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The fatal shooting this week of a 14-year-old girl visiting St. Thomas by cruise ship has many people wondering whether the U.S. Virgin Islands are still a safe place for tourists.

Lizmarie Perez Chapparro was struck by a stray bullet on Monday as she rode with her parents on an open-air safari bus. The family, which arrived on the island that morning aboard the 2,758-passenger Carnival Victory, were taking the bus to the Coki Point Beach area when gunfire broke out between rival gangs attending a funeral at a cemetery along the route.

In response to the incident, several cruise lines with port calls this week in St. Thomas have cancelled excursions to the Coki Point Beach area. In addition, some ships have even offered full refunds for anyone wishing to cancel their pre-booked shore excursions anywhere on the island.

The U.S. Virgin Islands have been plagued by growing violence over the past few decades, first in St. Croix and more recently in St. Thomas. In fact, as of Monday’s fatal shooting, the territory of 110,000 people had racked up 44 homicides this year – an increase of more than 30% over the same period last year. At this point, the U.S. Virgin Islands are on track in 2010 to experience a record homicide rate that is 13 times the American national average.

As a result, some cruise lines are thinking about reducing the number of port calls they make in St. Thomas, or even dropping the destination altogether. And it wouldn’t be the first time that cruise lines have taken this kind of drastic action.

For example, most cruise lines pulled out of St. Croix in 2002 because of concerns over rising crime on that island. And a number of cruise lines have pulled out of, or reduced port visits in Jamaica for the same reason.

So should cruise ships pull out of St. Thomas as a result of Monday’s senseless and tragic death?

As someone who has been to the region more than a dozen times over the past 30 years, I would hate to see that happen. After all, St. Thomas is a beautiful island with great scenery and beaches, lots of wonderfully warm and friendly people, and some of the best duty-free shopping in the Caribbean.

In addition, there isn’t a destination in the world that is completely crime-free, or where tourists don’t need to be cautious of where they are going. And fatal attacks on tourists are extremely rare anywhere in the Caribbean.

However, I do believe that Monday’s tragic event could be used as a catalyst for positive change in the region.

For example, cruise lines need to explore alternative ports in the region and begin reducing the number of calls they make in a very congested St. Thomas which is already too crowded on most days in winter. Some lines have already begun to do that by calling in the nearby British Virgin Islands of Tortola, Virgin Gorda and Jost Van Dyke, which are relatively crime free.  More lines should follow this lead.

In addition, the government of the U.S.V.I. needs to get more serious about reducing crime on St. Thomas, particularly violent crime. They ignored the problem on St. Croix and have already seen the economic impact of their inaction in terms of lost tourism dollars. So it’s time local leaders took their heads out of the sand and faced up to the fact that their island paradise is becoming ‘Paradise Lost’.

But if, among other things, local crime and port congestion can be curtailed, there’s no reason why St. Thomas can’t regain its reputation one day as a true Caribbean paradise.  

The recent announcement by Fred Olsen Cruises that it will likely drop its Canada-New England cruise itineraries if more rigorous ship emission standards are introduced raises some interesting questions about the future viability and cost of cruising the coastal waters of North America.   

For example:

Why are new emission standards necessary?

According to a clean technology company called STI, exhaust emissions from ships are a significant source of sulphur oxide, with the 15 biggest ships alone emitting about as much sulphur oxide pollution as all cars combined. Sulphur in the air creates acid rain, which damages crops and buildings, and when inhaled, can cause repiratory problems. That’s why the Canadian and American governments are introducing tougher emission standards for cruise and cargo ships.

How tough will the new standards be?

The regulations will require ships to use a more expensive grade of fuel with less sulphur content when they come within a 200-mile clear-air buffer zone in North America known as an Emission Control Area (ECA). Under the new standards, the maximum allowable sulphur level will be 1.0 percent by 2012, and by 2015 it will go down to 0.1 per cent. By comparison, cruise ships in Canadian and American waters typically burn bunker fuel that has a sulphur content ranging from 1.5 to 2.5 per cent.

Why is the cruise industry resisting?

The cruise industry says the annual cost to meet the 2015 standard will be $100-million in additional costs for Alaska cruises and $30-million for New England/Canada cruises based on current fuel prices.

What will be the impact of the new standards?

It will likely mean higher cruise fares and fewer cruises for passengers, and the loss of tourism dollars for communities on the east and west coasts of North America. While it’s unlikely large cruise lines will abandon the market like Fred Olsen, they will position fewer ships in Alaska and New England-Canada, and probably sail shorter itineraries to save money on fuel costs.

Don’t cruise lines care about the environment?

The world’s major cruise lines support smart environmental stewardship and most have rigorous programs in place aboard their ships to reduce waste and pollution. After all, unlike cargo ships, cruise ships have a vested interest in keeping their cruising destinations clean, beautiful and attractive places to visit.

So what’s the problem?

The cruise industry believes there are more cost-effective ways to reduce sulphur emissions than just requiring them to use higher grades of fuel. For example, they say there are alternatives such as scrubbers that remove sulphur after the oil is burned but before emissions are discharged through the funnel. In addition, cruise lines would like the implementation dates for the new standards to be delayed so they have more time to equip their ships with the appropriate equipment and technology. In light of the size of their fleets and the age of some vessels, the cost and time involved in retrofitting ships to meet the new standards in such a short time span will be time-consuming and costly.

So what’s the solution?

The emission standards should be changed so that ships can choose the most cost-efficient ways to emit less sulphur into the air. Regulators should be establishing emission limits, not prescriptions on how to achieve them. Regulators should also be flexible on implementation dates, and provide extensions where circumstances warrant.

In addition, ports of call should be looking at what they can do to help. For example, some North American ports, including Vancouver, Seattle and Juneau, have installed shore power systems that allow cruise ships to connect to city grids while docked instead of burning fuel for their power needs.

What’s the bottom line?

It’s important the cruise industry continue to improve their environmental performance, including by reducing the pollutants they emit into the air and water. However, governments should not be implementing new standards for the cruise industry that go beyond what is required on land. Nor should they be creating standards that go beyond what is technologically possible, or be establishing timelines that cannot be met without destroying the economic viability of a cruising region.

At the end of the day, all level-headed people involved in this issue should be working towards the same goal – a significant reduction in sulphur emissions from cruise ships plying the coasts of North America, and a continuation of a vibrant cruise business that creates thousands of jobs and generates millions of tourism dollars for communities in the east and west coasts of North America.

The BP oil spill may be negatively impacting wildlife, wetlands and beaches along the coasts of Louisiana, Alabama and northern Florida, but it is not causing any problems for cruise ships that sail from ports in the Gulf of Mexico to the Western Caribbean.

In fact, officials at Carnival Cruises – the largest cruise line operating from ports in the affected waters – say their ships are continuing to operate all scheduled itineraries as planned. 

According to a statement released June 2 by Carnival, “Ships sailing from New Orleans and Mobile are making slight course alterations as necessary to avoid the most heavily impacted spill areas and the vessel’s hulls are being routinely inspected for oil residue.  At this time, we are not anticipating any interruptions to our normal cruise schedules across the entire fleet.”

Carnival also operates a ship out of Galveston, but the Gulf current has been taking the spill on a northeasterly course away from the Texas coast.

The reason Carnival’s itineraries have not been impacted is that the ports their ships visit in places like the Yucatan coast of Mexico and the Western Caribbean islands of Grand Cayman and Jamaica are located well beyond the spill zone. As a result, Carnival’s ships are well south of the spill area within a few hours of leaving their home port.

However, while the BP oil spill has not impacted Carnival’s cruise schedule, it may be affecting their revenue.

According to local tourism officials, some people have been putting vacation trips to the Gulf States on hold until the oil spill is stopped and the impact contained. And that may be reducing the supply of cruise passengers, many of whom usually combine a land stay with their sea voyage.

To date, Carnival officials say they have not seen a drop in passengers taking cruises from Gulf ports. However, most of the people sailing on Gulf cruises over the past two months would have booked their cruises before the spill took place on April 20^th.  As a result, there could be a fall off in demand if oil continues to spew into the Gulf and the story remains on the front pages for weeks to come.

If demand for cruises departing from Gulf ports does decline, let’s hope it’s just a temporary reaction. After all, cruises to the Western Caribbean from Gulf ports represent one of the biggest values in the market, and they provide a convenient alternative to sailing from Florida, especially for people located in the west or mid-west. And they provide lots of employment for people who live and work in the home-port areas.

In the meantime, savvy cruisers should keep their eyes open for some tremendous bargains on cruises to the Western Caribbean from the Gulf ports of New Orleans, Mobile and Galveston.

Carnival Cruises has introduced new security measures that give the line the right to confiscate a wide variety of electronic products and other items brought onboard its ships. Some of the items are strictly prohibited, while others can be confiscated during the cruise if deemed to be used in a manner that presents a security hazard.

So far the new rules have created a backlash from clients who say the measures are unclear and could lead to different standards being applied across the Carnival fleet. In fact, the line has already relented on one issue and removed the ban on 700-watt hair dryers.

According to the FAQ on Carnival’s web site, the new items that may be confiscated during the cruise include:

May be confiscated on board:

• Personal grooming devices such as hair dryers, flat and curling irons, shavers, etc., are allowed on board when used with proper caution.  These devices should not be used when other electrical appliances are plugged in.  However, if such devices are determined to pose a hazard, they will be removed and returned the last day of the cruise prior to debark.

• Electronics such as laptops, cameras, cellular phones, etc. are allowed on board when used with proper caution.

• Electrical devices such as fans, power strips, multi plug box outlets/adaptors, and extension cords will be removed if determined to pose a hazard and returned the last day of the cruise prior to debark.  

• Musical Instruments: Only if the guest is participating in a pre-approved ship performance. 

• Floatation Devices:  For the comfort of all our guests, rafts, tubes and floatation devices other than those used as life preservers (water wings) cannot be used in the swimming pools on board. 

These categories are in addition to a wide range of items that will be confiscated at check in including:

Confiscated Items at check-in:  

• Alcohol (hard liquor)/sealed, unopened bottles

• Beer/sealed, unopened bottles/cans

• Wine or champagne/sealed, unopened bottles - beyond the allowable limit of one bottle per adult 21 years of age (brought on at embarkation time only)

• Clothing irons and steamers (all Carnival ships offer laundry facilities with irons and ironing boards. Fleet-wide valet laundry service is also available for a nominal fee.)

• Electrical and household appliances (i.e. coffee makers, hot plates, toasters, etc.)

• Candles

• Heating Pads

• Incense

What’s next?

Once Carnival has finalized its list of banned, prohibited and may be confiscated items, rumors say they will being putting together a list of prohibited clothing items. We hope this list will include white shoes, burgundy pants and lime-colored sports jackets. And of course, Speedo bathing suits worn by anyone over 50 with a beer belly!

As for the cruise line’s marketing slogan “Fun for All, All for Fun”, apparently passengers will be required to submit a list of things they like to do at sea six weeks in advance of the cruise so it can be vetted by bureaucrats in the company’s head office. If the items are approved, passengers will be given a “fun” permit that gives them permission to participate in a limited number of pre-approved actitivities as long as they have the permit stapled to their forehead.

We can’t wait to see what Carnival comes up with next!

The announcement last Friday that the cruise industry had reached a tentative agreement with Alaska’s Governor Sean Parnell on the state’s controversial “head tax” is a step in the right direction.

The Governor’s proposal to lower the $46 tax by 25% still has to be approved by the state legislature before it adjourns on April 18. But if it passes, the agreement will make Alaska a more cost-competitive destination, keep cruise lines from pulling out more ships, and restore thousands of tourism jobs that have been lost in the last three years.

The passenger head tax and a series of other taxes and environmental measures were introduced following a state-wide ballot initiative (a form of referendum) in 2006. Sponsored by a local group called “Responsible Cruising in Alaska,” the initiative introduced a series of new taxes and rules on top of existing ones, including:

- a new $46 per passenger head tax to pay for improvements to port infrastructure, even though cruise lines had already been paying (and still continue to pay) a voluntary improvement tax to almost every port they visit;

- a new $4 per person environmental fee to pay for state-employed Ocean Rangers to sail aboard every ship, even though cruise lines had already voluntarily agreed to rigorous environmental rules and reporting;

- a new 33% gaming fee imposed on the cruise ship casino profits; and,

-  a new, more stringent water emission regulation that is tougher than anything required on land, even though the cruise industry had already invested $200 million to meet previous environmental standards. The new rule is so strict that drinking water used onshore in Alaska has too high a copper content for cruise ships to use and discharge into state waters.

As a result, Alaska has earned the dubious distinction of having the highest cruise passenger tax in the world, as well as having some of the most onerous and costly cruise ship regulations on the planet.  This has squeezed profit margins for ships operating in Alaska, especially with a tough economy making it difficult for cruise lines to pass these increased operating costs on to consumers.

Not surprisingly, cruise lines have begun to move some ships out of Alaskan waters in favour of less costly and more welcoming destinations.  After all, unlike hotels, cruise ships are moveable assets and can be relocated to wherever they can attract the most passengers and earn the most money. In fact, there will be three fewer cruise ships plying Alaskan waters this summer, which will reduce cruise ship visitors to the state by 17% or 140,000 passengers – the first decline in 30 years. And if the tentative agreement is not approved, the decline will continue.

Even if the agreement is approved, more will need to be done. After all, cutting the head tax to $34.50 per person is just a way for Alaska to remove the 25% of the tax that is not being spent in Alaska port communities and which the cruise lines have been arguing is illegal. Under the U.S. constitution, taxes on interstate travel and commerce can only be used to improve facilities for those activities. However, Alaska has been using a portion of the tax to subsidize public projects that have nothing to do with cruising – which is clearly unfair and probably illegal.

So what does all this mean to the cruising public?

For the last 30 years cruise ships have provided an economical way for millions of people to experience the magnificent beauty of Alaska. They’ve worked cooperatively with local ports and state agencies to reduce their environmental footprint, grow tourism, and improve local infrastructure. And they continue to invest in making Alaska the type of destination the traveling public wants to visit.

So let’s hope the Legislature of Alaska will seize the moment in the weeks ahead and begin to reduce the unfair tax and regulatory burden they’ve placed on cruise lines. By doing so, they will ensure that Alaska remains a great destination for cruising, that passengers continue to have lots of choice, and that cruise fares remain affordable for years to come.

In the wake of a global financial crisis that forced cruise lines to cut fares, halt orders of new ships, and withdraw some vessels from foreign markets, the industry is poised for a return to growth in 2010.

At least, that’s what industry executives predicted this week at the 2010 Cruise Shipping Conference in Miami.

The cruise industry’s future was the main topic during the event’s opening session which kicked off with presentations from conference moderator Chris Hayman and Cruise Line International Association (CLIA) Chairman Richard Sasso.  

Hayman told a packed room of more than 1,000 people that the cruise industry is on its way to recovery in 2010 with strong growth in passenger bookings, particularly from Europe. “North America continues to be the dominant source of cruise passengers but the rest of the world is growing fast,” he said.

As proof, Hayman pointed to the record number of European passengers carried by cruise lines in 2009, which increased by 12% over the prior year compared to about 7% for the industry overall. That European growth was led by Germany and the United Kingdom who contributed 1.5 million and 1 million passengers respectively in 2009.

In addition, Hayman said the cruise industry is embarking on a trend towards more international deployment of ships after pulling back to North America and the Caribbean over the last two years in the face of the global financial crisis. This wider deployment will attract more international passengers and provide North Americans with a broader choice of attractive itineraries.

Richard Sasso, who is also President and CEO of MSC Cruises (USA), spoke about the steady evolution of cruising and the industry’s ability to navigate through several rough economic periods including during 2009. He said the industry’s resiliency was largely due to its innovative approach in building ships, designing onboard features and offering itineraries that meet the desires and expectations of its customers.

What was once a small business consisting of a few converted ocean liners is now a $100 billion global industry with more than 200 purpose-built cruise ships, Mr. Sasso said. During the past 30 years, he added, the industry has evolved from ocean liners to ocean playgrounds with amenities like balconies instead of port holes, 15,000 sq. ft. spas instead of 300 sq. ft. gyms, and rock climbing walls, ice skating rinks and surfing pools instead of shuffleboard.

“We’ve come a long way baby,” he quipped.

In terms of the industry’s future success, Sasso pointed to a number of key areas including the ability to keeping adding innovative new ships, provide value for money, deploy ships to a wider range of destinations and source passengers globally. And he predicted continued steady growth for the industry with passenger totals increasing to 14.3 million in 2010 versus 13.4 in 2009.

“So, where do we go?” asked Mr. Sasso. “If you look back and project forward, extraordinary things are about to happen.”

It’s only the first day of the Seatrade Cruise Shipping Conference in Miami and there’s already a central theme developing: cruising is going global in a big way.

What used to be a travel industry focused primarily on North Americans – and a small percentage of them at that — is apparently looking to expand into new markets and new destinations faster than you can say “up the gangplank.” And the results are going to be more ships, carrying a wider diversity of passengers, visiting a broader variety of ports in future than we have ever seen in the past.

The reason for this sea change of philosophy is quite simple. The rest of the world has always had a much lower rate of penetration in terms of the percentage of the population that has cruised versus North America. But the combination of declining cruise fares and increasing per capita incomes around the world is creating a compelling proposition for cruise lines to expand into new markets.

In addition, a growing number of government agencies around the world are beginning to realize the full economic impact of having cruise ships decant thousands of passengers into their major tourist destinations for a day or more. As a result, they are building new port facilities, launching aggressive marketing campaigns, and competing to get more cruise ship visits.

In fact, at both the morning and afternoon panel discussions at this annual gathering of cruise mavens, the main topics were sourcing new cruise passengers and developing new cruise markets for ships. And a number of international agencies made compelling presentations on why their markets were best primed for an expanded cruise ship presence, including Australia, Europe, Hong Kong and Africa.

As a result, the world’s major cruise lines have begun to base ships in new markets like Dubai, add more exotic ports to their itineraries like Vietnam and Taiwan, expand the range of itineraries in far-flung places like Australia and Hong Kong, and expand the cruising season in regions like Europe where several lines now operate year-long in the Mediterranean.  In particular, Med cruises in the winter appeal to a number of northern Europeans.

In addition, a number of major cruise lines are now going after passengers from non-North American markets such as Brazil, Chile, Eastern Europe, Mexico, Africa and Asia. In fact, Royal Caribbean’s Spanish subsidiary Pullman Tours recently announced it will be home porting a ship in Acapulco in compliance with Mexican cabotage laws. The move is seen as a joint effort by RCI and the Mexican authorities to further develop the cruising market in Mexico.

That’s not to say that Americans and Canadians are no longer a priority market. North America, which sourced some 13 million passengers in 2009, is still the world’s most lucrative cruise market. And we’ve barely scratched the surface in terms of its potential.

As one of the conference speakers from Royal Caribbean pointed out, nearly as many Americans visit Branson, Missouri every year as those who take cruises. So there is still lots of growth potential left for the North American market. However, there is even greater potential outside of North America because the percentage of the population in those markets who have taken a cruise has traditionally been much lower.

While the Miami Cruise Shipping conference is barely one day old, there’s no mistaking what the cruise industry officials here are trying to tell us:  the world of cruising is about to get more international, take us to many new destinations, and introduce us to a lot of exciting cultures.

So far, I like what I’m hearing.

(Commodore Dave is reporting from the Seatrade Cruise Shipping Conference in Miami.)

Much has been written about Royal Caribbean International’s decision to continue port calls at its private beach resort in Labadee, Haiti following the island’s devastating earthquake on January 12. In particular, some organizations have questioned the morality of passengers sipping margaritas on the beach in a private compound that suffered no damage while thousands of Haitians are suffering a mere 100 km away at the quake’s epi-centre in the country’s capital of Port-au-Prince.

There’s no question that the dramatically different images of pampered cruise ship passengers enjoying carefree fun on the beach versus hungry and homeless people wandering the devastated streets of Port-au-Prince are difficult to reconcile. In fact, on first glance, they can be downright offensive.  But there’s more to this story – a lot more — than what these images and some media reports may have let on.

So let’s put the issue of these Haitian port calls in perspective.

After much internal debate and discussion with officials from Haiti, executives at RCI decided to continue port calls in Labadee rather than diverting its ships elsewhere. They did so because they believed it was the most effective way they could help the country deal with this terrible tragedy now and in the future.

That decision was based on two primary factors: the amount of money pumped into the local economy every time a ship visits Labadee, and the potential for ships to bring food and other needed supplies ashore to help in the country’s relief efforts. For example, 40 pallets of rice, beans, powdered mile, water, and canned foods were delivered when the first RCI ship called on Labadee following the earthquake, and more has followed in subsequent visits. In addition, RCI is donating every cent of its revenue from the visits to humanitarian relief in Haiti, and more than 300 Haitians in the area derive part or all of their income from cruise ship visits.

So the facts show that RCI’s decision to continue calling at Labadee was the right one from both a humanitarian and economic perspective. But what about the public relations damage caused by those contrasting photos and stories, and the outrage felt by people who question the morality of vacationing so close to a disaster zone?

It may have helped RCI’s image if they had waited a few weeks after the earthquake before allowing their ships to call at Labadee. For one, it would have shown the cruise line was really struggling over its decision, that is was sensitive to the public’s perception of the situation in Haiti, and that it wanted to respond in a respectful fashion. And at the very least, it would have given them an opportunity to more fully flesh out their relief plan, determine the size of an appropriate corporate donation, and get out in front of what they should have known would be a public relations challenge.

As for the morality issue of pampered passengers having fun when so many people are suffering, it’s a legitimate concern that demonstrates our sense of humanity. As caring people, we don’t think it is right for “rich” holiday makers to be drinking margaritas on the beach while “poor” people are sleeping in tents just a few miles away.

However, while this is a noble sentiment, it’s also somewhat hypocritical. After all, would we still care if the happy holiday makers were celebrating on a beach in nearby Cuba or the Dominican Republic? And would this outcome be better for the people of Haiti, some of whom rely on tourism for their family income or are benefitting from RCI’s relief efforts?

The reality is that while we may have found the images of cruise ship passengers frolicking on the beach in Labadee somewhat troubling, I don’t believe we can fault the motives or actions of RCI. They’ve done their best to help in Haiti, despite a rather unfair public relations hit to their image. If we need someone to blame, perhaps we should be looking at those media outlets and special interest groups who were only too happy to profit from a misleading photo or headline.   

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