By Rosie Spinks from Skift

A judge ruling on a citizen-led referendum in the Cayman Islands has, for now, sided with cruise opposition. While the battle is localized, it could point to wider industry implications for the cruise industry.— Rosie Spinks

A judge handed down a victory on Wednesday for opponents of the cruise industry in the Cayman Islands. The government cannot move forward with a referendum on whether a new $200 million cruise berthing facility can be built in partnership with the cruise industry. It must pass additional legislation ensuring such referendums are carried out in a just and fair manner.

It may seem like a minor local decision, but for the cruise industry, whose challenges are many these days, its implications could be much broader. That’s because the biggest challenge to the long-term viability of cruising is not figuring out how to lure newer, younger consumers, but rather losing the willingness of desirable port communities to welcome an ever-growing number of larger vessels.

This is all bubbling up as the cruise industry received a black eye from the recent coronavirus crisis that prompted lines to quarantine ships. Social media surrounding those decisions has created a new public relations nightmare for the industry.

Back in the Caymans, the people-initiated referendum, which was the first of its kind there, was meant to happen in December, but was put on hold when local activists filed a judicial review late last year. Part of their argument was that the government was rushing the vote through in an unconstitutional matter, thereby making the government’s favored outcome — a yes for the cruise port — more likely.

But the implications of Wednesday’s decisions are far reaching. “I think [port opposition] is the biggest threat going forward,” said Tony Peisley, an independent cruise industry analyst and the editor of industry publication Cruise Insight. “[I] think the cruise lines know it is as well. Because what you get in the end is you can’t go to the places that your passengers want to go to.”

THE TENDERING PROBLEM

The Cayman Islands does have cruise tourism already, and quite a bit of it. According to government numbers, 1.9 million cruise passengers visited in 2018, accounting for more 80 percent of total visitor numbers. But it’s something of an outlier in the Caribbean because the vessels that visit must rely on a process known as tendering — where the ship anchors and passengers are ferried ashore in on smaller boats — rather than docking and letting arrivals walk right off the ship.

“Cruisers love Grand Cayman – the port’s Seven Mile Beach is incredibly popular, and scuba divers love the diving options available,” Colleen McDaniel, editor in chief for Cruise Critic, an online booking and member review site, said. “But because it’s a tender port, it can make actually visiting the port hit or miss – ships have a hard time tendering in inclement weather, meaning it’s a port that ships sometimes are forced to skip altogether … The process is sometimes time-consuming and can be difficult for passengers with mobility issues – some travelers prefer staying onboard instead of taking the tender to shore.”

Peisley explained that cruise lines generally craft their itineraries based on a mix of factors including port desirability to passengers, distance and time needed to travel between one port and the next, and even how lucrative the shore excursion offerings in a given port may be. Because of tender situation in Cayman, some cruise lines, notably Royal Caribbean, have decided not to send their largest class of Oasis ships (which can hold more than 6,000 passengers) to the island.

Jamaica’s tourism minister has blamed the lack of a large-scale berthing facility in Cayman Islands as one reason its own cruise arrival numbers have fallen as much as 25 percent — because larger ships are avoiding the western Caribbean route. This is despite Jamaica building its own large berthing facility to accommodate these vessels at its Falmouth port in partnership with Royal Caribbean in 2011. Royal Caribbean did not respond to a request for comment on this.

The new facility in George Town Harbor was meant to remedy all those problems, giving cruisers a nicer passenger experience, and in theory giving Cayman more cruisers — and more tourism revenue. But as most things do, the project comes with a downside: the harbor is home to delicate coral reefs, which are not only a sensitive ecosystem, but also a key diving area that lures higher-spending, longer-staying tourists. Dredging the harbor to build the facility would necessarily harm several acres of this habitat, according to a court document. That same document says the government has plans to relocate less than 3 percent of the reefs that would be destroyed by building the port.

Much of the local opposition to the port comes from the fact that Cayman Islands has a deep environmental and preservationist ethos embedded in the local culture, Nadia Hardie, head of the Cayman Island’s National Trust, which is also against the project, told Skift last year. Many don’t see the increased tourism dollars are worth it if it means ruining what is special about Cayman to begin with.

As the chief justice involved in the case put it in January, “the underlying issue which the referendum will decide … concerns the appropriate balance to be struck between the perceived economic opportunities of mass short-stay tourism and the destruction of internationally renowned coral reefs.”

WRITTEN IN THE HISTORY BOOKS

In 2018, local entrepreneur and activist Mario Rankin joined forces with other opponents of the project to form the group Cruise Port Referendum Cayman. In 2019, they garnered the necessary number of signatures to warrant holding the Cayman Islands’ first-ever people initiated referendum. However, concerns over the outdated nature of the existing environmental impact report done in 2015 — as well as the aforementioned accusation of a rushed vote — is what compelled them to file the judicial review. In effect, they’ve been arguing to delay the very referendum they fought for. And they won — at least for now.

“It’s been a long hard fight, 20 months of constant challenges and huge criticism for our own government elected by the people for the people,” Rankin said. “Finally our views and concerns are now written in the history books with ruling that has agreed with the people.”

In response to the decision, the National Trust released a statement saying it “looks forward to reviewing the updated Environmental Impact Assessment when published by Government and engaging in consultation on it. It is important that all essential environmental assessments are conducted and published, thus providing reliable information to the public in respect of the impact that this project will have on our endangered coral reefs, unique marine environment, and historical shipwrecks.”

The government said it would appeal the judge’s decision, adding, “pending the Court’s final order, aside from the immediate issue of an appeal, the Government will take time to consider its next steps regarding the port project, and will issue another statement in due course.”

On the issue of environmental concerns, a spokesperson for the government’s tourism and transport ministry provided Skift with a brochure on the project, which said “from the inception of this project, the Cayman Islands Government has done everything possible to ensure that the cruise berthing facility is carefully and responsibly built in a way that causes the least environmental impact.” It also claims the government will endeavour to replace 10 times the amount of coral lost through a process called “coral gardening.” On the allegation of rushing the referendum to get its preferred result, the spokesperson did not respond to a specific question from Skift.

A VERDANT ISLE

That the government was essentially on the same as the cruise industry in wanting the port built is not surprising. The facility in Cayman Islands is meant to be built in a public private partnership with the Verdant Isle Consortium, a group made up by the two largest cruise lines, Royal Caribbean and Carnival Corp, as well as two other construction parters. In its promotional brochure, the government explains that thanks to this partnership, the project will come at no cost to the taxpayer and result in a potential increase of 1.9 to 2.5 million passengers per year, and the attendant passenger fees increase that goes along with that.

Skift reached out to Verdant Isle for comment on Wednesday’s court ruling, as well as for a response to the environmental concerns of the project, and will update this post if it responds.

These kinds of public-private projects are becoming more common across the Caribbean cruise region, Peisley told Skift. While cruise companies have found great success with investing in their own private islands in the Caribbean, he said more cruise companies are increasingly accepting that they must also pay up front for or partner infrastructure projects in Caribbean ports if they want facilities to keep apace with the growth and expansion of the industry — not to mention passenger expectations.

“The cruise liners have always been reluctant to get involved in port developments and operations because that’s not the business they’re in. Not just in the Caribbean but everywhere else now. But sometimes they just have to do it,” Peisley said.

In one way, this can be beneficial for the cruise lines as it allows them to negotiate up front the amount of passenger tax they pay over time, which is a frequent point of contention between cruise lines and governments, Peisley said. But conversely, it comes with the optics of public resources being built to help private companies.

As the situation in Cayman shows, that can be particularly problematic at a time when the real value of what tourism dollars actually does for a community is coming under scrutiny now more than ever.

“We have to identify what our carrying capacity is. And that carrying capacity has to safeguard our environment first and foremost. Once we’ve identified how many cruise passengers we can accommodate in an environmentally friendly and sustainable way, then that’s the number we should stick to,” Rankin said. “Under no circumstances should we accommodate a cruise berthing facility to accommodate a private company who makes billions a year. We don’t own a cruise line so why are we building a dock for a cruise line?”

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For more on this story go to: https://skift.com/2020/02/20/grass-roots-opposition-to-cruises-in-the-caymans-looms-as-larger-warning-for-industry/