top of page
Mobile Phone Mock-ups

28 Oct 2024

Cayman Islands Cruise Industry Faces Decline: What's Next for the Future of Local Tourism?

Fashion Portrait
Fashion Portrait

A recently published report from the Economics and Statistics Office (ESO) has raised pressing concerns for the cruise tourism sector in the Cayman Islands. The findings, revealing a continued decline post-pandemic, shed light on troubling trends in the cruise industry that could have a significant ripple effect on the local economy. As the government emphasises the need for adaptive measures, stakeholders are now faced with tough questions about managing, mitigating, or reversing this downward trajectory.


This article delves into the report's key findings, the underlying factors driving this shift, and the potential pathways forward for the Cayman Islands' tourism sector.



A Decline in Cruise Calls

Hon. Kenneth Bryan, Minister for Tourism & Ports, speaking at a government press briefing, pointed to the persistent decrease in tourism numbers, particularly those linked to cruise travel. The downturn that began in 2020 due to the COVID-19 pandemic has proven to be more enduring than initially anticipated. According to the ESO report, the total contribution of cruise tourism to the Cayman Islands economy has been steadily falling, from USD 350.1 million in 2018 to USD 261 million in 2023, with projections setting this figure even lower at USD 253.4 million in 2024.


The worrying trend is also reflected in the number of jobs the cruise segment supports. As of 2024, it is estimated that 2,587 jobs—or 5.8% of annual employment—are tied to cruise tourism. This employment figure is at grave risk as the number of cruise calls continues to dwindle, and potential layoffs or employment shifts could follow if no intervention is taken.



Larger Vessels, Fewer Visits—A Sea Change in Cruise Tourism

One of the most critical factors highlighted in the report is the trend towards larger vessels within the cruise industry. Major players, including Royal Caribbean and Carnival Cruise Lines, are investing in larger ships that, thanks to their size, bypass destinations that need more infrastructure to accommodate them.


Senior Economist Ralston Henry echoed this concern: "For the larger cruise lines, such as Royal Caribbean and Carnival, there has been a significant shift towards larger vessels, which cannot easily dock or tender at destinations such as Cayman where smaller berthing facilities are the only option."


Tracking the data from these major cruise lines showed that only a tiny fraction of their newer, larger ships are making stops in the Cayman Islands, with most choosing alternative destinations capable of handling increased passenger loads.


The government has positioned the lack of a cruise berthing facility as critical for this shift. "Without a proper facility to accommodate these vessels, the Cayman Islands faces the risk of being further sidelined by the cruise lines," said Minister Bryan.



The Government's Call for Action—and a Referendum

Recognising this critical moment, the government has officially announced the postponement of the debate on constructing a cruise berthing facility. Initially set for this year, the referendum date has been rescheduled to coincide with the 2025 election. The decision underscores the issue's entanglement with tourism and more significant questions of local economic stability, environmental concerns, and public sentiment.


Despite the deferral, the UPM administration has expressed clear support for constructing a new berthing facility to ensure the Cayman Islands remains competitive in global cruise tourism. In defending the postponed referendum, Minister Bryan warned, "Without definitive action, this decline will continue to chip away at the core of our cruise tourism industry until, eventually, it dwindles to nothing.”



The Environmental Perspective

One reason a referendum has become essential is the longstanding debate regarding the environmental implications of constructing a cruise berthing facility. Coral reefs, vital to the local marine ecosystem and a major draw for eco-tourists, would likely be impacted by the dredging activities needed to build a large-scale berthing site.


Environmentalists and local activists have been vocal about potential damage to the marine environment, arguing that the "cost" of the berthing facility could ultimately detract from the natural beauty that brings many tourists—particularly divers and adventure-seekers—to the Cayman Islands in the first place. This community opposition, combined with conservationist concerns, has complicated the issue politically and remains one of the primary reasons the government has pushed the decision back to 2025.


In the referendum, Caymanians will ultimately decide whether the potential economic benefits of expanding the port outweigh the environmental costs.



Staying Afloat: Can Niche Markets Like Luxury Yield Results?

Despite the decline from the more extensive cruise lines, there are glimmers of hope for the cruise segment. Disney Cruise Lines and Celebrity Cruises—operators that rely on smaller ships—have seen meaningful growth post-pandemic. These lines frequently target more affluent travellers seeking unique, high-end experiences, an area where the Cayman Islands could potentially capitalise.


This trend could point to a relatively untapped area for the Islands: high-end, niche cruise tourism. By aligning promotional and infrastructural efforts with smaller cruise lines and luxury-seekers, the Cayman Islands can shift its approach, creating cruise experiences that cater to smaller yet higher-spending demographics. Future marketing efforts may need to pivot towards exclusive, curated experiences that attract smaller vessels but yield more lavish per-visitor spending.


The potential is evident, but the path forward would likely require local businesses and government agencies to collaborate, ensuring that high-end excursions, from food and drink to retail, are offered to these luxury cruise passengers.


The downturn presents a significant challenge for local business owners who rely heavily on cruise traffic—ranging from tour operators to restaurants and duty-free retail. These businesses face potential revenue losses as cruise ships bring in fewer visitors.


However, innovation and adaptation could help mitigate some of the decline. Businesses may target alternative tourist segments, including eco-tourism and stayover visitors, or pivot towards services aimed at more affluent cruise passengers, particularly those arriving on luxury lines. This transformation could involve adjusting marketing strategies, upgrading products or services, or leveraging technology to enhance visitor experiences.


For example, restaurants and retailers could develop unique offerings and packages to capture more revenue per visitor from luxury cruise passengers. Tour operators could tailor their offerings towards smaller groups or customisable eco-friendly tours that appeal to wealthier travellers.



Navigating the Future of Cayman Islands Cruise Tourism

The numbers paint a stark picture but offer an opportunity for reflection and recalibration. The ongoing decline in cruise visitors, spurred in part by a global trend toward larger vessels and compounded by local infrastructure limitations, underscores the need for urgent discussions about the future direction of the Cayman Islands' tourism strategy.


The government’s push to build a cruise berthing facility is a central, long-term solution—with the final say left to voters. In the meantime, there are also opportunities to explore alternative models of cruise tourism, focusing on niche markets and high-end experiences.


The question remains: Can the Cayman Islands adapt fast enough to secure its position in the competitive cruise tourism market while also supporting sustainable growth for its people, businesses, and environment? The next few years are critical for determining how the islands rise to meet these challenges.




 

Disclaimer: This article reflects considerations based on the latest publicly available data and estimates from the Government of the Cayman Islands and its relevant departments. Numbers and forecasts may be subject to revisions or updates.

02

8mosphere Technologies By The Numbers

30

A proven track record of success in aerospace and defense R&D.

years of experience

80

Actively engaged in driving innovation across diverse areas.

Ongoing projects

15

Recognition for groundbreaking technological advancements.

Patents Awarded

2.5K

A team of passionate and skilled engineers, scientists, and researchers.

Talented Employees

+

Related Content

Beach Erosion on Seven Mile Beach: What’s Being Done and What’s Next for the Cayman Islands?

In recent years, the issue of beach erosion along Grand Cayman's iconic Seven Mile Beach has become more than a peripheral concern—it now directly threatens the Cayman Islands’ economy, infrastructure, and international reputation as a premier tourist destination. Videos showing waves undermining walls—and, in some instances, lapping at the foundations of buildings—have sparked alarm within the local community and among stakeholders who depend on the beach for their livelihood.

1 Nov 2024

Cayman Islands Cruise Industry Faces Decline: What's Next for the Future of Local Tourism?

28 Oct 2024

bottom of page