Cruise lines make millions from turtle farm

The cruise industry makes around $1.7 million in annual profits from selling tickets to the Cayman Turtle Farm at a 100 percent mark-up to passengers.

A report by PwC on the economics of the tourist attraction concluded that while the heavily subsidized venue is unlikely to ever make a profit itself, it is a significant source of revenue for cruise lines.

Roughly 70 percent of the farm’s visitors come from cruise lines, particularly family-friendly operators like Disney and Carnival.

The report suggested government’s subsidy of the venue could be justified by its wider economic benefits to the tourist industry.

Part of the rationale for that judgment was speculation that if the cruise industry was unable to make such large profits from the turtle farm, it would seek to make them elsewhere – potentially putting the squeeze on smaller independent tour operators.

Ticket sales have always been an important source of revenue for the cruise industry, but the extent of the profit margin the industry garners from the loss-making turtle farm had not been publicized prior to this report.

According to the consultants, Cayman Turtle Farm ticket pricing data suggest a mark-up of around 100 percent. The market power of the cruise lines, which essentially control a huge portion of the farm’s customer base, is cited as a major factor in keeping wholesale prices low.

The consultants conclude, “In simplistic terms, this simply enhances profitability to the cruise lines and as such would have no wider economic impacts for the Cayman Islands.

“However, interviews with the various Cayman Islands industry participants indicate that, in the absence of this margin on Cayman Turtle Farm tour excursions, the cruise lines would likely seek to recover these returns elsewhere, possibly through either squeezing wholesale prices or raising retail prices on alternative attractions and transport.”

The report provides insight as to how cruise lines operate – making their money by acting as a broker or ticketing agent for island tour operators.

It appears to suggest that the Turtle Farm is acting as a buffer, protecting smaller operators such as Stingray City boat captains, from harsher margins.

“With the closure of Cayman Turtle Farm, the cruise lines would seek to recover profitability possibly through sales to alternative attractions, or through downward pressure on wholesale prices for remaining attractions,” it states.

The report adds that the relationship works both ways. The cruise lines are able to steer vast numbers of tourists to the farm. However, it points out that even with a vast increase in visitors, the farm will not break even unless it significantly scales down the size of the operation.

The turtle farm, along with Stingray City, say the consultants, give the Cayman Islands a somewhat “unique offering” in comparison to the dolphinariums, water parks and shopping excursions seen elsewhere.

It suggests the turtle farm is important to the cruise industry and features heavily in their marketing of cruises through the region, potentially even influencing tourists’ decisions to choose a cruise itinerary that offers Cayman.

“To an extent, there is a symbiotic relationship between Cayman Turtle Farm and the cruise lines, as the farm represents the second most popular attraction in the Cayman Islands and is therefore a significant draw in the cruise lines’ marketing of their itinerary, as well as a significant source of the cruise lines’ all-important margin from tour sales in the Cayman Islands,” the report says.

1 COMMENT

  1. Well there you have it. The profit Margin for the Cruise lines is surely more important than the sustainability of the CTF to the Cayman Island economy. The whole report to me just seems like a ploy to justify a huge mistake in judgment for whoever decided to invest so heavily into the attraction. It cannot be compared to the Stingray City attraction with doesn’t cost the country millions every years to operate. If visitors are interested in the turtles an attraction focused on that would draw just as much attention. I recently visited Barbados and they have a swim with the Turtles tour that’s very similar to Sting Ray City where they are observed in their natural environment, not a bunch of sickly turtles crammed into small bacteria infested pools shell to shell. And for those who love the meat I’d take this into consideration the next time you eat a turtle steak..

    A much better choice would have been a privately owned Water Park for the amusements. While the turtle farm could have been elsewhere in a protected lagoon type setting more closely matching their natural environment and as for the little Bird sanctuary part at CTF, they could have easily enhanced the existing Bird Sanctuary. Both of which would have created jobs.

    I don’t care what any report trying to justify this place says, it was a huge mistake, a failure and to this point is still a huge waste of public funds.

  2. It’s no surprise to me to hear that the cruise industry makes millions off of the turtle farm ticket sales. They also make a great deal off of Stingray city tours, A cruise ship is a money making entity. It’s a shame that our leaders have allowed the cruise lines to come in and demand what they want, control the price market and are allowed sell excursions such as Stingray City tours for $85 and when it comes down to the operator, their share is $7-10 per head. This is the lowest per passenger fare I have personally seen in 15-20 years, yet the cost of everything has risen for the people that live here???? (fuel, insurance,maintenance, various inspection fees and permits and the cost of living. How is this possible? I’ll tell you, there are too many Caymanians fronting for outside investors, Caymanians will not unite for a common cause which is our lively hood and our heritage. Without unity we have nothing. What you end up with is boats being operated by people who have no idea of what they’re doing on the water, who are responsible for peoples lives, visitors having a less than memorable time (sometimes scary) careless and unprofessional behavior which puts others at risk, the tourist, staff and the stingrays. This happens all because of greed. We must remember, when the stingrays are gone,there gone…. Keeping this in mind, it’s the passengers that book their cruise destinations, they want to come to Cayman because of what we have and our people, granted they are delivered to our shores via cruise ship, but by no means should the cruise lines run the show. We are the ones with the product that is in demand and we should have some say over what is to transpire. On another note, should the cruise lines contribute to the new berthing facility, what do you think the chances of a local business being anywhere near that facility. If you have no idea, I’ll help you… ZERO!!!!
    There must be a change.
    Thank you.

  3. @ Capt Parchment,
    i can agree with your crabs in a bucket mentality in Cayman but to blame the cruiseship for making money is insane. Who do you think is making the deal with the cruiseships to pre-book these excursions? Have you ever been on a cruise? Every port you go into has an excursion list, and everything is all paid for and arranged before the tourist step foot on land. Most of the profit is them marking up the price, if you didnt sign up for the 50 stingray city tour, you could do it yourself for 25 when you walk off the ship.
    Tourist is Caymans biggest industry IE cruiseships!
    As far as the turtle farm goes, I dont support it and never take any of my visitors there… its disgusting. I want to wash my hands just thinking of that place.

  4. The question is based on the comments is do we as a country want to expand our cruise business or just maintain the present numbers as it appears that the local tour operators are not really benefiting from the cruise industry.

    Maybe we should save the millions on the port expansion and invest in the airport and work on the stay over business instead to promote our tourist product?

  5. I have to agree with Sam on this, if we can’t afford the Piers at this point it may be best to wait until we can and focus on presenting the Cayman Island Product at its best for instance enhancing the experience tourists get once they land in GT and maybe working to the whole Tendering program. The one thing that baffles me is the lack of Tropical Landscaping in the GT area, when they get off the boat how long is it before they see a Palm Tree. It sucks that the biggest memory most of them have would be the dump or the crowded streets of Georgetown. Friendly faces, tropical breezes, Blue Water and the Inland experience is what people want to see while in the Caribbean. Not the smell of garbage and the sight of Concrete and blacktop. Hell a steel drum band welcoming people with cool island beats when they dock would even make a huge difference.

  6. @Lloyd

    Tourism is NOT Cruise Ships

    Indeed Cruise Ships need careful cost benefit analysis – they may actually Damage the cayman tourist product

    The figures show that the 1.2 million Cruise visitors spend 100 Million

    The stay-over tourists numbering nearer 300,000 spend a staggering 300 million.

    One guest was in Georgetown on a cruise ship day and commented that they were enjoying the capital until ‘the Horde’ descended and they had to leave.

    There will be as many cruise shippers in GT next week as the entire population of the island!

    The Island faces a fork in the road and must decide between high value/low volume visitors or the reverse.

    Consider this – If we could get the 50,000 visitors from the cruise ships next week as air passengers instead, that would be equivalent to HALF the ANNUAL TOTAL spend of the cruise ships.

    200 Million on an airport vs 200 Million on a Dock becomes a no-brainer

  7. Andy I kind of understand what you’re trying to portray but your numbers seem a little misleading to me. Let me express my opinion. Of the 300,000 stay over tourists that you mention spending 300 Million Dollars a year. That’s an average of 1000.00, but you also have to factor in that the average time they spend here is seven days and that means and average of 142.00 a day. Now on the other hand you have 1.2 Million Cruise Visitors spending 100 Million Dollars a year, which is an average of 83.00 each but keep in mind that the average stay for a cruise visitor is a roughly 6-8 Hours and the ships only come in on certain days of the week.
    Now about how you recommend getting the 50,000 cruise ship visitors here next week as Air Passengers. That’s about 12 ships off Cayman which come in 2 -3 at a time carrying 3000-4000 passengers each. To bring that many people in by air would require over 325 Flights into Cayman National Airport carrying 150 Passengers each and these flights would mostly be on the weekend. You also have to take into consideration that these types of Tourist will requiring accommodations for a week as well as other amenities such as rental cars and places to eat. Could our current infrastructure really handle that volume? Cruise Ship Visitors and Stay Over tourist are two completely different genres that need very different types of management.
    I do believe that both Stay Over and Cruise Visitors are an important part of the Caymans Island Economy, but we have to find a sustainable balance with what is invested into each area. I don’t think the cost of new piers would be worth the negative impact to the island and it’s environment especially when the environment is what keeps people coming back and wanting to stay. I really think that the CIG needs to back pedal on this whole idea and focus on Caymans most immediate needs, such as remediating the GT Dump and focus on presenting the Cayman Island Product at its best by enhancing the experience tourists get once they land in GT and making tendering a more pleasant experience. The one thing that baffles me is the lack of Tropical Landscaping in the GT area, when they get off the boat how long is it before they see a Palm Tree. It sucks that the biggest memory most of them have would be the dump or the crowded over paved streets of Georgetown. Friendly faces, fresh smelling tropical breezes, Blue Water and the Island experience is what people want to see while in the Caribbean. Not the smell of garbage and only the sight of Concrete and blacktop. Hell a steel drum band welcoming people with cool island beats when they dock would even make a huge difference.

  8. Michael, I wasn’t suggesting all 50,000 at the same time – The point I was trying to show was that an extra 1,000 tourists arriving by air each week would be spending equivalent to half the weekly average (23,000) cruise shippers.

    Or, put another way If Cayman lost ALL the cruise ship traffic overnight, it would only need 2,000 extra visitors a week to regain the status quo.

    When you consider the overheads in terms of roads facilities and other infrastructure we could better serve 1,000 than 50,000 a week.

    Cayman has to decide the brand it wishes to portray – Should GT be chic, elegant cafe boulevard or wall to wall tee-shirts and cheap souvenirs?

  9. Thanks Andy for clarifying your thoughts. I can see your point but I think Cayman needs both to make ends meet. They just need to find an equal balance. As for George Town, you’re right, it does seem to be focused primarily on the cruise ship tourists which is probably why outside of shopping most of the stay overs now frequent places like Camana Bay and Governors Square. I can only assume that Ironwood will be the next hot spot. George Town has lost its appeal to stay overs.

  10. High value / high volume is also possible with the right ships. The Oasis class ships ( and others ) are not booked at Carnival prices. These folks spend real money and ARE the ones who will fly back to visit via hotel. I would not under-estimate the real dollars spent by affluent cruise travelers.

  11. Andy, more to my point, check out out all the issues Cayman Airway currently have with overcrowding. Imagine how they would deal with and influx of 2,000 additional visitors every week.

Comments are closed.