Beach & Cruise Tourism: Volume vs. Value

[Above: Three cruise ships at the Philipsburg pier in St. Martin. Photo: Jonathan Tourtellot]

July Symposium in Grenada to Address Worldwide Coastal Tourism Overload

Tourism based on sun, sand, and sea is the largest, fastest growing, and most lucrative sector of the tourism industry. Globally, 12 of the 15 top international destinations – including Mexico, France and the United States — are countries with coastlines. In the U.S., three coastal states (New York, Florida and California) host nearly three quarters (74%) of the total number of overseas visitors to the country. And Mexico has over 2,000 hotels along its Pacific, Gulf, and Caribbean coastlines.

The growth and expansion of cruise tourism has been even more dramatic, with the number and size of ships, passengers, ports of call, and profits all on the rise. Cruise tourism is dominated by three main cruise lines – Royal Caribbean, Carnival, and Star/Norwegian Cruise Lines – which control 90% of the North American market. From 1970 to 2012, the cruise industry grew 40-fold, from 500,000 in 1970 and 4 million in 1990, to 20 million in 2012. Ship size increased from 500 – 800 passengers in the 1970s to today’s “floating cities”, the largest of which accommodates over 7,000 passengers and crew.

Cruise and all-inclusive coastal resorts are expected to remain popular, as increasingly urbanized travelers in the Americas, Europe, and Asia seek sun and sea combined with easy-to-book, fixed-price, and standardized holiday packages. Cruise and resort bookings have become the bread-and-butter business for tour operators and travel agents. And tourism-dependent countries, which typically measure success by increased tourist arrivals, have put out the welcome mat for big box coastal resorts and mega-cruise ships.

Environmental and Social Impacts

The expansion of coastal and marine tourism has, however, led to a range of serious environmental and social problems. These, in turn, have spawned increasing resistance from coastal communities and environmental groups, alarmed by destruction of mangroves and coral reefs, competition for fresh water and other scarce resources, rising real estate prices, and displacement of local fishing and farming communities.

High-volume, low-margin beach tourism in Spain. Photo: Jonathan Tourtellot

High-volume, low-margin beach tourism in Spain. Photo: Jonathan Tourtellot

In April 2013, for instance, a group of eleven conservation organizations petitioned Mexico’s Commission for Environmental Cooperation to stop development of four massive tourism resort projects around the Gulf of California. They charge that the projects violate Mexico’s environmental laws and threaten unique coral reefs and mangrove ecosystems as well as endangered species of whales, sharks and many types of migratory birds. And currently, in Haiti, the extremely poor residents on the tiny island of Ile-a-Vache are protesting government moves to expropriate their land to make way for high-end resort development.

Cruise ships have also caused a range of environmental problems. Beginning in the late 1980s, garbage dumped by cruise ships was washing up on Florida beaches and the Gulf of Mexico coastlines. Cruise lines have faced a steady stream of fines for illegal dumping. Between 1998 and 2002, for instance, the cruise lines paid over $50 million in fines. A combination of new regulations, NGO campaigns, and bad press has led cruise companies to take series of steps to clean up their practices – and their image. However, by the new millennium, civic activism had expanded to also include concerns about cruise ship impacts on destinations, both ports of call and home ports. Public protests have percolated in destinations as diverse as Hawaii, Alaska, Key West, Charleston, S.C. in the U.S.; Venice, Italy; Cozumel, Mexico, and Bermuda in the Caribbean.

The Economics of Cruise and All-Inclusive Resort Tourism

The economic model of cruise lines and all-inclusive resorts is largely the same — to keep tourist spending concentrated within the business – and this, in turn, has negative consequences for the economies of coastal destinations.

The cruise sector’s economic success is facilitated by a legal loophole: the “flag of convenience.” The three major cruise lines, while headquartered in Florida and carrying mainly American passengers, have registered their ships offshore, in Liberia in West Africa, Panama, and, the Bahamas. This allows them to circumvent a range of U.S. laws, including minimum wages and tax liabilities as well as safety standards, inspections, and environmental and labor laws.

In addition, on-board spending is an increasingly important part of cruise line income, ranging, according to a UN World Tourism Organization study, to between 25% and 35% of total income.   Cruises have a captive market within ships as well as at ports, with onshore excursions and facilities often owned by subsidiaries of cruise lines. According to another recent study, the average customer spends about $1700 for a cruise, including on ship and on land expenses and the majority of these expenses are captured within the cruise ship.

Fifty percent of cruise tourism takes place in the Caribbean where it goes toe-to-toe with land-based tourism. Both bring about 15 million visitors a year, but, according to the Caribbean Tourism Organization (CTO), land-based, stay over tourists spend 13 times more than cruise passengers ($994 vs. $77). CREST’s studies in Central America (Costa Rica, Honduras, and Belize) found similar disparities, with stay over visitors spending between six and eighteen times more than cruise passengers. These findings from the Caribbean and Central America confirm that stay over tourism is far more beneficial to the local economy than cruise tourism.

CREST has also analyzed the different types of stay over tourists in Costa Rica, comparing those coming to the large coastal resorts versus those coming for ecotourism. Based on airport departure surveys, we found that ecotourists in Costa Rica stay longer – on average, 12 nights in 2012 compared with 9 nights for those staying in coastal resorts – and spend more — $1300 compared with $1079. In addition, ecotourists visit more parts of the country and engage in a wider range of activities. Ecotourism therefore leaves more in the local economy and spreads the economic benefits around the country.

A range of other studies in Tobago, Turkey, Kenya, Canary Islands, and Barbados have found that all-inclusive resorts tend to kill off local restaurants and other businesses located outside the resort, while staff in all-inclusives face less favorable working conditions, including greater levels of stress, considerably less tips, and larger numbers on short term contracts than employees in other types of accommodations.

These findings show that that arrival numbers alone say little about the actual costs and benefits of tourism. The more limited economic benefits of large scale cruise and resort tourism, combined with their often negative environmental and social impacts, demonstrate that tourism planners need to put more emphasis on high value rather than high volume tourism.

Symposium & Sustainability Expo, July 9-11, 2014, in Grenada

St. Georges waterfront, Grenada. Photo: Jonathan Tourtellot

St. Georges waterfront, Grenada. Photo: Jonathan Tourtellot

Many coastal businesses and individuals are taking steps toward high value tourism through environmental, social, and economic innovation. CREST is partnering with the Caribbean Tourism Organization (CTO) and the island of Grenada to present the 3rd Innovators in Coastal Tourism Symposium & Sustainability Expo, July 9-11, 2014, in Grenada. This unique event will bring together 100 to 150 invited ‘green’ experts and practitioners, including real estate developers, operators, investors, and other businesses committed to (or considering) new sustainable models of marine, coastal, and island tourism development. These are the thought leaders who are breaking the mold of cookie-cutter resort development and mass-market cruise ships. In addition to business leaders, a select group of participants will be invited from key government agencies, NGOs, academia, community organizations, and international development organizations. Climate change and the need for responsible development has made these discussions all the more important, and we welcome all with an interest in sustainable coastal tourism to attend. Full updated Symposium details are available at: ctocrestsymposium.com.

This post adapted from my forthcoming book: Selling Sunshine: Coastal and Marine Tourism in the Americas, Island Press, 2015.

Martha Honey

About Martha Honey

Martha Honey is the Co-Director of the Center for Responsible Tourism (CREST). Her newest book, Selling Sunshine, will be published by Island Press in 2015.

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