Max E. Lambie, Contributor
CRUISE OPERATORS have dropped their prices to the point that they are taking away business from the stop-over sector.
A Cornell University study predicts only a two per cent annual growth in Caribbean stop-over arrivals for the next decade, whereas the cruise shipping is projected to grow at an 18 per cent rate.
Even the proposal to create land-based casinos might not be able to compete with the cruise megaliners.
A dramatic 40 per cent increase in Jamaica's cruise arrivals this year must also be tempered, however, by the decrease in those who exit the ship.
This is the all-important figure which is never given by the Jamaica Tourist Board (JTC). That figure should be modified further to reflect those who disembark and spend nothing.
There is a bright spot in both stop-over and cruise-passenger arrivals, however. The expenditure on ground tours and attractions has jumped. It must also be remembered that cruise shipping shore expenditure circulates in the economy twice as much as the hotel revenues, based on its multiplier factor.
Unfortunately though, cruise shipping is depressing stop-over revenue by at least 15 per cent annually.
The bottom line is that the stop-over sector will be losing business to the cruise sector permanently and irretrievably. Even the gambling market is going to the cruise ships and so is the shopping market. Jamaica's answer to the loss of stop-over revenue is to maximise the shore expenditure as is being done by opening more attractions.
Jamaica should never even think of a "common strategy" as has been suggested in an article of September 7 in The Gleaner by Janet Silvera "Common Policy needed on region's cruise industry".
The article is prompted by a Washington-based organisation, that I have never heard of before, that champions "sustainable tourism".
UNINFORMED CHARGES
Why is it that both the self-appointed and the regulatory environmental critics have been given the tacit authority to stymie the tourism industry by uninformed charges?
In this case the unknown Lelei LeLalulu of Washington, D.C attracts the support of the president-elect of the Caribbean Hotel Association and St. Lucia's Minister of tourism.
A number of Caribbean officials including Jamaica's Wykeham McNeill also agree that there needs to be negotiations on a regional basis. He is further quoted: "There are some things on the table from CARICOM". The article also mentions that there was a "joint ministerial decision made in New York", which the article does not say when.
It goes on to explain why a so-called joint approach is necessary in their opinion. They cite the history where Grenada levied a modest tax of US$1 on cruise shippers only to have the cruise lines pull out. The unknown Mr. Lelalulu also complains that there are reports that some Caribbean destinations 'were reneging' on the unspecific 'joint ministerial decision'.
This writer was at convention in San Diego, California, in the company of the chairman of Sandals who made a very aggressive speech to the cruise lines. The chairman called on his audience to be receptive to the appeals of the destinations.
A year after, I sat in on a similar unsuccessful meeting in Cancun between regional officials and the Florida cruise shippers.
At that time, this observer was thoroughly on the side of the destinations. I have just now learnt the realities about the economics of the industry. As a result, I have made a 180-degree change in attitude. Here are the new realties:
What matters most to the cruise operators is how the destination motivates passenger sales. They have enormous database statistics on this factor and the all-important parameter is passenger appeal".
No two destinations have the same passenger-appeal at any particular time. These market-pull figures vary month to month, too.
There are four routings. There is the north-west circuits those homeports in Miami and comprise Chetumal (Mexico), Cayman, and Ocho Rios. The eastern route home-ports in San Juan and goes to US Virgin island, Guadeloupe, St. Lucia and Grenada.
There are two minor routes. Miami to the Bahamas and Miami to Aruba.
The most important parameter in the economics of cruise shipping is that the market appeal. Moreover, the cost of the eastern cruise is greater than Jamaica's route, as the fly-and-cruise requires the extra airline fare to go to Puerto Rico. Some 60 per cent of the passengers boarding at Miami arrive by road.
Each sector has to negotiate independently. It may be that Jamaica's route may even receive a more receptive ear from the FCCA as Jamaica is in a stronger position than the eastern Caribbean.
Jamaica can get even better compensation once it ties down its attractiveness. The eastern Caribbean depends on head-tax whereas Jamaica needs to maximise on-shore spending.
Jamaica should secure its position in the cruise market before Cuba opens when the laws in the United States change to allow cruise visits.
Jamaica should be reminded of the debacle that occurred when we initiated the bauxite protocol we were the losers.
Socialist Cuba has vaulted ahead of Jamaica by having a more capitalistic outlook on tourism than Jamaica. Reference is made to the Business Week article of March 17th 1997: "Castro's Capitalist". Does Jamaica notice that the Bahamas, Dominican Republic and Cuba develop their policies independently?
