How Cruise Lines Get Free Employees

Cruise lines are a really clever business. They do a lot of things that no other businesses do.

They seem like Typical American Corporations, but they’re actually not. In fact, they’re not American at all. They’re offshore and they register their boats offshore, to avoid taxes. Before you go shedding a tear for Uncle Sam, realize that they fuel a whole industry that DOES get taxed (cruise agents) and that passengers pay port fees for US ports.

I just had an interesting conversation with an employee here who told me that they receive no income other than tips. Don’t jump to the conclusion that she’s spinning a story to get a tip from me– she’s a waitress at a different table, so my tips don’t go to her.

It’s a win-win-win situation.

Employees have a place to stay and three square meals a day, and have the opportunity earn money from the thousands of passengers onboard. The money they earn from passengers can be saved or spent as they please. It doesn’t have to cover rent or bills.

Cruise guests get great service (because employees have incentive to be good), and can pay a fair price. On the off chance an employee provides poor service, they don’t have to pay them. If an employee provides great service, they can reward it.

And last, the cruise lines have their megaships staffed by free and motivated employees. They can offer really good deals and still make a profit.

Doing something differently doesn’t mean you’re doing it better, but often doing something better means that you’re doing it differently.