Monday, August 16, 2010Big Drop In Cruise Calls

Alan MarkofBig Drop In 2011 Cruise Calls

A 26 per cent reduction in cruise calls in 2011 has George Town retailers concerned.

“This is the last thing we needed,” said Kirk Freeport managing director Gerry Kirkconnell, who learned about the reductions last week when he received the information from media houses selling advertising for on-board cruise publications.

Royal Caribbean, Princess Cruises and Celebrity Cruises will make a combined 54 fewer cruise calls to Grand Cayman in the one-year period ending 31 January, 2012, than they did in the
previous 12 months.

The reduction represents a 26 per cent decrease in calls from ships from the three cruise lines. Liberty of the Seas is scheduled to make only four calls to Grand Cayman in 2011 after being scheduled to make 24 calls in 2010. Celebrity Century is scheduled to make 26 fewer calls during 2011 than the 36 it was scheduled to make this year.

In terms of passenger capacity, the reduction in cruise calls will bring a 23 per cent decrease in potential cruise visitors.

Mr. Kirkconnell said that because he ships’ having fewer calls are the ones that brought some of the highest spending passengers, Cayman would actually lose more than 23 per cent of
its cruise spending.

“Liberty was our biggest ship,” he said, speaking about passenger spending. “We’re not only losing x-amount of ships, we’re losing the best ships.”

The big drop in cruise calls will force Kirk Freeport to close some of its stores, Mr. Kirkconnell said, adding that one store, Far Away Places, has already been closed this summer. He said some other stores would be combined into one, resulting in additional closures.

Michael Jappert, vice president of operations from another of Cayman’s large duty free retailers, Island Companies Ltd, said the development concerns him, especially considering the ships involved.

“Those ships tend to perform better than others,” he said. “They provide a significant portion of our business.”

However, Mr. Jappert said Island Companies doesn’t anticipate closing any of its stores and plans on opening four new stores in the next 60 to 90 days.

He said Island Companies’ strategy is to enhance the shopping experience for those customers who do walk through the doors of their stores.

“When you have less people, you have to do more with them,” he said.

The reduction of cruise calls comes on the heels of Royal Caribbean launching the world’s biggest passenger ship, the Oasis of the Seas, last December. Its sister ship, the Allure of the Seas, is scheduled to be launched in December. Royal Caribbean has previously stated that it would not bring those ships, which are replacing smaller ships on its Caribbean itineraries, to port in Cayman until there are docking facilities here. The two ships can carry more than 8,000 passengers and crew each, and Royal Caribbean has said it would take too long to try and off-load them in Cayman using tender boats.

Founding member of the Association for the Advancement of Cruise Tourism Brynley Davies said the development shouldn’t come as a surprise to anyone because Royal Caribbean had made its position clear for a long time.

“We are paying the price for dragging our feet in getting a cruise berthing facility,” he said. “We’re moving in the right direction now; we just need to get it done.”

In addition to the off-loading issue, Mr. Davies said Royal Caribbean believes Cayman’s current port facility cannot offer a reasonable guest experience.

“In the ports where Oasis-class ships are stopping, Royal Caribbean has also required operators to provide enhanced services, including moving the security screening off the ship to a location pier side,” he said. “This is all related to easing the movement of 6,000 guests and 2,000 crew and providing a positive guest experience.”

Mr. Davies said the Oasis-class ships have Western Caribbean itineraries that take them literally within sight of Grand Cayman, but they won’t stop here.

“I think this news should come as a wake-up call to those who believe that the cruise lines will continue to come to Cayman because we have a good geographical location or that we can dictate terms of business to them,” he said. “Oasis has been a massive hit with the ports it has visited, with reports that spending per head has gone up significantly when the ship is in town.

Cayman is now the last significant cruise port without a berthing facility and this news should focus people’s attention on how badly we need to support the government’s work in moving this essential project forward before we become a minor player in this important tourism sector.”

Back-bench legislator Cline Glidden Jr., who heads up the government’s committee overseeing the cruise berthing project, said that although the reduction of cruise calls by Royal Caribbean was expected, he believes it’s only temporary based on discussions with the cruise line.

“They’ve said that once we are able to get a berthing facility, they’re committed to sending their ships here.”

As for the progress on the berthing facility, Mr. Glidden said contract negotiations are on-going.

“We continue to get closer to what we see as a final agreement,” he said. “It’s very complex. This is the first public/private partnership of this size - about $200 million.”

Mr. Glidden said the goal is for Cayman to host the Florida-Caribbean Cruise Association’s annual conference in November 2012 and that the government proposes to open the cruise berthing facility at that time.

He said it has been estimated the facility will take 18 to 24 months to complete.

Oyster Publications Inc, PO box 3369, Road Town Tortola, British Virgin Islands, VG1110