Monday, March 10, 2008World Cruise Tourism Summit

GISSeatrade Cruise Shipping Convention

Remarks by The Hon. Julian Fraser, RA Minister for Communications and Works on World Cruise Tourism Summit - Seatrade Cruise Shipping Convention

These activities of this grand event called Seatrade are important to me as Minister responsible for Sea Ports in the British Virgin Islands, as it is one of my agencies that is charged with the task of providing port facilities to accommodate your vessels in the territory. But my interest goes deeper and you ought to know why.

In 2002 I assumed this same role as Minister, and despite hearing about Seatrade, for reasons more than one, not the least of which happened to be lack of interest, I did not attend this Convention.

After a four year hiatus which began in 2003 and ending last year, I have resumed the duties as Minister, and regrettably, I had no intentions to be here this year as well. That all changed however, after having a meeting with our local Cruise Tour Operators just upon assuming office, and subsequently reflecting on a statement made during a meeting with the Taxi Operators just prior to elections in August last year.

Emerging from both meetings was a message that was both common and clear, and it was that the BVI was not being taken seriously enough at this event, and that they wanted representation here from Government, at the highest level.

Today I am here with a delegation that runs the gamut; It includes three members of the House of Assembly; my Ministry’s Permanent Secretary; the Managing Director of The BVI Ports Authority; the Comptroller of Customs; the Acting Deputy Director of the BVI Tourist Board; and a representative from the Premier’s Office among others. Ladies and Gentlemen this showing here today speaks volumes to the level of importance my Government places on the future of Cruise Tourism in the BVI, and we want you to know that.

On behalf of Premier Ralph T. O’Neal and the people of the BVI, I bring you greetings, and I would like to extend my thanks to the Member Lines of the Florida-Caribbean Cruise Association for inviting me to participate in this World Cruise Tourism Summit: their First Forum in the Seatrade Cruise Shipping Convention.
The basis for our discussion at this Forum this morning comes in the form of a question, with three specific areas of concentration. I submit to you that the views expressed here this morning will vary from Panelist to Panelist depending upon their country’s experiences, and their desired view of the future.

The Question before the Forum is:

How can the cruise lines and destinations work together to achieve the mutual goal of improving overall consumer demand for the Caribbean, focusing on the following areas:-

• Strategies for converting Cruise Passengers to return to the destination as Land Based Visitors.

• Sharing of best practices – Consumer marketing, website/E marketing, and travel agent support.

• Cooperative sales and marketing initiatives.

Given the question, I must say that I find the Forum to be surprisingly interesting, as it seeks to address the industry from a holistic perspective, rather than pursue the myopic goal of self promotion. In fact, it is as if this industry’s Executives and Promoters have their ears to the ground: as we would say in politics, for the sub-topics here this morning focuses on addressing the very issues heard on a daily basis.

THE BVI CRUISE INDUSTRY

Over the past ten years Cruise Tourism in the British Virgin Islands has experienced growth at rates that can only be described as phenomenal, certainly a pace that outstripped by far that of the industry at large. Between 2000 and 2007 the number of cruise arrivals to the Territory has more than tripled that of the same period prior, and our preliminary statistics indicates no letting up, as passenger visits for 2007 shows a total of 575,211, an increase of 28% over 2005 which registered 449,152 passengers.

Again, to address the question, “How can the cruise lines and destinations work together to achieve the mutual goal of improving overall consumer demand for the Caribbean”? And further, the first point of focus, which is: “Strategies for converting Cruise Passengers to return to the destination as Land Based Visitors”. I must revert to a point made earlier, when I said “that the views expressed here this morning will vary from Panelist to Panelist depending upon their country’s experiences and their desired view of the future”.

The first step is to determine whether this is a desired goal of the destination in question, for believe it or not, despite its apparent promises of prosperity, not every destination shares the view that Cruise Tourism is a venture worth pursuing with vigor.
Second, the Industry needs to police itself, for it is the view of many with significant influence that the Industry is driven from without rather than from within. And sad to say, there is irrefutable evidence on the ground to back this claim up.

Perception being the greater part, and in some cases all of reality, the impression too many people, although a small minority, but nonetheless too many people, get of cruise passengers, whether as they walk the streets, tour in buses, or crowd the beaches, is not always good.

The unfair comparison some make of the spending habits of the Cruise Passenger with that of the overnight visitor is inflammatory but effective when making the case that the effort towards conversion is not worth being expended.

Some destinations have long established themselves as one which caters to a market well beyond the socioeconomic strata of a Cruise Passenger, so they ask themselves, why bother. Is this statement accurate? Maybe not, but the pundits have been able to cast so wide a net as to encapsulate all in sundry, just to make their argument.

That being said, why is it the view that the industry’s growth and direction is not the engine of Cruise Lines but rather their agents? Is it because of the very question being asked? When one looks on the ground, the rapid and sometimes disorganized deployment of passengers, which often results in ugly rifts between stakeholders serves to support the notion that there is no regards for coexistence between the two visitor groups.

Is it safe to say that the right hand doesn’t know what the left hand is doing? I would not go that far, but there are those who would, if only to make their point. I will not be so bold however, for I am all too cognizant, of the hard work and sterling dedication our agents have put into promoting this sector over the many years, and for that I have nothing but deep admiration for their successes, and to that end I pledge my support to the future betterment of the industry.

We in the BVI believe that we can achieve as our primary goal the converting of Cruise Passengers to Land Based Visitors by in fact providing a product which appeals to the customer’s appetite. But while this may be our primary goal, focus must not be lost on quality, in favor of economic gains, or the negative publicity will thwart the best of efforts.

The balance is a delicate one, so I urge this sector to yield whenever there is a spectre of conflict arising. My advice comes from the conviction that because you are the bigger target, you are the most vulnerable, and from a historical stand point you are the most expendable, therefore you have to step up your public relations if you want to change things. Throwing passengers at the problem will not help.

CONVERTING CRUISE PASSENGERS TO LAND BASED VISITORS

In Converting Cruise Passengers into Land Based Visitors, the objective of responding to consumer demands then becomes the primary focus of our destination. How then do we meet those demands of the consumer? Or in fact who is this consumer?

We believe that either of two approaches can be taken, one being where we supply the product and then seek the right customer: this then being the case of supply driven demand; or the other being tailoring your product to suit the consumers demand: which is then considered to be demand driven supply. Both of which are common thesis of economics.

Either way revenues will be generated but with very different consequences.

In a destination such as the British Virgin Islands where we sell ourselves as a niche market, or high end so to speak, it is imperative that we go for option one where we produce the product and vigorously pursue the customer to suite the product, rather than the other way around, as in the case with option two.

There is a prevailing view that because our destination caters to a Land Based Visitor with an annual median income of $250,000 and above, there is little sense in pursuing the Cruise Passenger as a potential cross over, particularly when considering the vast disparities between their average daily spending habits; which is where Cruise Passengers spend only a small fraction of that for Land Based Visitors.

This perception must be changed if the objective is to be successful. I do not subscribe to the belief that the top earning 10% of all Cruise Passengers are outside the niche, what I believe though, is that the niche, which includes the product, has to grow, if we are to capitalize on the huge potential this sector offers.

“Sharing of best practices: Consumer marketing, website/E marketing, and travel agent support” is another area for consideration.

And again, the first step is to determine whether this is a desired goal of the destination in question.

If the BVI wants to be a part of this Cruise Passenger movement, they like any other destination like them, must first acknowledge that Cruise Tourism has been here for a while, and it is not likely to go away, ever. To bury their heads in the proverbial sand and pretend it doesn’t matter, is a mistake, and one that can cost them dearly.

If this attitude is abandoned then the objective of the question becomes academic. I have full confidence in the marketing capabilities of the various Tourist Boards in the Caribbean, our own in particularly; to effectively market this sector as well as they do for the other. The advantage in this is that it gives them a say in what happens, and of course with that say comes a level of control.

“Cooperative sales and marketing initiatives” is a key ingredient to any success, which hinges on the willingness to embrace. It is the view of the Land Based Visitor sector that the Cruise Passenger sector is making money, a lot of money, and at their expense. This is a perception that must be addressed if there is any hope of there being any cooperation in this area.

In closing, let me say that it is hard to ignore the reality surrounding the directions in which both these sectors are heading. It is no secret that the Cruise Tourism Industry has been on a steady up swing throughout the last decade and into the present, with some forty new ships on order with scheduled deliveries between this year and 2012, an investment that is sure to add close to half a million passengers to the market.

On the other hand however, airlines are either victim of mergers, downsizing, or going out of business, thus leaving the sector at a disadvantage. While one can point to rising fuel costs for this demise, it is still tempting to look at the successes of the Cruise Tourism sector as a cause, since the same high fuel prices seems not to have any impact on their way of doing business.

So where does this leave us? My view is that this Forum suggests that this sector is listening, for it has certainly heard the other side. I think there is need for urgent and sustained dialog, and this to me is a good first step for which I support the Member Lines. I now urge that they keep it up.

Thank you for the opportunity to be here.

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