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Caribbean cruise restart flags challenges for destinations

'The host countries will bear costs, and is there enough revenue to bear costs when they're in recovery mode? I don't think so,' André Wright said
As cruise lines plan restarts in the Bahamas and Caribbean, André Wright is concerned about destination readiness, the visitor experience and who shoulders the added costs.

Are the destinations prepared to take ships? Is airlift adequate? Hotel capacity? Ground transportation? Are all the logistics in order?

Are emergency medical facilities and equipment adequate? Who's thinking about the 'what ifs?' Should a ship become stranded, what's the plan? Are there enough hotel rooms, enough flights out?

'One side needs to get back in business. But the other side needs to be ready to receive visitors. Is [the process] coordinated? And is it coordinated among the various islands?' posed Wright, EVP Standard International Group, a New York City-based financial advisory firm with expertise in Caribbean infrastructure projects.

The US Virgin Islands have been a major client. Others include St. Maarten, Curaçao and Jamaica.

Focus on host governments' standpoint

There's ample discussion about the cruise lines' perspective. Wright's focus is the host governments' standpoint and the impact on communities the ships visit. He estimated Caribbean governments are missing as much as one-third of their GDP without direct spending from tourism, not counting the lost indirect income.

Islands need the ships back. But are they ready?

Airlift to some future homeports is currently spotty, and many hotels aren't open. Wright wonders who's going to handle all the health data for arriving cruisers; some countries mandate insurance, COVID testing and health visas.

There's a lot of uncertainty in travel restrictions between islands, too. For example, right now only residents are able to return to St. Maarten from Aruba, Bonaire and Curaçao because of COVID levels in the ABC islands. Some cruise itineraries include destinations people aren't currently allowed to travel between.

Shuttered businesses

What experiences and activities await cruisers on shore?

Front Street in Philipsburg, St. Maarten, and Main Street and Back Street in Charlotte Amalie, St. Thomas, are 'ghost towns,' according to Wright, with many businesses shuttered.  

Lines will want to offer travelers something near to the experience they once had because 'They need to protect their brand. If they go to a place and that place is not what it used to be, or it's not ready,' that's a reputational risk.

'This will work itself out,' he said. 'It will not be perfect. People should not have rigid expectations because of the current environment or they might be upset.'

Revisiting berthing agreements

Wright also questions how the pandemic may impact cruise line agreements with host countries, and if things can stay the same when destination costs are higher. Modifications to existing berthing agreements may be needed.

'The host countries will bear costs, and is there enough revenue to bear costs when they're in recovery mode? I don't think so,' he said.

Meanwhile, the airlines are 'getting a bigger pass than the cruise lines,' Wright thinks because the US had to dispatch planes to repatriate cruisers stuck overseas early in the pandemic and arrange quarantine facilities. He's not surprised the US government doesn't want to go down that road again.

'This is why the CDC is being a little more rigid because the US government bore a lot of that cost for getting those passengers home,' he said. 'It was a nightmare scenario.'

Anyway, Wright noted aviation is different. A 200- or 250-seat aircraft transporting people for a few hours is not the same as a cruise ship.

Lines say there's time

Lines say there's still time to work out the uncertainties. Royal Caribbean isn't starting its homeporting in the Bahamas until June, and Crystal Cruises in July. The Bahamas have never turned around cruise ships before, but Nassau Cruise Port assured it will be ready thanks to parent Global Ports Holding's experience elsewhere.

Celebrity Cruises plans to begin its St. Maarten program in June, Seabourn from Barbados in July and Crystal its Antigua saiings in August (this also will be Antigua's first homeport program). Norwegian Cruise Line's Dominican Republic and Jamaica sailings also start in August. Apart from Norwegian Joy, these are not the biggest of ships, and all are expected to go out at reduced capacity.

Lines that have announced Bahamas/Caribbean homeports so far are requiring all passengers be vaccinated against COVID-19 or, in the case of Royal Caribbean,  adult passengers. Some lines plan 'bubble' excursions; others say it's too early to tell if people can roam freely. 

Regional problem-solving?

Wright didn't have an opinion on what role the Florida-Caribbean Cruise Association Americas Cruise Task Force or government groups like CARICOM may play tackling all these issues. He said great coordination will be needed among each destination's ministers of tourism, health, ports and aviation. All bring different perspectives.  

Long-term challenges

Once the Caribbean gets past COVID challenges, others remain.

For example: Infrastructure to handle the 6,000-passenger mega-ships.

'The infrastructure required is massive,' Wright said. 'That's another cost a lot of ports are facing, and how are they going to pay for that?'

A further challenge, in his view, is that destinations fall short on visitor experiences. So cruise ships, in providing much more on board, capture revenue that could go to the host communities.

When it comes to developing experiences, 'The countries haven't reached their peak. They aren't even mid-way to it,' Wright said. He pointed to how Marriott counts the number of experiences it offers. 'That's a metric,' he said, one that governments should think about.

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