Business
4:15 pm
Tue May 28, 2013

Cruise Industry Adopts Passenger 'Rights' As Incidents Mount

Originally published on Wed May 29, 2013 7:43 am

About 2,200 passengers were being flown back to Baltimore on Tuesday, a day after their cruise ship caught fire on its way to the Bahamas. There were no injuries aboard Royal Caribbean's Grandeur of the Seas.

But in the wake of the incident and others like it, the cruise ship companies have something of a black eye. The industry is now trying to reassure passengers it's OK for them to sail, adopting what it called a passenger "bill of rights."

More people have been taking cruises worldwide and for the cruise ship industry profits have been on the rise. But Jaime Katz, an analyst at Morningstar, says the industry has also found itself struggling with a series of incidents that have eaten into its bottom line.

"The cruise companies were set up to have a much stronger year this year," Katz says. "Then obviously the Carnival Triumph kind of kicked off a lot of noise earlier in the year."

The Triumph is a Carnival cruise ship that caught fire in February, leaving passengers stranded in the Gulf of Mexico for days. Incidents like these have generated bad publicity that has discouraged a lot of new passengers from booking trips. Katz says the industry has responded the way it always does, by lowering its fares.

"As long as they go ahead and fill all those cabins and set sail full, generally they're able to turn a pretty nice profit," she says.

A Difficult Recovery Seen

And yet the fallout from these incidents has been especially brutal. Ross Klein teaches at Memorial University in Newfoundland and writes a blog about cruising. He says the industry won't be able to recover as easily as it has in the past.

"When we have a number of events within a short time, such as was the case with Carnival Cruise Lines in the early part of this year, I think that has a longer-term impact," Klein says.

The Cruise Lines International Association, the industry's trade group, recently issued what it called a passenger bill of rights. It guarantees, for example, that cruise lines will fully reimburse passengers for a cruise that is interrupted by mechanical problems. The cruise lines also promise to provide transportation back to port for stranded passengers.

"I think the significance for consumers is it provides them a single source of clearly communicated information that demonstrates the industry's commitments to our passengers," says David Peikin, a spokesman for the association.

A 'Public Relations Move'

But Klein for one isn't very impressed with the move. "The bill of rights is a nice public relations move," he says.

Klein says many of the promises in the bill of rights are already standard practice in the industry. And though the association says the bill of rights amounts to a legal contract, Klein says it's not clear whether a court would see it that way.

Still, there are a lot of people out there who have never taken a cruise before, and they represent huge potential revenue. If the cruise ship industry is ever going to lure them onboard it needs to convince them it's looking out for their interests, and that means spelling out how passengers will be protected if another disaster occurs.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, HOST:

And I'm Melissa Block.

Some 2,200 passengers were being flown back to Baltimore on today. That's after their cruise ship caught fire yesterday on its way to the Bahamas. There were no injuries aboard Royal Caribbean's Grandeur of the Seas. But in the wake of the incident and others like it, cruise ship companies have something of a black eye.

As NPR's Jim Zarroli reports, the industry is now trying to reassure potential passengers it's OK to sail.

JIM ZARROLI, BYLINE: More people have been taking cruises worldwide and for the cruise ship industry, profits have been on the rise. But Jaime Katz, an analyst at Morningstar, says the industry has also found itself struggling with a series of incidents that have eaten into its bottom-line.

JAIME KATZ: The cruise companies were set up to have a much stronger year this year. And obviously the Carnival Triumph kind of kicked off a lot of noise earlier in the year.

ZARROLI: The Triumph is a Carnival cruise ship that caught fire in February, leaving passengers stranded in the Gulf of Mexico for days. Incidents like these have generated bad publicity that's discouraged a lot of new passengers from booking trips.

Katz says the industry has responded the way it always does, by lowering its fares.

KATZ: As long as they go ahead and fill all those cabins and set sail full, generally they're able to turn a pretty nice profit.

ZARROLI: And yet, the fallout from these incidents has been especially brutal. Ross Klein teaches at Memorial University in Newfoundland and writes a blog about cruising. Klein says the industry won't be able to recover as easily as it has in the past.

ROSS KLEIN: When we have a number of events within a short time, such as was the case with the Carnival Cruise Lines in the early part of this year, I think that has a longer-term impact.

ZARROLI: This week, the Cruise Lines International Association, the industry's trade group, issued what it called a Passenger's Bill of Rights. It guarantees, for example, that cruise lines will fully reimburse passengers for a cruise that is interrupted by mechanical problems. The cruise lines also promise to provide transportation back to port for stranded passengers.

David Peikin is a spokesman for the association.

DAVID PEIKIN: I think the significance for consumers is it provides them a single source of clearly communicated information that demonstrates the industry's commitments to our passengers.

ZARROLI: But Ross Klein, for one, isn't very impressed with the move.

KLEIN: The bill of rights is a nice public relations move.

ZARROLI: Klein says many of the promises in the bill of rights are already standard practice in the industry. And though the association says the bill of rights amounts to a legal contract, Klein says it's not clear whether a court would see it that way.

Still, there are a lot of people out there who have never taken a cruise before and they represent huge potential revenue. If the cruise ship industry is ever going to lure them on board it needs to convince them it's looking out for their interests. And that means spelling out how passengers will be protected if another disaster occurs.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.

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