How Do Cruise Line Employees Rate Their Employers?

In the article "Best (and Worst) Cruise Line Based on Traveler Reviews," it was established that travelers ranked the cruise lines in the following order in regards to experiences: Disney, Royal Caribbean (NYSE: RCL  ) , Carnival (NYSE: CCL  ) , and Norwegian Cruise Line (NASDAQ: NCLH  ) .

That was an important study, as it helped us determine that Disney and Royal Caribbean were the most likely to see sustainable demand. If travelers enjoy their cruise, then they're going to spread positive word of mouth. The same holds true for those who don't enjoy their experience. Looking at traveler ratings for cruise lines is imperative information for investors, but we have to see what employees think as well.

One study on its own might be important, but in order to establish a strong thesis on best of breed in the cruise line industry, we need to look at many different factors. In this case, instead of looking at traveler opinions of the cruise lines, we will take more of an inside look and see what the employees think. This is a good indication of company culture. When company culture is strong, the business is more likely to thrive because happy employees tend to be more productive and offer better customer service. If employees aren't happy, then they tend to simply go through the motions, not producing at their full potential or offering quality customer service.

Another Fool contributor, Brian Stoffel, recently pointed out in one of his articles that companies with strong company cultures tend to outperform the market. For instance, the top five company cultures would have returned $10,000 into $65,000 since 2009 (through December 16, 2013). By comparison, a $10,000 investment in the S&P 500 would have turned into $20,400. Those five companies: General Mills, Netflix, Adobe, Whole Foods Market, and Google

The results below are based on anonymous employee reviews at Glassdoor.com. Note that Disney Cruise Vacations only had 12 reviews and ratings. While a 4.1 of 5.0 rating is high, these results have to be excluded due to a small sample size. 

Royal Caribbean
Employees rated Royal Caribbean a 3.6 of 5.0, and 73% of employees would recommend the company to a friend. The average company culture rating is 3.2 (based on 250,000 companies.) Therefore, Royal Caribbean sports an above average rating for company culture.

Positives mentioned include cruise compensation, excellent compensation if you can sell, benefits, a growing brand, and amazing ships.

Negatives include long hours, slow responses to requests, strict rules (this could be looked at as a positive in a certain light, though), high turnover, difficulty to move up due to politics, and the need for more inter-department collaboration.

Prior to moving on, note that Royal Caribbean sports a return on equity of 5.54%. Return on equity is a good way to gauge management effectiveness. Let's see if it goes hand-in-hand with company culture ratings for the cruise line companies. 

Carnival
Employees rated Carnival a 3.4 of 5.0, which is slightly above average. Additionally, 62% of employees would recommend the company to a friend.

According to anonymous employee reviews, positives include likable coworkers, understanding management, cruise benefits, and good pay if you're exceeding your monthly goals.

Negatives include long hours and no room for growth due to politics. It's worth noting that one anonymous employee mentioned that Carnival is now heavily focused on data analysis to improve customer satisfaction. This is a good sign.

Carnival's return on equity stands at 4.45%, slightly lower than Royal Caribbean, as is the company culture rating. Likely not a coincidence. 

Norwegian Cruise Line
Employees rated Norwegian Cruise Line a 3.1 of 5.0, which is slightly below average, and 55% of employees would recommend the company to a friend. These aren't terrible numbers, but Norwegian Cruise Line once again scores lower than its peers. 

Unfortunately, it was difficult to find many positives. One was cruise and health benefits.

Negatives greatly outweighed the positives, however. These negatives include a very strict policy toward the usage of technology and socialization in general, lead theft, low pay, negative coaches, favoritism, antiquated working procedures, suggestions not being welcomed, and a lack of ethics.

Norwegian Cruise Line's return on equity: 2.95%, coinciding with the lowest company culture rating. 

Based on anonymous employee reviews, it seems as though Norwegian Cruise Line's company culture is subpar.

The bottom line
The above results coincide with "Best (and Worst) Cruise Line Based on Traveler Ratings." If you exclude Disney, Royal Caribbean is the most impressive cruise line, Carnival squeezes into the middle, and Norwegian Cruise Line lags its peers.

Travelers and employees feel the same way about these three brands, and return on equity matches these trends. This isn't a coincidence, and it's an indication that Royal Caribbean is the best-run cruise line of the three. While stock prices might fluctuate for a considerable amount of time, if you're looking to invest in the cruise line with the greatest odds of long-term success, then you should look into Royal Caribbean. Also note that Royal Caribbean, Carnival and Norwegian Cruise Line are trading at 23, 28, and 104 times earnings, respectively. Combining results and valuation, Royal Caribbean still looks the most appealing. Please do your own research prior to making any investment decisions. 

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Read/Post Comments (7) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 03, 2014, at 4:28 PM, deanananias wrote:

    Employees on cruise lines are really afraid to speak out about the negative aspects of their job in fear of retaliation by their superiors. The book SOS Spirit of Survival discusses how cruise line employees are treated and might be an eye opener for some people.

  • Report this Comment On February 03, 2014, at 4:42 PM, mamasan wrote:

    I googled this book, and it appears you are the author and the book deals with the Costa Concordia incident. Were you a member of the crew or a passenger?

  • Report this Comment On February 03, 2014, at 4:49 PM, trumpett wrote:

    Cruise lines do NOT have any kind of genuine benefits package.

    You do get free medical, as long as you are employed on the ship. Nothing carries with you when your contract is over. Your family is not covered.

    That "free medical" is extremely limited. You get 1 hour in the early morning and maybe another hour on the late afternoon to go see medical. You can do so ONLY with the approval of your supervisor, who has to fill out a form.

    You will be seen by medical personnel who are not licensed to practice in the USA. they cannot write you a prescription - they have to request an on-shore Dr. to do that for you. Quite often their accents will be so thick you can not understand them.

    You will always get "It's not so bad - go back to work."

    On one ship I worked, i went to medical in the evening just to get some throat lozenges. I was YELLED at by the medical staff to "Go away - crew hours ONLY." btw, the lozenges were in a bowl on the counter - I was watched and not allowed to grab a couple of them.

    On a RCCL ship, I sat down to get my blood pressure taken only to find my arm was then covered in blood. Was told by the nurse "Don't worry - it's only crew blood"...and she was serious.

    The last crew member who sat in that chair left 15 minutes before I sat in it, so that blood had gone NOT CLEANED UP for that time.

    Dental. RCCL will let you get ONE dental exam on a contract. You might get a cleaning with that. You will not get any dental work (cavities, root canals, etc.). Only if it's a work-related dental accident, which will have to be applied for and reviewed before approval, can you get any dental "work" done.

    Pension. RCCL is you work 20 years, and I think it was you get a $15,000 check, as long as you did not come back.

    Food. Crew food is the last stop before it's turned into chum for the fish. Left-over passenger food, recycled salad, etc.

    Internet. My last contract cost me $.40 a minute from 6am to 12pm. $.12 a minute from 12 to 6.

    Room. Regular crew are crammed into cabins so small it's impossible for two people to stand up at the same time.

    Crew are supposedly restricted to working 14 hour shifts, but they will often be forced to work 18 - 20 hour shifts, and told "If you don't like it, pack you bags & you'll be let off at the next port and you will have to pay your own way home."

    Just a little food for thought for any regular passengers who might read this - crew are treated like crap.

  • Report this Comment On February 03, 2014, at 4:50 PM, deanananias wrote:

    Yes, I am one of the authors and a survivor of the sinking of the Costa Concordia. The book details my experience but also discusses the Cruise Line industry and the need for changes in regards to personal safety for the passengers and crew.

  • Report this Comment On February 03, 2014, at 9:44 PM, maritza wrote:

    Royal Caribbean is the most disgusting and cheapest company around. They pay minimum wage to their Miami and Fort Lauderdale employees who do check-ins at the port. The check in agents are treated like garbage second class scum. The superiors are kiss ass corporate pigs . The ship staff brings left overs (crappy sandwiches) from the ship into the supervisor's break room and check in agents are not permitted to eat anything until the supervisors finish eating and then tell one of their flunkies that he can bring the garbage that's leftover to the dogs (the check in agents) Then he puts the leftovers in a roach infested stinky filthy break room where they are then permitted to eat this poor quality crap from the ship. If someone isnt happy about something and gives their opinion to a supervisor they are told to quit if they are not happy. There is always another idiot who will work for minimum wage. The break room at certain terminals are rat infested as well. The employees are working under deplorable conditions. Employees never get any recognition for being exceptional employees because the company doesn't believe in giving raises unless of course they are forced to , like if the minimum wage goes up 15 cents ! I quit RCCL last year and I think that the idiots who still work there should boycott this multi million dollar company that condones abusive behavior amongst the supervisors towards their employees. They are the most hypocritical and disingenuous cruise line out there. It's all a facade and customers are totally unaware of how poorly the employees are treated. It's all about numbers and nothing more. I was never allowed to go on a cruise which was supposed to be one of the benefits of working for this horrible company. Since I was so opinionated they made it impossible for me and my family to ever cruise. I was then told by my supervisor that "cruising is a privilege and not a benefit of RCCL". I now work for anothet cruise line and I am really treated "ROYALLY". I am paid well and I am appreciated for my excellent service unlike RCCL who actually could care less if someone is good or not. As long as you shut your mout, do as youre told and dont give your opinion and smile a lot at the supervisors during the staff meetings, act like you care what shes saying and then you will not be harassed. RCCL is one really bad company to work for

  • Report this Comment On February 03, 2014, at 9:57 PM, Travel3000 wrote:

    In response to Maritza - what cruise line do you now work for?

    How about Holland America? We have cruised with them about 10 times....

  • Report this Comment On February 04, 2014, at 1:14 PM, NoelChiefe wrote:

    Mostly of the crews are on one year contract basis process.Most of the time they are on the losing end (lack of due process)......because it is easy to fire them and their is a long line of applicants waiting.

    No tenure,low pay,long hours (I hope they implement the new rule of max 91hrs effective Aug 31,2014),irregular schedule,and crews lack of sleep.

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