Cruise ship industry not a panacea for port cities, finds
Report
A new report from
the Canadian Centre for Policy Alternatives says port cities need to
take a
realistic look at their expectations of what the cruise ship industry
can
deliver in economic benefits.
The
study finds that a likely slowdown in industry growth combined with
ongoing
investments in new cruise terminals and facilities is a recipe for
overcapacity
and “race-to-the-bottom” style competition between port cities.
Ross Klein, author of Charting a Course: The Cruise Industry, the
Government
of Canada
and Purposeful Development, says that in their rush to embrace the
cruise
industry, Canadian ports have underestimated the costs of development
and
overestimated income. “Ports are investing millions in anticipation of
a
continuing boom in the growth of the cruise industry — an expectation
that
isn’t realistic, given depressed prices for cruises, fewer contracts
for new
ships in 2005 and beyond, and the dependence of the industry on
American
cabotage laws.”
Klein says this expansion has been accompanied by port cities marketing
themselves to the cruise industry in an effort to capture part of the
market.
“With so many cities vying for business from the cruise industry, not
to
mention ports in the US,
conditions are ripe for one port to be played off against another.
There are
more suppliers than demand for ports — one city’s gain is another’s
loss.”
The Port
of Vancouver has
made significant
investments in its berth facilities, yet cruise ship calls have
decreased
significantly in 2003, he says. At the same time, cruise passenger
numbers for
BC are up overall. Victoria
has embarked on a redevelopment project that will cost between $5 and
$10
million. Prince Rupert is spending $9
million on
a new cruise terminal, and Nanaimo
is considering dredging and modifying one of its berths.
Klein says these investments are based on what tend to be unrealistic
estimates
of the benefits of cruise tourism, such as the commonly cited $100 per
passenger in onshore spending. “The cruise industry leaves a relatively
small
economic footprint,” says Klein. “Governments need to take a realistic
approach
to developing the industry that acknowledges the real costs, risks and
benefits
of cruise tourism.”
The report makes numerous recommendations on how to address these
problems,
including encouraging Canadian ports to work together to avoid being
pitted
against each other, introduction of a small head tax on cruise
passengers to
fund related expenses; a national, independent study that assesses the
economic
and social benefits and costs of cruise tourism, and encouraging the
federal
government to legislate sound environmental regulations, especially
dealing
with cruise ships dumping waste into local waters.
