US$162 million anticipated from cruise sector in new year – MOTTuesday, November 30, 2021
BY AVIA USTANNY COLLINDER
THE Ministry of Tourism (MOT) is projecting a solid year of earnings from cruise lines in 2022, although not equal to inflows in 2019, the year before the pandemic hit.
Projections shared with the Jamaica Observer are for US$162.46 million ($25.5 billion) to be earned from cruise visits in 2022. Stay over visitor earnings, meanwhile, are projected at US$2556.9 million ($401.17 billion) in 2022.
The level of recovery anticipated is being contrasted with pre-pandemic 2019, when cruise visitor earnings were US$181.26 million ($24.2 billion) compared to stay over inflows of US$3,121.09 million ($416.67 billion).
The value of the Jamaican dollar has depreciated since 2019 when the average exchange rate was about $133.5 to US$1. The current rate is US$156.9 to US$1.
Data from the Jamaica Tourist Board (JTB) indicate that cruise passengers accounted for over 1.5 million of the approximately 4.3 million tourists visiting the island in 2019.
The Port Authority of Jamaica (PAJ), shared that earnings flow into the island through statutory fees such as wharfage and pilotage fees, and each cruise passenger is required to pay a user facility fee to the port of call which is passed to the PAJ by the cruise line. Arrested development of the sector in 2020 under pandemic conditions broke a 13-year record of growth.
Data from the Statistical Institute of Jamaica show that cruise tourism saw an almost 300 per cent increase in earnings between 2008, when the sector earned $7.5 billion, and 2017 when that same branch of tourism saw earnings of $22.6 billion.
Revenue sources from the industry include government taxes, port fees paid by cruise lines and retail spending by cruise visitors.
Kimberley Stiff, assistant vice-president of marketing communications at the PAJ, told the Business Observer, “While the ports collects a variety of fees for each call, the majority of the revenue for Jamaica is generated through the passenger spend on shore in areas such as transportation; retail and duty-free shopping; craft, entertainment attractions etc.”
She noted that in the past, surveys have indicated that during normal times (pre-COVID-19) the average spend of a passenger is approximately US$100.
Additionally, at some of the ports of calls the vessels might also procure water and fuel. In home-porting operations there are additional economic benefits flowing from provisioning, increased airlift, hotel stays and other turnaround services.
Year to date August 2021 to November 18, 2021, a total of 50,160, passenger and crew/staff disembarked cruise ships in Jamaican ports. The total number of 'paying' passengers (excluding crew) for the period was 29,045.
Stiff said, “It is important to note for context that since the restart of the cruise industry globally, ships are averaging between 50 and 60 per cent occupancy and are anticipated to reach 75 per cent occupancy during the first quarter of 2022 and full occupancy by the end of the 2nd quarter of 2022.”
Earnings from port fees and taxes paid to year to date are approximately $28 million. A conservative estimate of revenue projected for the period November to March 2022, based on port and passenger fees, is $400 million.
The MOT says there are benefits to be derived from cruise flow to many small and medium-size tourism enterprises (SMTEs), as well as local service providers including contract carriage operators, craft vendors, artisans, food and beverage producers, local community groups, DJs and entertainers.