Caribbean Market Update

While the issues continue to brew in the Caribbean, definitive developments have taken place in Jamaica and the U.S. Virgin Islands that signal increased taxes along with cooperative efforts.

Healthy Dialogue

"We have opened up a healthy dialogue between the Caribbean islands and the cruise lines and are able to exchange information and discuss our needs," said Richard Sasso, Chairman of the Florida Caribbean Cruise Association (FCCA). "We have gotten away from the perception that we are the bad guys," Sasso said. "It is just as important for the Caribbean islands to understand our needs as it is for us to understand their needs. Now, we exchange information on a daily basis."

Sasso said that when a cruise line plans an itinerary it looks at three factors: the marquee value of the destination; the quality of the destination experience; and the relative cost to the cruise line.

"This process is part of our ongoing decision­ making," Sasso said. "In the process, each line may eliminate some ports and add others.

"An understanding of this process should also be part of the decision-making of the destinations," Sasso added.

"It is up to them to raise taxes. In the meantime, we will make sure that they fully understand where we are. At least then we will know that they made their decision based on complete information."


In Jamaica, Sasso said that the FCCA and the Jamaican government have reached a mutual understanding whereby the planned passenger head tax has been revised.

Initial plans called for the head tax to go from the present $10 to SIS effective October 1, 1993. The cruise lines complained, however, and said it would be impossible for them to absorb the tax increase on such short notice. Several cruise lines also reportedly said they would drop Jamaica from their itineraries.

Coincidentally, Carnival Cruise Lines recently announced a Western Caribbean itinerary for the Tropicale, sailing from Tampa and New Orleans, that excludes Jamaica.

The revised tax rates applicable in Jamaica will be $13 in Ocho Rios from January 1994 to September 1995, and $15 from October 1, 1995 through 1996; and $12 in Montego Bay for 1994 and 1995, increasing to $13.50 in 1996 and $15 in 1997. The Montego Bay rate will also apply to Kingston and Port Antonio. The reason for the different rates is that Ocho Rios is the preferred port of call, receiving more than 60 percent of the cruise passengers in 1992, according to a statement from the Jamaica Tourist Board.

The board said that it anticipated that the lower rate will provide an incentive for more ships to call in Montego Bay, Port Antonio and Kingston.

Sasso noted that although the FCCA and Jamaica have reached a mutual understanding, it still has to be implemented. He also said that it was his understanding that Jamaica intends to use the tax revenues to improve the cruise experience. "This is one of the subjects we need to discuss further," he said.


Other important commionents are evolving from the cruise line/island dialogue.

According to Jamaica's board of tourism, "the lines have agreed to assist Jamaica in improving the product and to offer increased employment opportunities to Jamaicans. They will also increase efforts at environmental compliance and examine their itineraries with a view to increase the flow of visitors in the shortest possible time. They will also develop a program aimed at enabling Jamaican suppliers to supply goods and services to the lines."

Sasso commented that the FCCA has been working in the direction of more sourcing of Caribbean products for the past 18 months. He said it boils down to "price. quality and availability." Sasso added that Celebrity Cruises. where he is Senior Vice President of Sales, purchases goods in the Caribbean already and will look at additional opportunities.

Sasso also said that he believed that more than 10 percent of the total employment in the cruise fleet already originates in the Caribbean.

According to the Tourist Board, a "council will be established involving representatives of the cruise lines and the Jamaican public and private sectors, to continuously review the areas outlined in the agreement."

U.S. Virgin Islands

ln the U.S. Virgin Islands, meanwhile, a committee has been formed "dedicated to finding ways to improve the U.S. Virgin Islands visitor experience," according to Eric E. Dawson, Commissioner of Economic Development and Agriculture.

"lmproving the visitor experience is our primary goal," Commissioner Dawson said. "I sincerely believe that the results of these meetings will eventually lead to the Virgin Istands being considered the model destination where cruise, hotel, retail and visitor attraction industries work together in harmony for their mutual benefit."

The committee, which plans to hold its first meeting September 2, will discuss ways to arrange an exchange program between hotel guests and cruise passengers and joint marketing opportunities to include land and sea vacations. ln addition, the committee will explore more ship calls to St. Croix and the possible dual use by cruise lines of both St. Thomas and St. Croix on the same itinerary.

ln addition to Commissioner Dawson, committee members include Dick Doumeng, President of the St. Thomas/St. John Hotel Association; John LaCapra, President of the FCCA; Ronald Oddo, President of the St. Thomas/St. John's Retailers Association; and delegates from major St. Thomas and St. John visitor attractions.

"It is a maner of giving hotel guests an opportunity to visit cruise ships in port, for lunch perhaps," Commissioner Dawson said, "and for cruise passengers to visit our hotel facilities."

"The same people can return to us as hotel guests and to the cruise lines as passengers." Dawson said. "Both parties must avail themselves of this opportuniry. We should look upon the cruise industry as a fam trip to our islands. lf we can provide the right exposure, that is a good marketing tool. We must be foresighted and look ahead. The cruise industry is here to stay."

Doumeng said that the committee will seek "win-win solutions for both the hotel and cruise industries." He noted that St. Thomas and St. John currently host more than 1.2 million cruise visitors each year.

In the U.S. Virgin Islands, the cruise ships are assessed a tax of $9.51 per passenger amortized against wharfage, pilotage, dockage and passenger dues.

"The concept of presenting ships to hotel guests and hotels to cruise ship passengers started on a mutual basis with Doumeng and LaCapra, both being instrumental," said Commissioner Dawson.

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