Passenger/Cruise Industry

Passenger Fleet

The U.S.-flag passenger fleet of deep-draft, oceangoing vessels, which underwent a precipitous and prolonged decline beginning in the 1960s and lasting well into the 1990s, is now poised for an upswing. Despite business setbacks resulting from the economic shock of September 11, 2001, legislative and other developments in recent years have sparked a renewed interest in building and operating U.S.-flag passenger ships. Currently, several companies, many of them formed only recently to take advantage of what are perceived to be growing opportunities in the U.S.-flag cruise market, have U.S.-flag passenger ships under construction, on order, or in the planning/design stages. In addition, two U.S.-flag cruise vessels in the control of the U.S. Maritime Administration are being examined by a number of existing and prospective operators for service in the U.S. domestic trades.

Cabotage Policy

U.S. cabotage laws cover both cargo and passenger vessels operating in the U.S. domestic trades. Basically speaking, the movement of merchandise in the domestic, waterborne trades is governed by Section 27 of the Merchant Marine Act of 1920 (46 U.S.C. 883; 19 CFR 4.80 and 4.80b), popularly known as the "Jones Act," which requires that only U.S.-built, U.S.-owned, and U.S.-crewed vessels be used to transport merchandise in U.S. domestic trade; while the Passenger Vessel Services Act of 1886 (46 U.S.C. 289), when applied in conjunction with particular sections of the Merchant Marine Act, governs the U.S. domestic passenger trades, setting the standards for passenger vessels as the Merchant Marine Act does for cargo vessels. Provisions of U.S. cabotage law also cover mixed-use vessels carrying both cargo and passengers.

Concerning the U.S. domestic passenger trades, the Passenger Vessel Services Act states:

No foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.

There are, however, certain exceptions to the prohibition on the use of foreign vessels to transport passengers in the U.S. domestic trades. For example, the Virgin Islands are exempt from U.S. cabotage laws until declared otherwise by presidential proclamation (46 App. U.S.C. 877). Foreign vessels may transport passengers between Puerto Rico and ports in the United States, provided that there is no eligible U.S. vessel offering such service (46 U.S.C. 289c). There is no violation of U.S. cabotage law in cases where passengers board a non-coastwise qualified vessel at one U.S. port and disembark (at the conclusion of the voyage) at another U.S. port, as long as the vessel makes an intermediate stop at a "distant foreign port" (19 CFR 4.80a).

The U.S. Customs Service, the agency responsible for interpreting U.S. cabotage laws, has ruled that foreign-flag cruise vessels may carry passengers on so-called "cruises to nowhere" (cruises that begin and end at the same U.S. port and do not touch any other port, U.S. or foreign) without violating the Passenger Vessel Services Act, since such voyages do not entail transportation between U.S. ports or places. Taking advantage of this ruling, numerous foreign-flag gaming vessels are operating in the lucrative and expanding U.S. cruise-to-nowhere market.

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U.S.-Flag Passenger Fleet Profile

Norwegian Cruise Lines

NCL America, the U.S. subsidiary of Norwegian Cruise Lines, inaugurated a new era of U.S.-flag cruising when the PRIDE OF ALOHA was christened on July 4, 2004 in Honolulu, Hawaii. The 77,000 ton, 2000 passenger vessel was the first of three U.S.-flag ships to provide inter-island service in Hawaii. It was followed by the PRIDE OF AMERICA in the summer of 2005. The 93,000 ton, 2400 passenger PRIDE OF HAWAII will be added in April of 2006.

When fully operational, the NCL America fleet generates more than $828 million in economic activity annually and provides more than 20, 400 jobs. Within that impressive economic impact are national security benefits as well. The NCL America fleet contributes to the critical pool of qualified U.S. seafarers and provides vital repair and maintenance work for U.S. shipyards, both essential pillars of U.S. sealift capability.

The Delta Queen Steamboat Co.

The Delta Queen Steamboat Co., a subsidiary of the prominent leisure group Delaware North Corporation, which celebrated its 112th year of operation in 2002, making it the oldest U.S.-flag line, and one of the oldest in the world, is headquartered on the Mississippi River in New Orleans. The company currently operates three paddle-wheel steamboats, the DELTA QUEEN, MISSISSIPPI QUEEN and AMERICAN QUEEN, offering three- to twelve-night cruises on the Mississippi, Ohio, Cumberland, Tennessee, Arkansas, Illinois and Kanawha Rivers.

Built in Scotland in 1926 at a cost of $875,000, the DELTA QUEEN was subsequently disassembled, completely rebuilt in the United States, and launched in Stockton, California. It operated on the Sacramento River until 1940, when it was commissioned for service as a U.S. Navy ferry in San Francisco Bay during World War II. The vessel was brought to the Mississippi River in 1947, listed on the National Register of Historic Places in 1970, and designated a National Historic Landmark in 1989. The DELTA QUEEN is 285 feet long, with a 58-foot beam and a draft of 8.5 feet. It has 91 passenger cabins, 182 berths, and carries a crew of 75.

Commissioned in 1976, the larger MISSISSIPPI QUEEN, modeled after a traditional Mississippi River steamboat design, was built at a cost of $27 million. It is 382 feet long, 68 feet wide, and has a draft of 8.5 feet. The vessel has 207 passenger cabins, 420 berths, and carries a crew of 165.

The 418-ft.-long, 436-passenger AMERICAN QUEEN is the largest overnight, paddle-wheel steamboat ever constructed for river travel. Built in Louisiana by McDermott Shipyard, the vessel entered service in the summer of 1995.

Clipper Cruise Line

St. Louis-based Clipper Cruise Line operates the 100-passenger NANTUCKET CLIPPER, the 138-passenger YORKTOWN CLIPPER, and the 121-passenger CLIPPER ADVENTURER, an expedition-style cruise liner registered in the Bahamas but employing an all-American hotel staff. Itineraries include the Caribbean, Alaska, the U.S. Atlantic Coast, Antarctica, Mexico, South and Central America, and Western Europe.

American Canadian Caribbean Line, Inc.

American Canadian Caribbean Line, Inc., based in Rhode Island, currently operates four vessels: the 99-passenger MAYAN PRINCE, the 84-passenger NIAGARA PRINCE, the 100-passenger GRANDE CARIBE, and the company's newest ship, the GRANDE MARINER, which was delivered in May 1998. American Canadian Caribbean Line operates in North America, Central and South America, and the Caribbean.

Alaska Sightseeing/Cruise West

Seattle-based Alaska Sightseeing/Cruise West operates eight passenger vessels: SPIRIT OF ALASKA, SPIRIT OF DISCOVERY, SPIRIT OF '98, SPIRIT OF GLACIER BAY, SHELTERED SEAS (daylight excursions), GLACIER SEAS (daylight excursions), SPIRIT OF COLUMBIA, and SPIRIT OF ENDEAVOR. They carry between 75 and 101 passengers. Itineraries include Alaska's Inside Passage, the coast of British Columbia, and the Snake, Columbia and Sacramento Rivers. The company also offers Alaska land tours.

American West Steamboat Company

On the paddle-wheel cruiser QUEEN OF THE WEST, American West Steamboat Company offers year-round cruising on the Columbia/Snake River system. The 163-passenger vessel operates two-, three-, four-, five- and seven-night cruises along the Columbia, Snake and Willamette Rivers, with most cruises departing from Portland. American West announced plans to build a 248-passenger oceangoing side-wheel cruise vessel for employment in Alaska and Hawaii. The new U.S.-flag vessel will be christened EMPRESS OF THE NORTH.

RiverBarge Excursion Lines

RiverBarge Excursion Lines offers cruise/tour products on "American heartland" waters. The U.S.-built, -flagged and -crewed RIVER EXPLORER, comprised of two three-deck hotel barges propelled by a 142-foot, 3,000-horsepower "towboat," began operations on July 4, 1998, with a seven-night cruise from New Orleans to Memphis. The composite vessel measures 732 feet by 50 feet and accommodates 198 overnight guests in 99 staterooms. RiverBarge offers four- to 10-day excursions along the Gulf Intracoastal Waterway and the Mississippi, Ohio, Missouri and Cumberland Rivers.

Special Expeditions

Special Expeditions is a New York-based operator of small cruise ships. The company's two U.S.-flag passenger vessels, the 70-passenger SEA BIRD and SEA LION, operate in Alaska during the summer and Baja, California during the winter.

American Safari Cruises

American Safari Cruises operates one yacht, the 120-foot, 21-passenger SAFARI QUEST on week-long cruises through Alaska's Inside Passage, sailing between Vancouver and Juneau, and Juneau and Sitka, respectively. It is able to take passengers to areas that are inaccessible to larger vessels

American Cruise Lines

American Cruise Lines, based in Haddam, Connecticut, operates the 49-passenger AMERICAN EAGLE and AMERICAN GLORY on multi-night cruises along the East Coast from New England to Florida

Alaska Marine Highway System

The nine vessels of the Alaska Marine Highway System provide passenger and auto ferry service between Alaska ports, carrying nearly 400,000 passengers and 100,000 vehicles annually.

Day Vessels

This broad category of vessels includes dinner cruise vessels, sightseeing and excursion vessels, gaming boats, car and passenger ferries, and private charter vessels. The Passenger Vessel Association estimates that the U.S.-flag passenger vessel industry, including day-cruise operations, carries nearly 100 million passengers annually.

U.S.-Flag Cruise-to-Nowhere Vessels

Currently, 19 U.S.-flag cruise-to-nowhere gaming vessels are operating in Florida, Massachusetts, South Carolina and New York. These vessels go on day-cruises which feature shipboard gaming beyond the state territorial limit. Such cruises end at the same port from which they begin, and typically, do not include a stop at an intervening port.

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A Short History Of The U.S. Riverboat Gaming Industry

In April 1989, Iowa became the first state to legalize riverboat gaming, and the first U.S.-flag vessels offering casino-style gaming entered service in Iowa on April 1, 1991. By the end of that year, five gaming vessels were operating there. Currently, nine Iowa gaming boats operate from Davenport (President), Clinton (Mississippi Belle II), Sioux City (Belle of Sioux City), Dubuque (Diamond Jo), Fort Madison (Catfish Bend), Marquette (Miss Marquette), Bettendorf (Lady Luck) and Council Bluffs (Kanesville Queen and Ameristar).

Following Iowa's lead, Illinois legalized riverboat gaming in February 1990. Illinois' first gaming vessel, Alton Belle Casino, commenced operations on September 10, 1991, followed in November of that year by the Par-A-Dice. Today, 12 gaming vessels operate in Illinois: Alton Belle (Alton), Par-a-Dice (Peoria), Casino Rock Island (Rock Island), Empress I & II (Joliet), Players (Metropolis), Harrah's Northern/Southern Star (Joliet), Casino Queen (East St. Louis), Hollywood Casino (two boats)(Aurora), and Grand Victoria (Elgin). The Illinois Gaming Board may issue a maximum of 10 licenses, each good for two boats. Illinois gaming law was changed 1999 to remove the previous ban on riverboat gaming in Cook County and to allow the state's waterborne casinos to operate while remaining permanently docked.

In April 1990, Mississippi lawmakers approved legislation allowing dockside gaming in Mississippi counties that opt for it. At present, 31 dockside gaming facilities are operating in Mississippi.

In Louisiana, which legalized riverboat gaming in July 1991, 13 gaming boats are currently in operation. They are: Argosy Casino (Baton Rouge), Bally's Casino (New Orleans), Players Lake Charles Casino (Lake Charles), Harrah's Casino (Shreveport), Treasure Chest Casino (Kenner), Isle of Capri-St. Charles (Westlake), Casino Rouge (Baton Rouge), Isle of Capri-Bossier City (Bossier City), Boomtown Belle (Harvey), Horseshoe Casino (Bossier City), Casino Magic (Bossier City), Showboat Star (Lake Charles), and Isle of Capri-Grand Palais (Westlake). The Louisiana Riverboat Gaming Commission may issue a maximum of 15 riverboat gaming licenses.

On November 3, 1992, Missouri voters, through a statewide referendum, approved legislation passed in May 1991 to allow riverboat gaming in communities along the Mississippi and Missouri rivers that approve it through local referenda. The Missouri Supreme Court ruled in November 1997 that in order to legally operate games of chance, including slot machines, licensed riverboats must actually touch the "surface stream" of one or the other of the two rivers. In November 1998, however, voters approved an amendment to permit the operation of lotteries, gift offers and games of chance (specifically, slot machines) on waterborne casinos in artificial spaces that contain water and are within 1,000 feet of the closest edge of the main channel of either of the two rivers. Currently, 16 waterborne casinos are licensed to operate in Missouri. All of them are permanently docked, and 10 of them are situated in man-made basins, at a distance from the banks of the Mississippi and Missouri rivers.

The latest state to legalize riverboat gaming, Indiana, did so in June 1993. Indiana's riverboat gaming law allows for as many as five gaming vessels on Lake Michigan, a maximum of five on the Ohio River, and one on Patoka Lake. However, Patoka Lake is under federal jurisdiction, and Indiana gaming authorities have been advised that gaming is currently prohibited there under federal law. At present, nine gaming vessels are operating in Indiana. They are: Aztar (Evansville), Majestic Star (Gary), Trump Casino (Gary), Empress III (Hammond), Grand Victoria (Rising Sun), Argosy (Lawrenceburg), Showboat (East Chicago), Blue Chip (Michigan City), and The Glory of Rome (Bridgeport).

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