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My daughter is currently employed by a US company on a cruise ship and holds a C-1/D 'in transit' visa.

When her ship goes into dry dock in Florida is she allowed to stay in the US for a holiday or does she need to apply for an ESTA - or does she need to fly out and then back in to the US on an ESTA please?

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If she will be leaving within 29 days after docking, she is fine. If not, she will have to apply for ESTA and be approved before she reaches the USA at which point she can enter on VWP where she will be allowed to vacation for up to 90 days. Changing status while within the USA can be long and problematic, as well as costly.

If she plans to apply for ESTA, she should apply at least 72 hours (3 days) in advance. Flying out and back into the USA is unnecessary in her case.

https://travel.state.gov/content/visas/en/other/crewmember.html

Crewmember (D) visas are nonimmigrant visas for persons working on board sea vessels or international airlines in the United States, providing services required for normal operation and intending to depart the United States on the same vessel or any other vessel within 29 days. If you travel to the United States to join the vessel you will work on, in addition to a crewmember (D) visa, you also need a transit (C-1) visa or a combination C-1/D visa

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