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What Is Fair Compensation When “Ship Happens”?

Written by: Kuki

Last year the Norwegian Dawn lost all power in the midst of a cruise. They were able to restore minimal power and get the ship (and passengers) to San Juan, Puerto Rico to effect repairs, and fly their passengers back to Miami where the cruise was originally scheduled to disembark. They were also forced to cancel the next cruise on the Dawn. There are other situations as well which can, and have arisen during a cruise forcing cruise lines to shorten a cruise, cancel upcoming cruises with short notice, miss ports of calls during a cruise, etc. Most of these occurrences happen very rarely. A few, like missed visits to scheduled ports of call on an itinerary, are more common; most often those are weather related.

Of course the cruise lines wish there were never any disruptions to any of their ship’s sailings, and their passenger’s enjoyment of their cruises, but as rare as they may be, they do occur. And the question is … What is fair compensation for these various disruptions to the product the customer’s have paid for?

In the case of the Norwegian Dawn last year, NCL gave customers a 75% refund, as well as a 50% discount off of the cost of a future cruise, which on the face of it certainly seems like fair compensation to me.

However, in the past, in various situations where disruptions to trips have occurred, the amounts of compensation, and types of restrictions on the use of compensation offered have caused great debate.

The “Cruise Contract” – the “fine print” in your ticket, which no one ever reads – ”allows” the cruise line to change an itinerary, or even cancel a cruise entirely, without offering any compensation. For business, and public relations reasons the cruise lines of course will normally offer some form of compensation hoping to smooth their relationship with their customers.

The most common of these disturbances to cruises is a ship missing a port visit due to weather; such as high seas in ports without docking facilities, which require operating tenders to get passengers ashore from the ship at anchor off the coast. In these situations most cruise lines seem to offer only a refund of “port charges”, which amounts to about $25 per passengers.

The cruise lines certainly have no control over high seas and weather related issues, so I do think any form of compensation to itinerary changes in those situations is fair and adequate. The simple truth for those booking cruises is that if you are booking a cruise based solely on the desire to visit a particular port, with no chance of missing it, is DO NOT go by ship! Fly there!

Occasionally a ship has to alter their itinerary, and miss ports because of mechanical issues with the ship. In those situations I believe the cruise lines should bear greater responsibility… and therefore be required to offer greater compensation.

Yes, mechanical problems can and do occur through no negligence of the cruise lines, and yes in many of those cases it’s difficult to make the required repairs quickly and efficiently while at sea. However, in my opinion the cruise lines should not expect the passengers to entirely pay for the cost of that occurrence, and it suffer it’s impact on their cruise, without fairly significant compensation. The customer has no means to prove whether the mechanical breakdown was a random occurrence, or a result of some form of lack of maintenance. And therefore satisfactory compensation should be negotiated with reason by both parties, which isn’t an easy task.

Then there are situations, like last year’s Dawn cruise, where mechanical problems cause cruises to either be shortened or cancelled all together. There are no hard and fast rules to what the cruise lines offer for compensation. When similar situations arise each cruise line decides and announces what compensation they are going to offer. Then, often, some passengers will attempt to negotiate further compensation than what was announced directly. In some cases they are successful and in some cases they are not. The cruise lines surely want to pay as little as possible to affected customers, yet keep them reasonably satisfied with the resolution. Without doubt that is a fine line to walk.

As well as those described above, the cruise lines will on occasion cancel a cruise because they have chartered out the entire ship to a large group or organization. Sometimes, when that happens, there are previously booked customers, and once again the cruise lines have to decide how to compensate those who are previously booked. They have to determine the compensation offered by considering how much notice of the cancellation they are giving. And even when the charters are announced many months in advance, there of course are some people who would have previously booked air transportation, or have booked flights using their frequent flyer miles (which often have to be booked a year in advance for availability to more exotic destinations.

Obviously all of these various scenarios leave customers disappointed their cruises have been affected, or cancelled, and certainly there is always going to be some who remain unhappy after the compensation is offered. Unfortunately it’s very difficult, if not impossible, to have standard compensation packages to cover every occasion. But it would certainly help the consumer if some of these situations were addressed on the cruise lines own web sites, with clear cut guidelines of the compensation they would offer. That would at least make it possible for their customers to be educated about the possibilities; though the cruise lines aren’t likely excited about advertising those possibilities.

No doubt we all have various opinions on what the compensation should be in the situations. And no doubt those who are unfortunate to be caught up in one have stronger opinions than those of us who have avoided them, and may have a position more sympathetic to the cruise lines.

I’d certainly be interested in hearing from our readers, offering constructive suggestions on what you think would be a fair calculator of compensation in some scenarios. Maybe someone can come up with a standard for the cruise lines to adopt.

- A View From The Kuki Side of Cruising -

 

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Comments

Comment from Debra
Time December 2, 2009 at 12:48 pm

Kuki,

Your article showed a lot of unbiased thought and was well presented.
Kudos to you.

For things that can happen to any cruise ship such as weather, political unrest, one-time problems, etc. I feel that as a whole the cruise industry does a fairly good job in handling these kinds of problems and providing compensation. When problems do happen they certainly are no fun for those involved but as you said stuff does happen. As you said those who have not been through a miserable experience because of a major problem, while cruising, really have no idea of what it can be like. The way that NCL handled the problem on the Dawn was an outstanding example of a company that is honest and cares about treating its customers fairly and they did an excellent job in proving it.

On the other side of the coin is the complete surrender of your rights when you board certain cruise ships. You are right that no one reads their cruise contracts until there is a major problem (I sure know I did not) and I was shocked when I found that Celebrity has a clause in their cruise contract that states “Celebrity does not guarantee the seaworthiness of their vessels”. The arrogance to even put such a clause in the cruise contract is a sign that there really needs to be some kind of oversight to ensure that the rights of consumers are not completely disregarded. Granted Celebrity is a very unique case in that they continue to sail three ships (Millennium, Infinity and Summit) that Celebrity has admitted have defect that from time to time causes these ships to loose the ability to maintain speed.

Speaking as one of the ten of thousands who have been burned by this problem on one of these ships; in my case Celebrity immediately offered $100 to make up for the loss missing over half of a 13 night Alaskan cruise. Almost all passengers on board viewed this as more of an insult than anything else. To be fair to Celebrity and after nearly two thousand complaints, at the end of the cruise, Celebrity finally did offer a 30% of voucher on a future cruise booked at full price. After my experience I decided to not to risk a similar experience and threw out my voucher. So I guess in this very unique situation, my suggestion would be for Celebrity to notify cruisers, before they book, that this problem could happen on their cruise and then set up a pre-determined compensation schedule and let the consumer make an informed decision.

Looking back at my experience, I now have discovered that, with no oversight on the horizon, that it is now up me to be aware of the record of cruise lines and and how each cruise line approaches these problems and how honestly and fairly the compensation to those affected is handled. Clearly after this demonstration, NCL would be right at the top of my list in this department

Much to the credit of most major cruise lines they usually have stepped up to the plate and have done a reasonable job in how they compensate passengers when there is a serious problem.

Debra

Comment from Kuki
Time December 2, 2009 at 1:44 pm

Debra,
Thanks for the post, but one thing that should be cleared up from your statement “Celebrity immediately offered $100 to make up for the loss missing over half of a 13 night Alaskan cruise. Almost all passengers on board viewed this as more of an insult than anything else. To be fair “.
If I’m not mistaken your cruise was not cut short, but because of bearing problems in the mod (which do suffer from premature wear on the Millenium class ships… and still involved in legal battle between Celebrity and the manufacturer), you did miss ports of call.

No question the initial offering of $100 was absurd, but the fact that before the cruise ended the company did come forward with the 30% offer did go in the right direction. I know people who were affected in a similar fashion (different cruise) who were able to negotiate a higher compensation.

I do agree that Celebrity would do well to have a “warning label” about the Millenium Class ships stating there is a possiblity (even if remote) that cruises on that ship may be affected, and laying out what compensation they would offer if it does occur. Then allow informed passengers to make the decision to take their chances or not.

I do remember a few years back new build ships were rather routinely being delivered late, and the cruise lines were being quite generous in their compensation to those booked on cancelled inaugural sailings. This caused a small tide of people booking inaugural sailings in hopes the ship would be late and their sailing cancelled.

There’s also those “complainers” who set out to find things wrong for which they may seek compensation.

So… the game does get played from both sides of the chess board. LOL

Comment from Debra
Time December 2, 2009 at 4:36 pm

Thanks for clearing up any misconception anyone might have about missing over half the Itinerary. I never said we did not complete the cruise. However, we did skip the ports of Seattle, Sitka, were not able to get anywhere near Hubbard Glacier, and sailed through most of the Inside Passage, on our return, at night.
I agree with most of your comments with the exception of the story about booking new ship builds. Never heard that one before!! While the story about new builds is interesting, I see no connection whatsoever, to the serious problem that I and so many others have encountered over the years. I guess I did not realize that I was playing in a chess game when I booked that cruise. LOL

Debra

Comment from ron
Time December 3, 2009 at 9:39 am

Debra, I think a lot of the disagreement over compensation stems from confusion as to what the customer thinks he or she actually purchased, and this can be a problem even for experienced cruisers and those who read the contracts.

Essentially, the cruise contract is nothing more than several pages of liability waivers and disclaimers. You will never find, in the contract, a description of what you actually paid for. Instead, the goods and services you paid for are described in your confirmation statement and elaborated in the cruise brochure. Here is where it gets dicey. You will find in the cruise brochure fine print something to the effect that the cruise fare pays for “transportation, most meals, and entertainment”, followed by a sentence stating that the fare does not include alcoholic drinks, shore excursions, etc. Neither statement will say anything about ports or itineraries. Basically the ports/destinations are embellishments to the cruise for which the cruise line is under no legal obligation to provide, even though your confirmation statement and the brochure shows them.

Frequently, bloggers, cruise line personnel and cruise contracts bring up the doctrine of “force majeure”, or act of God, as a reason for not compensating missed ports– “It’s not our fault, so we don’t have to pay”. This is completely wrong and leads to a widespread misconception that if a supplier is unable to provide the promised [prepaid] goods or services because of something outside of his control that he is somehow off the hook for a refund. For example if you prepay for a ticket to a rock concert, and the band doesn’t show for whatever reason, it doesn’t matter whose fault it is, you are entitled to a refund. This is such a basic rule in business and commerce that effectively commerce as we know it would be impossible without it. The credit card companies live by it.

So the ports are uncompensated not because of “force majeure”, but because they were never included in the cruise fare to begin with. What you actually paid for was “X” nights with room, meals, and entertainment, and so the question is, did you receive “X” nights with room, meals, and entertainment?

Using the above as a guide, I would say that if a cruise is canceled or cut short, the passenger is entitled to a proportional refund of the days missed, up to and including the entire cruise fare if the cruise is completely canceled. Missed ports should remain uncompensated, and as Kuki mentioned, travelers should be made aware that if they absolutely must see a port or destination it would be best to take a land tour. There are grey areas, such as when a cruise is completely ruined and without value, such as when the Dawn lost power and adrift, or if a ship is sailed into a hurricane. These should be handled on a case by case basis, depending how how many of the services were curtailed, the availability of shipboard facilities, etc.

Comment from Debra
Time December 3, 2009 at 5:34 pm

Ron,

You would have to read my review of this cruise to have any idea of the almost unbelievable way Celebrity handled our cruise on the Summit.

When you said, cruises that do not have days cut short offer no compensation, is absolutely not the whole truth. In many cases cruise lines offer compensation to passengers when things have gone wrong. I have seen cruise lines offer compensation, even in the case of a NORO cruise. Also in many cases cruise lines offer compensation for missed ports, without cutting the length of the cruise short.
Now, it is true that the cruise lines are under no legal obligation to do so, but IMHO most reputable cruise lines have been fair and honest with passengers and have been consistent with fair compensation.

In my case what I thought I had purchased was a cruise on a “premium” cruise line that provided ships that had no design defect, that could dramatically affect my cruise.

Case in point was the last propulsion failure that I know of, on the Millennium early this spring in Australia. The passengers missed Christ Church and one other port and as far as I know were only offered $100 pp in on board credit. Was Celebrity under a legal obligation to give anything? The answer is NO, but given the situation with Celebrity knowing this ship could fail, was the compensation fair to the unfortunate passengers on that cruise? IMHO, again the answer would be absolutely NO.

As I said before this case of the same problem happening some twenty times is unique to Celebrity, and maybe I am dead wrong but at the end of the day IMHO, it does point the need for some kind of minimal protection for passengers and may require some kind of government regulation for cruise lines that do business in the US.

Debra

Comment from Kuki
Time December 3, 2009 at 6:11 pm

Debra,
I think you’re offering alot of speculation and hearsay as fact, and that’s a dangerous place to go.

There’s no cruise lines I know of who’ve given more than $25 PP to passengers for a missed port (if the cruise itin. was changed and not shortened)… other than a couple of times I’ve heard where they added an hour of open bar.

As to the “Christ Church” incident, and the compensation “you think” was offered, it’s unwise to think you know, unless you can point to where those facts are available.

You yourself stated that Celebrity offered you a 30% discount on a future cruise (that you chose not to use).

Was that fair compensation? Who knows! But you were offered compensation; perhaps you could have negotiated it higher, but chose to carry that anger around and punish yourself over and over with that memory for years now.

Here you’ve praised NCL for their 75% refund, and 50% future cruise incident, as fair compensation.

Yet, there are people who were on that cruise who feel that offer was not adequate. So… each situation, and the reaction of each person is different.

That’s what led me to write this blog… the idea of how difficult it is to determine fair compensation.

If suggesting government regulation is the best you have to suggest, well…

I’ve agreed that it would be a good thing for Celebrity to acknowledge the possibility of a bearing problem arising, to inform customers, and let them decide whether to cruise or not. On that we agree.

But to rehash your one problem experience, over and over here serves no real purpose. Rather it shows you’re not really not really interested in discussing the topic, but just interested in using the space for your own agenda.

Comment from ron
Time December 3, 2009 at 7:14 pm

Debra:
I stand by my comment regarding noncompensation of missed ports. Again, the port calls are a feature of the cruise (one of many cruise features), which the cruise lines cannot and will not guarantee or include as a part of the cruise fare. As a practical matter, how would one cost out the value of a missed port? What percent of the per diem cabin rate would such a standard entail? Would missing Naples result in a higher compensation than Ocho Rios?

Even the grey areas offer differing shades of grey. Forgetting a passport would seem to be a slam dunk, but what about denial of boarding because of a suspected (but unproven) case of norovirus which might well be a mild case of food poisioning? If there were norovirus on the ship is it affecting only a few passengers or many passengers and crew, such that services and entertainment is partially or wholly shut down? There are many variables.

So there are a few cases where full compensation is a definite yes, such as an aborted or canceled cruise, a few cases where it’s a definite no, such as missed ports, and many cases of a definite maybe. I think the cruise lines provide most of this information in various places such as brochures, contracts, web sites, etc but perhaps it could be pulled together and better organized, clarified, and laid out in a single location, perhaps in tabular form.

As I write, the Oasis is under way. The Oasis makes no pretense–the ship is the destination. if one thinks ports of call are iffy now, one hasn’t seen anything. I believe this ship will push that paradigm (the ship is the destination) to the next level, at least for Royal Caribbean and the Oasis class.

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