Cruises, What You Don’t Know… February 7, 2009

I don’t usually write about travel, however, I figured I’d take a stab at one industry, which preys upon unsuspecting consumers. Florida is host to all the major cruise lines. They arrive and depart from ports such as Port Canaveral, Miami and Fort Lauderdale. The cruise line names are well known and include Princess Cruise Lines, Royal Caribbean, Celebrity Cruises, Carnival and Cunard (Carnival owns Cunard).

I’m not going to write about pretty ports of call or what do on a cruise. I’m going to write about how business (and safety or lack thereof) is operated on board these lines and why those who cruise may want to think twice about purchasing jewelry on board a cruise ship or, in ports of call such as St. Thomas and St. Maarten. There are quite a few horror stories concerning cruisers who purchased high-end jewelry on board a cruise ship (or in a port of call) and then arrived home to find out that the merchandise they purchased was not worth what they paid.

In fact, those who purchase art at Art Auctions on board cruise ships, are also at risk of losing money on purchasing works of art, which is price driven by the few that the control the art  production industry. I call it a “production” industry as the few who operate the art auctions pick and choose the artists and then drive the price. Get home and try to sell that piece art to a local art dealer and he’ll laugh in your face, as in many cases, you could have purchased that work of art at a lower price from the mall then on a cruise ship.

The cruise industry rarely manages its own retail stores on board. They contract to companies such as Harding Brothers and Starboard Cruises. These two companies pay the cruise lines a high percentage of their gross to the cruise line in exchange for the retail space. The employees in the shops are actually employed by the concessionaire (Hardings or Starboard) however, appear to blend in seamlessly with other shipboard personnel. If you’ve been on board an RCCL cruise, you’ve probably noticed all sorts of table displays hawking everything from costume jewelry, to gold being sold by the inch – to handbags and t-shirts. In many cases, these are known as trunk shows and the fees paid to hawk that product can be as high as 60% of the gross sales.

If a trunk show sells $50,000.00 in goods, in one week, the concessionaire takes in $30,000.00 for providing the space and then they may pay the cruise line 50% (or less) of their fee. In other words, it’s a tangled web of “vig” fees being paid all the way around.

This is why there is NO such thing as a bargain on a cruise ship. Jewelry has to be marked up so high as to provide a margin  for the seller and then a chunk goes to the concessionaire and the rest to the cruise line. Now we come to port of call shopping guides. These are sub-contracted employees wh0’s job it is to steer cruisers into jewelry stores in St. Maarten and St. Thomas.

One port shopping company (the largest one controlling most cruise ship port shopping) actually gets a piece of the action (10% of gross sales)  from the jewelry stores (in port). Imagine a jewelry store who pays to play? This is why Diamonds International gets a lot of the traffic and the small jewelry store (with the better deal) is never mentioned in port shopping presentations.

The cruise lines actually get a report at the end of each cruise as to the total gross amount (dollars) of jewelry sold by the stores. This way they can collect their 10% (or more) in referral fees.

How do they ensure their numbers are correct? Easy. The port shopping guides (and the company they work for) ask that all passengers register their purchases by listing them on a form before leaving the ship. The act of filling out the form (to get some quasi warranty on a purchase of jewelry) serves only ONE purpose – inventory control and accountability of land based jewelry retailers - to ensure they pay their “vig” to the cruise line.

Cruise Ships Built a Better Mousetrap…

One thing about cruise ships, they have a captive audience. Where cruise lines make their money is on beverages, over-priced jewelry (port of call or land based jewelry stores) and art auctions.

The cunning use of a shipboard ID card is all about how to rake in virtual dollars, which add up to “real” dollars - on the last night of a cruise. The worst cruise line in the world is Carnival. It’s ships are nightmare of neon lights and carpets. The service is about as bad as it gets and the food is no better than McDonald’s. Princess Cruises is a bit better but, nothing to scream about either and RCCL /Celebrity believe that bigger ships, bring in bigger dollars – they’re probably right.

Are Cruise Ships Safe?

Depends on what you think safe means. Many of the shipboard personnel have no clue how to say “no clue” in the English language. The front office staff are usually English speaking employees, however, the heart of the ship is nothing more than a mix of multi-language individuals working for peanuts. I’ve yet to find a cruise line willing to fly under an American flag (gee, I wonder why?). Have a claim against a cruise line? Go to Liberia and file a claim, as the cruise lines protect themselves from any and all claims under foreign entities, however, they have their corporate offices in Miami and Fort Lauderdale – huh?

The reports of people going missing have been on the rise. There are more than a few cases in which passengers simply disappeared without a trace. Another issue would be sexual assaults on passengers by crew members. Of course, we also have to mention on board illnesses spread by unsanitary conditions and murders. Yes, murders are committed at sea. In fact, in October 2008 a crew member was murdered on board the Queen Mary 2.

No, cruising is not as much as fun as it used to be. The ships have gotten bigger, as have the crowds and along with larger crowds, comes the possibility of injury or even death. In 2008, four passengers went missing. While this might seem like a small number of people, tell that to the families of those who went missing.

Let’s talk about drug smuggling. Imagine if a drug smuggler got caught with $7M dollars of drugs on board a cruise ship. No, you don’t have to imagine it. In 2008, drug smugglers were caught smuggling millions of dollars in drugs on various cruise lines. Just how much got past customs and entered the United States - will be a mystery. In fact, I think the cruise lines need some type of government oversight, as they seem to be a way in which to smuggle drugs into the United States. Norwegian Cruise Lines seems to be the most popular among drug smugglers.

So, there we have it. Cruise lines don’t appear to be doing much of anything to control crime at sea. The cruise lines will say (as they have in the past) “oh, that was an isolated incident” or “like any city at sea, we have a few problems with drugs, murders, rape, child abuse and crime – in general“.

The cruise industry appears to be an industry out of control, with little oversight and protection for its passengers. If they get sued, they run and hide under another country’s flag and I think that’s unacceptable. I believe that any ship, which seeks to pick up U.S. passengers in a U.S. port, should be required to fly an American flag. I believe there should be Federal Marshals on board every ship for every cruise (as required for U.S. airline carriers). I believe that the upper management of any cruise line (with offices in the U.S.) should be held accountable for any crimes against U.S. passengers.

In 2007, cruise lines reported an inordinate amount of bomb threats and potential terrorists attacks. The locations of these potential threats were in American ports. Just how many attacks or threats went unreported? We’ll never know.

I’ve been on dozens of cruise ships over the years and have been around the world on some of the world’s (so called) best cruise lines. I stopped cruising a few years ago, as the last cruise I took was a disaster in more ways than one. I dont’ have an axe to grind, just reporting what I’ve found online and my own personal experience. After my last cruise, I flew to a Caribbean island and stayed for seven days. I stayed in a four star resort (with meals included) and I paid far less than I would have on a cruise ship. Cruise are not cracked up to what they used to be. They’re all about cruising you somewhere you really don’t want to go (like Jamaica or Haiti) and they are nothing more than a way in which to scheme you out of money.

The next time I go on a cruise it will be on a ship proud to fly an American flag, however, I don’t think that will happen anytime soon:-)