Crime, Crew Member Treatment & Environmental Practices - Not "Wow" Gadgets - Will Shape the Millennials' View of Cruising in the Future

This week I have read a couple of articles about the Cruise Lines International Association's (CLIA) "Cruise 3 Sixty" conference in Fort Lauderdale. I read an article in the Sun Sentinel (Cruise Execs Talk About Industry's Future) and an article in Travel Weekly (CEOs Say Cruise Lines Must Wow Travelers).

CLIA's Christine Duffy moderated the conference attended by the travel agent loyals. She discussed the future of cruising with the executives of the major cruise lines like Richard Fain (Royal Caribbean), Arnold Donald (Carnival), Kevin Sheehan (NCL) and Pierfrancesco Vaga (MSC Cruises).

"The Millennials"

To attract more first-time cruisers, CLIA is targeting the "Millennials" (consumers born between 1980 & Millennials2000).  

The Sun Sentinel quotes Ms. Duffy saying: "This demographic group offers a window into the next generation of travelers and provides opportunity for serious growth. They have a strong desire to travel and to share experiences."

In simple terms Ms. Duffy is talking about the next generation of young people from age 14 to 34 (like my children and nieces) who CLIA is targeting as the next wave of 25 to 55 year-old cruisers. 

Who are these "Millennials?" What will they be interested in for their vacations?

Selling cruises to the the "Millennials" will not be an easy task. 

First, they are poorer than prior generations. They have more debt and student loans. And it won't be difficult to sell them cruises just because they will have lower incomes and less wealth. It's because there will be a disconnect between what the Millennials are interested in and what the cruise lines are offering, and because the Millennials will have a greater social consciousness than the current cruisers.  

Wow Gadgets Won't Wow the Millennials

The articles report that the cruise industry is trying to attract more first time cruisers by offering the public "more innovative ships with 'wow' features."

A recent publication correctly called the Millennials "digital wizards." Like my kids, they have grown up with high tech gaming toys seemingly before they could walk or talk. I don't see the Millennials being impressed by the "gee-whizz" and so-called "wow" gadgets being touted by Royal Caribbean (virtual balconies & the "North Star" device) or Princess (the "SeaWalk"). The Millennials are smart and their taste for technology is sophisticated. My kids have been mastering Apple products for 15 years. They Royal Caribbean Bumper Carsare not easily impressed with what I or the 60 and 70 year old cruise executives think are "cool." 

Some of the new attractions touted by the cruise lines are hardly wow gadgets in the first place. The bumper cars projected to appear on Royal Caribbean's next ship are a silly, old-school idea.  The Travel Weekly article even talks about "bowling alleys and self-leveling pool tables" and quotes Royal Caribbean's Chairman Richard Fain saying: "All of that conveys what cruising has to offer. It says something about what the industry stands for.”  Circa 1950 bumper cars, bowling alleys, pool tables for the Millennials? You have to be kidding me.   

The Millennials are less privileged, more diverse, and more liberal than today's cruisers. 4 out of 10 will not be white. They will be more sensitive to the plight of workers in the international community being over-worked and underpaid. They will be more attuned to environmental issues. They will have a greater understanding of the fragility of the air and water ecosystems that the cruise lines routinely abuse.

Human Rights, Not Bumper Cars

In the last three months, one cruise line in particular, MSC Cruises, has repeatedly made the news in the worst sort of way. Just this year, passengers and crew members have accused it of dumping garbage bags at seas in marine sanctuaries. The police and labor authorities raided one of MSC's ship to investigate allegations of the cruise line abusing crew members. MSC has drawn the ire of environmentalists by sailing through the San Marco basin and damaging the port in Venice.  

The traditional newspapers, like the Sun Sentinel and the Miami Herald, and travel publications like Celebrity Crew MemberTravel Weekly, have given little attention to these type of horror stories.

The image of the cruise industry will be shaped by issues like crime on cruise ships (a Disney crew member allegedly molested a 13 year old girl yesterday), crime in ports of call (a NCL crew member was shot and killed this week in Roatan), treatment of crew members from around the world (Carnival & Royal Caribbean seem to be competing to see who can best screw the crew members), and the cruise industry's pollution of the air and sea (have you seen the videos of MSC dumping trash?)

These are important issues that the Millennials will focus on. In the next 10 to 20 years, we will see the continued rise of social media and the presence of more contemporary publications focusing on issues of relevance to the Millennials.

Old school newspapers, which often blindly cater to the cruise industry, will continue to decline in readership and relevance.  

The bumper-car-and-pool-table and gadget-promoting cruise lines will lose the Millennials as customers unless they understand what the future really holds and begin to address issues of crime, crew member rights and environmental problems.  

Royal Caribbean Chairman Places Blame for Norovirus: "They're Having a Lot of Cold Up in the North"

Richard Fain Royal Caribbean NorovirusWith the norovirus controversy swirling around the Explorer of the Seas, Royal Caribbean cruise line executive Richard Fain appeared on a CNBC financial program today with host Simon Hobbs. Chairman Fain was discussing the fourth quarter 2013 profits when the issue came up of the over 600 sick passengers and crew.

Mr. Fain seemed to become quite defensive. He placed blame for what the ship doctors believe is the dreadful norovirus, saying: "They're having a lot of cold up in the north."   

Of course norovirus is not a cold, and its not caused by the cold. Far from it.

Norovirus is transmitted by fecally contaminated food or water; by person-to-person contact; and via aerosolization of the virus and subsequent contamination of surfaces. It can linger around for a week or two on surfaces and fabrics and even months and years in contaminated water.

How and why norovirus appears on cruise ships is a hotly debated topic.

Unless and until the CDC epidemiologist locates how the norovirus came on the cruise ship, it will be anyone's guess where the nasty bug came from. Blaming the people from New Jersey for bring a cold aboard the Explorer of the Seas is preposterous, but that's part of the blame game that cruise lines play.

The game plan for cruise lines is to always blame the passengers for the virus and to take the focus off of the possibility that an ill galley worker spread the virus or there were contamination problems with the food or water in the first place.

Mr. Fain told CNBC "'we screen our passengers best we can." Again, blame the passengers who slipped through the screening process, rather than saying that they screen their crew, food and water. 

Mr. Fain said his ships are "amazingly safe and secure" but he "wished he didn't have to prove it so many times."

Well if you have over 600 passengers and crew sick with norovirus puking all over the place, you have some proving to do again.  Accusing the people from Hoboken of having a cold is not going to work.

 

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"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

Senator Rockefeller Places Royal Caribbean & Norwegian Cruise Line Under the Microscope: Will Cruise CEO's Fain and Sheehan Be Honest?

Cruise lines hate U.S. governmental scrutiny of their business operations.  

The whole purpose of incorporating their businesses and flagging their cruise ships in foreign countries is to avoid U.S. taxes and the scrutiny of federal regulators. This business model permits the cruise lines to pay virtually no U.S. taxes and to avoid U.S. wage, labor and safety laws. Cruise lines often conceal shipboard crimes and the industry's abuse of crew members.

But one U.S. Senator, Jay Rockefeller of West Virginia, is taking the cruise lines' lack of transparency head on. Following Carnival's string of disabled cruise ships and nonchalant attitude towards its quests, Senator Rockefeller sent a letter to Carnival billionaire cruise CEO Micky Arison in March, inquiring into issues pertaining to the cruise line's avoidance of taxes as well as issues regarding the safety of cruise passengers. You can read the letter here

Carnival's letter back to Rockefeller dodged and weaved and argued and mostly avoided responding to Senator Rockefeller's concerns. Carnival refused to disclose, for example, the number of victims of sexual assault - a topic that the cruise lines strenuously try to avoid talking about.  We summarized Arison's defiant attitude in our article: Carnival CEO Arison's Letter to Senator Rockefeller: Screw You!

Undaunted, Senator Rockefeller has sent another letter to Arison and has also sent letters to the CEO of Royal Caribbean Cruises (Richard Fain) and Norwegian Cruise Lines (Kevin Sheehan).

NCL Cruise CEO Kevin SheehanIn his letters yesterday, the Senator is inquiring into the internal safety audits which the cruise lines and the cruise association are allegedly conducting. At the recent cruise trade show on Miami Beach, the Carnival, Royal Caribbean and NCL cruise executives talked at length about their ability to learn from their own internal investigations but never stated that they would release the reports from the investigations.

This is the usual cruise line ploy: assuring the public that they are busy at work investigating themselves after cruise ships sink or catch on fire; however, they never ever disclose the results of their alleged investigations. Carnival said that it was conducting an internal audit of its operations after the Carnival Splendor was disabled after an engine room fire in 2010.  But Carnival has never released the results of its investigation. The public remains in the dark.

Senator Rockefeller is also again demanding that the cruise lines disclose the number of crimes, particularly sexual assault, on cruise ships. The cruise industry has been notoriously dishonest in revealing accurate crimes statistics. It usually defaults to conclusory, self-serving opinions that crime is "rare" while simultaneously concealing the true crime statistics.

At a prior Congressional hearing, Royal Caribbean responded to a Congressional inquiry by stating Royal Caribbean Cruise CEO Richard Fainthat 66 women were raped during a three year period.  But in a court case we handled, the cruise line was ordered to reveal that the actual number of such crimes was much higher.

The LA Times reported on the cover-up in an article: Cruise Industry's Dark Waters.   

Royal Caribbean faced no consequence for misleading Congress back in 2006.  

The cruise lines' response to Senator Rockefeller in due on May 24th.  

Will RCCL CEO Fain and NCL CEO Sheehan be transparent? Or will they join Arison in a game of hide and seek?

Royal Caribbean Reports $392,800,000 Loss for Last Quarter

The Associated Press reports that cruise giant Royal Caribbean lost $392.8 million in the fourth quarter because of losses associated with its Spanish cruise line, Pullmantur.

The AP states that Royal Caribbean wrote down $413,900,000 due to a substantial drop in bookings and prices in Spain following the Spanish government’s austerity measures. Royal Caribbean also blamed its losses on the Costa Concordia disaster a year ago.

Royal Caribbean had a profit of $36.6 million during the same quarter a year ago. 

In December we reported that Royal Caribbean's top executive Richard Fain bailed on out on a large block of cruise line stock.

In December 2012, Chairman and Chief Executive Officer Richard Fain sold 143,140 shares of RCL stock for $4,964,095.  

Fain followed up by exercising options and selling 188,443 shares for $6,535,203, for a total of around $11,500,000.  

$11,500,000 in cash in your pocket and 6 weeks later your cruise line posts a loss of over $392,000,000. Goes to show you that cruise line executives have fun making millions hand over fist regardless of how the company performs.

Video below is of CEO Fain on one of the Royal Caribbean FlowRiders (via RCCL YouTube).

 

Cruise CEO Fain Bails On Royal Caribbean Stock For Over $11,500,000

Barron's reports that Royal Caribbean Cruises' top executive recently bailed out on a large block of cruise line stock just before the cruise line's shares touched a new 52-week intra-day high.

On December 13th Chairman and Chief Executive Officer Richard Fain sold 143,140 shares of RCL stock for $4,964,095, an average of $34.68 each. Barron's says that Fain followed up by exercising options and selling 188,443 shares for $6,535,203. 

The RCL stock is down over a point since CEO Fain bailed on the stock. Fain still holds 1,049,064 shares directly and 421,412 shares indirectly.

The last time we wrote about RCL's CEO was when he and other executives at the cruise line were sued for fraud for allegedly making false and misleading statements about the company's fourth quarter results for 2010. In January 2011, the day after touting the financial strength of the cruise line, CEO Fain sold 200,000 shares at a price of $46.63 for what the lawsuit alleges were total illicit proceeds of $9,326,000.  

Big bucks and cruise CEO's go hand in hand, irrespective of how the cruise industry is actually faring. A couple of weeks ago we wrote about Carniva's Micky Arison paying himself a bonus of $90,000,000 after what he describes as one of the one most challenging years for the cruise lines yet. 

Royal Caribbean Cruises CEO Richard Fain

January 4 2013 Update: The issue of cruise line executive compensation made our list of top ten stories for last year:

2012 was reportedly a difficult financial year for the cruise lines but you would never know it by looking at the huge sums of money, bonuses and stock options which the cruise line CEO's pay themselves. In contrast Fain' with his regular multi-million-dollar salary and the $11,500,000 from stock sales, Royal Caribbean's bar-servers were paid only $50 a month and required to work for tips carrying a dozen tropical drinks around the pool deck while balancing a bottle of rum on their heads

 

Photo Credit: Wall Street Journal Smart Money / by Jeffrey Salter / Redux 

"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, no 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 Freedom 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.

The Cruise Industry is Now Officially Out of Control

Yesterday was one of the stranger days in the weird world of cruising.

Royal Caribbean reported a 40% drop in net income for the first quarter of this year.  Its net income was $47 million, down from $78.4 million a year earlier. Royal Caribbean's CEO Richard Fain attributed the decline in net income on the Costa Concordia tragedy but said that he doesn't think that the effects of the Concordia disaster would be long term. "We did not expect the impact of the tragedy to be long term and we are seeing evidence the effects are waning.”

Perhaps the effects of the Concordia may fade, but not if the the cruise disasters keep coming. A month after Concordia, the Costa Allegra suffered a disabling fire and floated around in waters where pirates lRoyal Caribbean - Reputationike to also cruise. Things like this make families nervous.  Satirist Andy Borowitz published an article "Citing Safety Concerns, Somali Pirates Refuse to Board Cruise Ships - Fires, Capsizings Top Pirates' Concerns, Spokesperson Says."  Lots of cruise fans thought the article was serious.

This last week, the cruise industry has been rocked with the Star Princess scandal, when the Princess cruise ship sailed happily by a disabled little fishing boat drifting 100 miles off coast of Panama. World opinion came crashing down on Princess Cruises (also owned by Carnival) when the public learned that 2 of the young men (one just 16) died due to Princess' nonchalant attitude while several passengers pleaded for the cruise ship to assist the stricken boat.  

Speaking of outrageous conduct, this month started out with news that a Carnival security officer and housekeeping manager (both male) were involved in the strip searching of a girl on the Carnival Sensation which included allegedly making her remove her tampon while they watched.

While Fain was quick to point blame his company's sinking profits on his competitor (Carnival), he didn't mention that one of his cruise ships, the Azamara Quest, suffered an serious engine fire which disabled the vessel last month.  He also didn't mention that he still pocketed $5,900,000. Poor bastard. How can he survive on that?  

But seriously, lets think about this for a moment.  One of Fain's ships caught fire last month and he still makes around $6,000,000 with declining bookings and increased fuel and operating costs while a cruise disaster happens every other week it seems.  Royal Caribbean pays its waiters only $600 a year working over 12 hours a day. So Fain still makes 10,000 times more than he pays a waiter to serve your family.     

CBS indicated that the declining profits at Royal Caribbean were because passengers may be "spooked by the high profile cruise problems."  

Later that evening (last night) an engine room fire broke out on Royal Caribbean's Allure of the Sea. Cruise Law News was the first to report on the cruise ship fire yesterday.  This is the 80th cruise fire in the last 22 years. The Miami Herald, which is a supporter of the cruise industry and rarely covers negative cruise news, passed along the cruise line's PR statement that the fire was "small and quickly extinguished."  Why does that not make me feel any safer?  

The Allure is the largest cruise ship in the world with 7,500 passengers and crew.  All fires start small. Its a bad thing for a small fire to break out on the world's largest cruise ship in the middle of the sea. Like the Carnival Splendor which recently suffering an engine room fire, the Allure is a new ship.  Why are new ships catching on fire?  Most cruise fans could care less. The most important thing to them seems to be whether the fire will disrupt their cruise next week. 

The Miami Herald chose not to report on a blockbuster story which we reported on yesterday.  A Cunard cruise line youth counselor under arrest admitted that he sexually abused 13 boys on three Cunard Cruise Child PredatorCunard cruise ships which he worked on (Queen Mary 2, Queen Victoria and Queen Elizabeth) over the course of four years.  A prolific child sexual predator running amok on the cream of the cream luxury Cunard brand of cruise ships for four years.  The sick pervert also videotaped himself abusing the children on the cruise ships, either for his viewing pleasure later or perhaps for trading with other pedophiles.

If there is a sexual predator on Cunard ships, do you think that there are no perverts taking your child into a bathroom alone on Royal Caribbean and Carnival brands?  Wait a second, Cunard is owned by Carnival here in Miami.  Why wouldn't the Miami Herald report on 13 little boys being diddled on one of the Carnival brands?  You think that your kids are safer on a Carnival fun ship running out of Galveston than a Cunard ship sailing from Southampton?

I shouldn't be so hard on the Miami Herald.  It sold out on any type of investigative journalism a decade ago, and it was not the only newspaper not to report on the cruise line sexual pervert.  Not one other media outlet in the U.S. covered the story.  Only Cruise Law News did.  Major newspapers alternate between being cheerleaders for the cruise lines to being indifferent to something as shocking as 13 little kids targeted and preyed on by a cruise ship employee whose parents entrusted their kids literally into his filthy hands.  

What is going on?

Cruise executives make 10,000 times more than a waiter who works 360 hours a month, and can still rake in $6,000,000 in the worst economy while cruise ships sink, collide and burn around them.  Luxury cruise liners like the love boats of Princess look the other way while people are dying at sea. Newspapers rush out the cruise line's talking points of a supposedly "small and short" fire, but refuse to mention 13 child abused on the most prestigious cruise ships sailing today. A strip search of a girl on the Carnival "fun ships?"

The cruise industry appears out of control to me.

Another Shareholder Class Action Lawsuit Filed Against Royal Caribbean Alleging Fraud

Royal Caribbean - Stock Fraud?A third class action lawsuit has been filed against Royal Caribbean Cruises seeking class action certification for what is alleged to be fraudulent conduct by the cruise line and executives Richard  Fain, Brian Rice, and Henry Pujol.

The law suit was filed by the law firm of Kessler Topaz Meltzer & Check in Pennsylvania. 

We reported on the first two lawsuits alleging fraud in an article last month Royal Caribbean Stock Fraud Lawsuits - What Did the Cruise Line Executives Know and When Did They Know It?

The lawsuit was filed here in Miami, in Federal Court for the Southern District of Florida.

You can read the lawsuit papers here.

The law firm's press release can be read here.

Royal Caribbean Stock Fraud Lawsuits - What Did the Cruise Line Executives Know and When Did They Know It?

Two stock fraud lawsuits recently filed against Royal Caribbean Cruises have placed the cruise line's corporate ethics under the microscope.

In the case of Todd Roth v. Royal Caribbean Cruises, Ltd, Richard D. Fain, Brian J. Rice, and Henry L. Pujol, United States District Court, Southern District of Florida, Case No. 22783 - MSC, a stockholder alleges that the cruise lines withheld disclosing certain accounting errors dating back to 2009, misrepresented the company's financial status, and misled investors about the cruise line's financial future. The case was filed by the New York and Louisiana law firm of Kahn, Swick & Foti and the Florida firm of Vianale & Vianale.   

Richard D. Fain - Stock Fraud?The lawsuit alleges that on January 27, 2011, Royal Caribbean issued a press release where it made false and misleading statements that its fourth quarter results for 2010 were better than expected and it anticipated certain positive developments regarding its operations, expenses, costs, ratios and net income for 2010.  

On April 28, 2011, after the first quarter, Royal Caribbean again made misleading statements regarding its financial status.  The lawsuit alleges that CEO Richard Fain (photo left) falsely stated that "the year started off with a roar - strong bookings, low costs and solid profits - and in the first quarter every one of our brands exceeded its forecast . . . " 

However, on July 28, 2011,  Royal Caribbean suddenly and dramatically departed from its rosy projections regarding the company's financial operations.  The cruise line published a release revealing for the first time that it was performing well below expectations and that certain accounting errors (regarding treatment of interest income relating to amortization of certain financing fees) resulted in a drastic downward revision of the company's financial statements.

This news "shocked and alarmed" investors.  Royal Caribbean's stock price then fell precipitously in two days, from $35.75 to $30.50.  This development had a disastrous effect on the investments of individual shareholders.  The stockholder who filed suit, Todd Roth, had purchased 5,000 shares on July 26, 2011 at a price of $36.65 a share.  Three days later, with the stock trading at $30.50, he lost over $30,000. 

Included as defendants in the lawsuit are the CEO (Richard Fain), the Chief Financial Officer (Brian Rice) and the Corporate Financial Controller (Henry Pujol).  On January 28, 2011, the day after touting the financial strength of the cruise line, CEO Fain sold 200,000 shares at a price of $46.63 for a what the lawsuit alleges are total illicit proceeds of $9,326,000.  CFO Rice (photo right, below) quickly followed suit, selling 88,872 shares in the $46 to $47 range from February 1 - 14, 2011 for over Brian C. Rice - Stock Fraud$4,100,000 in illicit proceeds. 

Although not named personally in the lawsuit, Royal Caribbean President Adam Goldstein sold over 40,000 shares between February 1 - 16, 2011 - for a total of over $1,900,000.  Six other executives sold stock between January 28 and February 16, 2011, which combined with the stock sold by the named defendants totaled over $20,000,000.  

The lawsuit alleges that these individual defendants knew that the negative financial information had not been disclosed to the public and was being concealed, and they were participants in a "fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of Royal Caribbean securities . . . "      

Earlier this year, in an article entitled Royal Caribbean Executives Get Richer While Crew Members Get Poorer, I reported that  Royal Caribbean increased its 2010 compensation paid to CEO Richard Fain 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 President Adam Goldstein whose total compensation increased to over $4,000,000. 

These increases were primarily incentive based, meaning that the executives claimed that they met or exceeded certain financial goals for the corporation.  With this recent revelation that the company's financial performance was overstated and that the executives allegedly committed fraud or recklessly misrepresented the cruise line's financial data, the question arises whether the incentive based millions of dollars in compensation should be returned voluntarily to the corporation or disgorged in the pending lawsuits.    

The Roth lawsuit seeks class action status for what is referred to as either hundreds or thousands of other shareholders who were defrauded by the cruise line between January 27, 2011 and July 28, 2011. 

A second lawsuit seeking class action status was reportedly filed yesterday by the Pomerantz law firm with offices in New York, Chicago and Washington D.C.  It is on behalf of stockholder Stanley Wolfe and was filed in the United States District Court, Southern District of Florida, Case No. 22855.  This lawsuit seeks class certification for stockholders who purchased securities between April 23, 2009 and July 27, 2011.

Royal Caribbean Stock Chart

It will be interesting to see how these lawsuits turn out.  What did the cruise line executives know about the accounting errors?  When did they learn of the irregularities?  What did they do once they learned that the cruise line was performing substantially under expectations?  Did they dump their stock realizing that the price was artificially high?  Or did they act prudently and responsibly once the accounting mistakes were brought to their attention? 

 

Photo credits:  www.azamaraclubcruises.com

Chart credit:  Rick + Rick law firm

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

The Royal Caribbean School in Haiti - A Genuine Commitment or a Publicity Stunt?

The Miami Herald published an article on Friday entitled "New School, New Hope for Young Haitians" about Royal Caribbean Cruises building a new school in Labadee on the 260 acres which it leases from the Haitian government. 

The article points out that the new 6,500-square-foot campus consists of six buildings, twelve classrooms, administrative offices and a computer lab.  Around 230 students from nearby villages, from kindergarten to fifth grade, will study at the new school.

Royal Caribbean School Labadee Haiti - L'Ecole Nouvelle Royal CaribbeanThe construction was overseen by a Miami company Innovida which used lightweight yet sturdy materials which can withstand an earthquake and high winds. 

As much as a school facility like this was needed in Haiti, I could not help but to think what a meager expenditure a project like this represents considering the financial resources of this cruise line.  It made me think of two basic questions:

1. What, if anything, has Royal Caribbean done for Haiti in the last 25 years?

Royal Caribbean has been in Haiti for over 25 years.  This is the first development of anything remotely benefiting the local people.  The cruise line was roundly criticized when it sailed into its "private destination" in Labadee earlier this year, after the devastating earthquake to the south in Port-au-Prince, a PR nightmare which I wrote about in an article "Royal Caribbean "Returns" to its Trademarked, Private Fantasy Island of Labadee® - While Haiti Suffers." 

The Miami Herald article mentions that the new school cost only $425,000 to build.  Royal Caribbean collects over $6,000,000,000 (billion) a year and pays no U.S. Federal income tax because it is incorporated in Liberia and its cruise ships fly foreign flags.   Its last "investment" in Haiti was the multi-million dollar zip line amusement ride in its "private destination" of Labadee for the exclusive of its paying guests.  Haitians are kept on the other side of the cruise line's barb wire fence

Everytime a cruise ship like the Oasis of the Seas sails with 5,000 or 6,000 passengers to Labadee, the cruise line collects millions and millions of dollars in cruise fare each cruise.  An investment of $425,000 from a corporation like this is peanuts.

2. What, if anything, does the cruise line plan to do in the future?

There was some talk about this being one of, maybe, two schools to be built in Haiti.  That's it.  I doubt that there will be a second school.  I hope I am wrong.  But there are no discussions of anything resembling a multi-million dollar building project, like you see when a new port is constructed and hundreds of millions of dollars are budgeted.  

Is this the extent of the cruise line's investment in the host country?  When you think of what commitment really means, is $425,000 reflective of this cruise line's sense of loyalty and duty to Haiti?  Probably so.

Royal Caribbean School Labadee Haiti - L'Ecole Nouvelle Royal CaribbeanSeems like a pittance.

There are a number of online photographs of the school opening, such as the Innovide's Royal Caribbean School photo page.

You can see Royal Caribbean's CEO, Richard Fain, attending the opening ceremony, cutting the royal blue ribbons, standing in front of the sign for the "Royal Caribbean" school, posing in front of a banner proclaiming the opening of the "Royal Caribbean" school," and smiling for the camera in front of Haitian school children wearing "Royal Caribbean" blue polo shirts emblazened with the "Royal Caribbean" name and the "Royal Caribbean" logo.

These photos make me feel rather squeamish.  Is this a marketing stunt?

When I clicked on Fain's Chairman's Blog, I could not help but note that one of the first comments to his article about the new school reads as folllows: 

"I really love the RCI brand, but was it necessary to brand all of the kids?"

December 4, 2010 Update: Interested in a true commitment by a corporation to education? Read: What the Cruise Industry Has to Learn From My Cousins Back in Arkansas

 

Photo credits:

Photo 1:  Innovide

Photo 2:  Ricahrd Fain's Chairman's Blog

 

Cruise Vessel Security and Safety Act - Finally Making Waves

The Washington Post has published an article about the new Cruise Security and Safety Act, written by veteran travel writer Christopher Eliott.  Mr. Elliott is a a travel consultant for MSNBC and a writer for National Geographic Traveler magazine and for the Consumer Travel Alliance.

The article was originally entitled " A Long Way To Go To Ensure Passengers' Safety On Cruise Ships."  The article has been widely re-printed in newspapers across the U.S.  The article below is a re-print bearing the new title " Finally Making Waves About Cruise Security."

The article contains some quotes from me, my client Laurie Dishman, the President of the International Cruise Victims association Ken Carver, and the President and Founder of the Rape Abuse and Incest National Network Scott Berkowitz.  Here is the article, unedited, which appeared in the Houston Chronicle newspaper:

Finally Making Waves About Cruise Security    

Cruise Vessel Security and Safety Act - Cruise Crime Maybe you don't think of a floating vacation as a dangerous activity — after all, the last headline-grabbing sinking of a cruise liner was that of the MS Sea Diamond, which ran aground in 2007 near Santorini, Greece; two passengers disappeared and were presumed dead.  The cruise industry also contends that it has an outstanding safety record when it comes to onboard crimes such as theft and assaults.

Just one little problem: The federal government doesn't require cruise lines to report these crimes in a meaningful and systematic way, so we have to take them at their word. And some passengers don't.

Laurie Dishman counts herself among them.  She alleges that a janitor on a Royal Caribbean cruise raped her in 2006.

"I felt humiliated," the marketing director for a winery near Sacramento told a congressional hearing the following year.  "I could not believe what had happened."  Dishman's riveting testimony exposed the shortcomings of cruise ship security, prompting her representative, Doris Matsui, D-Calif., to sponsor the new legislation.  "It became grossly apparent that current law was not protecting American passengers while at sea," said Mara Lee, a spokeswoman for Matsui.

The Cruise Vessel Safety and Security Act will address that problem by requiring cruise lines to report crimes promptly to the FBI and to post a link on their Web sites to a Transportation Department website listing crimes that have occurred on cruise ships.

"This will be the first time in the history of the cruise industry when a cruise ship is required to report a crime in international waters," said James Walker, a maritime lawyer based in Miami.  "The public can finally see the criminal database and determine which cruise ships have the highest crime rates."

Watch for more peepholes

Cruise lines will have to install peepholes in cabin doors and raise guard rails on many ships, and add on-deck video surveillance and an emergency sound system on all new ones.  The legislation also mandates better crime-scene response by requiring ships to carry rape kits and anti-retroviral medications and to have a trained forensic sexual assault specialist on board.

"In effect, passengers on cruise ships will start to obtain the same protection they would expect if they were at a resort here in the United States," said Ken Carver, the chairman of the International Cruise Victims Association, which advocates for victims of crimes at sea.

This law is undoubtedly a good start at regulating a business that has skirted many government regulations in the past. But is it enough?

I asked the Cruise Lines International Association (CLIA) about the measure, and the trade association sent me a surprisingly supportive prepared statement.  This regulation, it said, would bring "greater consistency and clarification to many industry practices and existing regulations," which include current requirements to report serious crimes to the FBI.

"The safety and security of our guests and crew is CLIA's number one priority," it added.

When I hear a trade organization that resisted this law nearly every step of the way talking like that, I can't help being a little skeptical.  (The cruise industry insists it cooperated.) So I asked Alexander Anolik, a former lawyer for several cruise lines who now practices in San Francisco, whether the Cruise Vessel Safety and Security Act holds water.

"It will make cruising safer," he said. "But it doesn't go far enough."

Safety at seaside

He'd like to see higher ship rails, for example. The law will require them to reach 42 inches above the deck, but they'd prevent more passengers from falling overboard if they were 54 inches.

Also, Anolik says the law should make more ships retrofit their cabins with essential safety features such as peepholes, security latches and time-sensitive key technology.

Anolik said cruise lines are probably unhappy with the legislation because, in his experience, they try to "make sure every crime is hidden."

It's hard for me to tell whether CLIA is being a dignified loser or whether it got some important concessions when the bill was being marked up. It probably doesn't matter.  Advocates for passengers see this as an important first step in improving cruise ship safety — not the last port of call.

Scott Berkowitz, the president and founder of the Rape, Abuse & Incest National Network, which supports the measure, said that he'd like future legislation to address legal jurisdiction when a crime is committed on a cruise ship.  "This can result in huge practical barriers to prosecution, such as requirements that the victim travel to another country — at his or her own expense — several times for hearings and a trial," he said.

But the law represents a critical and essential step forward, and Dishman says it will help others like her.

"If this law was in place when I was brutally raped, there would have been evidence for a prosecution and the assailant who raped me would not be free," she told me.

Royal Caribbean has said it has a "zero-tolerance policy regarding any criminal activity" on its ships, adding, "Any allegation of a crime is treated seriously and reported to law enforcement." The company reportedly settled a lawsuit with Dishman in 2008.

Still, cruise experts agree, laws can go only so far in protecting you.  Passengers should continue to pack their common sense when they go cruising, which includes taking practical steps such as securing valuables, drinking in moderation and staying away from a ship's dark corners.

Even with these new measures in place, and the possibility of future regulation, one thing seems certain: Just because the ship isn't sinking doesn't mean that it's safe.

 

Elliott is the ombudsman for National Geographic Traveler magazine and for the Consumer Travel Alliance, a new nonprofit education organization. His e-mail: celliott@ngs.org
 

Credits:

Article               Christopher Eliott, Washington Post,  Houston Chronicle

Photo                jimg944 Flickr photostream

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

Following 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 Haiti - Earthquake - Poverty - Sufferingthousands 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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Royal Caribbean's "Debt of the Seas" - Ready to Sail - But Safety and Security Questions Remain Unanswered

TIME magazine's not-yet-published December 14th edition contains a story about Royal Caribbean's Oasis of the Seas called "Floating Island."

I thought that the title of the article was rather weak.  "Floating Foreclosure" might be more accurate . . . 

The best line in the article - to cruise lines, every passenger is a potential ATM - accurately reflects the cruise line's necessity to try and suck every dime out of their customers to pay for Royal Caribbean's $1,500,000,000 heavily-financed-floating-city which might as well be called Debt of the Seas. There are many beautiful photographs of the cruise ship. 

But the Oasis looks frightening like an over-developed, largely empty, and soon-to-be-repossessed-condominium, the likes of which plague the Miami skyline.

The last time that TIME devoted a couple of pages to the cruise industry was back in March of 2006 when it discussed crime aboard Royal Caribbean cruise ships in an article entitled "Crime Rocks the Boats."  That article is framed and hangs on my office wall, but not just because it mentions two of my clients.  TIME's insightful article by Julie Rawe was the first time a major periodical took a hard look at the cruise industry's nasty practice of covering up shipboard crimes. 

Janet Kelly - Jennifer Hagel - Royal Caribbean - Cruise CrimeBoth clients featured in the TIME article - Janet Kelly who was a victim of a violent shipboard crime and Jennifer Hagel who lost her husband under mysterious circumstances during a Royal Caribbean cruise - overcame their personal tragedies to help change the cruise industry.  Both ladies appeared before our U.S. Congress in 2006 and went on television to get the message out that changes needed to be made to protect American traveling on foreign flagged cruise ships, particularly Royal Caribbean's ships.     

So here we are almost four years later.  In the hysteria and hype surrounding the arrival of the Oasis of the Seas in South Florida, the media has lost all thought of the issue of passenger safety. The seemingly endless articles focus almost exclusively on the size, cost, and how-on-earth-are-we-going-to-pay-for what TIME calls a "sea monster" like the Oasis.     

Several weeks ago, I prepared "Seven Questions to Ask Royal Caribbean Executives Regarding Oasis of the Seas."  CEO Fain and President Goldstein were aboard the Oasis with microphone in hand and supposedly open for all questions.  But they refused to provide any information about the safety and  security of the passengers. Certainly U.S. passengers who pay thousands of dollars each to sail on this mega-target of a ship deserve straight forward answers whether their families will be safe from crime and terrorists. 

So here are some of the questions again, and easy ones at that:

Q:  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 Royal Caribbean - Cruise Line - Executives - Richard Fain - Adam Goldsteincruise ships.  In light of these problems, how many security guards are employed on the Oasis of the Seas?

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

Q:  How many security guards patrol the neighborhoods from 10:00 p.m. to 4 a.m., a time period we have found  when female passengers are at a higher risk of being assaulted?

Q:  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?

The Oasis of the Seas will make its inaugural sailing tomorrow - Saturday, December 5, 2009.  Because Royal Caribbean won't answer any questions, ask yourself - has Royal Caribbean invested adequately into safety and security technologies and personnel to protect you and your family?

The cruise line executives will never tell, but we shall soon find out.  

 

Credits

Janet Kelly and Jennifer Hagel     ABC News 

Royal Caribbean executives    Royal Caribbean via Cruise Critic

Fearless Fain, Royal Caribbean's CEO

Those of you who have followed my blog over the last three months know that I have been hard on Royal Caribbean.  I think that this cruise line treats its injured crew members terribly, and it has Royal Caribbean - Richard Fain - Who's the Daddy?handled the problem with sexual assaults on its cruise ships even worse.  I also think the Oasis of the Seas is a boondoggle.

So there are my biases.

But I have been rather intrigued by how Royal Caribbean's CEO, Richard Fain, doesn't seem to let much bother him.  Year after year he keep coming up with the never ending succession of bigger cruise ships which are announced to the world with great fanfare. 

Whenever there is a reporter or news camera surrounding a Royal Caribbean event, there Mr. Fain  is - showing President Clinton around Royal Caribbean's private "island" in Labadee, Haiti, or riding the flow-rider on the Independence of the Seas in Southampton, or waiving to reporters while spinning around and around on the carousel on the Oasis of the Seas

It is hard to imagine his competitor - Mickey Arison at Carnival - even trying to get aboard a boogie board. That would be ugly.  But "Fearless Fain" seems to be a former athlete and a natural at things like this.  He obviously is skilled at PR and marketing his Royal Caribbean brand with a hands-on approach. 

Now, I will quickly admit that the phrase "Fearless Fain" is not my idea.  Rather it was the title of an Richard Fain - Royal Caribbeanarticle written by John Honeywell a/k/a "Captain Greybeard" who writes an opinion piece for the Mirror in the U.K.  The flow-rider photo above is from Captain Greybeard's photo-stream on Flickr of the Independence of the Seas ("Who's the Daddy?")

Speaking of the flow-rider, there has already been one death after a passenger fell and struck his head.  But Royal Caribbean requires all passengers to sign waivers of liability before they step onto the boogie board and try to break their necks. And speaking of waivers, Mr. Fain announced on his "Chairman's Blog" that the new Oasis of the Seas will be able to expedite passengers riding the zipline over Central Park.  He suggested having them just swipe their sign and sail cards which will acknowledge their waiver of their rights if the line breaks.  No need for long lines, or a lot of Richard Fain - American Flag?paperwork. Very innovative.    

There is an interesting photograph of Mr. Fain signing papers when the cruise line officially took possession of the Oasis of the Seas.  Right in the center of the photograph is an American flag.  Now, this strikes me as funny.  Mr. Fain registered his company in Liberia.  All of his cruise ships fly flags of convenience in countries like Liberia and the Bahamas in order to avoid paying any U.S. income tax and avoid U.S. laws and regulations.

Was this happenstance?  Hardly.  I remember a couple of years ago when a Court in Miami ordered Mr. Fain to appear for a video deposition in downtown Miami in a case when parents alleged that their little girl had been molested by a youth counselor on a Royal Caribbean cruise ship.  Mr. Fain instructed the law firm Richard Fain - Havinf Fundefending the case to make certain that an American flag was positioned behind him as he sat in front of the videographer.  They didn't have a flag so they had to go and rent one for the afternoon. 

As Royal Caribbean tries to fill up the Oasis of the Seas and the Allure of the Seas comes into the fleet next year, it will be interesting to see if Mr. Fain can continue to skillfully market his Liberian corporation to us tax-paying U.S. citizens.            

Credits:

Richard Fain (photo 1)  John Honeywell a/k/a Captain Greybeard

Richard Fain (photos 2, 4)   Reuters via Daylife.com     

Richard Fain (photo 3) UpTake Travel Industry

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

Royal Caribbean's "Monster of the Seas" - a Cruise Ship Only Gordon Gekko Could Love

Cruise fans, travel agents and cruise communities have been abuzz in anticipation of Royal Caribbean's new cruise ship - the "Oasis of the Seas."   "Amazing! . . Wow! . . Look at that!" . . . have been the extent of the popular media's insight into this new super mega ship.    

But a few journalists have questioned the environmental appropriateness of this monster of a cruise ship. In an article entitled "A Titanic for These Times," San Francisco writer Mark Follman concludes that only someone interested in a "decadent vacation cruise" could rationalize boarding what will be the biggest, longest, tallest, widest, heaviest, and most expensive passenger ship ever built.

"Floating Emblem of a Bankrupt Era?"

Follman's intuition is that the experience would be akin to "feasting on a nine-course meal in the middle of an Ethiopian refugee camp."  He cites an article by Rory Nugent in the Atlantic magazine which questions the rationale of building such a monstrosity.  According to the article "Hope Floats," the passengers will consume 560,000 gallons of water a day,  and the ship will burn 12 tons of diesel an hour.  Although Royal Caribbean and the cruise industry's 16,000 travel agents may hope that the Oasis of the Seas will be a success, Mr. Nugent raises the question that the ship "may leave the dock already a dinosaur - a floating emblem of a bankrupt era."

A Corporate Felon That Can't Get It Right 

At a time when only fools question the effect of greenhouse gases, the melting of the Arctic cap, and the need to develop sustainable businesses, Royal Caribbean has spent and mostly borrowed over a billion dollars to create a ship so at odds with the environment that it resembles the monster in the movie Cloverfield.  In 2004, Royal Caribbean came off of a 5 year probation after pleading guilty to felonies for widespread pollution and repeated lying to the U.S. Coast Guard.  Just two days ago, the environmental group 'Friends of the Earth" awarded Royal Caribbean a "F" for the disastrous impact on air and water caused by its cruise ships. 

Three 250 HP Engines on a 37 Foot Boat?

Many corporations take on the personality and values of their leaders. During the publicity build up for the Oasis of the Seas' debut, Royal Caribbean's CEO Richard Fain was interviewed by David Andrews of the U. K.'s "Times Online."  In an article aptly entitled "Biggest is the Best for Cruise Chief,"  Mr. Fain reveals his rivalry with Carnival and the need to "give his business the ascendancy again . . . the Royal Caribbean International brand . . . will be bigger than anything Carnival can compete with."

After finishing the article, I felt that I had just read the lines for Gordon Gekko ("greed is good") in the 1987 movie Wall Street

 

The article ends with Mr. Fain mentioning his 37 foot powerboat - “it’s got three 250hp Yamaha engines, goes 52mph  . . . "

750 hp on a 37 foot boat?  I suppose that's more economical than the 100-megawatt power grid and 3,300 miles of electrical cables on his new monster of a cruise ship.

 

 

Photo credit - Oasis of the Seas - Royal Caribbean Cruises Ltd, via San Francisco Chronicle ("Oasis of the Seas is a real ocean monster")