I heard a real quick discussion of whether the government should save the cruise industry

[Joebucks]

2 hours ago, chengkp75 said:

The cruise lines, regardless of where they are "headquartered" or "based" (in the US), are not US corporations, they are incorporated in other countries like Britain and US (Carnival Corp & PLC) (Carnival PLC is the British corporation, not sure how much of the operations, but I suspect the vast majority, is under this and not the US incoporated Carnival Corp), Bermuda (NCLH), and Liberia (RCI).  Therefore, these corporations pay corporate taxes in the countries where they are incorporated.  The only state or local taxes paid by these cruise lines in the US are for those operations that are strictly US based (not sales or revenues of the ships) or US based employees.

 

Before anyone talks about bailing out the cruise industry, we need to see if they need bailing out.  Sure, they will have a bad year, maybe even a disastrous year, but I doubt they will fail.  The auto industry, for example, needed bailing out because foreign imports were undercutting them.  The cruise lines are the foreign competition, they don't have anyone who can come in and undercut them.

 

For the first part, are you indicating that this means cruise lines aren't important to the US economy? I would venture to say that is not you implication. However, I would also say that many people would interpret it that way.

 

For the second part, I agree for the most part. Cruise companies aren't in any trouble of folding at the moment.

 

 

[chengkp75]

2 minutes ago, Joebucks said:

 

For the first part, are you indicating that this means cruise lines aren't important to the US economy? I would venture to say that is not you implication. However, I would also say that many people would interpret it that way.

 

For the second part, I agree for the most part. Cruise companies aren't in any trouble of folding at the moment.

 

 

No, I am not indicating that the cruise industry is not important to the US economy, what I am indicating is that a bail out of the cruise lines would be using taxpayer money to bail out a corporation that pays little or no taxes to that government.  If the cruise lines want a bail out, let them re-organize (much as the auto companies did), and have them re-incorporate in the US, so the US taxpayer gets the benefit of the tax revenues as well as the trickle down benefits of jobs and goods purchased.  With or without a bail out, the cruise industry will revive.  The ships are not transient commodities that will disappear after short periods without usage, and as the world economy recovers, people will want to return to known diversions like cruising. With this revival of the cruise industry, the jobs and goods purchased in the US will return, with or without a bail out, so the taxpayers need an incentive to "invest" their money other than these benefits.

[chengkp75]

For a little perspective, let's compare the cruise industry in the US to something that is frequently maligned, incorrectly, here on CC;  the Jones Act.

 

Employment:  The Jones Act supports 650,000 US jobs, while the cruise industry supports 423,000 jobs, so pretty similar.

 

Economic Impact:  The Jones Act adds $113 billion to the US economy, while the cruise industry only contributes $53 billion, by their own figures.  So, why is there a push to repeal the Jones Act, yet questions as to whether to use tax money to bail out the cruise lines.  Obviously, investing in the Jones Act fleet gives a better return than the cruise industry.  Further, the Jones Act contributes $17 billion in direct taxes to state and federal governments.  At the same time, the cruise industry paid a total of wages and taxes of $1.7 billion to US employees and state, local, and federal governments.  According to CLIA's own statements, the majority of the taxes were Social Security payments for employees, and property taxes on corporate buildings.

[Joebucks]

1 hour ago, chengkp75 said:

No, I am not indicating that the cruise industry is not important to the US economy, what I am indicating is that a bail out of the cruise lines would be using taxpayer money to bail out a corporation that pays little or no taxes to that government.  If the cruise lines want a bail out, let them re-organize (much as the auto companies did), and have them re-incorporate in the US, so the US taxpayer gets the benefit of the tax revenues as well as the trickle down benefits of jobs and goods purchased.  With or without a bail out, the cruise industry will revive.  The ships are not transient commodities that will disappear after short periods without usage, and as the world economy recovers, people will want to return to known diversions like cruising. With this revival of the cruise industry, the jobs and goods purchased in the US will return, with or without a bail out, so the taxpayers need an incentive to "invest" their money other than these benefits.

 

Still a similar point as before though. Look, you know way more about cruises than I can ever dream of knowing. The whole hot topic of who pays "taxes to the government" is a deceptive topic that can also even be subjective based on what you want to talk about. It's like everyone shaking their fist at Amazon because they pay "nothing". Yet, what local government has told Amazon to leave? In fact, look how many have given Amazon additional perks. Obviously, there is a benefit to having Amazon around. Taxes to our government alone aren't some indicator of health to the US economy. If cruise lines were to disappear (I know they won't, but humor me) would that devastate our economies? From airlines, to longshoremen, to hotels, to Ubers, to restaurants, to suppliers, to ports, etc etc etc. Every business is feeling the burn right now. It's all connected at some point.

[navybankerteacher]

3 hours ago, Joebucks said:

 

For the first part, are you indicating that this means cruise lines aren't important to the US economy? I would venture to say that is not you implication. However, I would also say that many people would interpret it that way.

 

For the second part, I agree for the most part. Cruise companies aren't in any trouble of folding at the moment.

 

 

In what way do you think cruise lines are important to the US economy?  They do not contribute in any significant way to tax revenues. A very small number of their employees are US citizens/residents, or pay US taxes.

 

What they do contribute is recreation off shore - leading to many US residents to spend their vacation dollars off-shore - not contributing a dime to the US economy.  Many thousands of US consumers spend their vacation dollars elsewhere: not contributing to the US economy.  It is fairly obvious that the existence of cruising actually has a negative impact on the US economy.  

 

Sure, it is great to have cruising as an optional means of disposing of discretionary funds - but the only way cruising is important to the US economy is by decreasing domestic spending without contributing in any significant way to the domestic economy or to government tax revenues.

[Aquahound]

2 hours ago, Joebucks said:

 

 It's like everyone shaking their fist at Amazon because they pay "nothing". Yet, what local government has told Amazon to leave? In fact, look how many have given Amazon additional perks. Obviously, there is a benefit to having Amazon around. Taxes to our government alone aren't some indicator of health to the US economy. If cruise lines were to disappear (I know they won't, but humor me) would that devastate our economies? From airlines, to longshoremen, to hotels, to Ubers, to restaurants, to suppliers, to ports, etc etc etc. Every business is feeling the burn right now. It's all connected at some point.

 

Here in Seattle, Amazon itself may not pay a whole lot in taxes, but they employ over 50,000 people in high paying jobs, which boosts the local economy in many ways.  Compare that to RCCL who only employs about 2000 tax-paying people in Miami.

 

Sorry, but your Amazon example is not a good one. 

[njhorseman]

7 hours ago, chengkp75 said:

they are incorporated in other countries like Britain and US (Carnival Corp & PLC) (Carnival PLC is the British corporation, not sure how much of the operations, but I suspect the vast majority, is under this and not the US incoporated Carnival Corp)

Chief, you're wrong about where Carnival Corp. is incorporated. It's incorporated in Panama, not the US. Here's their SEC 10-K filing.

https://www.carnivalcorp.com/static-files/ddd975ba-cef0-43fe-9bf9-bb4c376ed914

 

So absolutely none of Carnival Corp. and plc is a US company...further supporting the position that they should not be entitled to a bail out by the US.

[CruiserBruce]

14 minutes ago, njhorseman said:

Chief, you're wrong about where Carnival Corp. is incorporated. It's incorporated in Panama, not the US. Here's their SEC 10-K filing.

https://www.carnivalcorp.com/static-files/ddd975ba-cef0-43fe-9bf9-bb4c376ed914

 

So absolutely none of Carnival Corp. and plc is a US company...further supporting the position that they should not be entitled to a bail out by the US.

The next thing about a bailout is that Trump is now demanding the cruise lines shut down for 30 days. As the cruise lines are doing this at the direction of the federal government, but not due to any illegal activity by the cruise lines, some sort of financial award is more likely...

[Aquahound]

13 minutes ago, CruiserBruce said:

The next thing about a bailout is that Trump is now demanding the cruise lines shut down for 30 days. As the cruise lines are doing this at the direction of the federal government, but not due to any illegal activity by the cruise lines, some sort of financial award is more likely...

 

That's not quite accurate.  The cruise lines are not shutting down due to any demand or direction.  

[Canuker]

In many ways, it does seem to have morphed into "Be Nasty to Cruise Companies" week.
I'm really not sure why; I happen to feel quite sorry for them.
And without them, there'd be no need for Cruise Critic. Well, that would put a stop to much of the negativity.
I think we should be doing all we can, here on this website, to support them.
Might venting at China be more appropriate?

[Aquahound]

Just now, Canuker said:

Might venting at China be more appropriate?

 

Tried that and was called a racist.  There was a whole thread on it.  Cruise Critic.....you're darned either way. 😉

[chengkp75]

1 hour ago, CruiserBruce said:

The next thing about a bailout is that Trump is now demanding the cruise lines shut down for 30 days. As the cruise lines are doing this at the direction of the federal government, but not due to any illegal activity by the cruise lines, some sort of financial award is more likely...

Haven't seen any indication of this, as the lines are closing down sequentially, whereas they would all shut down at once if it was a demand.

[tip]

Bail out the cruise industry?   How about paid family leave?  How about taking care of the little guy instead!

[CruiserBruce]

10 hours ago, Aquahound said:

 

That's not quite accurate.  The cruise lines are not shutting down due to any demand or direction.  

Trump is claiming it is at his request...

[navybankerteacher]

There is no need to “bail out the cruise industry” — as long as people want to cruise and as long as there are cruise ships there will be entrepreneurs to provide cruise opportunities.  What is at risk is the financial interest of the current owners of cruise lines. 

 

Current owners might be wiped out as existing equity owners lose their stakes. Virtually every bank holding company  in states like Connecticut and Texas went through insolvency in the 1980’s;  Chrysler and General Motors went through it in 2010’s, most US railroads went through it in the 1970’s, and most US airlines in have also gone through it. Still, we have Chrysler and GM, banks everywhere, and familiar airline names (just owned by different investors).

 

The industry does not need a bail out - only the current equity owners.

[bobandsherry]

While the ships themselves might employ (or contract) a small percentage of US citizens, the cruise industry as a whole affects a large amount of US citizens/residents (travel agents, hotels, port employees, etc)

Quit being rational and looking at the big picture impact. [emoji3]. {/Sarcasm off}

Sent from my ONEPLUS A6013 using Tapatalk

[bobandsherry]

No. Government should not bail out the cruise industry.  They are hardly an essential service to our global society.  Nor should government bail out luxury resorts whose business suffers in the short term due to the current pandemic. 
 
We can anticipate loss of income across various sectors in our economy due to COVID-19.  Government can't and should not bail out all of them. 

So just to ask, is there any industry that you think government should bail out? Curious if you are strictly no bailout kind of person or just have hate for cruise industry.

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[Joebucks]

14 hours ago, Aquahound said:

 

Here in Seattle, Amazon itself may not pay a whole lot in taxes, but they employ over 50,000 people in high paying jobs, which boosts the local economy in many ways.  Compare that to RCCL who only employs about 2000 tax-paying people in Miami.

 

Sorry, but your Amazon example is not a good one. 

 

My point was that corporate taxes or whatever tax pool discussed, aren't the be-all-end-all like so many people are bringing up. The Amazon example was a great one because is proves that there are more important things. The differences you point out between the two companies are irrelevant. Apparently, my point is not being articulated correctly though.

 

I'll just stop because apparently, cruises have no benefit to the local economy. Someone should tell cities like Galveston, Miami, Fort Lauderdale, Tampa, San Juan, Baltimore, Charleston, Jacksonville, Mobile, LA, New Orleans, Canaveral, Honolulu, San Francisco, San Diego, Norfolk, New York that they don't need cruising because the internet knows better.

Edited March 14, 2020 by Joebucks

[navybankerteacher]

57 minutes ago, bobandsherry said:

So just to ask, is there any industry that you think government should bail out? Curious if you are strictly no bailout kind of person or just have hate for cruise industry.

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The only industries which should be considered worth bailing out are those which provide either necessary employment or necessary services.  And the only bail out should be what is necessary to assist the capital reorganization - to keep things going until new ownership can be arranged:  either new investors or the government in the rare case of the industry being really necessary.  No bail out should protect the equity owners - who profit greatly if successful and who should be expected to take the loss if they are unsuccessful.

 

It is hard to claim that the cruise industry provides either necessary employment or necessary services to the US economy or the US public. Accordingly, there is no justification for US government investing in a bail out.

Edited March 14, 2020 by navybankerteacher

[Aquahound]

4 hours ago, CruiserBruce said:

Trump is claiming it is at his request...

 

Which is true, but "request" and "demand" have 2 totally different meanings.  

[chengkp75]

13 minutes ago, Aquahound said:

 

Which is true, but "request" and "demand" have 2 totally different meanings.  

And at the time that this was being discussed on here, Princess, Viking, and Disney had shut down before Trump's "request".

[Aquahound]

2 minutes ago, chengkp75 said:

And at the time that this was being discussed on here, Princess, Viking, and Disney had shut down before Trump's "request".

 

That's actually not true.  The suggestion from the White House came long before.  What followed was a little more than a week of talks between CLIA and the administration because shutting down operations is a logistical and financial nightmare.  I was privy to the discussions but just couldn't say anything until the agreement was made.  

 

Although, I will say the Viking one strikes me as odd because I don't remember them mentioned in the talks.  

[ldubs]

8 hours ago, navybankerteacher said:

The only industries which should be considered worth bailing out are those which provide either necessary employment or necessary services.  And the only bail out should be what is necessary to assist the capital reorganization - to keep things going until new ownership can be arranged:  either new investors or the government in the rare case of the industry being really necessary.  No bail out should protect the equity owners - who profit greatly if successful and who should be expected to take the loss if they are unsuccessful.

 

It is hard to claim that the cruise industry provides either necessary employment or necessary services to the US economy or the US public. Accordingly, there is no justification for US government investing in a bail out.

 

What is your meaning of "necessary employment"?   

[bobandsherry]

The only industries which should be considered worth bailing out are those which provide either necessary employment or necessary services.  

Pretty non-specifc. So such as?

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[ldubs]

On 3/13/2020 at 12:41 PM, chengkp75 said:

For a little perspective, let's compare the cruise industry in the US to something that is frequently maligned, incorrectly, here on CC;  the Jones Act.

 

Employment:  The Jones Act supports 650,000 US jobs, while the cruise industry supports 423,000 jobs, so pretty similar.

 

Economic Impact:  The Jones Act adds $113 billion to the US economy, while the cruise industry only contributes $53 billion, by their own figures.  So, why is there a push to repeal the Jones Act, yet questions as to whether to use tax money to bail out the cruise lines.  Obviously, investing in the Jones Act fleet gives a better return than the cruise industry.  Further, the Jones Act contributes $17 billion in direct taxes to state and federal governments.  At the same time, the cruise industry paid a total of wages and taxes of $1.7 billion to US employees and state, local, and federal governments.  According to CLIA's own statements, the majority of the taxes were Social Security payments for employees, and property taxes on corporate buildings.

 

This is very interesting and I think sharp assessment.   I suspect one primary reason for all the complaints about the Jones Act here on CC is because it causes inconvenience.  

Edited March 14, 2020 by ldubs