Consultant: Cayman Islands Cruise Port Will Cost $190M
PHOTO: Moses Kirkconnell, the Cayman Island’s deputy premier and tourism minister. (Photo courtesy of Cayman Islands tourism ministry)
The economic business case for the Cayman Island’s proposed cruise ship pier states the new facility will cost $190 million and could generate a potential economic impact of up to $439 million over 20 years for the country, and at worst create an impact of $112 million.
The report from project consultant PwC, issued this week in two stages, combines data compiled by PwC along with additional research from Business Research & Economic Advisors Report (BREA), which recently issued its annual report on cruise tourism’s economic impact in Caribbean destinations on behalf of the Florida-Caribbean Cruise Association (FCCA).
The BREA report concluded that the new cruise port would compel passengers to spend more time and money on shore, resulting in an estimated additional economic impact of at least $25 million a year.
The additional BREA information led PwC to revise its original estimates, which had concluded that the potential net economic gain from the cruise port could total $213 million and but in the worst case scenario could lead to a loss of $72 million.
PwC’s report acknowledges that a lack of more comprehensive data on cruise passengers’ spending and potential behavior in port in response to the construction created a significant disparity between the project’s potential upside and possible downside.
Nevertheless, Cayman Island government officials are confident the report provides a strong basis to proceed with the project. Despite being the fifth most-popular Caribbean cruise destination, the Cayman Islands lacks a large facility capable of berthing the largest cruise ships.
“The BREA report noted that historical data on passenger arrivals showed that growth in Grand Cayman has lagged significantly behind those destinations with berthing piers,” said Moses Kirkconnell, the Cayman Islands' deputy premier and tourism minister.
“The tourism industry contributes approximately 24 percent of the Cayman Islands' gross domestic product and contributions from cruise and stay-over visitation are vital to the economy,” he said. “Feedback from the cruise lines affirms the inconvenient truth that the Cayman Islands will continue to lose market share unless a berthing facility is constructed to facilitate the fast, easy and safe movement of passengers to and from their ships.”
While the best-case scenario envisions a continuation of the Cayman Islands’ cruise passenger growth and a successful operation with minimal environmental impact, the worst case is based on the potential harm port dredging would inflict on dive operators in George Town harbor, where the facility would be built.
PwC warns that an absence of data on scuba diver spending, specifically associated with George Town’s reefs, and a lack of information on how they would respond to cruise piers being built, made it difficult to assess the potential economic downsides of the project.
Specifically, the report says PwC lacks data on estimated losses to the local dive industry vary based on variables including how many divers use the George Town reefs compared with other Cayman dive sites. There is also insufficient information on divers’ expenditures in the capital, as well as on whether they would continue to spend money at other Cayman Islands dive sites if George Town was unavailable.
The BREA data found that 1.45 million passengers visited Grand Cayman during the 2014-15 cruise season, spending an average of four hours ashore and generating total expenditures of $160.9 million, an average passenger spend of $115.60 per person, which is 23 percent higher than PwC’s initial assessment.
Kirconnell said the ministry of tourism “is engaging in discussions with cruise lines to arrive at a funding model that will deliver the best possible outcome for the country while ensuring that the berthing facility is owned by the people of the Cayman Islands in 20 years.”
He added, “If the ministry is successful in securing a partnership with the cruise lines, we can realistically expect passenger volumes to be maintained or increased so that their investment can be recouped.”
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