a lawsuit first.  We are trying to obtain a visa for her from the U.S. Embassy so she can come to Miami to be properly evaluated and treated by board certified U.S. oncologists. 

Her life depends on it.

For anyone reading this article who like me has lost a loved one to cancer, you know that life is too precious to play games like this. Particularly by a $15 billion dollar corporation.  Life is far too precious for such arrogance. 

Royal Caribbean's Priorities - Profits Not People

Meanwhile the hype and fanfare surrounding the arrival of Royal Caribbean's billion dollar cruise ship Oasis of the Seas continue.  You can read what I think of this boondoggle and environmental disaster in "Royal Caribbean's "Monster of the Seas" - a Cruise Ship Only Gordon Gekko Could Love.  There are lots of empty cabins which Royal Caribbean needs to fill for the Oasis of the Seas to make money. 

Titanic dreams occupy the minds of Royal Caribbean executives, CEO Richard Fain and President Adam Goldstein.  Their egos and the fate of Royal Caribbean are hopelessly intertwined with these floating monstrosities.  

They have never heard of Ms. Jones or other crew members like her, living on $12 a day, fighting to stay alive.

 

Photo Credits

Oasis of the Seas      DailyMail.co.uk  "Inside the world's biggest and most expensive ever cruise ship, the £810million Oasis of the Seas"

Photo of Royal Caribbean crew member, Mr. Doran McDonald    Jonathon Postal, Miami New Times 

Leukemia blood film    Euthman's Flickr Photostream