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


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9 hours 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.
 

Yes. No and No. 

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56 minutes ago, ldubs said:

 

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.  

No, the primary reason for the complaints about the Jones act on  Cruise Critic is because the complainers have confused it with the Passenger Services Vessel Act . PVSA is what causes the inconvenience for cruisers. The Jones Act has no effect on cruising.

Edited by njhorseman
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1 hour ago, njhorseman said:

No, the primary reason for the complaints about the Jones act on  Cruise Critic is because the complainers have confused it with the Passenger Services Vessel Act . PVSA is what causes the inconvenience for cruisers. The Jones Act has no effect on cruising.

Amen!!!

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2 hours ago, bobandsherry said:


 

 


Pretty non-specifc. So such as?

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Necessary employment and necessary services - fairly specific concepts.  Obviously GM and Chrysler were seen as providing necessary employment, while a number of banks which needed TEMPORARY financial support (it should be noted that the US Govt. actually MADE MONEY on the temporary bailout they provided to the banking sector after 2009) to remain solvent so they could provide necessary  services such as banking -  were reasonable recipients of bail out.  The cruise industry, on the other hand provides very little employment and absolutely no necessary services —- and therefor should not be considered worthwhile recipients of bailout.  At worst, the equity owners might lose their stake, some creditors might take a bit of a loss, but the cruise industry - to the extent there was a demand for it would go on - just under different ownership.

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2 hours ago, ldubs said:

 

What is your meaning of "necessary employment"?   

In the context of justifying US government expenditure, employment should involve significant numbers of US workers.  The overwhelming number of cruise company employees are not US workers - they do not, for the most part, pay any taxes in the US - nor do they provide any really necessary service -  sure, cruising is enjoyable - but it’s hardly essential to the US economy. 

 

There are are too many higher priority activities out there to warrant spending money to support purely recreational activity.  If the cruise companies go under because of lack of financial support, the ships will still be there - just owned by a different set of equity owners — and if it takes a year or so to reorganize, it will just mean that a lot of cruisers will have a bit more time to save up.

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1 hour ago, navybankerteacher said:

Necessary employment and necessary services - fairly specific concepts.  Obviously GM and Chrysler were seen as providing necessary employment, while a number of banks which needed TEMPORARY financial support (it should be noted that the US Govt. actually MADE MONEY on the temporary bailout they provided to the banking sector after 2009) to remain solvent so they could provide necessary  services such as banking -  were reasonable recipients of bail out.  The cruise industry, on the other hand provides very little employment and absolutely no necessary services —- and therefor should not be considered worthwhile recipients of bailout.  At worst, the equity owners might lose their stake, some creditors might take a bit of a loss, but the cruise industry - to the extent there was a demand for it would go on - just under different ownership.

You seem to view value of an industry strictly on employment.  There is much more to contribution than jobs.  It's been estimated that the cruise industry contribution to the US economy is nearly $25 billion as of 2018.  Maybe you consider that immaterial. 

And the US Gov't did not MAKE MONEY on the bailouts for the auto industry.  With GM and Chrysler, the US Govt LOST MONEY on those two companies.  With GM the US Govt invested $51 Billion and recouped $39.7 billion.  Chrysler had an investment of $12.5 billion and recoup was only $11.2 billion.  By contrast, Ford did not take any money thinking they were doing the right thing, guess they were foolish one. 

 

Personally, I have no horse in the game to worry about.  Just seems there's a significant contribution that cruise industry adds to the US.  And the cruise industry did not bring this upon themselves for bad management -- unlike GM and Chrysler when they got into trouble. 

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4 hours ago, navybankerteacher said:

In the context of justifying US government expenditure, employment should involve significant numbers of US workers.  The overwhelming number of cruise company employees are not US workers - they do not, for the most part, pay any taxes in the US - nor do they provide any really necessary service -  sure, cruising is enjoyable - but it’s hardly essential to the US economy. 

 

There are are too many higher priority activities out there to warrant spending money to support purely recreational activity.  If the cruise companies go under because of lack of financial support, the ships will still be there - just owned by a different set of equity owners — and if it takes a year or so to reorganize, it will just mean that a lot of cruisers will have a bit more time to save up.

 

Thanks.  I tend to agree.  

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6 hours ago, njhorseman said:

No, the primary reason for the complaints about the Jones act on  Cruise Critic is because the complainers have confused it with the Passenger Services Vessel Act . PVSA is what causes the inconvenience for cruisers. The Jones Act has no effect on cruising.

 

Thanks. I know the two are often used interchangeably, but they shouldn't be.   

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4 hours ago, bobandsherry said:

You seem to view value of an industry strictly on employment.  There is much more to contribution than jobs.  It's been estimated that the cruise industry contribution to the US economy is nearly $25 billion as of 2018.  Maybe you consider that immaterial. 

And the US Gov't did not MAKE MONEY on the bailouts for the auto industry.  With GM and Chrysler, the US Govt LOST MONEY on those two companies.  With GM the US Govt invested $51 Billion and recouped $39.7 billion.  Chrysler had an investment of $12.5 billion and recoup was only $11.2 billion.  By contrast, Ford did not take any money thinking they were doing the right thing, guess they were foolish one. 

 

Personally, I have no horse in the game to worry about.  Just seems there's a significant contribution that cruise industry adds to the US.  And the cruise industry did not bring this upon themselves for bad management -- unlike GM and Chrysler when they got into trouble. 

As always governments will bail out firms and industries that suit them and their friends and allies.

 

 

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10 hours ago, bobandsherry said:

You seem to view value of an industry strictly on employment.  There is much more to contribution than jobs.  It's been estimated that the cruise industry contribution to the US economy is nearly $25 billion as of 2018.  Maybe you consider that immaterial. 

And the US Gov't did not MAKE MONEY on the bailouts for the auto industry.  With GM and Chrysler, the US Govt LOST MONEY on those two companies.  With GM the US Govt invested $51 Billion and recouped $39.7 billion.  Chrysler had an investment of $12.5 billion and recoup was only $11.2 billion.  By contrast, Ford did not take any money thinking they were doing the right thing, guess they were foolish one. 

 

Personally, I have no horse in the game to worry about.  Just seems there's a significant contribution that cruise industry adds to the US.  And the cruise industry did not bring this upon themselves for bad management -- unlike GM and Chrysler when they got into trouble. 

If you understood the post you dispute you would realize that I did not say the Government made money on the auto bail out.  It was still justified by the necessary US jobs it saved.  The temporary bail out of the banking industry saved some jobs, kept necessary banking services available, and did not cost anything in the long run.

 

Your $25 billion 2018 contribution to the US economy seems a bit of a stretch.  Most cruise employees are not US residents or tax payers. The service the lines provide are not necessary (while enjoyable) — and they lead to their millions of customers spending their discretionary funds outside the US.

 

Sure, their product (cruises) are enjoyable but not necessary - and if the companies go under other investors will pick up the pieces and continue offering cruises.  Simply put: there is no justification for spending public funds to support private investors.

 

p.s. When it comes to Ford being foolish: their stock owners kept their company, while GM and Chrysler stock owners lost everything .

Edited by navybankerteacher
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The thing all governments should have done in once they saw China lock down was not to be an ostrich and instead admitted and listened to their scientist and closed the borders, went into isolation, we'd be where China is now instead of where China is in December, amazing we wasted four months of learning and can now in Italy see where we will be in three weeks.  

 

ce la vis

 

https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca

Edited by chipmaster
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3 minutes ago, Aquahound said:

Coulda, shoulda, woulda.  Everyone's an expert after the fact.  🙄

 

So why hasn't travel ban and forced social distancing been done in the US, we've already all but assured all hospitals on East and West coast will be overflowing in three weeks.  We could at least protect the people and valuable health care resources in the central part of America and redeploy, as for certain we can't build a hospital in 100 days let alone 10 day, COL

 

Want to predict cases and deaths in 3 weeks with exponential growth and how it can be nipped if we change today?

covid_03_15_2020.JPG

Edited by chipmaster
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Your $25 billion 2018 contribution to the US economy seems a bit of a stretch.  Most cruise employees are not US residents or tax payers. The service the lines provide are not necessary (while enjoyable) — and they lead to their millions of customers spending their discretionary funds outside the US.



Certainly glad that you have the background, experience and knowledge to just totally discount the estimate. And you know, as I went to find my original source I found this from CLIA. They estimate it's $53 billion. So go ahead, discount their estimate by 50% and you come back to thr initial, and low ball, estimate.

https://cruising.org/news-and-research/press-room/2019/november/cruise-industry-contributes-nearly-53-billion-to-us-economy-in-2018

Have a great one....



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45 minutes ago, bobandsherry said:


 

 


Certainly glad that you have the background, experience and knowledge to just totally discount the estimate. And you know, as I went to find my original source I found this from CLIA. They estimate it's $53 billion. So go ahead, discount their estimate by 50% and you come back to thr initial, and low ball, estimate.

https://cruising.org/news-and-research/press-room/2019/november/cruise-industry-contributes-nearly-53-billion-to-us-economy-in-2018

Have a great one....



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Does it occur to you that, just possibly, a cruise line industry association which has managed to hold down the industry’s US income tax rate to about 1%, might have a tendency to overstate their contribution to the US economy — while they provide recreational spending opportunities to millions — which spending does NOT contribute much to the US economy. 

 

I am am not at all interested in trying to educate you - and wonder why you are so upset about my view that the cruise industry is not an essential candidate for US taxpayer bailout .

51 minutes ago, bobandsherry said:


 

 


Certainly glad that you have the background, experience and knowledge to just totally discount the estimate. And you know, as I went to find my original source I found this from CLIA. They estimate it's $53 billion. So go ahead, discount their estimate by 50% and you come back to thr initial, and low ball, estimate.

https://cruising.org/news-and-research/press-room/2019/november/cruise-industry-contributes-nearly-53-billion-to-us-economy-in-2018

Have a great one....



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I think I do have sufficient background, experience and knowledge to not rely so heavily on an industry association’s hype on how much they contribute to the US economy - while holding down their income tax rate to about 1%.

 

This thread is about whether the US should “rescue” cruise lines.  I do not think they do. Nor do I think I want to spend time discussing economics with you.

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1 hour ago, bobandsherry said:


 

 


Certainly glad that you have the background, experience and knowledge to just totally discount the estimate. And you know, as I went to find my original source I found this from CLIA. They estimate it's $53 billion. So go ahead, discount their estimate by 50% and you come back to thr initial, and low ball, estimate.

https://cruising.org/news-and-research/press-room/2019/november/cruise-industry-contributes-nearly-53-billion-to-us-economy-in-2018

Have a great one....



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According to this report the average cruiser generates over $4000 in economic benefits for the USA.  There is absolutely no way that is not overinflated.  

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3 minutes ago, ed01106 said:

According to this report the average cruiser generates over $4000 in economic benefits for the USA.  There is absolutely no way that is not overinflated.  

Well, it is possible with clever wording to simply show that an individual, who just happens to cruise, in the course of his entire activity does contribute  to the US economy —. just ignoring the fact that such cintribution had nothing to do with his cruising activity.

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President Trump himself said that cruising is a very important industry. Honestly, before anyone rebuts that or wants to defend their position, do you honestly think all of these cities have cruises coming out of their ports without benefit to them? Look at all of the ports getting back into the game too. It is well-established now how connected it is to many other industries. Do you think it is so unbelievably far-fetched that the administration made some sort of deal with the cruise lines to lessen the blow of the shutdown? So much narrow thinking here.

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25 minutes ago, ed01106 said:

According to this report the average cruiser generates over $4000 in economic benefits for the USA.  There is absolutely no way that is not overinflated.  

 

The CLIA press release also claims the cruise industry is responsible for 422,000 jobs in the US with an average salary of about $55K.  I suspect a lot of assumptions and multipliers in favor of the industry were utilized to inflate the numbers.   

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1 hour ago, ed01106 said:

According to this report the average cruiser generates over $4000 in economic benefits for the USA.  There is absolutely no way that is not overinflated.  

Well...if we fly to Ft Lauderdale, first class (as we usually do) thats around 1200pp, get a hotel for a couple of days...say $200pp, spend a few bucks on taxis and food...The ship requires supplies, fuel (have you ever seen the fuel bill for a cruise ship?) and other logistical support from the Florida area to keep us happy. And the big one, pay a commission on our booking (usually a suite, for no less than a 14 day cruise), that $4000 impact becomes much clearer.  So I can't say "there is no way that is overinflated".

 

Are we the average? No, I suspect we spend more than the average. But others spend more, and there are those fixed costs, like fuel and food, that are pretty equal across the board.

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57 minutes ago, CruiserBruce said:

Well...if we fly to Ft Lauderdale, first class (as we usually do) thats around 1200pp, get a hotel for a couple of days...say $200pp, spend a few bucks on taxis and food...The ship requires supplies, fuel (have you ever seen the fuel bill for a cruise ship?) and other logistical support from the Florida area to keep us happy. And the big one, pay a commission on our booking (usually a suite, for no less than a 14 day cruise), that $4000 impact becomes much clearer.  So I can't say "there is no way that is overinflated".

 

Are we the average? No, I suspect we spend more than the average. But others spend more, and there are those fixed costs, like fuel and food, that are pretty equal across the board.

Of course the food you eat on a cruise ship is something you would have purchased anyway. And, if you were not criuising, you may very well  have spent as many hotel, restaurant, taxi, and airline dollars on domestic vacations. Finally, from very many posts on these threads, the average cruiser spends one whole hell of a lot less than your $4,000 in the US above and beyond cruise fare.

 

The cruise industry has simply gotten a lot of people to spend their vacation dollars  off shore — unless, of course, you believe that they would not travel for vacation at all without cruises.

 

But this is all immaterial to  the point of this thread, which  is whether the US government should “save” the cruise industry.  The cruise industry does not need saving - perhaps the equity owners might need saving, but that is not in the interest of US tax payers.  Try taking a poll to see how many cruisers would like to pay higher taxes just so that the PRESENT owners of cruise lines do not take a loss.   If RCCL,  Carnival and NCL all went belly up, other investors would step up and buy the assets and put them to work.       

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21 hours ago, navybankerteacher said:

Necessary employment and necessary services - fairly specific concepts.  Obviously GM and Chrysler were seen as providing necessary employment, while a number of banks which needed TEMPORARY financial support (it should be noted that the US Govt. actually MADE MONEY on the temporary bailout they provided to the banking sector after 2009) to remain solvent so they could provide necessary  services such as banking -  were reasonable recipients of bail out.  The cruise industry, on the other hand provides very little employment and absolutely no necessary services —- and therefor should not be considered worthwhile recipients of bailout.  At worst, the equity owners might lose their stake, some creditors might take a bit of a loss, but the cruise industry - to the extent there was a demand for it would go on - just under different ownership.


It wasn't just necessary employment.  They also had active contracts for the Government including the military and DOD.  This is why Boeing will also get a bail out should they need it.

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8 hours ago, CruiserBruce said:

Well...if we fly to Ft Lauderdale, first class (as we usually do) thats around 1200pp, get a hotel for a couple of days...say $200pp, spend a few bucks on taxis and food...The ship requires supplies, fuel (have you ever seen the fuel bill for a cruise ship?) and other logistical support from the Florida area to keep us happy. And the big one, pay a commission on our booking (usually a suite, for no less than a 14 day cruise), that $4000 impact becomes much clearer.  So I can't say "there is no way that is overinflated".

 

Are we the average? No, I suspect we spend more than the average. But others spend more, and there are those fixed costs, like fuel and food, that are pretty equal across the board.

 

As you say the average cruiser isn't flying first class and isn't paying commissions on a suite.  I suspect far more fly to Florida for $300 and stay in insides & ocean views.    Also unless the number is qualified to only include those touching American ports, the average cruiser includes a lot of folks traveling in other parts of the world.   I certainly don't have any proof either way,  but I tend to agree with the original comment that the figure seems high for an average cruiser.   I will admit that the component that I suspect I would under estimate would be, as you say, fuel & perhaps provisioning costs.  

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