Port records more than 2 million cruise visitors: Research: industry overstates spending per cruise passenger

POSTED: 01/6/15 1:25 PM

St. Maarten – On the last day of 2014, the Oasis of the Seas docked in the cruise port, bringing the estimated total number of cruise arrivals for the year 2014 over the historic 2 million mark, at 2,000,864. Minister of Tourism and Economic Affairs Claret Connor honored John and Marleen Tharpe and their three granddaughters from Columbus, Georgia, as the 2 millionth-passengers. The family received a commemorative plaque and a free cruise for two people.

The Tharpe-couple visited St. Maarten on two earlier occasions, but for their granddaughters it was the first time.

Whether the island really received more than 2 million cruise passengers remains to be seen, because the estimate is based on double occupancy. The port said in a press release late on Wednesday evening that the exact numbers would be released next week.

In 2013, St. Maarten received 1.7 million cruise passengers. According to a 2012 study by Business Research & Economic Advisors the average spending per cruise passenger in St. Maarten is $185.40.

The same study showed that crewmembers on average spent $135.50 and that the industry generated 8,123 direct and indirect jobs and $159.8 million in employee wages.

It is of course tempting to multiply those 2 million-plus cruise passengers with the average spending the business Research-study found. That way, the local economy would take in $371.7 million this year.

But a report in the British Daily Mail suggests that a whopping 21 percent of passengers do not leave their cruise vessel at all when it is at its destination. This would mean that of the more than 2 million cruise arrivals the port recorded this year, only 1,580,682 set foot on land to spend their $185.40. That would bring the total revenue stream for the local economy already down from $371.7 million to $293 million.

The Daily Mail reported in July of last year that the main reasons for cruise passengers to stay on board are the abundance of free food and drink as well as “bad weather or a lack of interest.”

Bad weather will obviously not hit many cruise visitors in St. Maarten, but the lack of interest is an issue that requires attention. It signals that the on-land experience must be attractive; otherwise these visitors take a rain check.

There is also enough to say about the average spending number the port presented in its press release. Studies in the United States and abroad make one thing clear,” the website of Be Smart Savannah reports. This is a grassroots organization in Savanna, Georgia, that has its doubts about plans to build a cruise terminal. “Industry statistics and economic models grossly overstate cruise passenger spending and ignore the competition the cruise ships themselves bring in controlling how and where their passengers go.”

The website notes that the cruise industry’s economic models and industry surveys “portray its customers as new business opportunities that the cruise ships bring to the city merchants’ doors.”

The site describes, from cruise industry publications, how the cruise industry wreaks havoc on local merchants. It offers sponsored tours that passengers pay for onboard, while recommended shops and restaurants “must kick back a percentage of their revenue from passengers for the privilege of being cited.” There are also cruise ship duty free shops that undercut the prices local merchants ask. And then there are the “entirely separate cruise port enclaves that mimic the local scene but never let cruise passengers outside their fences.”

All these initiatives, Be Smart in Savannah points out, “ensure that local spending is far less than touted by the cruise lines’ promises.”

The United Nations Environmental Program (Unep) addresses the “enclave tourism” the cruise industry has created in an analysis. “Local businesses often see their chances to earn income from tourists severely reduced by the creation of all-inclusive vacation packages. When tourists remain for their entire stay at the same cruise ship or resort, which provides everything they need and where they make all their expenditures, not much opportunity is left for local people to profit from tourism.”

The site furthermore notes that “especially in the Caribbean (the world’s most popular cruise destination with 44.5 percent of cruise passengers), guests are encouraged to spend most of their time and money on board, and opportunities to spend money in some ports are closely managed and restricted.”

A study by the Department of Economic Development of the state of Connecticut quotes the International Council of Cruise Lines stating that, on average, a 2,000-passenger ship with a crew of 950 generates approximately $180,000 in on shore spending per US port.” That put per-passenger spending at $82, and the spending per crewmember at $17. Actual surveys however, showed that the actual spending per passenger ranged from $32 to $76 – an average of $55.71.

While this particular study dates back to 2004, and the numbers have in the meantime undoubtedly changed, the fact remains that the number put out by the International Council of Cruise Lines was already at the time 32 percent higher than actual spending. If this still applies today, actual on-land spending in St. Maarten would not be $185.40 but $126 and put the total spending for the 79 percent of passengers that leave their ship for 2014 not at $293 million but at $199.3 million. A respectable number, but way below what the cruise industry wants people to believe.

Be Smart in Savannah arrives at this conclusion: “The facts from non-industry sources, including research-based analysis rather than general economic models, make clear that the actual economic benefits from cruise passenger spending rarely meets the industry’s asserted levels, nor do they in some cases come close to off-setting the significant public costs associated with hosting cruise ships themselves.”

All this was not on the mind of port officials in Pointe Blanche when they celebrated the arrival of the (possible) 2-millionth cruise passenger of the year on Wednesday evening.

There were seven cruise ships in port on New Year’s Eve that carried between them more than 14,600 passengers. The visiting vessels were albatross (536 passengers), Celebrity reflection (3,046), Oasis of the Seas (5,400), Prinsendam (790), Seven Seas Navigator (490), Thomson celebration (1,254) and Ventura (3,100).

Supervisory board member Renald Williams said during a champagne toast that cruise tourism has challenges to deal with due to the opening up of Cuba and its proximity to the United States. “The main priority in the New Year should be to keep cruise passengers happy so that they will continue wanting to visit St. Maarten,” Williams said. He gave Minister Connor a commemorative plaque to mark the occasion.

“What you do every single day is very important for the country and the development of its people,” Connor said, adding that he felt proud of the achievement. He congratulated everyone on behalf of the Council of Ministers.

The minister said that St. Maarten is ‘a trendsetter” and that it will have to look for “innovative ways to stay at the top.” Looking towards the future, Connor spoke of “marking the 2.5 million-mark a few years from now.”

Port St. Maarten invested $2 million in the Down Street cruise heritage development project next to the Walter Plantz tender jetty. The project is still under construction. It includes a square with six cabanas to be used for bars or restaurants, arts and crafts stores, bathroom facilities and  lockers. The square will be accessible for handicapped visitors and there is parking for five taxis and for other cars on the beachside and around the area. A small splash pool for kids and a fountain illuminating 30 different lights at night are also part of the project. The square will have 24-hour security.

The port claims in its press release that cruise tourism generates one third of the country’s gross domestic product.

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