A top economist and expert on the Caribbean has questioned the financial contribution of cruise ships to Cayman.
Marla Dukharan, who delivered the keynote address at the Chamber of Commerce’s Economic Forum, ‘Cayman 2035’, highlighted that cruise ships tourists injected an average of $116 into the economy a head, up 10% on 2019, but a decline in real terms.
Martinique’s equivalent increase was 39%, the highest increase, but lower than in dollar terms, with Cayman in joint sixth position alongside Bonaire.
Dukharan asked the country to consider if the take from cruise ships was worth it.
Tourism Minister Kenneth Bryan said at an earlier panel that he backed the creation of cruise ship piers.
He maintained that the only way to increase cruise ship passenger numbers standing at 1 million, about half the pre-pandemic figure, was to build docks capable of berthing larger ships.
Bryan said, “If you don’t have a pier, you are not in cruise any more, I can promise you.”
He warned that unemployment would rise and businesses would close if they were not built, but that the decision should be left to a referendum.
Dukharan told the conference during her speech that Cayman ranked second for cost of living in the region, just behind high-cost Bermuda.
At the other end of the scale, Jamaica was ninth and Trinidad and Tobago was 10th.
Dukharan said the overall unemployment rate in Cayman had dropped from a high of 5.69% in 2021 to 3.3% in 2023 and 2.8% in the first quarter of last year.
But she added, “The number of Caymanians who are unemployed is climbing.”
She agreed that the Caymanian tax system, which does not feature direct taxation such as income tax, played a part in wealth inequality.
Dukharan pointed out that “tax on a turkey is the same for someone on half my income” and that indirect taxation meant “the burden was disproportionately heavy on the less well-off”.
She spotlighted research that found Cayman’s wealth inequality was “relatively high” in a survey of 178 countries, notching up a score of just under 40 out of 100.
The lowest rate was around the mid-30s and highest in the 60s.
She said that the income statistics suggested whatever policies the government was using to try and equalise wealth distribution were not working.
Dukharan was speaking at last Friday’s Chamber of Commerce forum, held at the Kimpton Seafire resort, which attracted more than 375 people.
She said that the country’s quality of life survey was “an excellent starting point” for policy decisions.
She added that there was evidence Caymanians were struggling with the cost of living, with 11% of households overcrowded and 5.1% of them behind on their electricity bills.
Dukharan said, “Seven percent of households were disconnected from at least one of their household services since last year.”
She advised Cayman to “strengthen institutions” and “build buffers”, such as a sovereign wealth fund, as well as manage its declining foreign exchange reserves.
Dukharan said the role of the monetary authority, CIMA, should be expanded so it could manage areas such as interest rates on the Cayman dollar and import cover.
She warned, “Facts and not feelings should inform decisions — the quality of life survey is an excellent tool. Use it.”
Dukharan added the quality of life survey, on a scale of zero to 100, showed the top score as 86.5 in the “economic and physical category”.
That broke down to a score of 95.1 for self-assessed poverty and food security, to the lowest level, 79.3, for economic and financial security.
But the economic and financial outlook appeared to be a sunnier prospect, notching up a score of 92.1.
A high score of 84.5 was recorded for health, which included mental and physical health, as well as services and conditions.
The score on the ‘natural and living environment’ recorded the lowest score of 70.4 with 69.5 on development and 71.3 for waste management.
Dukharan told the gathering, “Accountability is the only way to really drive results. The government scorecard drives accountability. Support it.”
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Quite a few divers come in on those cruise ships and spend significantly more than that average. I wonder if that income was factored in these calculations?
Say no to cruise piers, say yes to the environment and save seven mile beach.
How is this $116 per head determined, if island excursions are excluded it would be a lot less than that, and most cruise passengers do not take shore trips. If you figure in the cruiseline that makes most visits and has the lowest fares, it’s more akin to the old adage of the “3 P’s” – “a postcard, a pepsi and a pee”.
A recent article in one of the U.K’s top newspapers was about the rising prevalence of serious crime in the Caribbean Islands. Unfortunately we are now rated in the bottom 50% of the islands surveyed in terms of safety and below Jamaica which has a higher safety rating!.
Sounds like a lady who likes to play with numbers and has no clue what she is talking about. The real question is how many locals make a living from the cruise ship industry and from what I read it is in the thousands
We don’t know whether USD116 per cruise passenger is ‘worth it’, which is why we need a socio-economic impact study to determine the best way forward. Feelings are not facts. We need the facts. Thanks very much Cayman Compass for the coverage and for highlighting this issue.
Ms. Dukharan’s points on the wealth gap in Cayman and the role of cruise tourism particularly interesting. The fact that the top 20% of Caymanian earners earn almost 10 times as much as the bottom 20% highlights the importance of creating opportunities for those on the lower end of the income scale. Cruise tourism, which provides jobs and income to countless Caymanians working in retail, transportation, tours, and food service, is one of the few sectors that directly benefits this demographic. Dismissing its contribution feels contradictory when we are discussing reducing wealth inequality.
As for her point about whether the $116 per passenger is “worth it,” it seems she has overlooked the broader impact of cruise tourism. That $116 per head adds up significantly when multiplied by the nearly 1 million visitors Cayman received last year, contributing over $100 million to the economy. More importantly, most of that money is spent locally, supporting small businesses, taxi operators, and other local entrepreneurs those very people who are most affected by the wealth gap she highlighted.
I respect her observations, but I am not convinced she has fully considered the ripple effects of cruise tourism which is why a proper impact study should be conducted to validate these feelings with facts and not form facts from feelings 😊. It is not just about dollars per head; it is about the opportunities it creates for people who might otherwise struggle in a high-cost economy like ours. Strengthening institutions and building buffers are important goals, but we also need to preserve industries like cruise tourism that provide immediate and tangible benefits to everyday Caymanians without intermediaries!!