Retailers and restaurants in George Town are experiencing harsh times due to the very slow cruise summer and continuing lack of berthing facilities.
And stakeholders have warned that further closures of establishments may be inevitable.
Recently-released statistics from the Cayman Islands Department of Tourism revealed that the amount of tourists arriving by cruise ship during May, 2011 was 91,909 – the worst figure since 2000 and a 20 per cent drop on the same month in 2010.
This drop was not unexpected and is based on a mix of factors including the continued lack of progress on the mooted cruise berthing and the redeployment of cruise ships either out of the region, or to ports that can handle the new mega-ships such as Royal Caribbean’s Oasis-class vessels.
“We are very concerned,” said Chamber of Commerce chairman James O’Neill.
“We are a big supporter of doing the port and separating the cargo from the cruise. Now more than ever we need to come together, sit down and do something. We need to get it done, first and foremost, let everyone know where we are going and make a decision.
“That will go a long way with the folks in Florida [such as the influential Florida-Caribbean Cruise Association] and make it much easier to ensure we are included on routes going forward.”
Indeed, there is a consensus that the continued delay on the cruise berthing project is negatively affecting Cayman’s merchants.
“Really and truly, right now, George Town is going to die unless there is a port,” said Robert Hamaty of the Association for the Advancement of Cruise Tourism.
“Even when they make a decision to start we are almost four years behind the ball. You can buy a cruise two years in advance and it would take two years to get it built. This Island, right now, is probably 10 to 12 years behind the cruise industry. Everybody else has upgraded – three in Mexico, two in Roatan, Falmouth, the whole Western Caribbean itinerary – and we are getting left behind.”
The nature of the industry, he added is that in the case of Royal Caribbean, two of the smaller ships have been deployed elsewhere and replaced by an Oasis-class ship, which cannot dock at Cayman due to the amount of time needed to service them by tender.
“The cruise lines have left the Oasis-class ships in the region for the summer,” added Hugh Treadwell of the Cayman Islands Tourism Association.
“But they do not come to Grand Cayman and as a result in Cayman we get hit twice. There were a lot of ships pulling out of the Caribbean and Cayman this summer [and the large ships are visiting] Cozumel, St Thomas and St Martin, helping to stabilise those destinations’ summers. By us not having them here it is incredibly painful; the numbers would be bad enough even with those ships, but without them it is brutal.”
These factors are all impacting on businesses related to cruise tourism, said Hamaty, but there are also wider implications to the drop in cruise numbers.
“In the old days, Cayman never suffered from a foreign exchange shortage when all the other destinations did. That was our heyday, but those days have changed now – the competition is very, very strong.
“When you look at the cruise industry in Cayman it is not the dive operations, the merchants, those alone which are suffering. [Tortuga] used to employ 120 people and now we are down to 105. Every shop, not only is there a cashier there but there is also a supply chain, from the warehouse on, it is a lot of people which depend on the cruise industry. We are fighting for our employees,” he said.
According to Gene Thompson, the cruise tourism industry-related businesses probably hire a greater cross-section of Caymanians than any other sector.
“There are more independents; the taxis that serve the cruise industry are primarily separate and independent and are suffering big-time [for example].”
For the ordinary worker, noted Treadwell, there are often immediately-felt issues from reduced footfall through the retail, restaurant and bar outlets of George Town.
“In the areas of watch and jewellery most of those people work on commission and food and beverage work on tips so fewer people means less sales, less commission, less tips. It makes it very difficult for those staff to deal with their fixed expenses – this affects everybody.
“For business owners, all our bills are the same and we have to keep the power on, keep the lights on and do all of those things, keeping the back office infrastructure going. It is tough on cashflow for the owners and the staff. At the end of the day there’s less money for [employees] to eat out, to shop, to buy groceries,” he said.
James O’Neill added that the Chamber of Commerce was aware of Cayman’s potentially stronger status in comparison to other destinations, but cautioned that there was also a wider picture to view.
“We are fortunate in that we have a financial service leg to stand on but other places who rely on tourism do not have that. But, we cannot rely on that forever. We have to take the initiative and be serious; we have to get these things done and the port is the top of the list.
“We had a great winter season with a lot of people travelling and now there’s the slowdown. Globally, it is not like the economy has rebounded. That does not help anyone, including our tourism product. So we need something that is better and helps people to come back here. Part of that has to be a modern port facility to attract them,” he said.
O’Neill added that there was a great deal of concern amongst cruise-related businesses.
“Some people are cutting back, some people are actually thinking of closing down, and it is serious. If you go downtown now there is a serious issue there. It cannot just be one party or one group [working towards a change]; George Town is too important. The negative knock-on effect is tremendous if we do not address this.”
Retailer Caren Wight of Jingle Shells said that retailers were just “keeping going and hoping for the best”.
“We try to work our businesses as hard as we can with the least amount of staff that you can use and just hope for something [happening] in the future with new cruise ship berthing. There are a lot of people hanging on and it is not a good position to be in; we all have families and our own commitments. It is hard to look to the future with optimism.”
Memorandum of Understanding
During June, 2011 Premier McKeeva Bush announced he had signed what was described as a ministerial memorandum of understanding with China Harbour Engineering Company, which will build or expand cruise berthing facilities in George Town, Spotts and a pier at Cayman Turtle Farm in West Bay. He said the intent was to work toward signing a contract by November.
Bush told the Observer that the government has repeatedly warned that without a facility cruise numbers would continue to decline.
“ [The] government is, and has been, doing everything possible to ensure we secure the best deal possible and move forward with the cruise berthing project in a timely manner. In the interim, we are having discussions with the FCCA to ensure that we still keep a decent number of cruise arrivals until the new facilities are available.”
The Association for Cruise Tourism said that in the interim period between any new work, there are things that can be done to improve the visitor experience at the current facilities.
“We need to fix what we have right now, so that when the piers are built the [cruise lines] want to come back. If we continue to frustrate them they will not want to come back because of what they have experienced over the last three to four years.
“The Florida-Caribbean Cruise Association is involved with Royal Watler and loaned the money to pay for it; they have an interest and are not going to sail away from Cayman. We have to work on it now; things like putting someone in charge of Royal Watler is of paramount importance. We have one chance to make a first impression on a tourist,” said Hamaty.
O’Neill of the Cayman Islands Chamber of Commerce said it remains committed to discussing these issues with government, the private sector and stakeholders.
“We cannot put our heads in the sand and pretend that if we say nothing then everything will come back to normal and everything will be fine. That is not acceptable. We have to offer something that is not normal when you go to these different ports of call. We need a facility that can receive mega-ships where people can get on and off easily.
“But that’s not all; we need to rethink the whole downtown area. We have to do something about traffic, we have to do something about the whole product so that when people come here they have a good time. Every time people come here, walk around and see what we’re like, they see how different and special the Island is. We have the North Sound, East End, Seven Mile Beach – people can do those different things.” O’Neill said the lines of communication between the private and public sector were good but that talk was not enough.
“Everyone is saying the right words but now we need actions. Time is slipping away. The ramifications [of not acting] are not good; they are all negative. If you think about what we were able to do after Ivan all by ourselves, why can’t we get together and do something about the port? It’s astounding.”