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The cruise industry lobbyists are hard at work trying to shape the conversation about how the United States government needs to put together a relief package for the cruise industry.
There is no doubt, the industry took a shot into its midships when the CDC and Department of State issued travel warnings on the prudence of taking a cruise while under the shadow of the COVID-19 pandemic. Couple this shot with the tsunami of negative press which accompanies having two ships quarantined for COVID-19 infection and passengers dying, and that negative press isn’t going to abate any time soon.
Cruise industry and foreign flags
The plea from the lobbyists for a legislative bailout is and should fall on deaf ears. The lobbyists should be taking their requests to those nations under whose flag their ships sail. There is only one cruise ship of size which carries the flag of the United States - NCL’s Pride of America.
The cruise lines use flags of convenience in locations such as Panama or the Bahamas. Those U.S. based cruise companies do this to avoid U.S. maritime regulation, taxes and fees - it is the cruise lines who have made this decision for fiscal purposes. Afterall the cruise industry is a multi-billion dollar industry which is funded by the many Americans taking cruises each year. The Florida-Caribbean Cruise Association says that the industry brings 172,000 jobs to the United States.
Rep. Frederica Wilson (D-FL) clearly expects the U.S. government to come up with a bailout based on her public statement, “They’re losing money hand over fist. So we’ll be trying to find out how we can help. I’m sure they have a ton of suggestions.”
Rep Peter DeFazio (D-OR), chairman of the Transportation Committee came down on the other side of the equation noting that he isn’t interested in bailing out the cruise industry. He spoke plainly when he said, “They aren’t American. They don’t pay taxes in the United States of America. If they want to re-flag their ships … and pay U.S. wages and pay U.S. taxes, maybe.”
We agree with DeFazio.
In our view any relief should be limited to the 172,000 U.S. citizens who are negatively affected by the crisis. There is no doubt other cruise lines will follow Princess Cruises lead and suspend operations which will have a deleterious effect on a great number of those 172,000 who work within the cruise industry. They should be provided some sort of economic relief, just like the barista and the sales person in the local Florida mall.
ONLY HELP THE EMPLOYEES OF THE USA THAT PAID TAXES ON THERE INCOME
Are any of those 172,000 jobs held by American citizens?
Yes, most of them are landside positions.
The at-sea positions are largely non-US citizen jobs.
Do you know if the industry receive any bailout in the passed legislation? Great article and I feel, like I’m sure most people, that the view point expressed by DeFazio’s and you is spot on.
Aside from the major cruse companies being incorporated outside the US and flying non-US flags, they get around two-thirds of their revenue from US customers, yet most of the the vessels they own are built and maintained in Europe. So they principally support European industry and not US industry. Further, US citizens make up only a small percentage of their overall employees.
I question the 172,000 US headcount. It seems high since most of the crew are non-US and having that may shore-side support employees based in the US is questionable.
It clearly would be a lot more financially efficient to support just the US based employees than bailout the companies and have a substantial part of the bailout “leak” to non-US people and entities
The number 172000 nationwide is about right for landside employment - it includes goods and services, hotels and restaurants, all in proximity to the ports.
The number of at-sea crew who are US persons (legal residents or citizens) is very small.
As we note in the piece, they should go to the country in which they flag their vessels and not incorporate their company for help.