Cruise tourism

Among the economic priorities of the Aquino administration, tourism is often cited as a low-hanging fruit given the number of destinations that the Philippines has to offer. Within the industry itself, one segment that deserves attention is cruise tourism, considering that the archipelago has this advantage of having more than 7,000 islands, many still pristine.

Last week, Philippine Ambassador to Washington Jose Cuisia Jr. reported that three of the world’s biggest cruise operators have expressed interest to help develop the Philippines as a cruise ship destination. Cuisia met with senior officials of Carnival Cruise Line, Royal Caribbean International, and Norwegian Cruise Lines during a recent economic diplomacy mission to Florida. Norwegian Cruise is an American company founded in 1966. It is headquartered in Florida and accounts for a tenth of the global market. Royal Caribbean, owned by Royal Caribbean Cruises Ltd., originated in Norway and is likewise based in Florida. It is reported to control nearly a fifth of the world cruise market. Carnival Cruise is a British-American firm based also in Florida and has the biggest cruise fleet in the world and a market share of about 20 percent.

“The cruise giants were open to working with the Philippines in destination development while they discussed infrastructure requirements,” Cuisia said, adding that he took the opportunity to highlight the destination possibilities in the Philippines, particularly Vigan, which is in the running to be among the Seven New Wonders of the World. Vigan has been described as “the best-preserved example of a planned Spanish colonial town in Asia” and is the only Philippine city in the list of Unesco heritage sites.

Apart from helping the Philippines become a cruise ship destination, Carnival, Royal Caribbean and Norwegian Cruise Lines have also disclosed plans to employ more seafarers from the Philippines as they acquire more cruise ships to support their expansion plans. At present, these three firms already have a total of 61,700 Filipino crew members. “They have nothing but high praise for their Filipino crew,” Cuisia pointed out. Labor Attaché Luzviminda Padilla, who was among the embassy officials who accompanied Cuisia at the meeting, said Carnival employed the biggest number of Filipinos with 37,700, followed by Royal Caribbean with 16,000, and Norwegian Cruise Lines with 8,000.

It is estimated that cruise tourism generates about $20 billion a year in passenger expenditures and has been described as the fastest-growing segment of the travel industry, with an average annual growth exceeding 7 percent, or twice the growth of the entire tourism sector. North America dominates the market with more than 12 million passengers coming from American ports. The Caribbean, on the other hand, is the preferred destination, accounting for more than 40 percent of the market. In the winter, the Caribbean is home to about 60 percent of the world’s cruise ship fleet.

A recent study conducted by international consultancy firm Business Research and Economic Advisors for the Florida-Caribbean Cruise Association highlighted the impact of the cruise line sector on its destinations. It analyzed cruise-related spending and its impact on the economies of 21 destinations in the Caribbean and in Central and South America in cruise year May 2011 to April 2012. The study noted that cruise tourism generated significant economic benefits to the 21 participating destinations: Nearly $2 billion in direct expenditures, 45,225 jobs and $728 million in employee wages. The Bahamas led all destinations with $393.8 million, followed by St. Maarten (controlled by the Netherlands) with $356.2 million, the US Virgin Islands with $339.8 million, Puerto Rico with $186.6 million, and the Cayman Islands with $157.7 million. Combined, these five destinations with $1.43 billion in direct expenditures accounted for 72 percent of the total cruise tourism expenditures among the 21 destinations.

These figures should encourage the Philippines to strive to more than just supply international cruise lines with personnel and products like malunggay tea, coconut sugar, or souvenir items. The government should now focus on developing destinations with the best potentials for international cruise tourism. Three of the biggest cruise operators in the world have offered to help. There is nothing wrong in accepting such an offer. Given the right incentives, private-sector investors will be more than willing to help as well.