Adrian Loveridge Column – How High Will Cruise Ship Industry Bounce?
With cruises slated to return to the Caribbean from November, after what must be perceived as one of the biggest public relations catastrophes in the history of tourism, is there any way that we, here on Barbados or throughout the region, can gain a far more equitable share of the past profits and revenues this sector has generated in years to come?
According to ALG- Global, the number of cruise passengers has increased by more than 60 per cent over the last 10 years, reaching a 28.5 million throughput in 2018. Out of these, 40 per cent of the passengers are concentrated in the Caribbean market, which is the single highest market in the entire cruise sector.
The Florida-Caribbean Cruise Association, state that North America accounts for around 12 million of departing cruise ship passengers annually.
This despite the fact remains that the overwhelming majority of ships which ply the Caribbean Sea are not registered under the US flag, therefore not subject to US employment laws, covering among many others things, minimum wages and labour laws. As an example, industry brand giants Royal Caribbean’s corporate domicile is in Liberia and Carnival’s, Panama, despite being headquartered in the United States.
Many would agree that Barbados has done an extraordinary job of permitting dozens of cruise ships to anchor-off our shores eventually discharging thousands of crew members before allowing them to fly home, when other islands and some mainland ports have denied that dispensation and compassion.
Will those humanitarian concessions be taken in to account when cruise ship itineraries are being scheduled and marketed for late 2020 and 2021 or will ‘our’ reach-out be forgotten in the quest of returning to profitability?
Clearly we, as a country, have clearly demonstrated ‘our’ ability’ to handle large numbers of persons joining or leaving, even the largest capacity vessels presently afloat.
Following the trauma of Covid-19, future cruise ship passengers will inevitably consider this as a critical booking factor before selecting a particular Caribbean itinerary, to avoid being stranded at sea for an indeterminate time, should a similar or food based virus re-occur.
Increased Home-porting could also play a critical role in airlift recovery, allowing some airlines to sell any unsold cruise passenger seats to long stay visitors, increasing the fiscal benefit to the destination.
There also remains the unresolved inequity between the contribution made by the land based and cruise sectors. ‘Our’ ability to repatriate the sea farers was largely created by our land-based partners, whose payment of taxes provided the infrastructure to make it possible.
If there is ever going to be a balance of a level playing field, Government must re-visit the subject of disparity in taxation. Currently there is no VAT on cruise packages and the individual passenger charges currently levied do not in any way compensate for the national investment already made which supports this sector. Our land based tourism partners are subject to corporation tax, income tax, national insurance, VAT, land taxes, room levies and a bevy of other impositions, which cruise operators totally avoid.
Hopefully, all these considerations will be in the minds of our policymakers, as and when the cruise ships return.