Federal Maritime Commission calls for changes to cruise refund regulations

The Federal Maritime Commission is proposing a number of changes in refund regulations governing cruise operators and how they provide refunds in the event sailings are cancelled. 

The changes were proposed in an interim report published July 27 by the commission following a fact finding mission established April 30 after numerous complaints over the time cruise companies were taking to provide refunds after the US Centers for Disease Control (CDC) issued a no sail order in mid-March that shut down the industry. 

“Commissioner Louis E. Sola has proposed the Federal Maritime Commission initiate a rulemaking to amend its regulations governing Passenger Vessel Operators (PVOs or cruise lines) in order to create a uniform standard for non-performance of transportation and to make clear how passengers may obtain refunds,” the Federal Maritime Commission said in a statement. 

The statement said that Sola had determined that the FMC’s refund regulations do not adequately define what constitutes nonperformance of transportation. 

“Our analysis revealed that, for the most part, consumers are satisfied with the responses they have received from the PVOs concerning the cruises cancelled due to the CDC no sail order,”  remarked Commissioner Sola.  “That said, we discovered some places where we, as a regulator, could improve our ability to protect the consumer; that is why I propose amending the Commission’s rules related to non-performance and refunds.”

Commissioner Sola proposed that the Commission interpret nonperformance of transportation to include cancelling a sailing or delaying passenger boarding by at least 24 hours.  He also proposed that the Commission modify its regulations to make clear how passengers may obtain refunds under a PVO’s financial responsibility instruments, such as surety bonds.

“This proposal benefits both the consumer and the industry, it is a product that everyone affected can and should embrace,” said Commissioner Sola.

The Federal Maritime Commission is proposing a number of changes in refund regulations
The Federal Maritime Commission is proposing a number of changes in refund regulations
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Refund Regulations – The specific changes proposed are:

  • When a sailing is cancelled or a passenger boarding is delayed by at least 24 hours due to any reason other than a governmental order or declaration, full refunds must be paid within 60 days following a passenger refund request.
  • When a sailing is cancelled or consumer boarding is delayed due to a governmental order or declaration, full refunds must be paid within 180 days following a passenger refund request.
  • If, following a declaration of a public health emergency, any consumer cancels a cruise booking of a sailing that may be affected by such emergency after the PVO’s refund deadline, but the sailing is not cancelled, the PVO will provide a credit for a future cruise equal to the consumer’s amount of deposit. 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.
  • A PVO may set a reasonable deadline for a consumer entitled to a refund to request the refund which shall not be less than 6 months after the scheduled voyage.
  • Refunds should include all fees paid to the PVO by consumer to include all ancillary fees remitted to the carrier by the consumer.
  • Refunds to be given in the same fashion as monies were originally remitted to the carrier.

The Commission will vote by mid-August on whether to initiate rulemaking to prescribe the measures proposed by Commissioner Sola.  

Royal Caribbean cuts refund time

Earlier in July, Royal Caribbean noted that it had cut its average refund time down to 23 days after guests had reported that refunds were taking as much as 45 days and sometimes even longer.

“We want to report some great news, and that is that our average refund is twenty-three days,” the company’s Senior Vice President, Sales, Trade Support and Service, Vicki Freed, told travel agents during a webinar.

In late May, as the global shut down of the cruise industry due to the coronavirus pandemic hit with full force,  Royal Caribbean issued an apology, for delays in refunds, saying that it was “very sorry”.

In a statement issued at the time, Royal Caribbean’s Associate Vice President of Guest Experience, Aurora Yera-Rodriguez, said that the company had initially estimated that refunds would take 30 days, up from seven to 10 days during normal times, but due to an unprecedented volume of refund requests a backlog had accumulated and refunds were taking up to 45 days.

“Please know that each and every request is receiving the same level of care and dedication. And rest assured, your refund will be honored and it is coming – it’s just taking a little longer than expected and we’re very sorry about that,” Yera-Rodriguez  said.

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