Cruise Lines shut out of Coronavirus stimulus

[luv2kroooz]

2 hours ago, hallux said:

With all this discussion about the cruise lines being left out - has there been a single report of a cruise line going to the US government asking for a hand-out from the stimulus package?  

No, the terms of the legislation are perfectly clear. Why would they waste their time? The legislation is intended to benefit US companies impacted by Coronavirus. 

[luv2kroooz]

37 minutes ago, julig22 said:

But while I don't think the "US" as a whole should necessarily provide funds, those areas of the US like Alaska and Florida might need to  provide some financial aid as part of their individual state plans (I hope those exist!) for economic recovery.

...and what, or rather who, funds the individual state plans you are theorizing? Oh, that would be the Taxpayers of said state.

[pcakes122]

3 hours ago, chengkp75 said:

it really gets me when folks complain that the crew are not getting "the wage they deserve", or the "correct" wage, or "a fair wage".  Believe me, what the crew earns, and it may well be not enough to interest US citizens, or even be enough to "survive" in the US, they are earning upper middle class incomes in their home countries.

I don't want to go too far off-topic on this discussion, but I just had to thank you and commend you for saying this.  I have posted several times over the years how this really gets to me as well - especially when folks talk about the crew as if they are indentured servants being abused by a big corporation.  The reason it bothers me so much is that it assumes that the majority of the crew is stupid and easily duped - which is the furthest thing from the truth!  Many (if not most) of the crew members I have met actually have professional training (teachers, engineers, etc.) in their home countries, but have made a conscious and deliberate decision to work on the ships because of the salary opportunities and subsequent benefits to their families.  It drives me cuckoo when people talk about the crew as if they are helpless, second-class citizens.  To me, it shows an unconscious bias against people who don't speak English as their first language and it signifies a lack of respect.

 

Rant over (sorry!) 

[julig22]

18 minutes ago, blcruising said:

...and what, or rather who, funds the individual state plans you are theorizing? Oh, that would be the Taxpayers of said state.

Your point is?  The taxpayers of said city and/or state who benefit from the tourism.  You know, those port taxes/fees, hotel, restaurant, transportation taxes for arrival/departure ports, sales tax, liquor tax...

[luv2kroooz]

1 minute ago, julig22 said:

Your point is?  The taxpayers of said city and/or state who benefit from the tourism.  You know, those port taxes/fees, hotel, restaurant, transportation taxes for arrival/departure ports, sales tax, liquor tax...

My point is as follows.....your suggestion that States like Florida and Alaska might need to provide financial aid to the cruise lines is akin to saying the Taxpayers of Florida and Alaska should provide the aid.

[julig22]

18 minutes ago, blcruising said:

My point is as follows.....your suggestion that States like Florida and Alaska might need to provide financial aid to the cruise lines is akin to saying the Taxpayers of Florida and Alaska should provide the aid.

Well, give the man a gold star.  Yes, that is exactly what I am saying, although I didn't say should provide THE aid, I said provide some financial aid.  How is supporting tourism any different than supporting any other localized enterprise?  How is supporting the travel industry any different than a city/state offering tax incentives to bring, oh say Amazon, to their city/state?

And of course any location (state, city, or country) could choose to ignore any benefits that the cruise industry provides and see how that works for them.  I don't have a crystal ball.

[GlamorousGirl]

I disagree with the government’s call. While it’s true that most of the shipboard employees are foreign workers and the ships “base” themselves in foreign countries, they provide a huge benefit to the US economy. For one thing, all those port workers in US ports are citizens or legal residents. Second, enough people arrive in the port town early or stay on for a couple or few days after the cruise for tourism, boosting the economy significantly for these local areas. Finally, I agree with the people who say a lot fewer people would cruise if the cost were multiplied. If that happened, most of those benefits I just cited would be lost. Maybe they shouldn’t get the same amount - and they can beg their “flag” countries to make up the difference (good luck with that!) but they should get some help.

[GlamorousGirl]

6 hours ago, julig22 said:

I agree 100% - the places that benefit and/or depend on tourism need to step up.  Whether or not they have the money is another matter.  But while I don't think the "US" as a whole should necessarily provide funds, those areas of the US like Alaska and Florida might need to  provide some financial aid as part of their individual state plans (I hope those exist!) for economic recovery.

Florida and Alaska? Many more places benefit. In the US I’ve sailed out of or into NYC, Baltimore, Boston, Seattle, New Orleans, and LA - and there are more ports than that. Every time I’ve pumped money into the local economies staying at hotels, eating at restaurants, and visiting tourist attractions. I often make a road trip out of the trip to the cruise port, spending additional money in other cities along the way. Alaska and Seattle is a way oversimplification of the benefit the industry has on the US

[SteveH2508]

As a Brit, I do not have a dog in this fight, but it seems to me that the terms bail-out, handout etc. are being bandied around without defining exactly what the terms are. Is it a loan or a gimme?

 

The cruise lines are in a cash flow crisis: they need liquidity now. If the Government loaned them money and put some strict limitations on how it may be used (preserve jobs, cover cancellations, no new builds, cut exec. pay, no dividends etc.), the Government could very well end up making a bundle, from interest and repayments. They could also bring in some policy matters (environmental, %age of US people employed or whatever) that the cruise lines are going to find hard to resist.

 

The cruise lines are borrowing from the markets at about 12.5% IIRC. If the Government charges them 10% then win-win?

[luv2kroooz]

2 hours ago, SteveH2508 said:

The cruise lines are borrowing from the markets at about 12.5% IIRC. If the Government charges them 10% then win-win?

....unless they default on the loan repayment. You have to calculate risk when lending. The fact that Carnival borrowed at an outrageous 12% rate speaks volumes to me.

Edited April 9, 2020 by blcruising

[SteveH2508]

8 minutes ago, blcruising said:

....unless they default on the loan repayment. You have to calculate risk when lending. The fact that Carnival borrowed at an outrageous 12% rate speaks volumes to me.

There are quite a lot of assets that the Govt. loans could be secured against though. The politics of loaning tax payers' dollars to the foreign flagged cruise lines would be challenging however. I think governments have more urgent 'fish to fry' at the moment.

[PATRLR]

12 hours ago, njhorseman said:

Right:

https://thehill.com/homenews/senate/489788-cruise-lines-excluded-from-coronavirus-stimulus-bill

 

Trump said though it’s “very hard” to consider making them eligible for loans, he noted they do employ many people and promote economic activity. 

“It’s very hard to make a loan to a company when they’re based in a different country, but with that being said, they have thousands and thousands of people who work there,” he said. “The cruise line business is very important. … We’re going to try and work something out.”

 

Considering he has stated he does not intend to answer to anyone with respect to how he distributes the 1/2 billion he has control of, that quote tells me the cruise lines will get a bailout.  Damn.

 

5 hours ago, GlamorousGirl said:

I disagree with the government’s call. While it’s true that most of the shipboard employees are foreign workers and the ships “base” themselves in foreign countries, they provide a huge benefit to the US economy. For one thing, all those port workers in US ports are citizens or legal residents. Second, enough people arrive in the port town early or stay on for a couple or few days after the cruise for tourism, boosting the economy significantly for these local areas. Finally, I agree with the people who say a lot fewer people would cruise if the cost were multiplied. If that happened, most of those benefits I just cited would be lost. Maybe they shouldn’t get the same amount - and they can beg their “flag” countries to make up the difference (good luck with that!) but they should get some help.

All those dollars you mention are tourism dollars and will get spent somewhere else.  While the ports and their cities might take a hit, those dollars will go elsewhere in the economy.  The impact cruise lines have on the economy isn't justification for bailouts, IMO.

 

[vpearlkc]

People will still go to Alaska, Florida etc. They will still do tours. They will just fly in and spend more money on hotels, nightlife rental cars and more. It may actually be better for local tourism if only a few wealthy cruisers can get there on ships.

[njhorseman]

1 hour ago, PATRLR said:

Considering he has stated he does not intend to answer to anyone with respect to how he distributes the 1/2 billion he has control of, that quote tells me the cruise lines will get a bailout.  Damn.

The statement from Trump you're citing was made before the legislation was enacted and during the time when all interested parties were lobbying for their piece of the pie.  The final bill excluded companies incorporated outside the US and businesses without a majority of their employees being employed in the US so the major cruise lines are excluded on both counts.

 

I'm not sure what Trump controls, but if it's a half billion that's just lunch money. Carnival just acquired 6 billion in additional cash through issuing stock and high interest loans. NCL fully utilized a 1.55 billion credit  facility to bolster its cash. A half billion could serve the needs of a lot of small businesses and would be insignificant to the large cruise line holding companies.

[julig22]

6 hours ago, GlamorousGirl said:

Florida and Alaska? Many more places benefit. In the US I’ve sailed out of or into NYC, Baltimore, Boston, Seattle, New Orleans, and LA - and there are more ports than that. Every time I’ve pumped money into the local economies staying at hotels, eating at restaurants, and visiting tourist attractions. I often make a road trip out of the trip to the cruise port, spending additional money in other cities along the way. Alaska and Seattle is a way oversimplification of the benefit the industry has on the US

Of course there are many other places in the U.S. that benefit from cruises, either directly or indirectly.  I only mentioned a coup!e that depend heavily on the cruise industry because they are ports of call, not just a departure port. There are a number of ports in California, plus flights to overseas out of LAX - but none are heavily dependant on cruises.  Same for east coast.  Most coastal states have ports of call, just some are busier than others.  Many cruises out of Texas, just not NCL.  Hawaii, California and Florida depend heavily on tourism but cruises are only one part.  In Alaska however, cruise ships play a significant part in their tourism. 

[ray98]

If they want a bailout let FL foot the majority of the bill..  These cruise lines benefit them immensely as part of their tourism market which comes with lots of jobs and income for the state.  FL is one of the few states with no personal state income tax and that is because of tourism.  

[Buford T Justiice]

Private equity groups must be salivating at the potential opportunity to buy cruise lines out of bankruptcy.

[PATRLR]

1 hour ago, njhorseman said:

I'm not sure what Trump controls, but if it's a half billion that's just lunch money. Carnival just acquired 6 billion in additional cash through issuing stock and high interest loans. NCL fully utilized a 1.55 billion credit  facility to bolster its cash. A half billion could serve the needs of a lot of small businesses and would be insignificant to the large cruise line holding companies.

It's a half trillion, not billion.  My mistake.  

He made it clear that he does not intend to respect the oversight that Congress added.  This was from his signing statement (after the bill was passed, not before):  "I do not understand, and my Administration will not treat, this provision as permitting the [the Inspector General] to issue reports to the Congress without the presidential supervision".  And presumably just to be sure this oversight doesn't happen without his control he just fired the IG who would be doing the reporting.  

I'm not going to get into a debate about Trump here.  I stand by my statement that based on his statement that they will work something out combined with his statements and actions since the bill passed, the cruise lines will likely get some of the bailout money.

[tomk3212]

Couldn't be less surprised.  As the old sayings goes, 'What goes around, comes around.' and 'You reap what you have sown.''

 

The cruise lines made the deliberate business-based decision to incorporate themselves outside of US jurisdiction and foreign-flag their respective vessels to avoid taxes & shield themselves from lawsuits.  While I feel very sorry for the employees of NCL & the other cruise lines I do not feel sorry at all for their Directors and Senior Execs (FDR, r u listening? lol).

 

A WSJ reader in a Letters to the Editor yesterday suggested that the cruise lines should ask the nations their vessels are flagged under and/or where they are incorporated for a bail out.  'Sounds like a plan' to me...😱

[chengkp75]

29 minutes ago, Buford T Justiice said:

Private equity groups must be salivating at the potential opportunity to buy cruise lines out of bankruptcy.

Saudi royal trust just bought 8% of Carnival Corp.

[PATRLR]

2 hours ago, chengkp75 said:

Saudi royal trust just bought 8% of Carnival Corp.

I know the Saudi Royals like their big, personal yachts and all that, but buying Carnival seems a bit over top, even for them.  🙂

 

[Paul Bogle]

5 minutes ago, PATRLR said:

I know the Saudi Royals like their big, personal yachts and all that, but buying Carnival seems a bit over top, even for them.  🙂

 

 

They didn't purchase assets, they took a shareholder interest in the company. This is the same bunch who thought they could chop-up a Saudi national and contributor to western media in their embassy in Turkey and no one would notice.

 

As always caveat emptor.

[julig22]

10 hours ago, SteveH2508 said:

As a Brit, I do not have a dog in this fight, but it seems to me that the terms bail-out, handout etc. are being bandied around without defining exactly what the terms are. Is it a loan or a gimme?

You may not have a dog in this particular fight (US bailout) but NCL (as well as others) is not a USA corporation.  If there is any bailout, it needs to come from those places worldwide that benefit from the cruise industry.  Loan or gimme - depends on whether or not it is a win-win overall. 

 

My Norway cruise started/ended in London.  My now canceled British Isles cruise was to start/end in London, with an overnight stay and 11 ports, many in the UK.  So yes, there is a cruise presence in the UK, although cruises may not be a significant source of revenue and employment.

 

Almost every country has a vested interest in the cruise industry - some more than others.  Some areas need the industry to possibly survive, others not so much.  Some locations are in a better position to provide a cash influx (which the armchair quarterbacks seem to think is necessary), others not so much.  It's a matter of priorities.  Cruises are non-essential if you are looking at it from the vacation aspect, but are very essential if you depend on the jobs and income that they provide.

[Cindy]

I don't want to go too far off-topic on this discussion, but I just had to thank you and commend you for saying this.  I have posted several times over the years how this really gets to me as well - especially when folks talk about the crew as if they are indentured servants being abused by a big corporation.  The reason it bothers me so much is that it assumes that the majority of the crew is stupid and easily duped - which is the furthest thing from the truth!  Many (if not most) of the crew members I have met actually have professional training (teachers, engineers, etc.) in their home countries, but have made a conscious and deliberate decision to work on the ships because of the salary opportunities and subsequent benefits to their families.  It drives me cuckoo when people talk about the crew as if they are helpless, second-class citizens.  To me, it shows an unconscious bias against people who don't speak English as their first language and it signifies a lack of respect.
 
Rant over (sorry!) 

I have also met quite a few crew members who are using their time on ships as a way to gain experience in the hospitality/restaurant/hotel business.


Sent from my iPad using Forums

[PATRLR]

1 hour ago, Paul Bogle said:

 

They didn't purchase assets, they took a shareholder interest in the company. This is the same bunch who thought they could chop-up a Saudi national and contributor to western media in their embassy in Turkey and no one would notice.

 

As always caveat emptor.

Oh boy....  I'm sorry, I tried to make a funny (hence the smiley face 🙂 at the end).  Apparently I failed miserably.  

Yes, I am well aware that they took an equity interest and they didn't just purchase, for example, the Horizon to use as one of their private yachts.

 

Edited April 9, 2020 by PATRLR