MR. THOMPSON: For the benefit of those whom I have not had the pleasure of meeting or were not at the past hearings, I am Ted Thompson, Executive Vice President of the International Council of Cruise Lines an industry association that represents the interests of 16 of the largest overnight cruise ship operators in the North American market. ICCL members operate approximately 120 ships in over 800 ports in the United States and around the world. This year ICCL members expect to carry in the vicinity of 11.5 million vacationers.
In the last hearing we presented three strategic issues and 10 specific issues of concern. In this statement, we will focus on the economic aspects of the proposed guidelines.
As one of many vacation options, choosing a cruise is discretionary and we work hard to assure that every guest has a pleasant experience – one that will encourage them to return again and again. It is important to ICCL members to provide an enjoyable and accessible vacation experience to guests with special needs. To this end, we believe our members ships are at the leading edge of meeting all types of special needs. The newer ships have more access than ever thought possible. All this has been accomplished because it is the right thing to do and it is good for business; not because it was required by regulation.
At the same time, this is a business venture industry and our stock holders and other investors expect to make a return on their investment. Thus it is imperative that the scoping for access elements, such as the number of wheelchair accessible cabins, be appropriate to meet not only the needs and demands of the cruising public both now and in the future but also to ensure the economic viability of the industry.
It takes three standard cabins to construct two accessible cabins. Thus for each two accessible cabins that may be required and built beyond the demonstrated and required needs, one standard cabin is lost for the life of the ship along with the future income that would be generated by that cabin.
ICCL has contracted to conduct an economic sensitivity study along these lines. We would like to share with you some of the preliminary results. Details of the study and the findings will be submitted to the docket. We collected data on use of wheelchairs and scooters, and on the use of accessible cabins. Anyone who requested an accessible cabin was included within the definition of wheelchair users. It was also assumed that anyone using a wheelchair met the definition of disabled according to ADA definitions. We know that some guests use wheelchairs to help deal with short-term problems such as broken legs or sprained ankles, which would not meet the ADA definition of disabled, but we included these individuals in the data collection process. The numbers which we are going to review for you represent an upper bound on the use of wheelchairs on the cruise ships included in our sample.
We looked at a large sample of 1159 voyages in North America on 65 ICCL member ships on a broad spectrum of operating lines, itineraries and passenger demographics. On these voyages the ships involved carried 2,583,824 passengers.
• On these voyages there were 18,909 designated accessible cabins available.
• Of the total passengers , 6129 were wheelchair users which represents 0.24%
• Of the WC users, 2223 asked for and utilized a WC accessible Cabin which represents
o 36.3% of the total number of passengers using wheelchairs or
o 0.01% of the 2,583,824 total passengers in the sample voyages.
• 3906 passengers using wheelchairs utilized non wheel chair accessible cabins. - 63.73% of the total wheel chair users
This is where it gets more interesting.
The 36.3 % of wheelchair users that asked for and used WC cabins represents 11.8 % usage of the available WC cabins.
If all wheel chair users asked for and used WC Cabins this would represent 32.4 % usage of the available WC accessible cabins.
Thus, if each accessible cabin used is occupied by one person using a wheelchair (and a companion) we see that providing 0.51 % [approximately one/half of one percent of the total cabins on board as WC accessible, would meet the needs of the 6129 passengers using wheelchairs during the 1159 voyages contained in our 2005 sample.
Now, one/half of one percent may appear to be a very small usage rate for accessible cabins. This may be true, since we believe that there is some seasonal variation in the proportion of passengers using wheelchairs over the course of a year. Usage rates in the summer, for example, may be higher than in the Winter or Spring seasons. We are continuing our data collection for the rest of the year in order to document this seasonal variation, and provide us with a stronger basis for recommending a scoping level for accessible cabins. We want to insure that the supply of accessible cabins is sufficient to meet the demand for accessible cabins throughout the expected lifetime of each ship.
We have examined some longitudinal data regarding the change in the demand for accessible cabins over time. There is evidence that the usage of accessible cabins by guests with mobility-related disabilities is growing. Given time constraints for today’s testimony, we will submit this material for the record on July 28th.
Without specifying an actual scoping level, assume that a sufficient percentage of WC accessible cabins is provided to meet the needs of guests with mobility-related disabilities. Suppose further that the scoping level is changed, and the industry must build ½ of 1% or .5% more accessible cabins than the original assumed. On a [1600] cabin ship this would equate to an additional 8 accessible cabins meaning, it would take 12 Cabins to make these additional 8 cabins or the ship would lose 4 standard cabins. These 4 cabins are not cabins that would be used by persons without disabilities but cabins that no longer exist – no one can use them. Making some very rational assumptions with regards to usage and income per cabin on an industry wide basis (we have this data) we see that this ship looses approximately $560,000 dollars in unearned revenue each year of its life.
This works out to be an adverse economic impact of $140,000 per year for each accessible cabin that would be mandated beyond the actual need.
Multiplying the $140,000 lost revenue per cabin per year times the expected 30 year life of the ship results in $4.2 million unearned income per lost cabin over the life of the ship.
Assume 80 new ships are added to the fleet over the next 20 years to account for the industry growth rate. This equates to 4 ships per year being added to the fleet and does not account for additional ships that must be built to replace aging ships transferred to other markets.
Multiplying the $4.2 million times the 80 ships equals $336 Million lost in unearned revenue over the aggregate life of the ships (30 years per each ship) for each lost cabin.
Assuming a net loss of 3 standard cabins per ship based on a 0.5% increase in scoping applied to an average ship of 1200 cabins the above numbers yield a $1.008 Billion total revenue loss in unearned income.
This revenue stream is not discounted to present value.
Thus it is imperative from an access point of view and from a business point of view that the scoping for this accessibility element and others be extremely accurate.
Too small a number and we do not meet the needs and rights of our customers,
A number too high carries a huge economic penalty.
ICCL will submit data in this regards and work with the government to assure that these matters are accurately addressed.
In addressing the way forward ICCL believes:
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MR. [DOUGLAS] ANDERSON [BOARD MEMBER]: I have a question for Ted. I wanted to clarify the numbers that you were using as far as the loss to the industry. That was potential revenue? Assuming that every cruise would be sold out?
MR. THOMPSON: Yes that, is potential revenue, assuming that cabin is not there.
MR. ANDERSON: And did you also if you could include information about how many cruises go sell out as far as what's the average and you don't have to answer that now.
MR. THOMPSON: We can do that. Currently, they are selling about 103 to 107 percent.
Let me qualify that when I say 103 to 107%. 100% is considered what is lower birth, two beds per cabin in a standard cabin.
If a third person is in that cabin, using the upper birth or pullout, the couch pullout, that, is over and above. That's how you get numbers over a hundred percent. That does not mean we are carrying more passengers than we are certified for.
MR. ANDERSON: Thank you.
BOARD MEMBER Thank you Chairman.
This is for Mr. Thompson. While you have the Mike I certainly found your presentation quite compelling, especially because it is based upon real life data that your industry has collected.
I was kind of surprised, though, by the number of wheelchair users who did not choose a wheelchair cabin. I'm just wondering that process of selection was in that regard and why do you think the overall percentage was so low?
MR. THOMPSON: I don't know exactly the process of selection. Certainly, there are a number of you users that are able to walk certain distances. We are not permitted of course to ask if a person has a disability when they call up or book a cabin.
And so we assume that all wheelchair cabins were in use by the persons that need them and by the same token, I can also speak to the numbers that are there, Sir.
BOARD MEMBER: Does the document contribute to that are you submitted and outline the process that was used to collect the data?
MR. THOMPSON: Certainly, it addresses the process we used to collect the data, certainly.
BOARD MEMBER: Thank you.
Mr. [DENIS] PRATT [BOARD MEMBER]: Thank you, Mr. Talbot. I have a question for you Ted.
Is there a way that your industry can actually measure the I guess you could call it the abuse of the selection of the accessible rooms by people that don't need them?
I remember when we were touring the Disney Cruise Ship in Los Angeles, that comment was made by the person giving us the tour that as time goes on, more and more people are aware that these rooms are much larger and much more comfortable than the small cabins and there was more and more abuse of that because you not allowed to ask whether they had a disability or not.
Do you have any idea of what the percentage of that would be of people that use the room and don't need them?
MR. THOMPSON: That I don't know. If I hold on just a minute, let me ask my colleagues here? We don't collect that data.
MR. TALBOT: Dr. Harding.
MR. [Dr. JAMES] HARDING [BOARD MEMBER]: Thank you, Mr. Chairman. My question Ted, I'm sorry for picking on you, you brought it up in data which is important.
I think as a regular traveler, there is nothing more annoying than being guaranteed a space to serve dimensions and certain components and when you show up, you are the only one in the group who does not have a place to stay and you are forced to find other places.
When you were giving us this lost revenue and so forth, were you then suggesting that if you make a special room, it in fact is not a revenue generating space if you did not have other you know, a person with a disability in there?
And I guess, my question really gets into the fact that just because you make special accommodations for folks, it is a revenue generating room whether or not folks a person with a disability use it or not but getting back to the deeper question of how do we ensure proper usage of such a commodity?
MR. THOMPSON: First of all, let me clarify that the revenue lost, revenue numbers we were talking about were numbers based on number of cabins that are not built. It was not based on the revenue generating accessible rooms by a needs person.
I think it is important when a person that needs the room makes reservation, specify that they need that room.
And reservations for cruises are normally made 6 to 8 months in advance, not like a hotel where you might come in on the spur of a moment because a plane was cancelled or vacation and find that the room is not available. I would hope that when our members take a reservation for accessible rooms that it would be available for you.
Those are internal procedures that each of our members utilize and I can't speak to specifically, but you have a very good point.
Certainly, rooms used by persons that don't need them, I can understand can be very frustrating to a wheelchair user, having had a hip operation and smashed my leg at one point, and was a wheelchair user for a while and on crunches for a while. I found it very disconcerting when I was not able to get into a handicapped parking space because somebody had parked there. So I can understand that.
And I know there are members work to the extent that they cannot ask if somebody specifies a room if they actually need it whether or not that's right or wrong.
BOARD MEMBER: Mr. Chairman, one last question. Of all of your draft documents, what I have not heard specifically is what do you find beneficial to your industry in terms of our work?
We're trying to open it up for a broader population but I heard and purpose of trips to Alaska, what is the problem with expanding access to a broader population and I would like to hear from the industry as it relates to our rules?
What's good about it. That would go a long way for me.
MR. THOMPSON: Give us another hour or two. Certainly, we have the opportunity for public comment, will focus on things that are troublesome, things that the industry would like to see worked on to be made more acceptable.
In our first comment, for the way forward, we indicated that we thought the way forward was to take the majority of the proposed rules and go forward with them in a very speedy manner and taking out those few elements.
I think we indicated 10 or 11 of them for future study but the great majority I think is really quite acceptable.
MR. ANDERSON. As long as you have the mike, you bring up these numbers and we find that very interesting.
So looking for some additional information that we hope will be in the report in addition to looking at the number of rooms not built, if you can look at percentage of rooms requested and then, and suggested the access rooms that were not used, and use that as a means of calculating lost revenues, assuming that those
MR. THOMPSON: That's what this was based on.
It was solely on those rooms not built, had nothing to do by I guess what I was looking at, take the rooms not built, but back out those rooms that there was actual demand for.
So when you are talking about rooms not used, using that as a number for calculation?
One of the things that we showed was that we had some on 11059 voyages counting the accessible rooms on each ship, there was some 18,000 designated accessible rooms and even if every wheelchair user had requested and received a wheelchair accessible room, it would have only been 6,000 accessible rooms out of those 18,000.
So, essentially, those rooms were only used a third of the time if every single wheelchair users had used one.
BOARD MEMBER: So what you are suggesting is two thirds OF the rooms were in EXCESS of what the demand?
MR. THOMPSON: For those particular sample cruises we looked at that, may vary from season to season or Alaska versus the Caribbean.
For those cruises, if every wheelchair user had requested and used wheelchair accessible rooms, only one third of the rooms available would have been used.
>> That was just a sampling.
BOARD MEMBER: Pretty large sampling.
We will continue that.
BOARD MEMBER: All right, I look forward to seeing that data. Thank you very much.
MR. [GARY] TALBOT [BOARD MEMBER]: Just on a personal note, that is the number one complaint I have heard from folks that have contacted me because of our work on the Access Board is to call up, get a room, and it is not available, so I have to put high vacation out. So I'm looking forward to seeing that data because I know that is an issue for many of the community, that they are not able to book a cruise when they are trying to. Thank you.
Anybody else for Ted or anything else?
Mr. Pearce?
MR. [Philip] PEARCE [BOARD MEMBER]: Thank you Mr. Chairman.
My question also is for Ted and I do have a follow up question for Mr. Chapman.
The question I have for you is what I would like to see also in your data if you can provide that for us, is the trend over the last, say five years, ten years if you can get it, five years if you can't, of wheelchair users on cruises. And the reason I asked for that is because my expectation is that a number of wheelchair users that is dramatically increased over even the last five years because people have become more and more aware that cruises are actually available to people in wheelchairs where is in the past, I know, I cruised several years ago and I stayed in a room kind of down in the dungeon in the ship because that was the only wheelchair accessible room they had on the ship and an older ship.
But that was just the way it was, and my expectations are that we will find that the number of wheelchair users seeking to cruise is going to increase dramatically, and also realize that you guys when you have those wheelchair accessible rooms available, if they don't sell out to someone that calls a specific request that but you sell it the someone else and kind of get a bonus because it is nice to have all that extra room.
I think that is a worthwhile thing but I would like to see a trend if you could gather that information for us as well.
MR. THOMPSON: We will take that request under advisement to the extent we get data on this wheelchair users ten years ago, I don't know but certainly, your last point is very salient. A lot of people recognize that the accessible rooms are much larger and will ask for them whether they need them or not because we cannot ask if they really need it.
BOARD MEMBER: And Mr. Chapman, if I can, if he still here, my question for you is: You talked about and you showed pictures of designs of vessels currently in operation.
My question is: is there do you see any issues are and at what level do you see there is a problem for future vessel design to be able to incorporate accessibility within the design of that vessel? And is that something you see as being a possibility for the industry as a whole?
At what point does it become a problem for the size of the vessel?
MR. THOMPSON: Certainly, it does have the potential to be a very big problem.
First vessel that I showed in the water taxi to be able to put a toilet room that needs the guidelines on that vessel which seriously impaired its ability to function. And that was a T boat.
I showed other T boats, some that were a little larger than the K boat that would not have that difficulty.
And the thing that goes back to the diversity that Pete spoke about, the diversity in the industry, so I'm not prepared to say but I think it is helpful to see some examples of vessels where the guidelines could be I think readily implemented in the new construction report.