Federal Maritime Commission Weighs in on Cruise Line Refund Policies

Nearly every cruise line has different cancellation and refund policies for cruises being canceled, postponed, or delayed. While the airline industry has had a relatively unified cancelation policy that protects travelers against nonperformance from carriers, the same cannot be said about the cruise lines.

In fact, cruise lines have had a fair share of criticisms in the past concerning difficulty in having refunds processed in a timely manner.

The Federal Maritime Commission would like to see this changed. Federal Commissioner Louis Sola, who has been at the forefront of a return of cruising in the last 18 months, believes that: “clearer guidance is needed in determining whether a passenger is entitled to obtain a refund if a cruise line cancels a voyage, makes a significant schedule change, or significantly delays a voyage.”

Booking a Cruise Remains a Low-Risk Activity

Although the cruise industry has faced some of the worst financial months in its history during the COVID-19 pandemic, booking a cruise remains relatively low-risk. However, cancelations can still happen.

Given the recent ban on unvaccinated cruise passengers from Royal Caribbean and Carnival, negative travel advice from the CDC to the Bahamas and St. Maarten, and the recommendation to avoid cruise travel if not fully vaccinated, some cruise ships could still cancel voyages due to low passenger numbers. It is from these possible occurrences that Louis Sola wants to protect passengers.

The proposal from the Commissioner states that if a sailing is canceled or a passenger boarding is delayed by 24-plus hours for any reason besides a governmental order or declaration, a full refund must be paid within 60 days following a passenger’s refund request.

If the sailing is delayed or canceled by a government declaration or order, a full refund must be paid within 180 days. The proposal will not affect any cruise line cancellation policies for guests who cancel a cruise outside of reasons of nonperformance or government orders and declarations.

So while booking a cruise remains low risk, the new proposal would make it straightforward for passengers of any cruise line as to when they can expect to receive their refunds—something where there are huge differences between various cruise lines.

Putting an End to Differing Refund Policies

The proposal would end a myriad of different cancellation and refund policies now in existence with each cruise line that operates in the United States. While Carnival Cruise Line does not give an estimate of how long a refund would take on a canceled cruise, other lines under the Carnival Corporation like Seabourn and Princess state 60 days.

For other cruise lines like MSC, it could be 60-90 days; Crystal Cruises takes up to 90 days. Royal Caribbean and Celebrity Cruises say 7-10 days after the request has been processed; however, it could take up to 30 days or more; of course, this does not state how long the processing time is.

Louis Sola said to CNBC:

“Every cruise line had a different policy so we wanted to create a standardized system as had been done with the airline industry. I hope this update will be out to the public shortly.”

The proposal, which is still under review, has several key points when cruise lines would be required to pay out a refund:

1. Nonperformance of a cruise line includes canceling or delaying a passenger boarding by 24 hours or more. If this happens, full refunds must be paid within sixty days following a passenger refund request.
2. When a sailing is canceled or consumer boarding is delayed by twenty-four hours or more due to a governmental order or declaration, full refunds must be paid within one hundred eighty days following a passenger refund request.
3. If there is a public health emergency and a guest cancels after the refund deadline, but the cruise does go ahead, the cruise line must provide a future cruise credit. In all other cases in which a consumer cancels and embarkation and sailing occur within the prescribed timeline, the cruise line’s rules for cancellation will apply.
4. Guests and cruise lines can still enter an agreement for a future cruise credit instead of a refund.

The public can make comments on the proposal until October 25, 2021. After this date, the FMC can make any final revisions, and the proposal will be put to the vote.

If you have any comments and would like to submit them, this can be done by emailing secretary@fmc.gov. For comments, include in the subject line: “Docket No. 20-15, Comments on PVO Financial Responsibility Rulemaking.” Comments should be attached to the email as a Microsoft Word or text-searchable PDF document. If you want to read the entire proposal, it can be found here.