After encouraging staff to mislead cruise customers about COVID-19, Norwegian reverses

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After encouraging sales employees to mislead concerned customers about the risks of taking cruises during the COVID-19 outbreak, Norwegian Cruise Line has backpedaled.

In response to a sharp rise in cruise cancellations in February, Norwegian Cruise Line sales managers recommended employees last week to do “anything for the sale,” according to a sales employee in South Florida who asked to remain anonymous for fear of retaliation from the company. As first reported by the Miami New Times, company managers downplayed the threat of the virus internally and directed salespeople to do the same with customers.

Managers told employees in meetings, according to the employee who spoke with the Herald, and via email, according to the New Times, to convince cautious clients to cruise by using lines like, “The Coronavirus can only survive in cold temperatures, so the Caribbean is a fantastic choice for your next cruise” and “Scientists and medical professionals have confirmed that the warm weather of the spring will be the end of the Coronavirus.”

After the New Times story published the canned sales responses Wednesday morning, Executive Vice President and General Counsel Daniel Farkas told sales staff to abandon the phrases about coronavirus in an email Wednesday afternoon.

“Effective immediately, if you are referencing the below, please discontinue using them,” read the email, with a list of the lines previously approved and distributed.

That same day, the company announced tightened boarding requirements in an email to sales staff. The company is denying boarding to people who have visited COVID-19 hot spots China, Hong Kong, Macau, South Korea, Iran, or Italy or who have come into contact with people who have visited those places in the last 30 days.

Scientists do not yet know enough about the virus to determine if it is responsive to weather. As of Sunday, the State Department and U.S. Centers for Disease Control and Prevention are warning all Americans, especially those who are older or have underlying health conditions, to avoid cruise travel, citing a higher risk of infection on cruise ships.

The World Health Organization deemed the virus a pandemic Wednesday. Nearly 130,000 people worldwide have tested positive for the virus, and more than 4,700 have died.

Christine da Silva, vice president of public relations for Norwegian Cruise Line, said Thursday the company is aware of the Miami New Times story and is “looking into the matter.”

“We remain committed to operating with integrity and providing our guests with the best possible vacation experiences across the globe,” she said.

Norwegian Cruise Line Holdings is a Bermudan company with headquarters in Doral. The company operates three cruise lines: Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania Cruises. On Thursday, the company’s shares closed down more than 35%, at $9.65; the Nasdaq, on which it trades, dropped 9.43%. Overall, NCL’s shares have dropped more than 83% for the year. In 2019, Norwegian Cruise Line Holdings reported a profit of $930.2 million.

As part of the effort to boost sales amid mass cancellations, managers told employees not to mention the novel coronavirus unless customers brought it up first. However, the employee who spoke with the Herald said almost every customer who has been in touch with the sales department has asked about it. Sales employees make most of their income from cruise booking commissions, ranging from 1% to 5% depending on the number of bookings closed per month.

Worried about commissions, the employee used some of the lines, particularly telling customers that Norwegian was experiencing a “huge surge in demand” for non-Asia trips, suggesting clients book their travel to avoid “paying more tomorrow.”

“Managers said it was fine because we needed to create urgency for the clients,” the employee said. “They wanted us to keep being aggressive. A lot of people were using those lines to hook in customers.”

Senior vice president in the marketing department Bob Becker repeatedly downplayed the virus to employees.

In a Feb. 24 email to the sales team obtained by the Herald, Becker said he was at a bar in Buffalo where no one was discussing the virus. “I realize that they do not sell Corona so therefore Coronavirus is a non-issue. ... No one knows or cares about the Coronavirus.” He continued, “This is where we turn it up, for every cancellation you get, work harder for your next 3 bookings.” Norwegian Cruise Line CEO Harry Sommer and other executives were copied on the message.

Becker tried to keep the tactics under wraps. In an email with the subject line “be very careful” sent to sales staff March 9, the executive asked employees to avoid journalists.

“The media is trying to trick employees at cruise lines to say stuff about corona…………..nobody speaks to the media ever,” Becker wrote. “We have a PR team to do that………be cautious.”

The employee said managers repeatedly told employees to tell customers that “the coronavirus is not as bad as the media says.”

Because commissions are deducted for cancellations, some sales employees now owe the company, the employee said. On March 5, a sales manager sent an email to employees introducing a “March Madness challenge”: For employees who agree to work 28 days out of the month, the company will waive half of the cancellation fees they incurred in February.

Norwegian Cruise Line isn’t the only company in the industry experiencing cancellations. Royal Caribbean Cruises Ltd. confirmed it has laid off contract workers associated with “special projects” in an effort to limit expenses.