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

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

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

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

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

I don’t think so.

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

I don’t think so either.

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

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

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

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

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

Yes, and worse.

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

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

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

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

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

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

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

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

http://plus.cnbc.com/rssvideosearch/action/player/id/3000234894/code/cnbcplayershare

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

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

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

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

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

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

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

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

The cruise industry’s reputation is under siege.  

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

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

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

Are you convinced?

 

Watch the latest video at video.foxbusiness.com

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

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

Do you know this former Royal Caribbean crew member?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

But there is more to the story. 

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

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

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

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

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

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

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

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

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

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

What a sad spectacle. 

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

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

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

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

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

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

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

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

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

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

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

This is hardly the first time this has happened.

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

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

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

It looks like Royal Caribbean ignored that request too. 

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

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

 

Photo credits:

Adam Goldstein – Royal Caribbean Flickr page

Laurie Dishman – Sacramento Bee

 

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

Dear XXX, 

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

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

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

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

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

Sincerely,

Adam Goldstein
President and CEO
Royal Caribbean International

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

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

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

The answer is what I call the Royal attitude.

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

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

Its dismissive press release then added salt into the wound.

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

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

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

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

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

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

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

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