By NEIL HARTNELL
Tribune Business Editor
Nassau Cruise Port is projecting passenger numbers will plummet by 61.4 percent in 2020, with no new arrivals for at least five months, as it today launches its $130m bond financing.
Michael Maura, Nassau Cruise Port’s chief executive, said the operator/developer is forecasting that the cruise industry will return to Prince George Wharf after “six months of nothing” in the 2020 fourth quarter with much-reduced passenger numbers.
Speaking to Tribune Business after the port’s capital raising was formally unveiled to potential investors and finance houses on Friday, Mr Maura said arrivals coming through The Bahamas’ biggest tourism gateway are projected to drop by 2.34m year-over-year as a result of the COVID-19 pandemic - falling from 3.81 in 2019 to 1.47m.
That near-two-thirds decline includes the 835,000 passengers who arrived in Nassau between New Year’s Day and the start of the economic lockdown on March 16, meaning that some 635,000 cruise arrivals are forecast to come during a final quarter that includes the Thanksgiving and Christmas holidays.
Nassau Cruise Port’s projections, which were shared with this newspaper and investors, forecast a steady post-2020 recovery even though 2021 passenger numbers will likely still be almost 32 percent down on 2019 figures at 2.6m.
Cruise arrivals are predicted to rebound to 3.7m in 2022, just below last year’s numbers, before finally exceeding 2019’s benchmark when 3.88m are brought to the Bahamian capital. Passenger numbers are predicted to grow steadily thereafter at 4.8 percent per annum through 2030, and at 3.8 percent thereafter, with total arrivals hitting 7.48m in 2039.
Mr Maura, describing Nassau Cruise Port’s projections as “conservative”, acknowledged that the 2020 passenger numbers represented “a material reduction” as a result of COVID-19’s impact and the subsequent global cruise industry shutdown.
“In the first quarter we handled on average 76,000 passengers a week,” he told Tribune Business. “In the fourth quarter we’re looking at handling approximately 48,000 passengers a week. That’s after six weeks of nothing....
“We said we’re going to look at the fourth quarter. I have spoken to, and had the benefit of speaking with, every cruise line that comes to The Bahamas. They say The Bahamas is significant and strategic in their return to the water.
“They see themselves calling on The Bahamas first because of the three to four-day cruises, enabling them to offer two to three calls in the same itinerary, and with only one head (departure) tax needing to be paid.”
Mr Maura said the Nassau Cruise Port was basing its rebound optimism on multiple factors, not least The Bahamas’ proximity to the major south Florida cruise ports as well as its geography, which enables it to offer calls at multiple islands.
The US Jones Act, which requires foreign-flagged vessels such as cruise ships to make at least one overseas port of call before they can return to their US home port, coupled with the Trump administration’s tightening of relations with Cuba, again makes The Bahamas the only viable port of call on the short three to four-day cruises likely to be popular in COVID-19’s immediate aftermath.
And, with 113 new cruise vessels on order as at March 1, 2020, with a collective 232,172 passenger capacity, Mr Maura said “those ships have to sail some place” once all the necessary health and safety protocols were properly implemented.
Still, acknowledging that the recovery will not be immediate, Mr Maura said that once past the pandemic Nassau will still be some 1.21m cruise visitors down compared to 2019 for the 2021 full-year.
“That is less than 70 percent of the 2019 numbers,” he added. “We’re still more than 30 percent below in 2021 what we had in 2019. Not until 2023 are we going to see 2019 numbers. We believe we’re going to find we’re going to be busy, but at the same time we’d rather be conservative.
“Even during this ‘no sail’ order we’re getting contacted on a daily basis by the cruise lines asking for berths and berth availability. There’s a whole team they have looking at getting back to business and making sure berths are available.”
Bahamas Paradise Cruise Line has already announced its intention to resume voyages to Freeport and Nassau with its two ships in June and July, respectively, with Royal Caribbean’s website also stating that June 12 is when it will restart.
However, Nassau Cruise Port’s forecast of at least a five-month wait for cruise tourism to return will likely be of little immediate comfort to Bay Street/downtown Nassau merchants; taxi drivers; tour operators and excursion providers; restaurants; straw vendors; hair braiders; and hotels (such as Atlantis with its day passes) who all rely on the sector for their living.
While the prospect of a lengthy wait may come as little surprise to many, they - and their employees - are faced with a lengthy period during which they will have to focus on survival from both a business and personal perspective.
And some observers will likely argue that Nassau Cruise Port’s forecast of a 2020 fourth quarter cruise industry return is too optimistic even if the city - and The Bahamas in general - are likely to be the first ports of call when the sector does open up.
Indeed, several believe that the cruise lines will not come back until New Year 2021 at earliest given the numerous obstacles it must overcome to resume sailing. Even if the US permits the industry to launch once the Centres for Disease Control and Prevention’s (CDC) 100-day ‘no sail’ order expires, it must then satisfy the Bahamian government that it has implemented the necessary safety measures to ensure it does not bring COVID-19 infected passengers here.
Given that opening The Bahamas’ borders to tourism generally will only occur in the sixth and final stage of the Prime Minister’s economic revival strategy, the cruise industry’s return still appears some way off - and certainly beyond June.
The cruise industry will also have to overcome significant negative publicity stemming from the multiple outbreaks of COVID-19 upon its ships, which led in some cases to passengers being stranded at sea for days if not weeks before they were permitted to disembark. The Guardian newspaper in the UK reported on Thursday that more than 100,000 cruise ship crew remain stuck on ships, of which at least 50 have suffered an outbreak of the virus.
However, Mr Maura voiced “absolute confidence” in the cruise industry’s ability to rebound rapidly despite the challenges it faces and bring The Bahamas with it. He added that the industry is working with the CDC, World Health Organisation (WHO) and International Maritime Organisation (IMO) to address all health-related concerns.
“They would have had to make retrofits, have to make design changes, implement the necessary safety protocols and invest in the necessary technology, including temperature screening and COVID-19 testing, not only on ship but at their port terminals,” the Nassau Container Port chief said.
“From a COVID-19 perspective, the cruise lines are working with the CDC and submitting plans to it on how they’ll operate when they return to service, and how they’re going to monitor and screen persons leaving the ship. The COVID-19 testing will be required not just for passengers but crew.”
Mr Maura said cruise lines will also have to invest in quarantine and isolation facilities aboard their vessels, while trained medical personnel will also have to be in place. He added that Nassau Cruise Port was also working on the health and safety measures it needs to implement, and sits on a committee alongside Atlantis and Nassau Development Company (NAD) executives to devise the necessary protocols.
“We’re looking at what we have to do as a destination to provide a safe experience for those visitors but also to ensure Bahamian residents and citizens can safely go to work,” he added.
Mr Maura added that the “incredible experience and value for money” offered by the cruise industry would also help restore consumer confidence and overcome health-related fears. He suggested this was shown by the fact around 50 percent of persons who had booked a cruise during the COVID-19 ‘no sail’ order have elected to rebook and take a credit for a future voyage rather than seek a refund.
And the cruise industry’s need to offer discounts to entice customers back will also benefit The Bahamas because this will push it to focus on three and four-night cruises to keep costs low, Mr Maura said.
“The cruise lines are likely to have to discount to build volume for their ships, so they will want to keep costs as low as possible,” he added, “and those three-day cruises burn the least amount of fuel. That’s something they have to consider in these circumstances, and the cruise lines are looking at The Bahamas as being a very important part of their return.
“We’re absolutely confident we’ll have success working through this. We have no doubt that the cruise industry will hit the water safer and better than before.”