First CIG report released on state of cruise tourism
(CNS): The Economics and Statistics Office has released a report on the impact of cruise tourism on Cayman’s economy, based on data from the Florida Caribbean Cruise Association, the Port Authority of the Cayman Islands and the Department of Tourism. The document looks at government revenue from cruise tourism, how much passengers spend while ashore, the jobs it supports and the anticipated decline over the coming years.
Some of the figures are imprecise estimates based on passenger information, the limited data that cruise lines are willing to share, or guesstimates about the future of the cruise industry. However, the report outlines a clear decline in Cayman Islands Government revenue from passenger tax and that fewer passengers will result in a drop in money being spent in the economy.
The report, released during a press briefing on Wednesday, is the first published document setting out why the UPM administration supports building some kind of cruise pier to prevent what Tourism Minister Kenneth Bryan said will be the steady decline of cruise tourism before it eventually “dwindles to nothing”.
According to the report, cruise passenger arrivals are expected to fall by 4.8% in 2024 before increasing by 5.2% in 2025. Arrivals then are projected to decline by an average of 5.2% annually in the ensuing years. Gross value added is projected to drop to $128.9 million, or 1.8% of GDP, by 2029.
The total supported jobs are projected to decline by an aggregated 19.3% between 2023 and 2029, dropping from around 2,580 jobs to 1,169. CIG revenue from cruise ships is projected to fall by an average of 4.3% annually after 2025.
The report begins the government-funded campaign relating to one of three questions voters will be asked: whether or not it should build an unspecified cruise berthing facility. Bryan has claimed that the campaign will be fair because it will present arguments for and against the idea, even though he and his UPM colleagues all support constructing cruise berthing facilities.
Those opposing cruise berthing say the environmental damage, the cost, the strain on infrastructure and tourism attractions, and the negative impact on overnight guests and residents amount to too high a price to pay for the limited benefits enjoyed by some operators and retailers.
During a press briefing on Wednesday about the report, ESO Senior Economist Ralstan Henry said that it was not possible to say precisely how many of the estimated 2,580 jobs relating to cruise tourism are dependent on cruise passengers alone, as almost all of them also cater to overnight guests and residents. A notable exception is the tender pilots, who would lose their jobs anyway if the piers were built.
The CIG is also unable to say exactly how many Caymanians are employed in the cruise sector, but the report concluded that the rate of employment for Caymanians in the retail sector overall is 43%, while 47% of those working in the excursion-related fields are believed to be local.
However, it is not known how many of these workers are also supported by overnight visitors and residents or how the imbalance toward permit holders may prevent the loss of any jobs held by locals. The government is also unable to say how much the cruise lines take from the price of the excursions they sell and how much is left for local tour operators.
The statistics show that spending by cruise passengers was already in decline in 2019 when the highest number of cruise passengers visited the Cayman Islands in the country’s history. The total amount spent by passengers on Grand Cayman fell to $166.8M from a high of $178.1M in 2018.
Since then, this figure has declined even more to just $132.8 million last year. However, given how the cruise sector is changing, it is difficult for the CIG to justify the claim that the piers will return spending to previous levels. Cruise ships already do all they can to keep passengers on board for as much of the trip as possible, and they are now adding more private islands to the call schedule, dropping traditional ports.
Constructing piers would allow passengers to get on and off ships more easily. This means they would be much more likely to return to the ship for a free lunch instead of spending money in a restaurant or bar on shore.
Nevertheless, the report gives the public an idea of how the CIG sees the economic impact of declining cruise tourism, what it means for the public purse and the broader impact on GDP.
But as the sector gradually declines, it is impossible to say how many Caymanians will lose their jobs or small businesses, especially as the tourism ministry expects an increase in overnight guests in the coming years.
Over the last few years, the number of new hotel, condo and Airbnb beds being added to the country’s room stock has increased significantly, and three more hotels are expected to open over the next year or so.
Speaking about the report, Bryan said it showed that over time, the continued reduction in cruise calls to Grand Cayman will cause severe negative impacts on the economy “through the loss of millions of dollars in revenue” as well as the loss of Caymanian jobs and Caymanian-owned businesses that support the cruise sector.
“As a government, we believe that building a pier would be in the long-term best interest of the Cayman Islands, as it would sustain our cruise tourism industry for years to come,” Bryan stated. “However, this is not a decision that the government intends to make alone. We want to hear from the people what their perspective is, and that is why having a referendum on this issue as soon as possible is vitally important.”
He said that the Department of Communications has developed a draft plan that will be expanded to cover all three subject areas in the referendum. The campaign will provide balanced information on the pros and cons of each issue, he said.
Bryan added that there will be a televised national debate between individuals standing for
and against the cruise pier, allowing both sides to articulate their respective positions. A video will be produced highlighting the pros and cons of all three referendum questions, and a website will be launched to serve as a central hub for all referendum-related information alongside information on social media channels.
“It is vital that every Caymanian, regardless of how they choose to access information, can find the answers they need. I cannot stress enough how important it is that everyone is fully informed before heading to the polls,” he said.
“I am also aware that the public has lots of questions, such as questions about the economic impact of the cruise industry and about Caymanian employment in this sector, among others… Rest assured, we will continue to engage with the public, answer your questions, and ensure that you are fully equipped to make informed choices,” the minister added.
See the report in the CNS Library and see today’s briefing on CIGTV YouTube below:
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I think of cruise as visitors who drop in for day to sample what we offer here, before returning as overnight tourists. Half the condo owners along SMB were probably first introduced to our Country as a result of cruise, or a friend’s recommendation stemming from cruise. We want to find a way to build those cruise piers and keep tourists and investors of the future interested in orbiting back here for an overnight visit.
Cruise piers are not the solution for Cayman.
The beaches are gone, and there is nothing left for the cruise passengers to do it seems. Where do they go now that Indigo and kimpton have assumed the main public beach? Calico Jacks is gone and Royal Palms has fallen into the sea…so how does all this help cruise line passengers?
Where does the minister expect them to go or do? Building piers means they walking back on for the lunch they already paid for during booking.
Typical – there is no consideration given to having a cruise sector based on very high end 100 – 500 passenger cruise ships that carry passengers who might buy more than a made in China $5 souvenir.
The impact of losing the cruise sector was demonstrated during Covid. The economy did well, the public beaches were accessible by Caymanians,
the environment began to recover, traffic in the downtown core was manageable, stress levels were down – I say don’t build the cruise port now and re-evaluate the situation in 25 years…. or maybe never.
Poor Kenny is the master of double talk he must think the public are as crazy as him
Terrifying that Kenneth Bryan is anywhere near anything of this scale given his ineptitude and lack of education.
FOLLOW the $$$$
Allowing the cruise lines to bully CIG into building piers will be a grave mistake for this country.
It is absolutely disgusting to see CIG dancing like captive monkeys to the organ grinders of the local duty free and concession owners. The fact that CIG cannot even provide precise numbers to back up the flimsy business case shows you that the entire dock scheme is built on muddy grounds and murky depths. The cruise industry simply does not warrant the massive expense and environmental dangers associated with an engineering project of the scale being demanded.
The UPM/PACT stooges and their pretend King of the Ocean Sea Kenny B need to be voted out. And the higher ups in the administrative sector of CIG, from the Governor and DG to the COs need to step up and start acting as something more than rubber stamps for the politicians.
not too much different than asking tobacco companies if smoking is bad for your health..
“But as the sector gradually declines, it is impossible to say how many Caymanians will lose their jobs or small businesses, especially as the tourism ministry expects an increase in overnight guests in the coming years.”
This is all I need to see. CIG knows exactly what these numbers are but it does not support their narrative. The jobs lost will be WP holders.
Bottom line, the cruise lines want to go to the Cayman Islands simply because it attracts potential cruisers as part of the itinerary. What they make on excursions etc is nothing more than the gravy beyond the cruise ticket price and us the servers.
Focus on stayover and eco tourism.
Good riddance to the cruise ships.
References to Caymanians employed in the cruise sector appear grossly exaggerated. Holding an RERC or even a “Cayman” passport, does not mean you are Caymanian!
Even many of the Caymanians in the industry are recently imported foreign citizens. How some of them became Caymanian is in itself an issue.
If the government cannot give us accurate numbers we should not be entertaining them.