COVID-19 offers new opportunities for cruising in the Caribbean
On February 25, roughly two weeks before the World Health Organization declared COVID-19 a global pandemic, Jamaica and the Cayman Islands denied permission to the Meraviglia cruise ship to disembark passengers, fearing an ill crew member could have the virus. This angered MSC Cruises, the Meraviglia ’s parent company, which issued a statement saying it was “extremely disappointed” in decisions by the two Caribbean countries. It later pulled another vessel, MSC Divina, from a scheduled visit to Jamaica.
Just days later, Jamaica again infuriated the cruise sector when Carnival Cruise Line, the parent company of the Costa Luminosa, was advised that the passengers from Italy – then the COVID-19 epicentre – would not be allowed onshore. In retaliation, Carnival threatened to end its stops in Jamaica, and later rerouted two of its ships that were scheduled to visit here. A Costa Luminosa traveller would later become the first COVID-19 patient in the Cayman Islands.
Several other Caribbean governments also prevented another vessel, Fred Olsen Cruise Lines’ Braemar, from berthing, citing fears that the passengers could spread the virus among the local populations.
This sort of resistance by Caribbean countries to the powerful cruise sector is virtually unheard of, noticed Ross Klein, a professor at Canada’s Memorial University. “This is odd for the industry. They’re not used to ports standing up for themselves,” Klein was quoted as saying in The Intercept, a US-based non-profit news organisation. “[Normally], the cruise industry says, ‘If you don’t like us, we’ll go somewhere else’.”
The Caribbean has long been a gold nest for the cruise sector and remains the most popular cruising destination in the world, with 34.4 per cent of ship deployment in 2018, twice as many as the Mediterranean, the second most popular.
“While we will have a diminished tourism industry without cruise, the cruise industry will shrink incredibly without the Caribbean and cannot survive in its present form. They need us more,” Neville Boxill, a Barbadian cruise expert, told The Sunday Gleaner.
The sector has repeatedly been accused of dumping sewage, food waste, plastic, and oil into Caribbean waters, and there have been concerns by environmentalists about reef damage and over-tourism.
The cruise lines, which work hard at being good corporate partners during crises, point to the economic impact of cruising on the Caribbean. Cruise tourism generated nearly US$3.4 billion in direct expenditures, 79,000 jobs and US$903 million in employee wages among the 36 destinations in Latin America and the Caribbean, according to the most recent survey conducted in 2018 by US-based Business Research and Economic Advisors, on behalf of the Florida Caribbean Cruise Association, a non-profit organisation composed of 21 cruise lines operating nearly 200 vessels in Floridian, Caribbean and Latin American waters. The contribution to the Caribbean is in the region of US$2 billion.
“Jamaica had the third-highest level of direct expenditures with $245 million in spending by cruise lines and their passengers and crew,” the report said of the 2017-2018 cruise year when cruise earnings reached approximately US$159,650 (J$22.6 billion).
“Cruise provides the best and most immediate form of conversion of wealth into the pockets and economies of the local destination. The impact of this sizeable earning, therefore, has been instantaneous in the communities across the country,” Ed Bartlett, Jamaica’s tourism minister, said in February last year at a Jamaica Vacations’ cruise council event.
But with cruise’s contribution to Jamaica’s GDP at 0.7 per cent, and not much better across the region, many critics insist the negatives far outweigh any economic benefits. According to the Caribbean Tourism Organization, there were nearly as many cruise visits to the region last year (a record 30.2 million) as there were stay over visitors (31.5 million). Yet, cruise visitors accounted for approximately 8.1 per cent of visitor spending – US$3.3 billion – while overnight tourists brought US$37.3 billion.
“What is the rate of return on investment for the country that has invested in ever-expanding port facilities, shopping opportunities, import of foreign goods to be sold duty-free while local craft, manufactured soaps and beauty items remain ‘unsuited’ for that buyer [cruise passenger],” asked Atherton Martin, a Dominican environmentalist and hotelier and long-time critic of the cruise industry.
‘NO SAIL’ ORDER
With the number of cruise passengers contracting COVID-19 rising after the row with Jamaica, the cruise lines halted operations on March 14 when the US Centers for Disease Control and Prevention (CDC) issued a ‘no sail’ order. The order was first extended in April and was scheduled to end on July 24 but was extended again on July 17, barring ships from sailing through September 30, 2020.
The CDC said in its executive summary that there were “a total of 99 outbreaks on 123 different cruise ships, meaning that 80 per cent of ships within US jurisdiction were affected by COVID-19 during this time frame”.
This pause has given the Caribbean an excellent opportunity to negotiate a different relationship with the industry, which will see the cruise lines making a greater contribution to the sustainable development of the region, some observers said.
“There will never be a better opportunity,” Boxill said. “As desperate as the countries are to restart tourism, the cruise lines are more desperate to restart cruising. This gives us a rare opportunity to negotiate from a position of strength but only if we take a unified collaborative approach.”
In addition to the environmental concerns, the issue of head tax has been among the most controversial. At US$15, Jamaica is among the highest head tax rates in the Caribbean, surpassed only by Bermuda (US$20) and The Bahamas (US$18) and matched by the British Virgin Islands. Most Caribbean countries are in single digits, with the Dominican Republic as low is US$1.
The cruise lines have repeatedly and successfully repelled any attempts at raising the tax by pitting the countries against each other. Boxill said a new relationship must go beyond taxes.
REBALANCING THE RELATIONSHIP
“[There must be a] rebalancing of the relationship in favour of the lines making a bigger contribution to the destinations, not just in taxes. Guaranteed quotas for employment and provisioning are potentially better and more easily achieved. [So are] commitments to tie summer cruise volumes to winter cruise volumes.”
An even more profound question asked by critics, including Martin, is whether the sailing pause brought about by the pandemic meant the Caribbean no longer needed the cruise lines.
“No, of course not,” Martin told The Sunday Gleaner, answering his own question. However, he said a new approach must be agreed that encourages and incentivises the cruise lines to spend “two or three days so that the visitors really get a sense and taste of an island and, in addition, have the opportunity to spend more and maybe even discover new partners, business and otherwise”.
Boxill also agreed, saying cruise supports attractions, restaurants, tour companies and taxis.
So, while ships remain anchored and cruise lines try to ride out the storm, the sentiment is cruise should stay but things must be different.
““There is still time to build a new cruise sector as well as the broader tourism sector,” Martin said.” We do not need a COVID imperative to get this done. We need an energy source that will outlast any pandemic – our own minds, hearts and energy.”