Cruise dock won’t solve problem of decline, says economist

(CNS): As Cayman voters prepare to answer the referendum question about whether or not the Cayman Islands Government should develop cruise berthing facilities, respected regional economist Marla Dukharan has presented a report challenging the idea that it would be the answer to the declining cruise calls.

At a Cruise Port Referendum Cayman (CPR) rally on Tuesday, Dukharan presented her latest findings, based on data supplied by the cruise sector, the CIG and other relevant regional and international sources, which showed that the project could be detrimental rather than helpful to the local economy.

Dukharan raised many red flags in the data analysis and warned that committing to a cruise berthing facility is likely to have a serious detrimental impact on public finances, given the very small contribution that the cruise sector makes towards the economy as a whole, its GDP and government coffers.

The report was not commissioned by either the government, which supports developing cruise berthing facilities, or the local activist group CPR, which is opposed. However, it confirmed many of the arguments that those opposing a berthing facility have made.

CPR invited Dukharan to present the findings before Cayman goes to the polls. The grassroots activist group does not oppose cruise tourism per se but does object to the idea of building a cruise dock. CPR has raised concerns that the open-ended referendum question that the government is asking is too vague and also illogical, given the complete lack of any information about what such a project might look like.

There are real concerns that a ‘yes’ vote would give the next administration a blank cheque to construct a multi-million dollar facility that would cause untold environmental damage, negatively impact the already inadequate infrastructure and bankrupt the public purse.

Dukharan’s presentation provided factual and concrete support for the arguments the CPR group has been making. She also challenged the government on whether or not it is actually asking the right question given the problem they are trying to resolve, which is to prevent job losses and protect small businesses.

With Cayman already deeply divided over the subject and the government backing the development of a facility as a solution in the absence of real data to support it, Dukharan warned that the polarisation is dangerous. She said the CIG must look more closely at real statistics and evidence, which show that berthing facilities are not the simple panacea that is being claimed.

The report, Beyond The Debate and Into The Data: Cruise Tourism in Cayman, paints a very different picture of the decline in cruise arrivals here than the tourism ministry’s position, which is that it’s because the mega ships now plying the region are sailing by.

She found that even destinations with cruise piers are seeing a significant decline in cruise calls, and the real-term spending of cruise passengers throughout the region has dropped. Overall passenger spending between 2018 and 2024 increased by just 3% across the region. Once that is adjusted for inflation, cruise passengers are spending far less today than they did six years ago before the pandemic.

The data from the cruise sector also shows just 11% of new ships being built are classed as mega ships. More than 39% of the next batch of ships are for smaller vessels carrying between 2,000 and 3,000 passengers.

Itineraries are also changing. Many of the mega ships offer four-day cruises, and Cayman as a destination remains outside those routes. In addition, cruise lines are continually deploying their ships elsewhere in the world, from the Arctic Circle to Asia, and the number of vessels coming to the Caribbean as a whole is declining.

Dukharan revealed a catalogue of other issues that are contributing to the decline in cruise numbers and warned that the solution the government is looking for won’t be found in a project that will merely enrich the cruise lines.

She also pointed out that there is not enough information outlining the exact number of Caymanian-owned businesses and jobs held by local people that are being negatively affected by the declining cruise numbers. Dukharan said she would discourage the government from spending millions of dollars to resolve a problem that has not been properly identified and could be addressed through other means.

The economist argued that there are other ways the government could help those who are at least partially dependent on cruise visitors for their livelihoods, such as helping trip operators get a better deal from the cruise lines and investing in the creation of higher-paying jobs for local people in stay-over tourism or other sectors.

These are some of the solutions that her report details that are cheaper and far less impactful than cruise berthing — a project that she says is not going to address the real problem.

Dukharan’s research shows that the share of sales from on-shore trips given to Caymanian operators is among the lowest in the region, even though Grand Cayman has some of the highest numbers of passengers booking excursions compared to other destinations. She said that cruise lines make four times more from the sale of excursions to passengers than the actual operators they contract with.

As voters consider the ‘yes or ‘no’ option on cruise facilities, Dukharan said the government faces many high-cost priority infrastructure projects that it must address in the short term, from the landfill to a new cargo port. She said many of these projects, which will impact the whole community, should be further up the agenda than cruise berthing facilities, given that the government has not yet conducted a proper cost-benefit analysis based on accurate data.

With other solutions available that could address the basic problem of tourism-related businesses at risk of closing and losing some of Cayman’s lowest-paid jobs, Dukharan was clear that she would “strongly discourage” such a project that would enrich the cruise lines but would not enrich Caymanians.

See Dukharan’s report in full on her website.

Watch the CPR Rally on YouTube below:

Check out the CNS Election Section interactive map to see who is running in each constituency.

See the list of candidates and their party affiliations here.

Tags: Cruise dock referendum question, Cruise Port Referendum campaign, Featured, Marla Dukharan

Category: Referendum