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Wednesday, June 26 2019 @ 05:06 PM UTC

Carnival: Workers earn more onboard

Employment & Jobs Miami-based Carnival Corp. has grown into the worldís biggest cruise vacation company through savvy marketing, creampuff U.S. tax laws and inexpensive labor recruited from poor nations around the world. Carnivalís crews work 10- to 16-hour days, seven days a week, many of them primarily for tips. The company avoids U.S. corporate income tax and labor laws ó and posted profits of $1.8 billion last year ó because the company is incorporated in Panama. And while ferrying North American passengers to exotic ports of call, it strikes deals with vendors to keep a share of the money customers spend onshore. Editor's Note: Did you know that Carnival Cruise Lines is incorporated in the Republic of Panama? I didn't. That means they are paying income taxes on the $1.8 billion dollars they made last year to the Panamanian government. Of course, none of the details are public.

Carnival: Workers earn more onboard

FLORIDA TODAY staff
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Cruise shots. Sharon Tiwari, a teacher at Walsingham House School in Mumbai looks at photos of her fiance, Daniel Chandekar, who works for Carnival, taken on one of his stops at Cape Canaveral.źĚ Craig Rubadoux, FLORIDA TODAY



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Miami-based Carnival Corp. has grown into the worldís biggest cruise vacation company through savvy marketing, creampuff U.S. tax laws and inexpensive labor recruited from poor nations around the world.

Carnivalís crews work 10- to 16-hour days, seven days a week, many of them primarily for tips. The company avoids U.S. corporate income tax and labor laws ó and posted profits of $1.8§ billion last year ó because the company is incorporated in Panama. Andwhile ferrying North American passengers to exotic ports of call, it strikes deals with vendors to keep a share of the money customers spend onshore.

For the special report ďCanaveralís Crews: the people and profits behind the cruise ship party,Ē FLORIDA TODAY staff writers John A. Torres and Matt Reed sought interviews with Carnival Corp. officers. Company spokesman Vance Gulliksen took our questions by e-mail and responded on behalf of the company.

FLORIDA TODAY: How does Carnival respond to critics who say ship workers are being exploited by being made to work long hours for little pay?

Carnival: Carnival Cruise Lines provides employment opportunities for 33,000 shipboard employees across its 21-ship fleet, as well as another 3,500 employees at its shoreside offices in Miami, Miramar, Fla., and Colorado Springs, Colo.

Carnivalís global work force is extremely diversified, comprised of upwards of 100 different nationalities.

With cruise ships essentially operating as ďfloating resorts,Ē a wide variety of job positions are required, from food and beverage and housekeeping personnel to carpenters, electricians and deck officers.

Because cruise ships operate on a 24-hour-a-day, seven days a week basis, the workweek of a shipboard employee is typically longer than the average employee on land. However, many shipboard employees earn much more than they could in their home countries.
In fact, there are countless stories of shipboard employees at Carnival and other cruise lines using their shipboard employment to support their entire families (or even multiple families), build homes, put children through college or start a business in their home country.

Realizing the uniqueness of shipboard employment, Carnival endeavors to provide shipboard employees with a desirable working environment and a variety of benefits. In addition to free room, board and medical care, Carnival offers the cruise industryís only shipboard retirement plan, along with fleetwide crew training centers with opportunities for personal and professional enrichment, crew-only Internet cafes, crew recreation centers, crew gyms and monthly crew activities.

FT: How are employees paid ? Is there a mechanism for them to send money home?

Carnival: Shipboard employees are paid in cash on board. Also, Carnival has recently instituted a system in which shipboard employees can wire money back home directly from the ship.

FT: What about passengersí tips, in particular pre-paid tips .§.§. Do those get spread out evenly among the servers and room attendants?

Carnival: The service teams share tips for their respective section, i.e. Dining room team, head waiter and team waiter share the tips from guests at their section. Similarly, state room stewards and the assistants share tips from their section of cabins.

FT: How critical is it to Carnivalís bottom line that the company is incorporated in Panama?

Carnival: On tax and legal issues, we donít elaborate beyond what is included in our government filings. We think that the language contained within these filings is very clear.

FT: Your annual report to the U.S. Security and Exchange Commission mentions that a change in Carnivalís U.S. tax status could significantly affect Carnivalís future profit growth. Is there any proposed legislation or current threat to that status?

Carnival: No.

FT: From the companyís perspective, how does Carnival impact a home port like Canaveral?

Carnival: Carnival Cruise Lines has sailed from Port Canaveral since 1993, and the port is one of the fastest-growing homeports not only for Carnival but for the cruise industry as a whole.

Carnival will expand its operations from Port Canaveral with the launch of the portís first four- and five-day cruise program on the 2,052-passenger Sensation this spring (the program will be taken over by its sister ship, the 2,052-passenger Elation in the fall).

Including these three ships, Carnival expects to carry 560,000 passengers from Port Canaveral, making Port Canaveral Carnivalís second-busiest homeport behind Miami.

While we donít have specific information regarding the cruise industryís economic impact on Port Canaveral, Florida is by far the biggest beneficiary of the cruise industry.

According to a 2004 study by the ICCL (International Council of Cruise Lines), last year the cruise industry accounted for $5.15§billion in direct purchases for goods and services in Florida ó more than triple the next closest state. A 2,000-passenger ship with 950 crew members generates roughly $245,000 in onshore spending in a U.S. homeport city. The average passenger spends approximately $100 per homeport and U.S. port of call visit.

FT: The companyís annual report to the SEC mentions sales onboard and in ports, where Carnival may receive a percentage of revenues collected by concessionaires. Can you give an example of how that latter part works?

Carnival: Concessionaires are independent companies contracted with the cruise lines to provide goods and services for guests during their cruise. At Carnival, we use concessionaires for such areas as shipboard spas, gift shops, art auctions, our fleetwide golf program and shore excursions.

Carnival signs agreements with concessionairesí on-board revenues and the company receives a percentage of these sales.
FT: In what ways do U.S. or local authorities oversee your operations (e.g., safety, environmental)?

Carnival: Carnival is a member of the Washington, D.C.-based International Council of Cruise Lines and adheres to the organizationís guidelines, which promote measures that foster a safe, secure and healthy cruise ship environment.

The ICCL works in tandem with a variety of U.S. and international maritime organizations in the regulatory and policy development process.

http://www.floridatoday.com/apps/pbcs.dll/article?AID=/20051212/BUSINESS/51212001

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