Cayman’s cruise sector must sink or swim in new dynamic

As Cayman’s tourism officials voyage further into uncharted waters in search of a new national cruise tourism model, they warn that vendors must rethink their business strategies or face the grim reality of sinking with a now abandoned scheme.

In 2019, it became clear that government-led plans for a cruise berthing facility were not the wishes of the people, who protested and took legal action to stave off the negative impacts of the $200 million project.

Four years later, the pier project remains dead in the water, while the industry continues to rebuild itself after being ravaged by the COVID-19 pandemic.

“We are working our way around the national decision as to no piers because if we had piers we could get back 2019 numbers quite easily. Most of my colleagues in the Caribbean [have] done that already,” said Tourism Minister Kenneth Bryan while speaking at a press conference on Monday, 26 June.

Without piers, Cayman is looking at a declining passenger base, and business owners are being urged to adapt to the new reality.

The press conference came on the heels of the Florida Caribbean Cruise Associations annual Platinum Associate Member Advisory Council (PAMAC) conference in the Cayman Islands.

But while most Caribbean islands have clawed back their tourism numbers to pre-pandemic volumes, Cayman is trailing behind by 22% – and Bryan expects that to sink further as the year goes on.

According to Department of Tourism director Rosa Harris, between January and May of 2023, Cayman recorded 666,000 passenger arrivals, which is 78.3% of the 852,564 passengers recorded during the same period in 2019.

To plug the leak, Minister Bryan announced his desire for a $2 million tourism grant to help kickstart niche and cottage industry tourism business – which would be funded from the government’s general revenue. But this initiative is not a bailout and won’t help alleviate potential financial burdens on existing businesses.

To this end, Cayman Islands Tourism Association president Troy Leacock says the onus to evolve with the new national strategy is on business owners.

“Business owners, particularly those who rely on cruise tourism for the majority of their customers, must realise that this shift from quality over quantity means a strategy that caters to mass tourism will have to be re-thought,” said Leacock. “What does this mean? They must find new ways to upsell and increase the value of their offerings so that tourists will pay more.”

According to Wendy McDonald, Royal Caribbean’s Regional VP of Government Relations, Cayman is a destination that consistently provides high guest satisfaction and positive reviews. However, this was based on a high volume cruise passenger model, which has since been abandoned in favour of what Bryan has termed the “white glove approach” in a bid to cater to the more affluent cruise passengers.

“A boat trip with 100 people to Stingray City versus a trip with, say, five or ten people will produce two different experiences altogether,” Leacock said.

“The latter of those two experiences provides a chance for business owners to give customers a more intimate experience, and you do have cruise passengers who want that and will spend more to get it.”

But upselling products is half the battle.

Leacock also echoed Bryan’s sentiment for the need for Caymanian operators to rally together for greater bargaining power when negotiating profit-share agreements with cruise line companies.

“At the end of the day, this is a free market, and so each business owner will do what they believe will be most beneficial for them and their businesses, and, in some instances, this will include undercutting each other,” said Leacock.

He said while he would want to see Caymanian vendors get an equal split of profits, if not more, he understands that no two companies are presented with the exact same circumstances and that, ultimately, it is a matter that could be addressed with minimal government intervention.