Leaked memo reveals some Princess Cruise and Holland America crew members will take pay cuts through June as the coronavirus sends shockwaves through the cruise industry

Holland America LineHolland America’s Nieuw Amsterdam ship.
  • Holland America Line, Princess Cruises, Seabourn, and P&O Cruises Australia will cut the pay of some crew members in the coming months, according to a letter sent to crew members dated April 9.
  • Crew members have continued to be paid since Carnival Corp., the cruise lines’ parent company, halted new cruises in March, the letter says.
  • It’s unclear when the cruise lines’ ships will return to service.
  • Holland America Line, Princess Cruises, and Seabourn did not respond to a request for comment.
  • Do you work in the cruise industry? Do you have an opinion on how your company or the industry as a whole has handled the coronavirus? Email this reporter at [email protected].
  • Visit Business Insider’s homepage for more stories.

Some crew members from Holland America Line, Princess Cruises, Seabourn, and P&O Cruises Australia will take pay cuts in the coming months, according to a letter sent to crew members dated April 9. Business Insider viewed photos of the letter.

“Most of our ships are no longer serving guests. As a resulted, we must now shift to a staffing and compensation model for April, May, and June that balances the current economic and operation situation with the needs of our shipboard team members,” said Susan Coskey, the senior vice president of human resources for Holland America Group, which includes Holland America Line, Princess Cruises, Seabourn, and P&O Australia. All Holland America Group crew members have continued to be paid since the group’s parent company, Carnival Corp., halted operations in March, Coskey said in the letter.

Crew members whose contracts end on or before May 9 will receive their normal pay if it doesn’t usually include tips from passengers. Those with contracts ending by May 9 whose pay tends to include tips will get the higher of the following two options: the minimum pay outlined in their contract or 70% of what they would have been expected to make between their base pay and tips.

All contracts scheduled to end on or after May 10 will now end on May 10, the letter says. Workers in that group will receive their scheduled pay through the day their contract was originally set to end or June 9, whichever is earlier. In addition, they will receive $US500 or 50% of what they earn during the 30 days before their contract ends, adjusted for the number of days worked during that period, if the latter is greater than $US500.

Some crew members may work past May 10 if their role is deemed necessary for the upkeep of their ship. Workers who are not in essential roles but remain on their ships after their contract ends will receive food, lodging, and medical care.

Coskey said Holland America Group does not yet know when crew members will receive new work assignments since it’s unclear when the group’s ships will return to service.

“Throughout this journey, you have shown your resilience and determination in the face of almost constant change and challenge, and we are deeply grateful,” Coskey said. “Thank you again for your understanding throughout this unprecedented situation.”

The cruise industry has been shut down since March after COVID-19 spread to hundreds of passengers and crew members on ships like the Diamond Princess, Costa Luminosa, and Zaandam, though there are still 114 ships carrying over 93,000 crew members in or close to US ports, according to the Centres for Disease Control and Prevention (CDC). Cruise companies had planned to resume new trips in May at the earliest, but a new order from the CDC could prevent cruise ships from sailing in US-controlled waters until July.

Amid the disruptions caused by COVID-19, a steep decline in revenue has threatened the cruise industry’s financial health, causing the stock prices of major cruise companies like Carnival Corp., Royal Caribbean Cruises, and Norwegian Cruise Line Holdings to plummet as the companies tap credit lines or issue bonds to fulfil their cash needs. While analysts told Business Insider the cruise industry will eventually rebound, they said it’s difficult to predict when that will happen.

Holland America Line, Princess Cruises, and Seabourn did not respond to a request for comment.

Do you work in the cruise industry? Do you have an opinion on how your company or the industry as a whole has handled the coronavirus? Email this reporter at [email protected].

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