Carnival Corporation CEO and president Arnold Donald flew into Grand Cayman this month for a quick stopover. Before a meeting with the Chamber of Commerce and government officials, Donald sat down with the Cayman Compass to answer some common questions about the cruise port.
What is your vision for the cruise tourism product here in Cayman if the port is approved?
I’m not sure there’s been a referendum like that ever in the past, so for us it’s a historic thing. It’s important that we fit in with the will of the locals. We are guests and we bring guests here.
There are two mantras in our business. The first is: happy crew, happy guests. And second and equal: happy locals, happy guests. So our guests don’t want to go someplace they’re not welcome and we certainly don’t want to introduce them to that. But they’ve always been welcome here. We have a 40-year history in Cayman and we’re excited about it. So our vision is to bring, in a sustainable fashion, more guests to Cayman to help drive the local economy and to expose people to all the beauty, wonder and experience that is here in Cayman.
If a majority of locals vote against the port project, what does that mean for Carnival and the future relationship with Cayman?
I think, first of all, we’ve been coming here all along and I’m sure we will continue to come. As the ships get larger and are unable to tender guests in, I think over time you might see a decline in the number of guests coming to Cayman. Ships are becoming somewhat larger and, therefore, not able to tender in. I think over time there would be a decline. But if that were the will of the people, we obviously would respect that and honour that.
We have to abide by the rules and regulations wherever we go and that gives us the freedom to operate. So while we are optimistic and hopeful that it’s supported and is passed so we can continue to contribute to economic prosperity here in Cayman, we’ll be very respectful.
Can you explain tendering and why there’s this message that the larger classes of ships won’t be tendered?
Concerning tendering, there will always be ships that will require tendering capacity. So there will always be some tendering for the foreseeable future. The challenge with some of the much larger ships is that they don’t tender anywhere in the world. The reason is just because of the flow of the guests on the ship. You have, in some cases, many more thousands of guests and the tendering operation can become quite tedious. In our business, happy guests, happy crew, and a long queue does not make for happy guests.
Some of these larger ships are going to be in the Caribbean, they are going to be on Caribbean itineraries, and Cayman will want to be a part of that.
How many of these larger ships will be frequenting the Caribbean? How common will it be that these ships might come to port here?
In our fleet, across our cruise line brands, we have [approximately] 108 ships. They certainly are not all super large ships. There’s only a few of them. But in the Caribbean over time, there will be a handful and then a dozen or so of these ships. But they are carrying a lot of guests and they will be on itineraries that Cayman would fit well in and guests would like to come. I think the combination of that with the existing fleet will slowly add opportunity for additional guests to come to Cayman and hopefully as we work together, we can manage that in a way where it’s seamless for everyone and especially the locals.
There are a lot of port projects going on in the Caribbean right now and a lot of them are driven by cruise tourism. What’s the guarantee that this investment will be worth it for us? That these other new, modern ports might also be competing for those large ships?
The demand for the Caribbean is strong. It’s one of the most frequented, guest-favoured spots in the world. There’s almost 80 islands in the Caribbean. Cayman will always be one of the favourite spots, as are several others. Once you put the itineraries together, you just see again the opportunity for growth. But we do need more destinations and improvements in the destinations being able to receive ships, distributing the guests and also have additional excursions and opportunities.
How can we be certain we wouldn’t experience a similar effect as Falmouth, Jamaica, that had a decline last year in cruise arrivals?
I think the wonderful thing for Cayman here is, first of all, the investment is not coming from the people or the government of Cayman. So the investment is coming in a different way. Therefore, there’s no risk involved for the Cayman taxpayer or for the government. But those making the investment obviously feel there is an opportunity to see a return. If not, it would just be a business that had a plan that didn’t work out. But there’s no penalty to people of Cayman or the government, if for some reason there’s a decline in cruise traffic.
The passenger fee that will go to the cruise lines, isn’t that a tax in a sense that would have otherwise gone to government?
I guess, you’re right. It could be a technical risk, as I understand the deal. I’ve got to tell you, I’ve got a lot of ports, so I’m not sure of all the details. But, you know, I guess there could be a theoretical risk that if the investment is made and the traffic declines, you might see on a per-unit basis a little less. So, you have to rely on some increase.
I think the other aspect of this project though is the cargo aspect. And there’s going to be significant improvement on the cargo side. You’re allowing for much more efficient utilisation on the cargo side, which will drive down the costs, which, again, the locals can benefit from.
The other concern, of course, is the environmental impact. How do we know that Carnival will have a better environmental record moving forward?
Our highest responsibility, and therefore our priority, is excellence and safety, environmental protection and compliance. Those are not just words. Not only is it the right thing to do but if you think about our business, if we aren’t safe, people are not going to sail with us. No one wants to go to a location where they can’t breathe the air, that the water is polluted, that is soiled and unkempt. No one wants that. So it’s not only the right thing to do from a societal standpoint, it’s absolutely required for our business.
It is our highest responsibility and one of our top priorities. Does that mean we never make mistakes? We sell thousands of itineraries a year. We have hundreds of ships on those itineraries, so occasionally mistakes are made. We want transparency. We want to make certain we learn from our mistakes so that we can never repeat them and that we can mitigate any future mistakes. Overall, our track record has been very good in the Caribbean and elsewhere. That doesn’t mean we’re not without mistakes and we’re not making excuses for the mistakes. We have to learn from them.
If we look at the dumping case in the Bahamas (Carnival has acknowledged dumping treated sewage in Bahamian waters), what went wrong there and what did Carnival learn from that?
So, my understanding of the situation in the Bahamas was, there is a regulation, a Marpol regulation, concerning discharges of even treated material within a certain distance from a shoreline. Our internal standards for that are actually greater than what the international law requires.
Within the international law, there is a provision regarding archipelagos.
But that particular ruling then has to be taken up by the local country. So they make their own rules. International law provides the opportunity but it’s subject to the local [law]. What happened with that particular case is, we were well outside the shoreline, so well within our own regulations as well as international regulations. But there was an archipelago, which is huge for the Bahamas. We self-identified and self-reported out of an abundance of caution.
Even now I’m not certain that there’s evidence the Bahamas ever adopted that particular regulation. But we don’t want to do it. It is treated material. It’s not harmful stuff. It is treated material but we want to be in compliance. Out of an abundance of caution, we self-reported and we have taken measures to say we will not discharge in an archipelago, regardless of what the regulation is. That’s what we set for ourselves going forward.
What kinds of jobs would the port project offer that aren’t already in existence here?
There would obviously be the construction aspect of it all. There would be a number of jobs created because it’s new construction, so it’s new work. There would be hundreds of jobs created within that context. Hopefully as you bring additional guests in, it will also cause growth. We talked about additional excursion opportunities and different ways to experience Cayman. So that will create additional jobs. Also, with additional volume, [there are] additional job opportunities within sectors that are already benefitting today. Then you have the economic multiplier effect from provisioning to craftsmanship to transportation on the island, etc. … What I do know, typically one job on a cruise ship creates five to seven additional jobs in an economy.