We highlight some, but not all, of the numerous significant and unquantified risks where mitigation strategies could be (i) high cost (ii) unidentified (iii) based on unreliable data or (iv) subject to environmental uncertainty associated with this project.
Finance Model Transparency
What would Caymanians really pay for the project? Governments have a duty to deliver value-for-money projects with public finances.
The 2019 cruise pier proposal would have cost in excess of CI $200 million and Cayman would have paid the financiers over $400 million for it, over 25 years incl. interest. Inflation and cost of construction has skyrocketed since then. And Government projects are notorious for exceeding budgets by millions of dollars. Airport design flaws and overruns reported by the Auditor General have been significant, what will be done differently for this project? Will we saddle our future generations with this debt?
Cayman Has Higher Priority Infrastructure/Social Investment Needs
- a modern public transportation system that will reduce gridlock, increase community wellbeing, make transportation safer, more accessible and affordable.
- affordable housing
- investment in solar energy to bring down the cost of electricity
- ensuring all Caymanian children and our elders have adequate health care
A Pier Won’t Fix Cayman’s Cruise Tourism Problems
The cruise industry is vulnerable to external factors beyond our control. Remember the Covid 19 pandemic? Global economic swings and recessions also have a large impact on the cruise sector. Currently US credit card debt is at an all time high and new trends are showing that consumers are opting for cheaper shorter 3 to 4 day cruises over longer cruises which generally are those that have Cayman on its itinerary.
- Regional data clearly shows having a pier or not having a pier is not the issue.
- The data (2019 vs 2024 Caribbean cruise arrivals) shows Cayman having the most dramatic drop from 2019, but we are still at over 1 million cruise arrivals.
- Cayman is still #6 in the region for cruise arrivals.
- Most of the other places with higher numbers are significantly larger than Cayman and or with multiple islands / cruise ports – Bahamas, Cozumel, Dominican Republic. The other smaller islands are just slightly ahead of Cayman – Turks, USVI.
Competitive Disadvantage of Cruise Lines Unable to Berth
With berthing, cruise lines reported they would likely stop calling on Cayman if they were unable to berth (PWC report, pg.19). What will happen on days with more than four ships? Will other lines be willing to pay their competitors, Royal Caribbean and Carnival, to use the pier?
Cruise Ship Reputation and Long-Term Outlook
Cruise tourism is vitally important to our islands and a positive cruiser experience is what we all want for Cayman. However, news and social media continue to highlight areas of concern over illegal activity, i.e., questionable practices by the industry such as fines and penalties for illegal activity, e.g., dumping of blackwater and garbage, as well as sanitation and safety issues.
Learning From Other Popular Cruise Destinations
Why aren’t we learning from jurisdictions reacting to over-tourism problems? Venice recently banned mega-ships, and Bruges, Dublin, Dubrovnik, Amsterdam and Santorini are introducing policies to limit or reduce cruise numbers. And cruise ships are crashing and damaging piers, e.g., Honduras, Puerto Rico, Buenos Aires, Bermuda.
Uncertainty
The valuation in the PwC Outline Business Case is subject to inherent limitations based on varying assumptions and unreliable/unavailable data which have significant implications for the results. These uncertainties are critical when considering whether this project will truly provide long-term benefits for Caymanians.
Final Conclusion Raises Red Flags
The PWC conclusion reads, “The impact of the CBF [cruise berthing facility] is still driven by the number of visitors to the Cayman Islands who participate in ‘diving’ [watersports activities] and their behaviour in response to any damage to the reefs in GTH [George Town Harbour]. “These questions are fundamental to the economic rationale of the CBF.”
Evidence directly from the international dive community demonstrates the extreme likelihood of undervaluation:
Ocean Futures Society President and Founder Jean-Michel Cousteau’s open letter to the Ministers of Tourism and Environment. (Cayman Compass, 4 Oct. 2018)
Mission Blue, founded by leading Oceanographer: Sylvia Earle, designated George Town Harbour as a ‘Hope Spot’. See here
- Ocean Futures Society President and Founder Jean-Michel Cousteau’s open letter to the Ministers of Tourism and Environment.
- Mission Blue, founded by leading Oceanographer: Sylvia Earle, designated GT Harbour as a “Hope Spot”.
- International petitions on the project shared by wide-reaching international organisations such as DEMA (Divers Equipment & Marketing Association) reaching over 30,000 signatures.
- Rainforest Rescue has launched an international petition: Don’t trash coral reefs for the cruise industry! Currently 172,000 signatures and aiming to attain 200,000.
- International petitions on the project shared by wide-reaching international organisations such as DEMA (Divers Equipment and Marketing Association) reaching over 30,000 signatures.
80/20 Rule
Significantly, while approximately 80% of our annual tourism headcount comes from cruise and 20% from stayover, Caymanians benefit more from stayover guests whose dollar spending contributes approximately 80% of annual tourism revenue, the ‘80/20 rule’.
Information has been obtained by CPR from publicly available reports found on the websites for the Department of Tourism www.supportourtourism.com and Department of Environment Www.doe.ky.
If you would like to receive more information, please contact us at: cprcayman@gmail.com.
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Environmental Impact