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Cruise Lines Need an Overhaul
Opinion · March 14, 2003

Holland America's Caribbean cruises are billed as voyages to paradise filled with "sun, serenity, good times and romance." But for hundreds of passengers who sailed on the company's Amsterdam last fall, their vacations didn't live up to that promise.

Instead, they were infected by the Norwalk virus, an increasingly common gastrointestinal ailment that confined many of them to their cabins with diarrhea, vomiting spells and a fever.

Although the travelers recovered, the memories of a cruise ruined by sickness lingered. A lawsuit filed against Holland America on behalf of a group of passengers who contracted the virus, accuses the firm of negligent hygienic practices and failure to warn travelers of contamination hazards.

Holland America says it is doing all it can to protect passengers from the Norwalk virus and is prepared to defend its record in court. It may never come to that, however, because the cruise industry is all but immune to lawsuits.

Maritime law favors the cruise line over the passenger, making it difficult for travelers to recover any meaningful damages if their floating vacation is wrecked. As travel-law expert Thomas Dickerson puts it, the rights of an injured passenger are not governed by 21st-century laws, but "19th-century legal principals, the purpose of which are to insulate the maritime industry from the legitimate claims of passengers."

With the midwinter "wave" period — the season when most cruises are booked — now almost over, the industry's own illness is coming into sharper focus. War worries and a surplus of cabins are putting a strain on the cruise lines. The average per-day price of a one-week cruise, based on double occupancy, slipped from $154 in 2001 to $134 for the first part of 2003, according to cruise agency 02Cruise.com — evidence that the industry is hurting for business.

Is there a way to bring passengers back and at the same time fix this leaky metaphorical boat? Yes, but it won't be easy. Cruise lines need to start playing by the same rules as the rest of the travel industry and make some tough choices about how they sell their product.

Many cruise ships aren't registered in the United States. Instead, they fly a "flag of convenience" and are registered in a country with low taxes, lax safety regulations and few crew restrictions. That lets them sidestep many of the laws taken for granted by people who fly, drive and stay in hotels. It also lets cruise lines keep customers at bay for anything from medical malpractice claims to payments for damaged or stolen property.

Flying a foreign flag to get around a country's laws is wrong. If a ship is owned by an American company, serves American ports and sails with American passengers, shouldn't it also be registered in the United States?

Cruise-line-passenger contracts need a rewrite, too. Today, the contracts, which spell out the obligations of the cruise line to the passenger, are full of mumbo jumbo and legalese that even lawyers have difficulty understanding. Buried in the fine print is a set of onerous provisions that impose time limits on any claim and can stipulate that the cruise line may use another country's laws to handle a case if it's convenient.

"The cruise lines are making the most favorable arrangements for themselves in their contracts," says Robert Force, a maritime-law expert and a professor at Tulane University's law school. Isn't it time the cruise lines took a look at their contracts to make them fairer — or even just understandable?

The cruise lines also ought to rethink a topsy-turvy economic model that leaves them spending money on things they shouldn't while neglecting what's important. By being exempt from most American labor laws, cruise companies are able to hire crewmembers at a fraction of the cost of a land-based hotel worker — about $3 a day plus room and board for a cabin steward, according to Anne Campbell, editor of Cruisemates.com. Meanwhile, travel agents are paid from 10% to 13% of the price of the cruise, Campbell says, for doing little more than booking a ticket.

That's happening at a time when the rest of the travel industry is cutting agent commissions and encouraging customers to buy air, hotel and rental cars online. Granted, booking a cruise is more complex than buying a simple airline ticket, and agents deserve to be fairly compensated for their work. But don't crewmembers, too?

The cruise industry has heard these arguments before, but it isn't buying them. Michael Crye, president of the International Council of Cruise Lines, a trade association for the industry, points out that a significant number of ships are registered in countries such as the United Kingdom, Holland and Norway. Those are hardly flags of convenience under which a ship can elude taxes and regulations.

What's more, the contract stipulations regarding the time and place a passenger can sue are there for a reason. "We want to resolve the cases promptly in a court that actually understands maritime law,' he says. Crye also notes that salaries for crewmembers are up to 10 times the national average for comparable jobs in many of their homelands. And he defends the agency-compensation practices, calling the travel professionals "an essential part of the industry."

Geoffrey Norton, the attorney who filed the lawsuit against Holland America, begs to differ. He believes the system is flawed and that instead of defending it, the cruise industry should follow the lead of the companies whose ships are registered in the United States. Vessels such as those offering riverboat cruises or inter-island shuttles are subject to the laws of the land, which he says is reassuring to passengers during these uncertain times. And people are more likely to cruise with a line that makes them feel comfortable.

"Maybe there's something to be learned from those cruise lines," he says.

Maybe. Unfortunately, Congress is doing its best to block progress.

In 1996, it amended a federal law limiting cruise lines' liability, in effect severely curtailing passengers' rights. It also scuttled a proposed law that would have imposed minimum-wage and overtime requirements on foreign employees who work on cruise ships that visit U.S. ports.

The lawmakers apparently thought they were doing the cruise lines a favor. In truth, they were unleashing a statutory contagion that has now infected most of the cruise industry.

Christopher Elliott is a travel commentator based in Key Largo, Fla. All e-mailed questions may be edited, condensed or republished at the site's discretion.