Thursday, March 4, 2021
• Hits ‘insurmountable thresholds’ for local firms
• Ships too eager to get excursion ‘piece of pie’
• Industry must play its part to improve product
By NEIL HARTNELL
Tribune Business Editor
A Cabinet minister yesterday urged the cruise lines to “not dump on the destination” given that they often created “insurmountable thresholds” for Bahamian entrepreneurs to do business with them.
Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business he wanted to give “a little bit of push back” to recent criticisms by Carnival Cruise Lines executives that Nassau lacked fresh product - particularly new and exciting attractions and tours - to entice passengers off their ships when the industry eventually returns post-COVID-19.
Calling for a more equal partnership between The Bahamas and the cruise industry, Mr D’Aguilar said the latter’s practice of adding its own mark-up to the fee levied by Bahamian providers was effectively pricing local tours and excursions out of the market.
Arguing that it was unfair for the cruise lines to solely blame this nation, and that they also needed to adjust their own practices, he added that their mark-ups often gave passengers the impression there was “no value for money” in leaving the ship for shore-based attractions.
Mr D’Aguilar urged the cruise industry to curb its desire for a cut of shore excursion revenue so that the experiences offered by Bahamian entrepreneurs “gain traction and reputation”, while acknowledging that the government and private sector must work together to ensure this nation fulfills its side of the bargain.
Responding to assertions by Giora Israel, Carnival Group’s senior vice-president for port and destination development, the minister told this newspaper: “What we sometimes find is that the threshold to get into business with the cruise companies is insurmountable for a number of people.
“There’s the level of insurance you need, and their take from their guests. If you are selling something for $30, they may want to sell it to their passengers for $60. They’re putting the price point too high, and therefore the customers feel they won’t get value.
“I always try to encourage the cruise companies not to demand so much from their customers; let’s get the business up and running for it to get a reputation and demonstrate good value for money before you decide to take on a bit extra so you can make much more from your passengers going on these excursions,” Mr D’Aguilar continued.
“It’s not enough to dump the entire problem on the destination. We also need the cruise companies to facilitate and assist in helping these businesses to get traction before they demand a greater piece of the pie.”
The cruise lines’ selling of shore tours, excursions, attractions and things to do in port has long been a controversial subject among Bahamian providers, merchants and vendors. Concerns have been raised in the past that the vessels’ on-board marketing initiatives direct passengers to certain providers while others are excluded.
And the mark-ups charged by the cruise lines, when they sell Bahamian operators’ products to passengers on board, have been another sore point as indicated by Mr D’Aguilar. “In an ideal world, if the tour is worth $40, let’s not ask anything else for it,” he said yesterday.
“Let’s create in the minds of passengers value for money. Let it get traction. As it progresses and reports come that this is an interesting, fun excursion, then add on a certain amount for the cruise companies for selling it on board their ship.
“It’s not enough for the cruise companies to say there’s nothing interesting to do. The question is why there’s nothing to do. You have an interesting idea, but when they [the cruise lines] sell it to the customer, the customer believes there’s no value.”
Mr D’Aguilar’s “push back” comes at a sensitive time given the ongoing uncertainty over when the cruise industry will meet US health protocols and be allowed to resume sailing, plus the Government’s reliance on the likes of Royal Caribbean (Grand Lucayan), Carnival (Grand Port) and Disney (Lighthouse Point) to pick up pre-pandemic projects it is relying on to revive the economy.
But while the weaknesses in the downtown Nassau/Bay Street tourism product have long been known, many in the Bahamian tourism industry will likely back Mr D’Aguilar’s comments by asserting that the decline has not been helped by the absence of a true partnership with the cruise lines.
They will point to the industry’s increased use of private islands ahead of Nassau and Freeport; the lines leaving their retail, restaurant and other facilities open while in port; restrictions on the mark-ups local operators are allowed; and the cruise sector’s move into this space with their own attractions such as Royal Caribbean’s proposed Paradise Island ‘beach break’ destination.
Mr D’Aguilar yesterday conceded that “it’s a bit more blame on our side in developing interesting excursions”, adding that Mr Israel’s criticisms do have some merit. “I always lament that we have 10,000 passengers coming here every single day of the year, and it’s a poor reflection on the destination that we haven’t been creative and entrepreneurial to take advantage of that steady flow of customers,” he said.
He added that the Government had created the Tourism Development Corporation, headed by Janet Johnson, to help address the cruise line criticisms and “tap into and create the linkages between the domestic economy and the tourism sector; to create additional tours”.
Admitting that there had been much talk about fostering such linkages, albeit with little “traction”, Mr D’Aguilar said one of the reasons that Atlantis and its water park amenities were the most attractive cruise passenger excursions pre-COVID was because of the mega resort’s ability to accommodate large numbers.
Suggesting that The Bahamas will have to make “a substantial investment” in its tourism product post-COVID to accommodate ever-growing numbers of cruise passengers, the minister said local providers also have to compete against the cruise ships’ own attractions when they are in port.
“They make it difficult for people to come off the ship, especially if they have been to the destination a couple of times,” Mr D’Aguilar added. “We really have to be on our game and mobilise all our entrepreneurial pieces to make it happen. It’s going to require a lot of investment, and we need the help of the cruise companies as well.”
Mr Israel previously told Tribune Business that Nassau must do far more to overhaul its “product” post-pandemic as the identity of its most popular tour, visits to locals hotels and their amenities, “tells you a lot”.
While praising the private-public partnership (PPP) with Global Ports Holding for Prince George Wharf’s $268m transformation, Mr Israel said he and other Carnival executives had repeatedly urged the government to constantly refresh Nassau’s attractions, excursions and tours offering if it was to rebuild its reputation as a leading tourism destination.
He explained that this was especially important as many of the passengers on Carnival’s three, four and five-night cruises through The Bahamas were repeat customers who had visited the city before, and therefore needed new and exciting activities to entice them off the ship.
“One of the issues we’ve stated to the Bahamian government is what Nassau needs more than the maritime facilities is the enhancement of the destination for activities,” Mr Israel said. “Over the years there has been very little product to offer people coming again and again.
“It’s not the port itself, it’s the product; the availability of” new attractions and excursions for passengers on short-haul cruises who have visited Nassau before on previous trips. In the absence of new and upgraded products, Mr Israel added: “Prior to COVID-19, we were only able to sell 26 percent to 28 percent of passengers a tour.”
This, he added, meant that only 700-800 passengers on a 3,000-person cruise ship went on a tour or excursion, limiting the income and revenue earned by the Bahamian-owned tourism operators that typically populate this space.