Cruise tourism in a deep existential crisis

PHILIPSBURG – Cruise Tourism in St. Maarten is in a deep existential crisis, no matter how seemingly optimistic outgoing Tourism and Economic Affairs Minister Stuart Johnson spins the story. Cruise tourism has been a boon to the destination for decades; now it has turned into the local economy’s Achilles’ Heel.

The numbers paint a gloomy picture of an industry that is desperately fighting to get back on its feet after Hurricane Irma. In 2014, the port welcomed a record number of 2 million cruise passengers who spent on average $191 on the island.

But in the wake of Hurricane Irma, St. Maarten is still struggling to get anywhere near that record number. Between November 1, 2018 and April 30, 2019 only 466 cruise ships docked in port carrying 1,239,707 passengers. Average passenger spending dropped by more than 25 percent to $142.23 according to a report Business Research and Economic Advisors (BREA) compiled for the Florida Caribbean Cruise Association (FCCA).

The impact of these numbers on the economy is huge. Between 2014 and 2018 the port saw 950,581 fewer cruise passengers. This means –depending on the number you use for average cruise passenger spending – that local businesses saw between $135.2 and $181.6 million less revenue. For the government this represents a loss in turnover tax of between roughly $6.75 and $9 million.

Compared to the previous cruise season, the port stated in a press release that the numbers will go even further down between November 1 of this year and April 30, 2020: from 1,239,707 to 1,049,419; that’s 190,288 fewer cruise passengers and another blow to the local economy – based on the average spending in 2018 – of $27.1 million.

The number of cruise ships coming into port will drop during the upcoming season from 466 to 416, while the average number of passengers these cruise liners carry drops from 2,660 to 2,522.

The BREA-report established that in 2018 cruise tourism expenditures in St. Maarten added up to $143.24 million, while cruise-related employment was 3,499. The employee wage income for these workers was a combined $72.34 million, an average of close to $20,675 per employee ($1,722 per month). Cruise lines spent $13.88 million in St. Maarten on port fees and services and supplies; that number will obviously also go down in the upcoming season.

This rather dramatic downturn does not seem to disturb the port authorities. In an optimistic press release, the port announced a two-year investment plan that suggests that money is no problem. The port intends to construct replicas of an historical ship and of the Great Salt Pond among other initiatives “out of its own cash flow.” The port did not say anything about how much capital it will invest. The objective is “to enhance the guest passenger experience” at the port.

The port has also announced that it is searching for a strategic partner. This could be a private port operator (like Global Ports Holding) or a cruise line, its press release stated. This seems to indicate that selling out management to Global Ports Holding is not a done deal yet: the port intends to issue a request for proposal.

While the appreciation of cruise passenger that still come to St. Maarten remains high, their numbers are dwindling. How replicas of an historic ship and the Great Salt Pond will turn the tide remains for now a damn good question.

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“St. Maarten needs to put the ‘WOW’ back in the guests’ experience”
Port St. Maarten to Undertake Investments to Maintain and Enhance High Guest Satisfaction Ratings