Cayman operators get terrible deals from cruise lines
(CNS): The decline in cruise passenger numbers in the Cayman Islands isn’t the only problem for people working in the sector, according to a new report by regional economist Marla Dukharan. The report shows that, compared to tour operators at most other destinations in the region, those here are getting a smaller slice of the pie from the cruise lines for the on-shore excursions they provide, even though the ships sell more trips in the Cayman Islands than in many other ports of call.
Dukharan has been lauded by local government leaders for several years because she has often said that Cayman has the best run economy in the Caribbean. However, in her report, she raised a number of red flags over the CI government’s desire to build cruise berthing facilities because, she said, the numbers don’t add up and it would not be worth the cost.
While passenger numbers for the Cayman Islands are dropping — as they are around the region — local operators are missing out on the profit to be made from the passengers that are still coming here because of the large proportion of the profit from sales that the cruise lines are taking. An operator might now get as little as US$47 for a trip that is sold to overnight guests for well over US$100.
Dukharan said that building piers to try to boost passenger numbers is unlikely to be the answer to the problem of operators’ falling profits. She has warned that Cayman’s successful and well-run economy could be harmed by such a project because the data the government is using to justify it is both flawed and inadequate.
In her work, using data from the Cayman Islands, the cruise sector and economic information from other regional and international sources, she demonstrated that the decline in cruise passengers is fuelled by a number of factors. She found that the problem the CIG is trying to solve could be addressed through other means, as there are no guarantees that constructing piers will be the panacea.
The conclusion in a recent ESO report that Caymanians and Cayman had lost millions of dollars because there was no cruise pier is not justified. The office did not establish a direct link between the two or consider all of the other factors demonstrated in the wider data that are contributing to declining passenger numbers across the region.
Cruise ship numbers are declining throughout the Caribbean and not just in Cayman. 65% of ports that have developed costly cruise facilities are still seeing a decline. Changing trends, the redeployment of ships elsewhere around the world, the emergence of four-day cruises, a drop in overall passenger spend and other changes are all impacting what Dukharan has said is an industry that is becoming a “declining star” when it comes to categorizing its economic status as a sector.
The economic expert has argued that if Cayman wants to tackle the problem of job losses and the closure of small businesses because of a decline in passenger numbers, there are other things that can be done to help instead of costly piers.
In her presentation of the report to the CPR rally this week, she said there was not enough data available for the ESO to establish direct causation of no pier equals a decline in passengers. “If 68% of countries with cruise piers are seeing declines, you can’t say that we are seeing declines because we don’t have a cruise pier,” Dukharan said.
A critical problem for Cayman that she has identified is the poor deal operators have with the cruise lines. Dukharan said the CIG could do much more to help operators get a larger share of the sales for the excursions they provide to passengers who buy them through the ship. According to industry data, “shore excursions” is the largest purchase that cruise visitors make when they visit here, with 59% going on a tour, higher than the Caribbean average of 58.4% last year.
“Sint Maarten, the Bahamas, and Cozumel, all with cruise pier infrastructure, recorded lower proportions of cruise passengers purchasing onshore excursions,” Dukharan notes in the report, calling into question another one of the tourism ministry’s claims that with a pier more people have more time to take more trips.
However, it is the share of the cash taken from trips that local operators get from the cruise lines that caused Dukharan concern. She explains that the effective price of a shore excursion is about US$102 per party, and each party averages 2.1 people, equating to US$48.60 per person for an average excursion in Cayman.
However, she said that this is a fraction of the cost per adult that the stayover tourists pay to operators here for their various activities and tours. When Caymanians sell directly to visitors, they earn almost twice as much per party, demonstrating how much the cruise lines are pocketing in profit.
“I think this is unfair to tour operators,” she said and suggested that someone in the Department of Tourism should help tour providers negotiate for better compensation from the cruise lines, which are making some four times more profit per head from their passengers when they pull into port than anyone here is making.
See Dukharan’s presentation on YouTube below and her report here.
See a related story in the CNS Election Section here.
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Everyone will decide for themselves, and I had already decided to vote “NO” on the cruise piers before reading this article. The article confirms that I made the right decision.
Is this lady coming to Cayman (or has she already been)? I’d like to attend her presentation and shake her hand!!!
Our MP’s focus should be on improving the tourism product in Cayman. Not bringing more unsustainable mass tourism!
Our tourism product is the worst it’s been in my 40 years of life!
It would be interesting to know who has Kenny’s ear and pulling his strings. He doesn’t have any data to prove his arguments. At least now we have some factual information instead of the fear mongering.
Kenny’s motivation is to be re elected, so he is doing the bidding of his GT merchants pushing for piers, and funding his campaign to do so.
As the new Mac, he is also aware of the rewards that would flow his way, if the piers construction contact is strategically awarded.
In other words, Greed and self interest are his real motivation, and “I’m doing this for my people”, is his cover story.
As a former tour operator I have attended many Caribbean Cruise Conventions since 1995. Operators from all the Caribbean Island nations and ourselves complained about the share in the rates charged on board for tours. The Cruise ship companies ignored the complaints and will continue to do so. I might add there is always an operator on Island who breaks ranks with the consensus and undercharges rates that have been agreed by every one else.
It is a spiraling circus.
Agree. What we have to keep in mind is that Grand Cayman is a necessary waypoint in almost all of the Carribean cruises; they need us far more than we need them. Thus, we should not be courting them, hell no! We should be negotiating better terms for those in GC who interface with the cruise passengers. A useful Cabinet would do exactly that; they would have the people’s best interest at heart. That would also likely negate the need for a cruise port, because it doesn’t do anyone any good to unload thousands of passengers, other than government’s head count.
“Necessary waypoint”.
So even if we don’t add piers, they will still come , because we’re necessary.
Good to have your confirmation that piers are not needed.
Did Kenny read her reports or he is insisting the piers are good for Cayman?
Minister Bush told them the piers are the way to go and that CHEC or AmeriCaric=be are the best options to build it.
Can Kenny read?
He is insisting that piers are good ,….for him, his election prospects and his image as the new Mac.
He totally ignores that to achieve all that, Cayman will have to borrow a further $450,000,000…plus interest, plus the costs of maintaining the piers. Cayman’s debt will reach one Billion dollars.
Irresponsible self serving decision makers are dangerous , and the cost of piers will heap suffering on our already fragile economy .
Kenny … read?!
Bwahhahhaaaaaa
”she raised a number of red flags over the CI government’s desire to build cruise berthing facilities because, she said, the numbers don’t add up and it would not be worth the cost”
Yes but the kickbacks make all the difference for those spending our money
Unfortunately Caymanian has less to offer than our deluded ministers believe. Overpriced and basic attractions = disaster. Remember the live bands at royal palms back in the day etc etc. Nothing in the way of happy live entertainment in town or along the beach just idiots fighting over loungers and ganja supplies and inflated food and drinks on offer. It soon gets around. Wake up before it’s really too late Cayman.
Yes it was fun, pleasant, easygoing for everybody. Now, it has a become rude, dsrespectful, money grabbing, over trafficked, over populated, no beach, dumped government disaster.
I would like an economist to check on the high prices of fuel and cost of living? How about if she could do a report on this vital information for the country. The CPR said they were nonprofit? So she came from wherever for free to make a report based on all of the caribbean cruise industry port? This would be very interesting. If our cost of living was on par of the rest of the caribbean we would be making a lot of profit.
The cruise ships cost hundreds of millions of dollars, they have a very large amount of staff to maintain their ships, etc, etc. Our costs are a lot because of greediness. Businesses we rely on for water, electricity, health, medicines are not made here but have to brought in. We pay much higher prices because of the size of the population compare to islands around us. So of course those other ports make more profit. People in the Bahamas, Turks and Caicos pay medical insurance from their government and I have been at health city and have seen them with chemo for three months and heart surgery all covered by their government. The cost is spread across their population and their government is not making a profit. Their premiums are a couple of hundred dollars per person. If we look at our system we would probably die if we had to wait the companies to pay for the same thing.
Went to Panama and their cost of living is one third of ours. Minimum wages are US$3.00 per hour. Rent is US$80 for a smaller apartment and electricity is US$80 per month with A/C. So their contract with a ship would be higher but what about the distance? Are they including travelling time from the ports to the attractions? Probably!
Mexico has many cruise ship ports on both sides Caribbean Sea and Pacific Ocean. They are now going to charge US$42.50 per person in port fees because they need to engage their army against the cartels those port. Carnival will probably stop going there. Was that in the report ??
Other islands like Martinique got an issue with English speaking guests because they didn’t speak French and refused to serve them. Cruise ships pulled out and their Government changed their decision because they need US dollars. Was that in the report?
I can go on and on or you can do better research. But one has to understand there is another side of this story that is being blocked because we don’t like cruise ship tourists because a small of group don’t like change. We have been denied for 30-40 years infrastructure to improve our industry. Spotts looks like crap for years we asked for tents so guests could be protected from rain and sun. We treated these people with no empathy? Why? two ships in Spotts were too much coming off tenders? CPR what excuse are going to pull out of the mist for this one???
Any business will try to get the lower cost to make more profit. If you accept that price thats your fault.
Mr Murray Mitten tried to get people to stay together and unite on pricing but they wanted it all for themselves so they are different companies that make more and their are companies who make less. So if you only took a few of the disgruntled who charged less, whose fault is that? Did you put that in your data?
Look at how much more you are understanding in these two letters ? More to follow.
Another reason for declines in some islands is police clearances can be bought and so on those islands. The police know they will have issues like selling drugs to the guests they will be blocked them from businesses on the port. We know that to be true because people going to those islands complain about it. They claim if they go back they will stay on the ships and not visit the islands. Did you include that in the data?
if we go to a vehicle dealer to get service and the price is over CI$100 per hour and a person we trust tells us we can do that job for $50 an hour are we unfair to the higher price company? The same technician works for the company for $15-25 per hour. But if he comes in the evening and can make $50 per hour is he making a profit, of he is. But the greedy puppy is not starving he is still doing well. They call that supply and demand, Capitalism at its finest. We can pick any business and will come back with the same scenario.
If the government doesn’t build a port somewhere in Cayman we will slowly close all these attractions. If they charge more and more with a lower volume they will cease to exist. What should these people do to pay their existing loans on houses and equipment along with buildings lacking stores and shops? No problem sell it to Blackrock, state street, Vanguard or some other entity like them. what will they do with it? build a park, cafes, 20-50 story buildings, what any ideas? So again what will we do for these people??????
I think you are confusing CPR a NPO organisation for the government. The government is responsible for maintaining and upkeeping. If there are not updates and basic things like public restrooms and tents for shade, that’s the government’s job to do.
CPR is questioning the need for a pier given the costs and the environmental impact. I don’t know why you are calling them a small group of people, when they have over 2.7K followers on facebook. ACT has 400. On top of the fact CPR got 25% of the total electorate at the time (2019) to sign a petition for a people’s initiated referendum. That’s approximately 5,200 people.
Read the report, she’s not making up data, she’s reviewing the data that is out there and making conclusions on that data. She specifically said at the beginning of her report that it was not paid for by CPR. She came as part of Cayman Finance’s economic forum and stayed to make the report. C’mon.
Anyone can say whatever they want from ignorance, but try to educate yourself. Read the report, read the news articles. It’s not hard.
VOTE NO!
Marlas bigger point on questioning to focus on this when you have an unmanaged dump, terrible traffic, unmanaged finances high cost of living, and an eroding beach is the right one. Cruise operators have sharp teeth and the government will get bit.
How much is the economist being paid and by whom? Enquiring minds want to know.
Enquiring minds would like to know who actually benefits from a mega millions port.
The contractor will never tell you who benefits, but we know their best friend and Mini-me will be rewarded, and The Chinese will own us eventually.
The politicians and fronting agents for CHEC and Americaribe.
Read the report! Not paid for by CPR. Shows how impartial it is!
To quote Jack Nicholson. “You can’t handle the truth”
Another win over emotions, lies and half-truths by Marla!
Kenneth Bryan stares at phone screen reading story..
Shrugs..walks away….
Conjuring a rebuttal.
reading or just looking at the pictures
He doesn’t even know the meaning of the word rebuttal, let alone how to put it in a sentence.