The cruise industry has historically benefitted from a consumer base that is broadly forgiving of its environmental missteps. But times are changing.
From an optics point of view, it was striking: The executive committee of the world’s largest cruise company pleaded guilty on June 3 to six counts of violating its probation for environmental crimes. Carnival Corporation CEO Arnold Donald issued an apology to the court on behalf of the company. Although they were required by a judge to be there, the other executives remained silent.
Yet the $20 million settlement is a proverbial drop in the bucket in terms of the value of Carnival Corporation, which posted a 2018 profit of $3.2 billion. It was the third time the company has been convicted for environmental dumping since 1998, according to the Miami Herald. The fine was half of what the cruise company was charged three years ago — which was the largest-ever criminal penalty for intentional vessel pollution.
While the settlement proceedings — during which U.S. District Judge Patricia Seitz expressed a desire to detain Carnival’s executives and block their vessels from docking in U.S. ports — may have led to some public relations embarrassment, it remains to be seen whether it will result in any lasting change.
Especially in a world where the travel and aviation industries are becoming aware of the business risks of consumers’ increased environmental concerns, it’s worth asking whether the cruise industry sees the same risk on the horizon. Carnival, after all, hasn’t been the only operator caught polluting. Along with Carnival’s Princess Cruises and Holland America ships, one from Norwegian Cruise Line was fined for multiple environmental violations in Alaskan waters in 2015.
Yet while it’s been insulated for years, is conscious consumerism coming for the cruise industry?
A Forgiving Customer
The cruise industry, which is taking steps to improve, is traditionally not known as a sustainable way to travel. At the annual Seatrade Cruise Global conference in April, top executives — including Donald — defended the industry’s impact on the environment, highlighting technological advancements that have made ships more fuel-efficient. Donald said his company has reduced fuel consumption by 33 percent since 2007.
Although it comprises a fraction of the marine shipping industry — which together accounts for roughly 3 percent of carbon emissions annually — critics are quick to point out that, unlike container ships, floating hotel casinos are nonessential.
The industry has long been the target of environmental and local activist groups who, in just one example, are questioning the industry’s decision to meet the International Maritime Organization’s new 2020 fuel standards with the use of scrubbers, rather than the cleaner option of low sulfur marine gas oil. In addition the regulatory structure of the maritime industry means the ultimate authority to enforce international law often falls to the ship’s flag state, not the countries where these ships often dock or where the majority of their customers come from.
Tony Peisley is an independent cruise industry analyst who has covered the industry for 30 years and written reports for the likes of Seatrade News and Mintel. He said historically, the industry’s environmental credentials haven’t been a huge risk factor for cruise operators’ bottom lines as their passengers are generally very forgiving of the industry they love to vacation in.
“I’ve written about [conscious consumerism in this industry] off and on for 10, 15 years, and I’ve always said…there’s no evidence of people turning up to book a cruise holiday in a travel agency and asking them questions about how green are these people and what’s their environmental compliance like,” Peisley said. “And to my knowledge it still isn’t happening.”
That said, there may be signs of a shift. In April at Cruise360, an industry-wide conference hosted by trade group the Cruise Lines International Association (CLIA), Royal Caribbean’s Vice Chairman Adam Goldstein delivered a keynote speech in which he warned the industry that communicating its environmental compliance would become a larger part of the cruise industry’s core efforts. Especially as it tries to attract the “extra 10 or 20 million cruisers we will be needing inside of a decade.”
“There is just extraordinary sensitivity through the continent of Europe to how all industries, all companies, and even governments are behaving when it comes to sustainability,” Goldstein said. “It is the first question that comes up anywhere I go there. And I don’t see that changing other than to get even more intense. I don’t know if the United States will ever be like that, but I am very confident to say it will become more like that.”
Peisley, as a longtime watcher of the industry, regarded the speech as notable. “It’s the first time I’ve heard somebody say something as open as that about it. They must be concerned about it.”
Rollercoasters vs Sustainability
Part of that concern could reasonably come from the demographic that the cruise industry has proved maniacally obsessed with courting: millennials and Gen Z. Though they’ve tried with roller coasters, influencer campaigns, and sleek new ships, Kendra Ulrich, senior shipping campaigner from Stand Earth, says they’d be wise to focus their attention more squarely on environmental efforts.
“Carnival is trying to appeal to millennials, who as a generation care about the environment,” Ulrich said. “If Carnival actually wants to tap into that market, then they are going to have to clean up and become an environmental leader.”
Carnival says that the environment is a top priority for the company, and points to initiatives like reducing the use of single-use plastics on board and reducing food waste, as well as other initiatives that a spokesman said will soon be announced.
“We are investing millions of dollars in innovative green technologies like liquefied natural gas to power our ships. We recently achieved an important milestone by reducing the rate of our carbon footprint across the company by 25 percent, and we are aiming to do even more going forward,” a spokesperson said. “We fully realize that ocean is where we live and work and it needs to remain clean and pristine, and we’re rededicating ourselves to this very mission with the actions currently underway and those being planned across all our brands.”
CLIA adds that the industry as a whole “is dedicated to environmental and destination sustainability and is working hard every single day to protect and sustain the environment in which we operate.” They note that the industry has committed to reduce the rate of carbon emissions by 40 percent fleet-wide by 2030.
For his part Peisley still questions whether the environmental pressure will, in fact, come from suddenly-woke cruisers themselves. He notes that it’s long been the case that cruising isn’t just a vacation choice — it’s an identity. And it’s one that he finds unlikely to be deterred by environmental concerns if the price remains attractive.
He says it’s much more likely to be motivated by the places these cruise ships are visiting, which, in the age of overtourism, are increasingly fed up with seeing large ships dock and sit in port. Many of them, he notes, are making it more difficult for cruise ships to arrive. Following last week’s collision in Venice of the MSC Opera into a dock and a tourist boat, Italian officials cited the need to ban cruise ships from using the crowded Giudecca Canal. They did not however, call for a ban on cruise ships altogether, according to Bloomberg.
“If you suddenly can’t got to Venice. Or you can go [only] if you park 50 miles away and bus people in — it’s a big difference,” Paisley said. “They have to win the hearts and minds of the places they go to.”
Photo credit: The Carnival Miracle in Alaska. Both Carnival and Norwegian Cruise Line have been fined for multiple environmental violations in Alaskan waters. Carnival Cruise