Is the Caribbean’s On-Island Resort Sector Being Crushed by the Cruise Industry?
In this week of the ALIS CALA annual Caribbean hotel investment conference, I found the latest report by the World Travel and Tourism Council, titled “Cruising For Impact”, to be highly pertinent – if rather biased. Given its significant reliance on data from the Cruise Lines International Association, the report read more like a P R exercise for the cruise industry. There may be areas of the world where cruise lines still provide valuable benefits to local communities. However, over recent years, the opposite has become true in the Caribbean. The current business model of the cruise lines has become decidedly exploitive of the region with significant longer-term negative impacts on the region’s on-island tourism development, particularly, for existing hotels and new resort projects. While my role over more than two decades involves Caribbean resort development, I have previous early experience of three years as a hotel officer on board cruise ships and, later, as Hotel Services V P for four explorer cruise ships. I believe that gives me a well-founded viewpoint in evaluating how passenger spend, operating costs and taxation applies to the cruise industry in the Caribbean, compared to the stay-over visitor tourism of island hotels, condo rentals, timeshare and marinas. Today’s giant cruise ships have large scale leisure facilities on board including multiple restaurants, bars and shops, as well as casinos, spas and water parks, which all now present a direct disincentive to spending time – and money – in Caribbean ports. Ships now ban bringing duty free liquor on board in calling ports – on “security” grounds. Ships have their own jewelry and electronics shops on board. St Maarten is still one of the more successful cruise calling ports for retail outlets but, even there, the size of the duty-free retail sector in Philipsburg has shrunk considerably in recent years, thanks to direct competition from onboard shops. Ships’ commissions for shore excursions have risen over the last few decades from 10% to 50%. That inevitably drives shore excursion prices significantly higher, as local companies struggle to operate vehicles and boats on a viable basis. The end result today is that a smaller percentage of passengers actually go on excursions and an increased ratio of passengers never go ashore at all in many Caribbean ports. On that basis, any attempt to compare “spend per hour” from the reduced percentage of cruise ship passengers going ashore against the spend of longer-term stay-over tourists on the islands is fanciful. The average spend per cruise ship passenger, quoted in another recent “cruise friendly” article at $165 (over $30 per hour ashore), seems very dubious. Average cruise ship ticket prices have declined in real terms over recent decades, attracting more budget-oriented passengers. After having to haggle with cruise ship passengers over the fare, most taxi drivers in the Caribbean will tell you - from their personal observation – that the average purchase per person ashore is more like “two beers and a tee shirt”. How does that start to even compare
Share
