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Whither American Cruise Ships?

Shipping out to sea on a luxury cruise liner just doesn't seem to fit too well within our current economic or environmental realities.
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(Photo: Aleksey Stemmer/Shutterstock)

(Photo: Aleksey Stemmer/Shutterstock)

Not long ago, Arnold Donald, the CEO of Carnival Corporation, which owns a number of the planet's leading cruise lines, admitted his industry was suffering from a growing image problem. According to him, more and more Americans have "negative preconceived notions of what cruising is," he said during a conference call.

And his concern is justified. Mere mention of the words "cruise ship" can conjure up visions of perpetual seasickness, crowded sun decks, and long lines for the buffet. For young people, cruises can mean a week of non-fun hanging out with a bunch of boring old people. For literary types, they might recall David Foster Wallace's despair-filled essay "Shipping Out: On the (Nearly Lethal) Comforts of a Luxury Cruise," published by Harper's magazine in 1996.

To avoid drowning completely, the cruise liner industry morphed into its modern-day incarnation, offering an opportunity for the average family to tour the Caribbean, enjoy non-stop entertainment, and take a break from known reality.

In recent years, the industry has also been besieged by multiple eyeball-grabbing stories of horror, such as when the Costa Concordia capsized off the coast of Italy in 2012, resulting in the deaths of 32 passengers. Just over a year later, another ship caught fire in the Gulf of Mexico, leaving the vessel floating adrift without electricity or working toilets. Last April, the Centers for Disease Control and Prevention stated that outbreaks of diarrhea and vomiting aboard three recent voyages—two on the same ship—were likely due to the norovirus, which spreads through contact with contaminated food and surfaces.

This failure to communicate a positive portrayal of the cruise experience, Arnold suggests, is one of the reasons why the industry is slowly shifting its focus to nations such as China, Australia, and New Zealand—places less anchored down by unpleasant stereotypes of spending precious vacation time on a big boat with hordes of strangers. With growth rates exceeding those in North America and Europe—historically the industry's two most-profitable continents—analysts expect that by 2017 China will become the world's second-largest market for cruises (behind the U.S.). Earlier this spring, Royal Caribbean Cruises, another industry heavyweight, announced plans to permanently relocate its latest and greatest creation, the 4,180-passenger Quantum of the Seas, from New York to Shanghai.

This year, the Cruise Lines International Association forecasts that nearly 22 million people will take to the seas aboard a luxury vessel. While the industry trade group also reports that U.S. citizens still comprise just over half of the global passenger share (the U.K. and Ireland represent the second-largest demographic with a mere eight percent), what will happen to these numbers if unfavorable feelings toward cruise lines become the norm amongst America's future generations? Unable to stir up fresh demand, will the aging industry be forced to set sail for more promising shores?

According to research compiled by Duke University, the concept of pleasure cruises can be traced back to the 1840s. By the time the Titanic set out on its maiden voyage in 1912, an emphasis on comfort, luxury, and formal dinners had overridden the objective of getting travelers to their destination as quickly as possible. Between World War I and World War II—both periods in which cruise ships were primarily used to transport troops—the industry entered a kind of golden age, as the rich and famous traveled from this land to that in style. In the late 1950s, however, the birth of transatlantic passenger jets signaled the end of that era. To avoid drowning completely, the cruise liner industry morphed into its modern-day incarnation, offering an opportunity for the average family to tour the Caribbean, enjoy non-stop entertainment, and take a break from known reality. The Love Boat, a popular television series that ran from the mid '70s to mid '80s, helped convey this idea of nautical good times to the public.

But now it's 2014, and the world has turned yet again. We’re certainly not in an environmental situation that jives well with an industry built upon gigantic boats traversing deep waters while burning through heaps of fuel. Recently, Carnival Corporation stated it would invest $400 million in new technologies designed to reduce pollution produced by its fleet. For those whose lives on Earth will outlast those of Carnival executives and shareholders, however, this news might come across as a myopic attempt to keep an overall destructive activity afloat. (There has also been a recent upswing in whales being hit by cruise ships, but the causes are still unclear.)

The cruise ship ideal doesn’t fit too comfortably in our economic reality, either. When industry watchdogs such as James Walker, a lawyer who represents crew members and passengers against cruise lines, argues that ticket prices remain relatively low because the largely foreign-based staffs work excessively long hours for extremely low wages, industry executives might have cause for concern. Furthermore, since many cruise lines, such as Carnival and Royal Caribbean, are incorporated in countries such as Panama, Bermuda, Liberia, and the Bahamas, the industry isn't held to U.S. labor laws, regulations, or certain taxes. All of which is done in service of making cruise-line passengers temporarily feel like aristocrats.

Currently, luxury liners have been teaming up with concert promoters to host music festivals at sea. Performances by acts such as Kid Rock, Weezer, Skrillex, Paramore, New Kids on the Block, and James Murphy of LCD Soundsystem, not to mention several-day-long dance parties such as the annual Holy Ship!, have persuaded many segments of American youth to come aboard. Chances of this trend supporting the entire U.S. cruise industry for years into the future, however, are slim.

For 2014, Carnival Corporation expects to earn less than what the analysts had predicted. To attract new customers, the company also plans to slash prices and spend over $600 million on advertising (20 percent more than 2012). If industry leaders such as Carnival's CEO Arnold Donald can't change the perception of cruises for Americans who've never been on one, there's a chance China very well may become the place where most of the world's cruise ships dock.