Cruise spending down steeply

Cruise tourism expenditure took a slide in 2007 as total spending of cruise tourists fell by 41.6 per cent, according to the Government’s Annual Economic Report for that year.

The report notes that total spending for cruise tourism fell from CI$141.5 million in 2006 to CI$82.6 million in 2007, the result of an 11 per cent drop in cruise visitors and a sharp fall of 34.3 per cent in average spending per person.

Average spending per cruise passenger went from CI$81.40 in 2006 to CI$53.50 in 2007, according to Department of Tourism figures used in the report.

Member of the Cayman Islands Tourism Association Board representing the cruise sector, Bud Johnson of Atlantis Submarines said that with regard to the decline in average per passenger spending, he suspects that this could be linked with which cruise lines reduced calls here over the past couple of years.

‘I’ve a suspicion that it has to do with the demographic of the 11 per cent decline in arrivals,’ he said.

If they were cruise lines with higher-end clients with more disposable income to spend, then this could the reason for such a decline in average per passenger spending.

He noted that cruise arrivals are not all the same and businesses need to tailor their market strategies to the specific cruise market they are targeting.

He said that from his own business’s perspective, which is tour driven, they have not seen that level of decline reflected in cruise arrivals and their market share remains steady.

Secretary of the Association for the Advancement of Cruise Tourism Emma Graham-Taylor of The Image Group noted that the economic climate in the US probably has not helped.

Although the report does not break down demographically where the cruise visitors hail from, she believes it is safe to assume that the percentages are pretty similar to the breakdown of the stayover visitor to Cayman, with about 79 per cent from the US.

‘I think it is also clear that with the economic climate in the US cruise passengers are watching very carefully where they spend their money and it could be assumed that services that are included on their cruise (like food and soft drinks) are impacting on land expenditure more than before as this is where cruise passengers can save money on their cruise – by not spending in local food and beverage outlets,’ she said.

But without a breakdown of which sectors are reporting the largest downturn in revenues (retail/shore excursions/transport or food and beverage) she said it is difficult to actually qualify this.

Another possible reason Ms Graham-Taylor gives is that the cruise ships themselves are becoming more of a ‘destination’ and are offering on-board activities and services like never before. ‘This may also affect how many passengers actually come ashore and spend money in port,’ she said.

She states that the tendering system is also a deterrent to people coming ashore.

‘This can be seen in the discrepancy between the decrease in ships calls (18 per cent) and the decrease in actual passenger numbers (11 per cent) indicating larger ships carrying more passengers.

‘It is therefore much harder to disembark these large ships in their entirety in a timely way and acknowledging the larger the ship undoubtedly the more attractions on board it is offering its guests – wave riders, rock walls, pool side movies, huge gyms and spas, ice rinks etc.’

Ms Graham-Taylor noted that businesses also have to look inwardly at the product if they are to start analyzing the drop in expenditure. ‘Are we offering enough incentive for our cruise guests to part with their money on shore?’ she asks. ‘Is our product (retail/shore excursions/food and beverage) attractive, different enough and customer friendly as well as offering value for money and ease of safety of use? If we have to think too long about the answer to this question then we have the answer,’ she said.

Ms Graham-Taylor notes times are going to be even tougher down the road for tourism.

‘With the current happenings in the US economy this year this situation is only going to get worse and we have to get much, much better at what we do here in Cayman – in all areas of our tourism industry, if we want to survive.

‘The 79 per cent USA visitor statistic should be a very loud wake up call to anyone here invested in the tourism industry.’

A survey done on 19 cruise destinations by the FCCA for the 2005/06 cruise year showed that the average spending per passenger in the Cayman Islands was US$82.73, which came ninth in average passenger spending from the 19 destinations. The highest was the US Virgin Islands, at US$179.69 per passenger and the lowest Martinique at US$39.35.

In relation to that report at the time Chairman of the FCCA and CEO Carnival Cruise Lines Micky Arison said passengers were not spending as much in Cayman because they were waiting in line for tenders, making the crew busier also.

‘The process of tendering is unbelievably expensive to a destination,’ he said.

When asked for comments on the drop in cruise expenditure mentioned in the Government’s 2007 Annual Economic Report, the Florida Caribbean Cruise Association declined to comment on a report that did not come from them.