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No Cruise Tourists For Five Months (At Least)

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Michael Maura

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

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.”

Comments

Well_mudda_take_sic 5 months, 3 weeks ago

Nassau Cruise Port's projections for the numbers of cruise ship passenger arrivals to the Bahamas during the next year or so and over the next decade are truly wishful thinking and more like pie in the sky.

Had the risks associated with the current $130 million bond offering been given proper recognition, the interest rate on the bonds would have been set well upwards of 20% rather than 8%. And even at a much higher interest rate than one offered, it will take investors with an unusual appetite for great risk to subscribe for any of these bonds.

Never under estimate the the lasting impact on the human mind and human behaviour of prolonged instances of traumatising fear. The global Covid-19 crisis will undoubtedly cause permanent transformational changes in leisure travel, both by sea and by air. Many of the cruise ship companies are likely to go belly up, even with significant near term financial support by certain governments, especially the US. The same goes for some of the largest airlines......recently the share price of American Airlines began trading below $10, and even Warren Buffet has now dumped all of his shareholdings in various airlines saying that the industry will never be the same.

There's much carnage to come in the cruise line travel industry around the world and I suspect this is one of the reasons why the promoters were so anxious to proceed with this $130 million bond offering.

Just think about it for a moment. Only the truly brain-dead would even consider taking a cruise on one of these monstrous floating hotels that are impossible to keep clean. And who wants to take a cruise with a bunch of brain-dead suicidal idiots who are easily attracted to rock bottom discounts simply because they have so little money and don't value their lives. Not exactly the best kind of company to be couped up with anywhere. These gigantic over-sized ships have proven themselves to be superb incubators for the norovirus and more lately the deadly Covid-19 virus. For sensible people, life's just too short to let the cruise ship industry pre-maturely end it for a deeply discounted cruise anywhere.

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concerned799 5 months, 3 weeks ago

What about we just not have a cruise ship industry and instead having a hotel based tourism product together which much higher on island spends of visitors who stay in hotels?

Curious how this is not explored as if accepting only the lowest yielding form of a tourism product is the only option available to the Bahamas?

It is beyond the scope of government policy to fashion and regulate what would be the best form a tourism industry for the Bahamas should take?

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Hoda 5 months, 3 weeks ago

I don’t think ppl think only cruise ships can sustain the industry. But cruise ships were a dominant part of tourism, they provided an all inclusive experience that was more affordable or just easier for some people. The Bahamas is expensive. Everyone can’t afford One and only ocean club, Atlantis, etc, the family islands can be an expensive but unique experience, not that those are the only options. The travelers were choosing cruises. Will the travelers choose or be comfortable on commercial planes again? Will the airline industry, whose mission has been to stuff as much people in coach make it?

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Exumian 5 months, 3 weeks ago

We are playing with Fire! Nassau is the biggest Attraction the country has to offer. That the Government is unabashedly surrendering our very livelihood to the Cruise industry is 'Insane.' Nothing Mr Maura is saying puts the Bahamas first. Everything points to a huge increase in the number of Cruiseships USING the Bahamas and shows their intention to flood our country..not only Nassau...but every island with their ships. 113 NEW SHIPS ON ORDER...!!! You can bet they are ALL looking at the Bahamas. It is note worthy that the according to Mr. Maura The Bahamas is the only viable option for the Cruise industry for the forseeable future!!! He then goes on to paint a dismal picture for the future for the Cruiseshipping industry while floating a 130 million dollar bond offer ..which is now looking more like 200 plus but doesn't ever say what the ROI will be for the Bahamas. And we all know that this industry delivers the lowest per capita yield of all in the different sectors of Tourism. To be real cruise passengers cannot support our hotel industry. It is a Parasitic industry that eventually kills it's host if you read what one company says about going ashore in Nassau you would be shocked. Having 3000 plus passengers sitting on a cruiseship docked at Woods Rogers Drive does little fir New Providence . And the culture and people it brings with it are totally alien to our culture. Nassau has become just another cruiseport offering cheap goods and people hawking high priced low value merchandise. Ask the tour operators what percentage of the tour price they retain. It's a rip off. And as for our hotels.. it is so sad to see the line of poorly dressed persons heading to the casino on PI. What the government is allowing now will KILL what's left of our landbased hotel industry. Just look at the history of both sectors over time. Whereas the hotels in the past had the larger market share today the ships now command the higher percentage. The numbers tell the story of where we are headed. Our country should be investing in itself. Not in Sand Castles!! Imagine what a 200 million investment in one of our family islands can do for it's people and our bottom line! You only have to look at the salaries of Cruise companies executives to realize who is making the profit from this industry. It is NOT the country...Cruising killed Baystreet. It is going to do the same to the rest of the Bahamas. COVID is a WAKE UP CALL. WE NEED TO BE VERY CAREFUL HOW WE ANSWER THAT CALL.

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Well_mudda_take_sic 5 months, 3 weeks ago

Repost:

The problem here is that the Red China Virus anti-body test currently costs about $100 in the US and may not be fully reliable for quite sometime, i.e. the chance of a false-positive result remains much higher than it should be. Senior healthcare officials in the US are therefore presently recommending at least two, and preferably three, independent anti-body tests be done to ensure reliability of the findings. This means the current cost of being reliably certified immune in the US rises to about $300 per person. The total cost of everyone residing in the Bahamas being reliably tested for anti-bodies would therefore be about $115 million.

While the higher-end tourists arriving by air may be willing to pony up the additional $300 for a reliable immunity certificate prior to their arrival in the Bahamas, I seriously doubt the cheapskate cruise ship passengers would be willing to do so. Nevertheless the corrupt cruise ship companies (as well as the Nassau Cruise Port developers) are already putting big time pressure on both Minnis and D'Aguilar to allow their passengers to gain entry to our country on the basis of only an inexpensive pre-screening temperature test for fever. Of course that proposal is absolutely ludicrous and a complete non-starter given that super spreaders of the Red China Virus are usually asymptomatic, i.e. they are highly infectious but show no symptoms at all.

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Well_mudda_take_sic 5 months, 3 weeks ago

Michael Maura stated: "They {the cruise ship companies} 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.”

This guy should carefully listen to himself and ask, as a Bahamian: "Why on earth have our governments, both past and present, allowed these monstrous cruise ships to make as many as three calls on the same itinerary but only pay one head tax?"

The passengers on these ships should be paying a head tax for each and every port and island they call on in our country, including the smaller islands leased (hopefully not freehold owned) by certain of the cruise ship companies. And this head tax for each port/island called on should be in addition to the normal departure tax per head.

Perhaps most important of all though, Minnis and D'Aguilar really need to stop their sucking up to these very greedy cruise ship companies and start demonstrating that the Bahamas is no longer content for them to continue operating their greedy "all-inclusive" business models as they have done in recent decades. These cruise ship companies are notorious for their corrupt wheelin' and dealin' with corruptible elected and other senior government officials in order to get whatever they want. And prior to the Covid-19 crisis they were raking in record breaking huge profits year after year from the operation of their cruise ships in our seas.

Meanwhile we have stood by and watched our once thriving downtown Nassau district shrivel up and become a dirty rundown place with most shops now reduced to selling lower-end merchandise like cheap imported T-shirts and trinket souvenir items. It is well known that the cruise ship passengers are aggressively encouraged to spend the lion's share of their budgeted vacation money in the many shops and at the casinos on board the monstrous floating hotels while being feted and fed.

Minnis must make it known that there is a new sheriff in town and that the Covid-19 crisis has made his government acutely aware of the need to go about repositioning the Bahamas as a higher-end tourist destination. And for starters this will mean reverting back to the days when the cruise ships were prohibited from opening their shops and casinos while in our territorial waters.

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fletcher935 5 months, 3 weeks ago

This should be a major concern for all of us. I just don't see the hundreds of tourists on a weekly basis wandering around PGW anytime soon. People would rather spend their discretionary income closer to home.

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Well_mudda_take_sic 5 months, 2 weeks ago

Repost of earlier mid-March post:

Sheer greed and complete disregard for human safety resulted in the cruise lines building bigger and bigger ships, to the point where they cannot both be operated profitably and properly cleaned between cruises. To be competitively profitable these monstrous floating hotels must spend a minimum number of days each year at sea loaded with as many passengers as possible. In other words, to continue profitably operating these gigantic ships they must remain as unclean as possible without detection of their filthiness by the human eye. And that's the conundrum the cruise lines now face as public health officials all over the world are coming to the realization that these grossly over-sized ships cannot possibly be profitably operated safely. These monstrous floating hotels are doomed by their sheer size alone to always be the ideal breeding ground and transmission environment for harmful and/or deadly pathogens like Covid 19. Hopefully public health officials the world over will now put an end to this industry if the foolish patrons of these cruise lines up to now do not do so themselves. And to think Minnis and D'Aguilar have been working over-time since May 2017 to put all of our country's fragile economic eggs in this filthy and greedy industry's basket.

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