What’s in it for the cruise lines?

| 04/09/2019 | 40 Comments

Mario Rankin writes: As the petition verification process nears to an end, the first ever people-initiated referendum is imminent. Caymanians will make the decision on the largest capital works project in our history and not a political agenda.

This participatory democracy couldn’t have come at a better time. In the last year, we’ve seen numerous publications by the government, on every available social media/news platforms to try and convince us that cruise berthing is the only way our tourism product can survive. They’ve gone as far as to pay to spread misleading “facts” such as:

  1. It will create 900 new jobs
  2. It will make us more competitive
  3. It will save our cruise industry
  4. It will bring more passengers
  5. It will cost 200 million
  6. It will be paid back in 25 years
  7. It won’t cost the Caymanian people a dime
  8. We will get it back in 25 years

I could list a few more misleading reasons, however I must stay focused on the next few paragraphs, which will illustrate exactly what is taking place right before our very eyes. Please pay close attention.

In the earlier part of this year, the government was quick to inform us that two other cruise lines had made a commitment to help finance the piers, banking on the optics of how it would resonate with the tour operators and other locals, who are not fully aware of the true details.

When the preferred bidder was made public, we found out that Royal Caribbean International and Carnival Cruise Line were a part of the Verdant Isle Group, who won the bid. We later found out that Royal Caribbean International and Carnival Cruise Line made it very clear they didn’t want any other cruise lines being a part of this investment.

Now, if one didn’t care about the survival of our islands’ ability to secure a future for the next generation, then that very interesting turn of events wouldn’t show up on their radar. However, for those of us that are very cued into what is going on, I must make the following facts public and ensure people are aware, so when it’s time to vote on this issue we understand what’s at stake.

Let’s dive straight into the details.

1. Reasons for Royal Caribbean International and Carnival Cruise Line not wanting any other cruise lines involved with the berthing facility is so they can continue to control the cruise market in the Caribbean. Some interesting facts to digest: 60% of their global revenue comes from the Caribbean region and 35% of the entire cruise industry comes the Caribbean, so make no mistake, they need the Caribbean to survive because this is a billion dollar industry.

2. The Cayman Islands tourism product is a vibrant industry that is flourishing with record-breaking numbers every year because of our uniqueness, plus clean environment, along with a low crime rate. This allows us to be a premium destination and why cruise lines call to our port. However, we have heard some really disturbing statements by our own government saying ‘it’s all at risk’ if we don’t build a berthing facility.

3. Here’s the breakdown: Royal Caribbean International and Carnival Cruise Line’s only objective is to have a port to park their Oasis-class and above ships. Please don’t forget, there are many other cruise lines out there that call to our port. They are largely responsible for our current success and won’t be able to use the piers once “the Big 2” are allowed to finance them. Those are the cold, hard facts.

4. When looking at other jurisdictions that have entered into public-private partnership with these two companies, you will find there’s never a happy ending, where that country enjoys the host of so-called benefits that were promised prior to the agreement. We should look closely at the proposed terms of re-payment for their investment into our port.

That 25 year payment plan that is being promoted by the government and cruise lines isn’t exactly what it seems. Here’s why: In the absence of a guarantee from “the big 2” to bring the desired number of passengers required for the re-payment of the cost of their investment, this can become very tricky.

If we are unable to pay back the cost within that allotted 25 years due to unforeseen circumstances, like bad weather, we can see that 25 year turn into 30 or even 40 years, and that won’t be in the best interest of the Caymanian people. This is why it’s so important that our government share the information, in full detail, on what agreement they have in place with these two cruise lines.

5. After much reading and research, I have come to the belief that Royal Caribbean International and Carnival Cruise Line are simply buying out our cruise industry, with its clear agenda and with the government’s consent. The writing is on the wall, it’s been there the entire time. When you look closely at all of the pieces of this puzzle, it becomes crystal clear what’s truly at play here, and that is that they are

  • Making sure they are the only two investors that finance the port
  • Making sure they collect and control most revenues from berthing head tax etc. for as long as it takes to repay
  • Controlling the cost of all pre-booked tours by their companies, creating an unfair advantage to the other people operating tours without a pre-booked contract with them.

This sounds more and more like another Falmouth!

6. This a full analysis of what is written on the wall for all to see. It’s deliberately designed to be confusing to us all, with shallow promises of jobs and economic growth in an already thriving industry that doesn’t need a berthing facility to maintain its success. It’s only to further secure their stronghold on cruise tourism industry in the Caribbean, which accounts for 60% of their global revenue.

Please take note that there is very little to zero conversation or information being circulated in any of our own government pro-port campaigns about any of the other cruise lines that aren’t owned by the Big 2. Why is that? They are just as important to the numbers that we post annually of cruise passengers that visit our island.

I will end with this last revelation of what is actually happening. The government claims that this investment will be repaid mostly with the monies generated by the tender fees, $5.20 now. Here is where it gets tricky once again. If that is in fact the case, does that mean that if the other cruise lines that are not allowed to use the piers decided to “pass us by” and those passengers that would have potentially contributed to the head tax revenue that pays back the investors are lost, wouldn’t this clearly create a major concern with the timeline of 25 years to re-pay the players in this arrangement and put our port at risk of staying in the ownership of a foreign entities for a much longer period?

This new port isn’t to increase the headcount and subsequently create more jobs, or generate more revenue for the Caymanian people, this is to give them full monopoly of the cruise industry.


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Category: development, Local News, Viewpoint

Comments (40)

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  1. Anonymous says:

    All the locals love to complain about Dart and how he’s over developed the island. Well here is YOUR chance to stop another major money making corporate who cares nothing about this island, our people, our culture, and preserving anything of our environment BEFORE it’s too late. Listen to logic. Because if you vote to go ahead with this awful idea you are destroying the last bit of Cayman and you have no right to ever complain after. The power is in your hands NOW.

    WHAT ARE YOU GOING TO DO? Destroy what little is left of your home to make some massive corporation richer? We are all doing well enough. We won’t be better off. Trust me.

  2. Anonymous says:

    Like the :”North Star” leader controlling Alden?

  3. Ron Ebanks says:

    I think the 900 jobs would be work permits and 200 Caymanians put out of business and that would be smallest dowñfall of the pier project for the Caymanian .

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    • Anonymous says:

      Can someone tell me if a Hurricane like Dorian hit the proposed port would the port survive? Do the engineers know? Apparently with global warming we in the Caribbean are going to get bigger hurricanes in the future. Sure would be good if someone can give an answer before I take my vote in the referendum.

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  4. Anonymous says:

    Mario: Even if we were to generously assume everybody wanted this, on any big infrastructure project the catalogue of lifetime project “costs” is lengthy, and “construction” can be one of the smaller line items overall. Irreversible enviro degradation, knock-on stayover/resident impacts, passenger guarantee make-up payments by CIG, running costs (continuous marine dredging, insurance, marine pilots, engineers), and the decommissioning cost can each be many times more than the initial construction cost. We haven’t honestly tabulated the FULL COST LIST and gone through each one, line by line. That needs to happen.

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  5. Anonymous says:

    If you are hooked to Sailing La Vagabonde channel, don’t miss their CRUISE SHIPS. 7 Reasons NOT to go! episode https://www.youtube.com/watch?v=P1CRFN3qzBs

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  6. Anonymous says:

    Lovely and informative post!!!

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  7. Anonymous says:

    I am sorry but if given a choice I will believe the Indians over the pilgrims.

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  8. Anonymous says:

    A lengthy article, albeit very recent, provides some insights to the conversation around cruise ships and ports.
    https://www.hakaimagazine.com/features/leviathans-in-the-harbor/

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    • The More You Know™ says:

      “A Leviathan (Hebrew) is a creature with the form of a sea monster…” – and difficult to control once unleashed. Great article title! Fits perfectly.

      It’s a most excellent article showing the not so great side & overall bad effects these very large super ships can inflict. Thank you for providing the link. It was an opener for sure.

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      • Anonymous says:

        I found it helpful because it succinctly captures the realities of the industry with many timely and appropriate examples as to why consumers, ports, and countries should rethink whether they want to be further in bed with these corporations or not. The fact that Key West chose not (via referendum) to widen its channel to accommodate larger ships was of particular note.

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    • Anonymous says:

      Those who are giving the article s thumbs down, would you please share what part of the article you disagree with? Is it the part about the ships producing huge emissions? Dumping waste at sea? Or the fact a popular port of call held a referendum to NOT cater to the larger ships? Or should the ports be ‘grateful’ to have these large vessels, registered to nations with poor employment laws, to visit Cayman to sprinkle some money around on their. Terms? Care to share?

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  9. Swim to the Key says:

    Interesting commentary. Thanks. But I’m more concerned with rising ocean waters. We’re probably going to need a cruise ship to get off the island if global climate changesaren’t made within the next 12 years or so (impacted for the better).

    This week we can see the effects of Tidal surge due to Hurricane Dorian access the Bahamas, just like we experienced with Ivan in and around Grand Cayman. If a moving storm can make an island disappear from heat radar because the land is totally submerged underwater andddrenched for extended periods, imagine what 20 feet of non-receding sea waters will do.

    Wikipedia states:
    ‘The aphorism “a rising tide lifts all boats” is associated with the idea that an improved economy will benefit all participants…’

    Indeed, sometimes this is true. But in rising ocean waters terms, so will anything else that floats. Yikes! The big new dock isn’t going to help in either scenario.

    Most of us will be dead by the time mother nature takes back the islands, but what of those who remain and see it happening in real time. 😞

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    • Anonymous says:

      The article above posted in the comment above yours speaks rather clearly to the environmental impacts of the cruise industry- quite staggering to say the least.

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  10. Anonymous says:

    The cruiselines are busniesses, not not-for profit charities. Of course they want to make money.

    Our government has struck the best deal ever heard of in the Caribbean. Every other country has had to give their shirt, full control forever of the ports to the cruiselines and investors, build their own shops etc.

    This is the first time in history that a country has been able to negotiate a short term use, cruise line funded port development where the country ultimately holds the upper hand and gets the most benefit from the development.

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    • Abys says:

      We are the 75% who will vote yes and enjoy the holiday.

      If the majority *really* didn’t want it, it would have taken a month to get the required signatures.

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    • Anonymous says:

      It might be the best deal in the Caribbean (unverified), but that’s not saying much. The build costs are being presented as around $200mio, which is largely irrelevant as what we are giving up for the next 25 years is somewhere between $650mio and $900mio, that number does included the upkeep. What exactly do we get for that? A dock that benefits who? Who in Cayman actually needs a dock, cruise passengers might have an easier time getting on and off, but being bloody minded, so what? Also what do we end up with at the end of 25 years, something that’s worn out and needs rebuilding, or something that’s contractually bound to be returned in A1 condition?

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      • Anonymous says:

        Well said. It wont cost us a thing! Except all the revenue for 25 years!

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      • Anonymous says:

        The cruise port deal IS the best deal in the Caribbean – and if you can find a better one go right ahead and tell us about it! This is the FIRST time that Royal and Carnival have EVER agreed to work together to build a cruise terminal and the first time that there wont be any upland development included in the deal.

        What you evidently don’t understand is that ‘WE’ the general public are not giving up anything. WE are not paying for the piers. WE are not taking out any loans. WE are not paying for the upkeep and general maintenance. And since WE are not the ones facing the bank for a loan OR putting up our own money, what business is it of ours how much interest the bank makes on this deal? That’s between the developer and the bank. If you have a mortgage, check how much you borrowed and how much you’re paying back. Same with a car loan or any kind of loan. The bank ALLWAYS gets back more than it lends.

        And as for your comment about what we get back after 25years, you’re misinformed on that score too. The deal includes the developer maintaining the piers for 25 years. That’s why its called Design, Build, Finance and MAINTAIN.
        If the piers get damaged in a hurricane – they repair it at THEIR cost. If something wears out and needs replacing, they replace it at THEIR cost.

        These are just some of the reasons why this is being called the best deal in the Caribbean. NO other island has been able to negotiate anything near as close to the benefits WE have secured.

        Its obviously the bread on your table isn’t dependent on cruise so no matter how good the deal is, you can afford to be ‘bloody minded’ and say ‘so what’. But for those of us who DO depend on cruise, this is a GREAT DEAL and we support it!

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        • Really ???? says:

          We don’t want this kind of deal Donald.

        • Rick says:

          The reason it is the best deal in the Caribbean is due to the resistance from the local populace being experienced. That should tell you something. Cruise tourism did not put the CI in a position to think seriously about rejecting the port; stay-over tourism did. And we are seriously thinking of destroying the competitive advantage tha the CI have in relation to stay-over tourism. I cannot honestly think of a single plus in this deal for the CI but it is very clear that it is a net negative.

    • Anonymous says:

      Is 25 years considered short term?

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    • Anonymous says:

      You did not read the fine print.

      The passenger tax is being reduced by US $2.32 PER PASSENGER..

      Using last year’s passenger numbers, the Cayman Islands will collect US $4.2
      million less per year, US $110 MILLION over the next 25 years.

      Yet still government says.the dock is not costing the Cayman Islands a dime.

      UCome on government, stop taking us as fools, stop lying to us, start telling us the truth.

  11. Sunrise says:

    The only concern for these two cruise companies are the amount of money and business that they can generate for themselves, to hell with the locals!!! We can never let these cruise lines have control of the cruise economy for these islands!! I don’t know what the hell the minister of tourism is really doing to destroy the little that we now have left from the tourism trade!! Please people, let us show them who the real GOVERNMENT is!!!

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  12. Anonymous says:

    Thank you Mario for the facts!!!

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    • Anonymous says:

      Can we support the development of an Oil Refinery on the North Sound, anyone?

      It truly takes all types😰

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    • Anonymous says:

      What facts? Mario just makes statements and says “these are the facts” but in truth most of the time what he says is fiction rather that fact. Facts can be verified, but Mario’s version of fact usually goes like this: “I know this for a fact, but they will never admit to it…”

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      • Anonymous says:

        I noticed that. He says ‘pay attention’ then asks a question. He says ‘here is a fact they don’t want you to know’ then asks a question. I kept reading for something…never came

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  13. Anonymous says:

    It looks like part of the island is being given to Royal Caribbean and Carnival Criuise and the other half sold to the Dart Corporation Destroyers of our Beloved Isles Cayman. That should be the epitaph of this unity government and their hangers- on.

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  14. Anonymous says:

    Will the government respect democracy for the peoples will or ignore freedom like Britain is doing it’s own nation?

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  15. Caymanian anti port says:

    If the port goes through, which I don’t want it. A condition they should agree to is that every Caymanian gets a free 2 week cruise in a suite every year for the next 25 years at a location of our choice.
    Until this is agreed, my mind won’t change.

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    • ThIs WrItInG Is VeRy IrRiTaTiNg says:

      Building cruise ship piers is not the answer for the tour operators. If the government really wants to help the tour operators they need to tell the cruise ship companies to significantly increase the amounts they pay them for the tours booked by their passengers through their online systems. It makes no sense that the cruise ship companies keep the majority of the fees for providing an online platform to book tours. The tour operators are the ones taking all of the risks. Any cruise lines that do not want to give the operators a fair split should be banned from stopping here. The tour operators don’t need more volume they need a fair split of the fees paid by the passengers.

      We need to reduce the number of cruise ship passengers coming here not increase it. Our attractions are already over capacity and deteriorating rapidly.

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      • Anonymous says:

        12:17: Well said! 🙂

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      • Anonymous says:

        Unfortunately we don’t have the bargaining power to change those terms. The cruise lines would just say ‘fine, we aren’t coming then’. Calling their bluff would be risky. They know how to manipulate much bigger governments than ours.

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        • Anonymous says:

          The government cannot negotiate this only the operators can. So, operators, get together and sort it out if this is so important. If you go down the road of “we just need more tourists because the price keeps going down” it’s better to change the market dynamics to empower the operators. This dock just gives the cruise lines more power and control over the pittance they pay the people running the tours and like the commenter said, take all the risk.

    • Anonymous says:

      You’d sell the country out to the tune of $500m for a 2 week cruise? I’ve got some magic beans for sale if you’re interested!

    • Now that's a sweet deal says:

      LOL. 1 A.M.

  16. Anonymous says:

    Very sobering thoughts shared in the VP. This project sounds like financial and political suicide.
    Why is the government desperate to do this project no matter the costs? They are not being honest with the public. There is more to this story than they wish to share.

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    • Anonymous says:

      Because embedded in those construction costs will be plenty to go round for those who made it happen.

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