Cruise lines are getting pickier as competition for their passengers heats up.
Those destinations that adapt to the way the industry is changing will come out ahead, observers say.
In The Bahamas, sea arrivals account for more than two-thirds of our four million annual visitors, but they contribute just 10 per cent of total tourist spending of $1.5 billion.
However, the Nassau Tourism Development Board (NTDB) points out that this $150 million goes directly to taxi drivers, tour and attraction operators, straw and craft vendors, hair braiders, surrey drivers, ferryboat operators and shopkeepers.
According to the NTDB (a consortium of private sector interests formed in 1994 to promote product improvement in Nassau), many of these small and large businesses would not exist in their current form without the customers provided by cruise ships.
“Both cruise and stopover tourists are vital components of our total tourism package, and many businesses think it would be impossible to survive without both,” NTDB executive director Frank Comito said.
Preliminary figures from the Ministry of Tourism show a 4.7 per cent drop in total visitors to New Providence last year, with sea arrivals down 5.8 per cent.
And retailers and excursion operators say the cruise passengers who do come are spending a lot less.
According to Mr. Comito, most cruise visitors to Nassau are provided by the two largest lines, Carnival and Royal Caribbean. Disney, Norwegian and Princess cruises stop mainly at private islands in the Bahamas.
Costa and Celebrity cruises make regular calls at Nassau for half the year.
“Cruise lines expose our destination to millions of potential repeat visitors who will stay in hotels,” Comito said. “Currently, about six per cent of stopover visitors come to the Bahamas as a result of a previous cruise visit. That six per cent spent about $50 million with us last year. Every one per cent addition to that conversion rate represents another $10 million in our economy.”
The NTDB has called for a “massive” public and private sector effort to upgrade and manage the downtown area in response to rising visitor complaints about derelict buildings, personal safety, harrassment, stray dogs and pollution.
The rebuilding of the straw market (destroyed by fire in September, 2001) is not expected to begin until later this year, but another initiative aimed at improving the cruise-visitor experience opens on Prince George Dock this week.
Though it took seven years to happen, the $18-million welcome centre called Festival Place features a post office, Junkanoo expo, tourist information centre, and indoor market with vendors selling Bahamian merchandise and food.
According to architect Jackson Burnside, who conceived the project in 1993, “the port area is a phenomenal business opportunity that ought to be run by private enterprise. This is potentially one of our biggest visitor attractions, but there are too many government agencies with separate agendas wielding power on the docks. And governments should not to try to run business.”
International events are likely to increase the importance of cruise tourism to the Bahamas and other regional economies over the near term. Major airlines are already in serious trouble due to rising fuel costs and many travellers’ fear of flying, industry observers say.
Ever since the Sept. 11 terror attacks, these pressures have created a demand for cruise itineraries closer to the American mainland.
Cruise lines responded by opening new drive-up markets in the U.S., cutting ticket prices and raising travel-agent commissions. These strategies enabled them to attract many first-time customers.
Now, however, cruise lines are looking for extra revenue to compensate for the cost-cutting.
“For destinations to keep or attract cruise business today they need to bring more to the table,” Mr Comito said. “First, we need to pay more attention to providing a clean, hassle-free environment, and
second we need to maintain good relations with our cruise industry partners.”
Huge investments are already being made by top competitors such as Panama and Mexico, and recently, the Turks & Caicos government reached agreement with Carnival Cruises to spend millions on a port facility that will have a major impact on the Bahamas’ core three-to-four-day cruise business.
Ships are actually being paid to call at some destinations, while other ports are building new facilities and launching aggressive marketing programmes to lure cruise lines, according to industry experts.
An article in Cruise Industry News quoted one regional port authority executive as saying: “If you do not contribute enough to their bottom line, it is good-bye. And they do not want to hear about head tax.They do not want to pay us. They want us to pay them to come.”
Despite competitive pressures, cruise lines are continuing to invest in new ships and upgrading existing fleets. By 2005, another 35 ships will be launched at a cost of about $12 billion, meaning cruises will be an important part of our tourism mix for years to come.
By Larry Smith
