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Cruise Industry Projected To Contribute $240 Million To P.R. Economy In FY 2005

P.R. Tourism Co. expects 300,000 more cruise passengers this fiscal year; still working on incentives plan for cruise lines


July 1, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

The cruise industry will make a direct economic contribution to Puerto Rico’s economy of an estimated $240 million in fiscal year (FY) 2005, which began July 1, according to a recent study by Canada-based InterVistas Consulting.

"These are very conservative figures," said Irene Rocafort, the special aide to the Puerto Rico Tourism Co. who has been in charge of developing a new incentives plan, based on the InterVistas study, for cruise lines operating in Puerto Rico.

Rocafort said estimates indicate Puerto Rico will receive 1.4 million cruise passengers in FY 2005, 22% more than the 1.1 million passengers that preliminary Planning Board figures indicate were received in FY 2003. The Tourism Co. also expects the island to be a port of call for 580 ships and a home port for 235.

According to the study, expenditures by homeport cruises total $89 million, or $470,373 per vessel call. These expenditures include port charges and fees, food and beverage, fuel, hotel supplies, vessel maintenance and repair, and more. Transit-ship expenditures total $70.3 million, or $193,687 per vessel call.

In other words, cruise lines spend $204.14 per passenger on ships that use Puerto Rico as a home port, whereas cruises that use the island as a port of call spend $92.18.

The study also revealed that home-port passengers staying in Puerto Rico at least one night before or after a cruise spend an average of $104.57. Those who don’t stay pre- or postcruise spend an average of only $11.19. Passengers who make a port-of-call visit to Puerto Rico spend an average $53.82.

Royal Caribbean Cruises accounts for two-thirds of Puerto Rico’s home-port traffic and Carnival Cruise Lines for the remaining third. When speaking about passenger traffic of transit vessels, Royal Caribbean accounts for 50%, Carnival for 43%, and other cruise lines such as MSC Cruises and Radisson for 7%.

The Tourism Co. intends to use the study’s findings to counter the 22% increase in cruise-passenger fees implemented by the Ports Authority (CB April 29) and to boost cruise activity in Puerto Rico. Effective July 1, cruise-passenger fees will go up from $10.30 to $13.25.

"The new incentives plan aims to strengthen the island as a competitive port for cruise lines. Trends such as homeland cruising (cruises staying at U.S. mainland ports), new ports in Mexico and the western Caribbean, and new routes to Europe and Alaska mean more competition," said Rocafort.

In addition, the plan aims to increase the number of small cruise lines doing business in Puerto Rico. "We intend for small vessels like those Radisson and MSC operate to take advantage of the incentives plan and do business here," said Rocafort.

Rocafort said the new incentives plan will take various factors into consideration, such as whether the ships use Puerto Rico as a homeport or a port of call, whether the ships buy supplies locally, the number of passengers, and the number of pre- and post-cruise bookings generated from cruise passengers. The previous incentives plan focused solely on passenger volume. For example, it reduced the passenger fee from $10.30 to $5 once the cruise line reached the goal of 120,000 passengers in Puerto Rico.

As of press time Monday, Rocafort and other Tourism Co. officials were still trying to get the $8.5 million needed for the plan from the Legislature. The funds would be allocated to the Tourism Co., the Ports Authority, and other government agencies.

"We can’t reveal the specifics of the plan since we are still working with the Legislature. The House approved our request during the weekend, but we continue lobbying the Senate," said Rocafort.

This Caribbean Business article appears courtesy of Casiano Communications.
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