Dock backers warned ‘careful what you wish for’

| 03/04/2019 | 38 Comments
Cayman News Service

Cruise ships in the George Town Harbour

(CNS): The recent news that Carnival has created its own locally-based watersports and tour operator to divert business from long-standing Caymanian operators and funnel profits back into the cruise line’s pockets should serve as a warning to all those supporting the government’s proposed cruise berthing facility, the opposition leader has said. The move by Carnival may very well be copied by the other cruise lines that have entered into agreements with government to part-finance the project, leaving those who think the project will increase their profits high and dry.

Ezzard Miller told CNS this week that those small businesses catering to the cruise sector who believe that the development of the piers will result in more business for them should be careful what they wish for because the opposite could turn out to be the case.

Cruise lines are already taking more than 70% of the cost of excursions and in many cases squeezing operators to the bone, which is why many of them believe the only way they can make money is by increasing the numbers of passengers and the excursions they can run each day.

Operators have been told by government officials that the piers will see ships stay longer, giving them a chance to run more than one excursion per day, hence their support for the project. But there are no guarantees the cruise lines plan to alter their timetables.

The government has also centred its justification for the controversial development on this promise that more passengers in port for longer means more business for Caymanian operators. But the existing poor margins coupled with this new arrangement by Carnival could see things get worse, not better, for local businesses.

Tourism Minister Moses Kirkconnell has entered into a side deal agreement with at least three cruise lines, with more talks pending; Carnival, Royal Caribbean and Disney have all agreed to put up some of the financing for the project. While the terms of these deals remain under wraps, since government has refused to reveal the details and rejected FOI requests by CNS, it is understood that it is based on passenger headcount commitments and an increase in fees that they will take back.

But given that Carnival is likely to take a significant cut from the trips by partnering with just one local operator that the cruise line is financing, the other two cruise lines that have agreed to invest may also want to take the same approach as Carnival to ensure that their investment is returned as quickly as possible.

“We know that the cruise lines are only concerned about their own profits and not the impact on local operators,” Miller said, as he pointed to the constant squeeze on local businesses.

He said that many operators have already been pushed out by the larger hotels, which now will not allow any other water and tour operators to display their offerings in the resorts other than those they have franchise deals with.

And they are also already struggling to make a profit from the trips booked directly on board ships, given the tiny margins. Now Carnival is cutting off business altogether from the wider pool to steer all the business through what is essentially its own Cayman-based operator.

The opposition leader believes other cruise lines are now bound to follow suit, leaving the current operators who depend on cruise passengers for a large part of their business facing significant losses rather than gains. If government continues to cut deals with cruise lines as part of the project, their influence will increase, making it harder for government to prevent them from marginalising local operators.

“I believe our government has an obligation to protect local operators, especially as it partly funds the Land and Sea Cooperative, whose members are the most affected by the actions of Carnival and any other cruise lines that are likely to do the same,” he said. “This flies in the face of the claims made by the government in its promotion of the port project.”

Miller said government could act now and protect smaller operators by refusing licences to operators who partner with cruise lines’ spin-off companies, as he warned the operators calling for the port that it may all well end up being to their significant detriment.

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Category: Business, Tourism

Comments (38)

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  1. Chris says:

    Beware, if you love your Islands, you will have to protect them. Think carefully, what do you value most and what is best for their future and that of your family.
    Please consider developing the natural beauty and healthiness of island life, the exploiters will abandon you, as soon as you have been exploited!

  2. Anonymous says:

    People we need to not be distracted by CIG’s obvious attempt to inflate one issue to get us distracted from the others we’ve been fighting. Is it me or was there a dredger moved into the port?

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  3. mervyn cumber says:

    What you are missing, is that the cruise lines encourage you to come in “low” for your trip with the promise of huge number! It never happens! They insist you don’t have capacity, then you show them that they never sold enough tickets to fill your boat, but their little staff members disagree! It is all a very dangerous game, with all the Islands in the Caribbean selling their “souls” to the cruise lines, being business wise “prostitution”! They do not care!
    I do not need to be anonymous, my name is Mervyn.
    Thanks!

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    • Anonymous says:

      Good man Mervyn , you obviously speak from DonFoster experience. Do you know who the “local partner” is ?

  4. Anonymous says:

    You bunch of cry babies need to get a life!
    This is progress and we need it. Mr Kirkconnell, get that dock built now!

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  5. Anonymous says:

    What company?????!!!

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  6. Anonymous says:

    “the terms of these deals remain under wraps, since government has refused to reveal the details and rejected FOI requests.”

    That’s enough right there to tell us that someone is planning on making some big money on this deal. Guess who!

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    • WhaYaSay! says:

      I would not be at all surprised if, once the port deal is done, Kirk Jewelers is sold to Dart (my suspicion is the sale hinges on the port deal being done).

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      • Anonymous says:

        I agree. Kirk Jewellers in 15 years has gone from a dynamic expanding luxury business to one which is just waiting to be bought for its assets, trade connections, and goodwill. Yeah they go through the Christmas motions but it’s not the same. They sell fountain pens for thousands of dollars and one of their staff told me they don’t even stock the ink you would need to use it. They’ve checked out. There’s clearly a lot riding on the port that’s driving it. Whenever something in public life doesn’t logically add up it’s usually because there’s something you don’t know that if you knew it, would explain everything, and this is probably just one example.

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        • Anonymous says:

          Their stores are falling apart and looking very outdated. Just a matter of time till the Dart Group gets it and then knocks old Georgetown down and develops the new DartTown.

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    • Anonymous says:

      Guess who…?
      CHEC the previous fiasco, that’s who.

  7. Spanish Bill says:

    These plans have worked very poorly in the Bahamas. The Cruise lines transport tourists to their all inclusive areas and run their outings from there. Completely cutting out the local operators.

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  8. Tom says:

    Red sail sport are worst company who refuse have local business in the hotels or help local business. They should cut back not taking over the island!

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    • Ron Ebanks says:

      I cimcomplet agree with Mr Ezzard Miller .
      The disturbing words to the little small people in the Tourism , is that the Cruise lilin all want their investment back as quick as possible ,. The Hotels have squeezed out the little people out , and Government is sitting back and letting it all happen .

      What and who will stop the Cruise ships from squeezing the little operators out ?

      I believe that it’s time for the people to learn how to do something for themselves
      Rather than depending on someone else to do for them .

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    • Anonymous says:

      How can red sail refuse to “have local business in the hotels” when they aren’t a hotel?

      Red sail IS a local business what more help should they be doing for local business? Please enlighten us.

      I know for a fact that they are the most philanthropic watersports business on island so please take you petty complaints elsewhere!

      Stay blessed.

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      • Anonymous says:

        Because Red Sail invest in their business, staff and equipment. They purchase the appropriate licenses and they operate within the settled laws.
        Most of the so called operators in the water sports industry are cowboys who run dangerous and ill equipped vessels, employ untrained and in experienced ‘captains’ and crew, with a total disregard for the laws and regulations that they are obliged to follow.
        Personally, I think this pirate industry could do with thinning out and professional operators only allowed to survive.
        Then stop the cruise lines from selling tours unless 50% plus goes to the operator first, and insist that all remaining operators conform strictly to all regulations, including passenger capacity, safety equipment and standardised staff training and qualification.
        Without that, you are not qualified to be carrying fare paying passengers and should be prosecuted.

  9. Anonymous says:

    Who is the local partner?

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    • Anonymous says:

      From a post on another article, the son of someone that works at immigration or customs? I can’t even remember now.
      And who cares??? It’s a done deal just like all the other things on Dart and the government agenda.
      Now where do you think that casino will be located???

  10. Anonymous says:

    Those same fools that supporting this project, will be the same ones crying to the next government for help.

    They will be pushed out of the market to the point that they will be fighting over scraps.

    And no one will feel sorry for them.

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  11. Anonymous says:

    Will govt ever enforce the law that tour guides Must be Caymanians?
    Yes..it does matter. You would not believe some of the stuff tourists are told on tours!!

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    • Anonymous says:

      I do know some of the disgusting things Caymanians get up to at the Sandbar. Such as poaching conch, inappropriately handling stingrays and fishing. To say nothing thing of the shambolic boats they run and the uneducated idiots they employ.
      Caymanians are at the root of this issue.

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  12. Anonymous says:

    Just tak carnival out. Sign royal, disney, Norwegian, celeberity, Holland and call it a day

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  13. Anonymous says:

    ‘Cruise lines are already taking more than 70% of the cost of excursions and in many cases squeezing operators to the bone,’

    No they don’t, some context needed here. The cruiselines ask vendors to come up with a net rate for a tour which may be negotiated. The vendor agrees to a price before the cruiseline ever creates their retail price or ‘marks it up.’

    What really happens is every Tom, Dick, & Harry vendor approach’s the cruiselines and undercuts their brethren to get the tour and thus ‘squeezing each other to the bone.’

    Is there some guidance needed relating to the article, perhaps, but get fundamentals inline first.

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    • Anonymous says:

      What it means is for every $50 the visitor pays the cruise line for their trip the local operator gets $15

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      • Anonymous says:

        Yes but the point is the tour company has come up with that £15 per head and said to the cruise operator I can do it for that based on you giving me 100/200 etc pax per day. What they sell it for on the ship is their business. If the operator wanted more it has to set its net rate higher in the first instance.

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        • Anonymous says:

          You don’t even live here 2:42pm. If you did, you would know that we do not use £ here. You should also know that cruise lines use USD across the board in this hemisphere. So all dealings with them are in USD. The comment you replied to also used $ not £.
          Stay on point.

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    • Anonymous says:

      9:34 You haven’t got a clue about this. What happens is the cruise lines set a maximum amount they’re prepared to pay for something like Stingray City then play the operators off against each other to get it. They do that pretty much everywhere they visit throughout the world. The only reason they’re setting up in business here is to put more pressure on local operators to take unrealistic rates from them. This is something that watersports operators have been bitching about for at least the last decade because it lowers standards and raises serious safety issues.

      The last I heard the maths were running around $90-£95 to the cruise line and $18 to the local tour operator. The person who told me this stopped dealing with the cruise lines a long time ago and now concentrates on stayover visitors and local residents. He says it’s way more profitable and stress-free. Maybe there’s a lesson there?

      • Anonymous says:

        you may be right with the limited knowledge I submitted the comment, but what is particularly interesting is you have by your own admission stated that the local operators are willing to and engage in undercutting each other (albeit maybe indirectly) to get the business. Anyone can work for free, so if the margins aren’t there what is the point in staying in the arena… I don’t get it.

  14. Anonymous says:

    Before we knee jerk against it, is it simply 5 more busses among the already present 500, or are they bringing a fleet of 500?

    What exactly is the scale of competition?

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    • Anonymous says:

      @9:12 Scale of competition? It’s billion dollar corporations vs the man with a $40,000 loan for his bus to put food on the table. Now let your imagination run wild.

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      • Anonymous says:

        So, where is the petition for the referendum? That is taking far too long – Soon come?

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        • Anonymous says:

          they are working on the proper wording for a joint referundum to read.

          Do you support rebanning Gay marriage and support the building of a new Port?

          Yes
          No

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