By Fritz Pinnock & Harry Maragh, ContributorsTHE CARIBBEAN enjoys 51 per cent of the world's cruise market, which makes it by far the largest market share, followed by the Mediterranean with 15 per cent. Yet, compared to the Mediterranean which earns over 20 per cent, the Caribbean yields only 15.6 per cent (US$2.6 billion) of this US$16.5 billion a year industry.
This obvious disparity between market share and revenue generation is a source of concern and an indication that the Caribbean, and Jamaica in particular, must redefine its cruise tourism product.
This requires a holistic strategic approach, in order to identify and capitalise on regional strengths. The Florida Cruise Ship Association (FCCA) together with PriceWaterHouse recently published the findings of a study, which focused on the economic contribution of cruise shipping to the Caribbean. Jamaica will earn in excess of US$73 million this year from direct cruise passenger spending, which falls below the Caribbean average by US$10 million. The study revealed that the average cruise ship passenger spends US$103.78 at each port of call.
CONSUMER ITEMS
The purchase of jewellery and watches, which accounts for almost 38 per cent (US$39) of total expenditure, is the single largest category followed by clothing at 12.52 per cent (US$13) and souvenirs at 11.56 per cent (US$12). This clearly shows that 61.6 per cent or US$64 is spent on the purchase of consumer items (shopping).
The U.S. Virgin Island attracts the highest spend per passenger in the Caribbean, amounting to US$173, of which 72.5 per cent is spent on shopping. Unfortunately, in Jamaica, Ocho Rios and Montego Bay, attract significantly less with US$72 per passenger. However, visitors to Ocho Rios spend a greater percentage (51%) on goods than those disembarking at Montego Bay (44%).
The reason behind these disparities require in-depth analysis in order to maximise on the revenue generated by the record 1.1 Million cruise ship passengers expected to visit Jamaica this year.
SPENDING PATTERN
It is quite clear that the spending pattern of cruise ship passengers support the notion that the Caribbean is an in-bond-shopping destination, and yet as a region we have never used this important factor in our marketing and promotional strategy.
Cruise passengers are looking for variety, uniqueness and overall greater value from each destination and so if we do not keep up we will become history. The market is price elastic and so if we do not compare the value versus the cost to the passengers for our tours and offerings, we will be left behind as a very good 'ex-port of call'.
The paradigm has shifted away from the 'sun, sea and sand' and we need to offer more to the growing and demanding tourist sector. This begs the question, why has Jamaica chosen to tax the in-bond shops at this time, thereby placing them at a disadvantage to other Caribbean destinations? Or is it that we are not aware of the trend and development of the sector?
Additionally, the in-bond sector needs to play a greater role in marketing the industry as we are too fragmented in approaching the international cruise industry. The Jamaica Tourist Board and The Port Authority of Jamaica alone cannot formulate the optimal strategy and do all the promotion. The In-Bond shopping community and the general hotel sector need to play a united role in promoting the Caribbean as the world's 'warmest' exotic shopping destination. Each player needs to put his money where his mouth is.
New ports of call are competing for the attractive cruise market. The average cruise ship spends approximately US$259,000 per port of call for the average vessel carrying 2,000 passengers and 900 crew members. The difference between the US Virgin Island's revenues and Jamaica's suggests that there is over US$100 million out there that we could have earned above the current levels.
The time has come when Jamaica needs to put together one complete system based on 'adding-value' as opposed to adding cost to the cruise lines. Cruise lines are prepared to pay for that which adds more to value than cost.
In closing, it can be done; however, it will require a plan, money, commitment, time and teamwork.
We need to upgrade or get out!
Fritz H. A. Pinnock is managing director of Lannaman & Morris (Shipping) Limited while Harry P. Maragh is executive chairman and CEO of Lannaman & Morris (Shipping) Limited/president of The Shipping Association of Jamaica.
For further information contact:
fritz@lannaman.com.
