President Trump announced a list of “Great American Economic Revival” industry groups at the coronavirus briefing on Tuesday. He said that the groups will advise the White House on reopening the economy after the shutdown necessitated by the COVID-19 pandemic.
The Great American Economic Revival Cruise Industry Group
This week the White House has been speaking with industry leaders after releasing a list which contained three executives working for cruise lines based here in Miami, Florida. President Trump picked Carnival Corporation Chairman Micky Arison, Royal Caribbean Cruises’ CEO Richard Fain and Norwegian Cruise Line Holdings’ CEO Frank Del Rio as the representatives of the cruise industry. All three executives are listed under the “hospitality” group.
According to the Washington Post, White House officials describe calls from the president to some of the industry leaders as a chance to provide the president with anecdotes and personal takes on the timeline for reopening the economy, “with some telling him it looks like May 1 for their and others saying June.”
So who are these cruise industry leaders and what are they likely telling the White House when cruising should open again for business?
Carnival’s Chairman Micky Arison
Micky Arison is the son of the founder of Carnival, Ted Arison, who retired in 1990. Micky Arison served as Carnival’s CEO until 2013. He was replaced by Arnold Donald after the Costa Concordia disaster involving Costa Cruises, one of Carnival Corporation’s nine cruise brands. By one source, Arison was worth $10,000,000,000 before COVID-19 devastated the cruise industry. In one year alone when he was CEO, Arison collected a bonus of $90,000,000. This was in 2012, after the Costa Concordia debacle (when Carnival offered the passengers a total settlement each of only around $15,000).
All of the cruise executives or their predecessors incorporated their businesses and registered their cruise ships outside of the U.S. in order to avoid all U.S. taxes. As a New York Time reporter pointed out, Carnival Cruise Line is incorporated in Panama and registers all of its ships in either Panama or the Bahamas in order to escape U.S. taxes. By virtue of its foreign incorporation and vessel registrations, Carnival avoids all wage and labor laws and U.S. occupational health and safety law as well.
TRUMP'S TASK FORCE on re-opening the economy includes MICKY ARISON, chair of @CarnivalCruise, which is incorporated offshore.
— Kenneth P. Vogel (@kenvogel) April 15, 2020
Due to the COVID-19 pandemic, CCL stock dropped from a 52 week high of around $52 a share to as low as slightly under $8 a share, and is trading now around $12 a share.
Arison is one of Trump’s friends in the business word. The Washington Post reported that Carnival sponsored Trump’s reality show franchise The Apprentice. Carnival continued to sponsor Trump’s TV show over the years including the New Celebrity Apprentice.
Carnival Cruise Line was an advertiser for Trump World magazine, which failed in 2003 after two publications (photo above, of Trump at Trump World press conference in November 2002 at lectern with Carnival Cruise Logo).
Norwegian Cruise Line’s CEO Frank Del Rio
Norwegian Cruise Line’s CEO Frank Del Rio is a huge supporter of President Trump. At an annual Seatrade Global conference in Fort Lauderdale in 2017, CEO Del Rio lauded the “Trump Effect.” Del Rio explained that because of President Trump, the stock market was at all time high. He concluded that fewer regulations and pro-business tax cuts were good for his business. Of course, the cruise industry has always struggled with its environmental image with Carnival, Royal Caribbean and NCL all pleading guilty to numerous environmental felonies, obstruction of justice and lying to the U.S. Coast Guard and Department of Justice over the years. President Trump gutted the EPA, significantly defunded the CDC and is now working to stop funding to the World Health Organization. Unfortunately, all of the cruise executives in question seem to share the current administration’s view of protecting the environment.
NCL’s relationship with President Trump can be traced back to at least 2005 when NCL advertised heavily on Trump’s television show The Apprentice. Episodes of the TV show were filmed on NCL ships. NCL offered a winner of a promotional sweepstake a grand-prize of a free trip for two to New York, three nights at the Trump Hotel and a choice of a cruise aboard a NCL cruise ship.
In 2005 a 70 foot“rogue” wave struck NCL’s Dawn cruise ship in 2005, breaking cabin windows, flooding over 60 cabins and injuring guests. Another maritime lawyer in Miami sued NCL, alleging that the cruise line endangered its passengers by trying to sail through rough weather so that the cruise ship could arrive back in port in New York in time to be filmed in the Apprentice television show. (NCL denied these allegations, and a jury decided in NCL’s favor).
Del Rio had a net worth of around $40,000,000 as of February 2020 according to this source. He collected nearly $68,000,000 in the four years from 2015 through 2018, collecting $22,590,000 in 2018, $10,490,000 in 2017, $2,900,000 in 2016 and $31,900,000 in 2015 as we reported last year.
Due to the COVID-19 pandemic, NCL stock dropped from a 52 week high of around $60 a share to as low as slightly under $8 a share, and is trading now around $12 a share.
NCL is incororated in Bermuda and does not pay U.S. taxes or comply with U.S. wage and labor laws.
Royal Caribbean’s CEO Richard Fain
Richard Fain has a net worth of at least $155,000,000 according to this source. CEO Fain has been the highest paid cruise executive over the last several years. Mr. Fain was paid $13,343,413 in (2017), an increase of nearly three million dollars, from $10,405,684 in 2016.
Royal Caribbean is incorporated in Liberia (Africa), and registers its ships in the Bahamas to avoid U.S. taxes and labor and wage laws.
Fain owned nearly 900,000 shares of the company’s stock, two years ago. Due to the COVID-19 pandemic, RCL stock dropped from a 52 week high of around $135 a share to as low as slightly over $22 a share, and is trading now around $36 a share. His losses on his RCL stock alone are around $90,000,000 due to COVID-19.
Yesterday, Royal Caribbean terminated around 25% of its employees as a cost-saving measure.
All of the Cruise Executives Appear Ready to Re-Start Cruising As Soon As Possible
None of the cruise lines are publicly acknowledging or supporting the CDC’s recent extension of the “no-sail” order to July 24th. Carnival announced that it will begin cruising after June 30th with Royal Caribbean and NCL keeping their startup dates around May 11th. Most lines are suspending cruises only to either the end of this month or sometime in May.
The cruise lines are holding on to the funds owed to its customers for as long as possible because they are not generating any income as long as their ships are idle. Carnival reportedly has over $4 billion in cruise fares paid by its customers.
CEO Arnold Donald – Its Safer on a Cruise Ship
Carnival’s CEO, who was not selected to be on Trump’s “Grand America” industry group, has been the cruise leader in minimizing the risk of COVID-19 and advocating the resuming of cruises again sooner than prudent.
In an “Axios on HBO” interview, Donald claimed that being on a cruise ship was “a less risky environment” than being shoreside. Donald even went so far as to argue that that a cruise ship is not like a theater or an arena: “It’s more like Central Park. There’s lots of natural social distancing [because] the ship is so large. People are not always gathered and clumped together.”
The Carnival CEO’s arguments have been largely lampooned on social media as being out of touch with the reality of cruising. His argument that a cruise ship is more like Central Park in New York ignored the fact that the mayor closed the park in order to stop the spread of the virus. A recent photograph taken aboard the Ruby Princess operated by Carnival subsidiary Princess Cruises shows hundreds of guests tightly crowded together in the atrium of the cruise ship. Shortly after the photo was taken, thousands of the passengers were disembarked in Australia. Later many hundreds of the guests and crew members tested positive for COVID19 and 18 people died.
Carnival’s CEO Donald spent the better part of his interview yesterday on CNBC claiming that cruise bookings are strong and it is just a matter of time before the cruise industry will bounce back. But restarting cruise operations too soon is highly risky. The CDC has made it perfectly clear in its order extending the “no-sail” to July 24th, that “if unrestricted cruise ship passenger operations were permitted to resume, infected and exposed cruise ship cases would place healthcare workers at substantial increased risk.”
CLIA Disputes the CDC’s Conclusion that Cruise Ship Travel Markedly Increases the Spread of Coronavirus
The cruise industry’s trade organization CLIA also recently disputed the CDC’s findings by claiming in a press release that “cruising is neither the source or cause of the virus or its spread.” This is a patently false statement which flies in the face of the conclusions reached by the scientists at the CDC.
The CDC concluded that “cruise ship travel markedly increases the risk and impact of the COVID19 disease outbreak in the United States.” The CDC further found that cruising “exacerbates the global spread of COVID19” and that the cruise industry failed to control the spread of the disease sufficiently, causing an unnecessary burden on the already over-burdened local, state and national healthcare systems. You can read the CDC’s latest finding here.
Prediction: Business as Usual As Soon As Possible
The cruise executives to continue to claim that cruises don’t exacerbate the spread of the virus despite clear and overwhelming evidence that they do. All of these highly paid executives have their personal fortunes intertwined with their respective cruise businesses which have suffered due to the suspension of cruising. There is every selfish reason for these tycoons to tell Trump exactly what he wants to hear.
There has been a notion expressed that COVID-19 has been a wake-up call to the cruise industry. The reasoning goes that the deadly virus exposed the truth about cruise lines which resist federal oversight by registering their ships in countries like Panama and the Bahamas, polluting the air and water around the world, and exploiting their employees who are not subject to the protection of U.S. wage and labor laws. The hope is that when cruising finally re-opens the industry will be gentler and kinder to the environment and its employees. Some even suggest that cruise lines will even be receptive to incorporating in the U.S. and bringing their ships under the authority of the U.S.
But it is clear that there will be no changes to the business model of the cruise industry with these cruise executives heading up Trump’s “Great America Economic Revival.” Protecting the environment is the last thing on President Trump’s or the cruise tycoons’ minds. And with around 50,000 to 80,000 crew members currently stuck on ships at sea without pay or a clear idea how or when they will ever get home, it’s is absurd to think that these executives with their bloated salaries will begin to think for a second about the crew’s best interests.
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April 17, 2020 Update:
In an Miami Herald article today, CEO Arnold Donald was quoted as saying: “We are not in any way burdening the nation with lots of people being sent to shore needing to be hospitalized. I don’t want to get into the details.”
The Herald writes “the cruise industry has disputed health officials’ repeated warnings that its ships more dangerous for infectious disease spread vs other environments. If companies want a shot at luring back customers, they better accept reality, experts say.”
Photo credit: President Trumph at press conference upon launching Trump World – Australia’s Daily Telegraph article “Love Boat Billionaire Behind the Ruby Princess;” President Trump on the Carnival Legend – Thos Robinson/Getty Images via Washington Post; Micky Arison-Donald Trump – HeatNation; Frank Del Rio – CNBC; The Apprentice – The Apprentice – Season 5, Episode 5 – Cruise Control – Vimeo Joe Foley; Richard Fain – Flickr – United Way of Miami-Dade via Cruise Executive Richard Fain Hits the Jackpot Again; Passengers on Ruby Princess – Daily Mail.