Inflation fuels increased cruise spending since 2018
(CNS): A new survey sponsored by the Florida-Caribbean Cruise Association claims that passenger spending in 2023-2024 across 33 Caribbean and Latin American ports of call has reached record levels. The cruise industry association said 33.3 million passengers and crew spent a total of US$4.27 billion this last year, an increase of 27% compared to 2018, the last year the survey was done.
However, this figure corresponds with the accumulative rate of inflation over the same period in the US, which was about 25%, and an even higher rate in the Cayman Islands.
The survey found that despite a decrease in headcount, passengers spent $161.5M in Cayman over the last twelve months, well over the average of $104.36M and the seventh largest amount of the 33 destinations reviewed in the survey.
Even as some cruise lines have begun diverting their larger ships to pressure this jurisdiction to build cruise berthing facilities, passengers still spent more here than in 26 other destinations.
However, this destination’s excessive inflation rate has wiped out any benefit that could have been derived from the increase in expenditure.
The survey also showed that what passengers spend money on is changing, an important indication that many retailers, including those in Cayman, are no longer appealing to the current generation of cruise shoppers.
The study found the amount of money spent on jewellery and watches fell by 26% compared to the 2018 study. Spending on local crafts and souvenirs also fell by 25%. Instead cruisers are spending more on trips and on food and drink.
Even though passengers spent more this year on trips than in past years, the survey shows that over 77% of the passengers visiting Cayman who bought excursions did so via cruise ships. Many local tour operators complain that their business is declining because the cruise lines are taking an ever-increasing chunk of the price of a ticket for an excursion, squeezing the amount they actually receive.
The study, Economic Contribution of Cruise Tourism to the Destination Economies, which was released this week at the FCCA conference in St Maarten, was conducted by Business Research & Economic Advisors (BREA) on behalf of the FCCA.
It also claims that over 94,000 jobs, paying more than $1.27 billion in wages, were generated as a result of the cruise industry in the 33 participating destinations.
However, the number given to BREA by this destination of jobs fuelled by the cruise sector is misleading. While the survey suggests that around 3,000 people were earning their living from cruise passengers, this number actually relates to everyone working in tourism, hospitality or related retail.
All of these jobs are also supported by stay-over tourists and residents. The government has not yet been able to say what percentage is supported purely or predominantly by cruise ships, nor are they able to say exactly how many of those jobs are held by local workers, though it is estimated that well over half the workers catering to cruise passengers are work permit holders.
Nevertheless, FCCA CEO Michele Paige claimed the numbers show what cruise tourism brings to the region and said the findings would “serve as the foundation of building further mutual success between cruise lines and destination stakeholders”.
The study measured direct spending impacts through passenger and crew surveys, cruise line spending for services and provisions, port revenues, and employment generated by cruise ship calls. Economic impacts were measured by collecting data from local government agencies, regional development agencies and international economic agencies to evaluate impacts on employment, wages, port fees and taxes.
See the overall survey here and the destination reports here.
- Fascinated
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I’m a stay over tourist and I do not spend $115. a day ( if you do not count the accommodations and rental car).
If I was doing crime analysis, I would take a look at that report and say “Houston, we have a problem”.
Every country, other than Cayman shows a passenger to crew member shore visit in the ratio range of 2-4 to 1. Jamaica, for example, is 1.4 million passengers to 548 thousand crew members.
Cayman has 425 thousand crew members coming ashore compared with 348.9 thousand passengers.
What is the reason for such a high ratio of crew members coming ashore in Cayman? Certainly not because they have family here or can buy things more cheaply here than anywhere else.
Are crew members on the cruise ships being used as drug mules to bring drugs into and/or take them out of Cayman?
$161 million works out at $436,000 a day,but half the days last year we had no ships. This is poppycock!
Why aren’t we worried about what happens to the Finance Pillar when the king’s FCO learns about $2 billion in Balance Sheet omissions? Where is that on the worry list?
CIG literally has no hard data to support any of their reasoning for a cruise ship pier. Their business case is unsupportable.
Always was. Its why the last project failed. They had an outline business case which made a number of assumptions to be checked by further analysis. When the additional assessments were done the initial case was sown to not be the real case and Govt saw the writing on the wall and pulled the proposal because the economic numbers did not support it.
There you have it folks, the goose is dead for Cayman. There’s no reason for tourists to open their wallets here anymore. Cruise tourism is a bust despite Kenny’s incessant whining that it really goes boom. Time to move on or these islands will be a bust with left with an expensive cruise pier and dwindling number of ships calling.
So according to Mac he will proceed with the cruise piers to justify 0% increase in revenue.
And the local operators are backing the cruise piers because they are tiefing 80%+ from them so larger ships means more tiefage and a greater loss to those businesses.
#legalizecommonsense
Refer to the OAG’s opinion on the Port Authority’s “transparent” books…they have never earned a clean report card.
This is a good piece and a good point. I personally am no fan whatsoever of cruise ships or cruise tourism.
That said, I am a big fan of big data so I’d like a lot of the holes filled in before we make any big decisions.
For example the big one is: what are they spending money on? Younger people tend to spend on experiences instead of things; so are there experiences we should be creating instead of selling keychains? Is there a way for those experiences to be more beneficial to our people than low-end retail? Should we be changing our retail models and would those changes be good for our people?
Things don’t happen in a bubble, so we can’t just say “inflation is doing xyz and therefor we don’t benefit and therefor we should do abc”
What we should be saying and asking is “this is the changing landscape of the industry and this is how we see it moving. Is there a way to move with it that benefits us and what does that look like?”
If the answer is “no we need to get away from it” then we need to get away from it. If the answer is “yes we can make this work better for us” then we do it.
Noted the highest age group of those doing the cruising to the islands I scanned were mid 40’s- mid 60’s. That is who should be targeted for their shopping, activities, wants while on an island escape holiday.
This is exactly why we need to decide what we want and not what the cruise ships want.
We have decide what is best for our island in terms of how we make money, traffic, infrastructure. And believe me there is lots to be desired, but we do not need to rush into making a decision about a cruise pier when a lot of the reasons for cruising are changing.
What is the point of arguing that walking off is easier for elderly when the whole of town is completely unsafe for wheelchairs or elderly. I’ve seen people using their motorised wheelchairs on the road because there wasn’t enough space on the sidewalk (if there was a sidewalk at all).
Cruising is fickle and we cannot meet this demand without first determining 1. is is the right thing for us? and 2. if it is the right thing, on what terms do we want it under?
Cruise lines should not be telling us how to build our house!
FCCA seems to own our minister for tourism because he is following the same lines ppm. Cayman has other more important priorities!
VOTE NO to any Cruise port project because it will financially cripple the Caymans. The cruise lines want all the leverage in your country. So many more cheaper or reasonable things can be done to improve the lives of your people without building piers.
So, in other words, no increase in revenue, and with higher wage drag, losses for operators. Another proof positive from the horse’s mouth that it’s time to transition those businesses and personal to other lines of work.
even if the economic benefits were greater, it’s not worth it for the country!
Lets focus on long term tourists, they too have a detrimental effect on our environment, but to a far lesser degree.
Well that’s not what it says at all. It says nothing about costs and wages. The eso reports would indicate that wages are not going up much if at all especially for operators paying minimum wage and using a gratuity scheme.
It only mentions inflation as a whole. Exactly how revenue and business expenses play off each other is not covered in any specific report.
Without looking at that data we are just guessing.
Inflation is a general increase in the prices of goods and services in an economy, ie. the CPI trend is derivative of patterns in cost of goods and wages.