t is no surprise that the Caribbean is the hottest cruise travel destination. With its beautiful beaches and affordable accommodations, the Caribbean islands account for 35% of global cruise tourism annually, bringing significant revenue for the region’s industries and the cruise lines they engage with. Yet the real economic, social, and environmental impacts of cruise tourism are destructive to the Caribbean’s development prospects.
Cruise ships have purportedly bolstered the Caribbean’s growth by engaging with the local economy—economies that are highly dependent on the blue economy, or the use of ocean resources for economic growth and overall standard of living. Cruise tourism encourages unfair competition, which in turn creates dependency between the cruise industry and the region. In order to develop touristic resources in accordance with cruise line’s demands, Caribbean countries invest in port infrastructure and on-shore facilities, including imported manufacturing goods that can cost millions of dollars. It takes years to recover those costs. In lending their ports to tourism, these countries end up forfeiting time and space that could otherwise be used for cargo and maritime trade. This is significant since 80% of food in the Caribbean is imported.
Cruise lines also beat out competition with local businesses on excursions and onshore shops. Most passengers tend to remain onboard and only stay in the country for short periods of time to participate in low cost, cruise line funded excursions. This negatively affects hotels and onshore businesses, making them simply add-ons to the cruises’ own facilities like duty-free shops and private islands.
Cruise lines are not helping the Caribbean countries develop their industries, but instead feasting on their resources and growing their capital with little regard for social responsibility. Rather than taking real action, these companies produce incompetent private initiatives to help local communities and comply with inadequate corporate social responsibility standards to salvage their reputation. They also provide few employment opportunities for Caribbeans, with only 10% of crew members being native to the Caribbean.
Nonetheless, cruise lines and their advocates often argue that this investment will eventually trickle down to local communities. It is clear, however, that tourism mostly benefits these companies and their stockholders, not the communities that make up the islands.
For instance, cruise lines like Royal Caribbean profit immensely off Caribbean states, while countries like the Bahamas have little to show for their direct gain. From 2014 to 2015, the Bahama’s total economic revenue from cruise tourism was $138.5 million. Meanwhile, Royal Caribbean Cruises, a single company, made about US$8.3 billion in 2015 alone. Free-market economists argue that they created about 7,054 jobs. Nevertheless, the bulk of these jobs were commercial services like hotels. Cruise lines, in return, get benefits such as tax breaks from Caribbean governments that distort markets as governments subsidize cruise lines over local companies that do not enjoy the same tax relief. Furthermore, cruise lines pay little to no U.S. taxes due to loopholes, leaving them to take full advantage of their profits, while local businesses do not receive this kind of bailout. Caribbean countries are not only losing opportunities to build their domestic industries, but are also not taking advantage of tourism to employ their citizens.
Furthermore, the Caribbean is the single sub-region that suffers the most from climate change due to their position at sea and blue economies that constantly depend on climate conditions and endangered ecosystems. Meanwhile, the cruise lines not only make disproportionate gains, but just one large cruise ship can burn about 66,000 gallons of diesel a day, further exploiting the ecosystems of the Caribbean and setting back environmental protection programs. Oftentimes, environmental damage acts as a tradeoff for industrial growth, where many avoid environmental and safety regulations by simply paying more. Royal Caribbean has abstained from air pollution reduction and advancing safe sewage systems that destroy Caribbean maritime ecosystems. In 2019, Carnival Cruise pled guilty to dumping copious amounts of plastic waste and oil on the Bahamas’ shores. Furthermore, Carnival admitted to having fabricated waste records and sent crews to make temporary adjustments to environmental violations before inspections. This is just one example of the many instances where cruise lines have neglected environmental regulations.
The islands should cautiously consider the economic gains they receive by engaging so heavily with cruise lines. The Caribbean needs to redirect their focus towards a more sustainable development model that can effectively utilize tourism, while investing in the diversification of other industries. The Caribbean is home to fast-growing industries that can flourish if foreign investment is incentivized—like high-tech agribusiness and renewable energy. The private sector also has potential to grow if certain barriers are removed, for example, tax breaks currently given to cruise companies can be given to investors in other fields. Currently, Caribbean states are engaged in a race to the bottom, where their workers are underpaid, their markets are limited, and few regulations protect workers, the private sector, or even the environment. Collective action with clear enforcement measures can stop cruise lines from dictating the future of Caribbean development.
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The Cruise Industry Hinders Caribbean Development
Photo by Georgy Trofimov via Unsplash.
June 22, 2022
Although the Caribbean is a key destination for cruise lines, host countries do not fully benefit from the potential development gains of the industry. Collective action and coordinated regulation by Caribbean nations can shift this dynamic, argues Marian Balceiro.
I
t is no surprise that the Caribbean is the hottest cruise travel destination. With its beautiful beaches and affordable accommodations, the Caribbean islands account for 35% of global cruise tourism annually, bringing significant revenue for the region’s industries and the cruise lines they engage with. Yet the real economic, social, and environmental impacts of cruise tourism are destructive to the Caribbean’s development prospects.
Cruise ships have purportedly bolstered the Caribbean’s growth by engaging with the local economy—economies that are highly dependent on the blue economy, or the use of ocean resources for economic growth and overall standard of living. Cruise tourism encourages unfair competition, which in turn creates dependency between the cruise industry and the region. In order to develop touristic resources in accordance with cruise line’s demands, Caribbean countries invest in port infrastructure and on-shore facilities, including imported manufacturing goods that can cost millions of dollars. It takes years to recover those costs. In lending their ports to tourism, these countries end up forfeiting time and space that could otherwise be used for cargo and maritime trade. This is significant since 80% of food in the Caribbean is imported.
Cruise lines also beat out competition with local businesses on excursions and onshore shops. Most passengers tend to remain onboard and only stay in the country for short periods of time to participate in low cost, cruise line funded excursions. This negatively affects hotels and onshore businesses, making them simply add-ons to the cruises’ own facilities like duty-free shops and private islands.
Cruise lines are not helping the Caribbean countries develop their industries, but instead feasting on their resources and growing their capital with little regard for social responsibility. Rather than taking real action, these companies produce incompetent private initiatives to help local communities and comply with inadequate corporate social responsibility standards to salvage their reputation. They also provide few employment opportunities for Caribbeans, with only 10% of crew members being native to the Caribbean.
Nonetheless, cruise lines and their advocates often argue that this investment will eventually trickle down to local communities. It is clear, however, that tourism mostly benefits these companies and their stockholders, not the communities that make up the islands.
For instance, cruise lines like Royal Caribbean profit immensely off Caribbean states, while countries like the Bahamas have little to show for their direct gain. From 2014 to 2015, the Bahama’s total economic revenue from cruise tourism was $138.5 million. Meanwhile, Royal Caribbean Cruises, a single company, made about US$8.3 billion in 2015 alone. Free-market economists argue that they created about 7,054 jobs. Nevertheless, the bulk of these jobs were commercial services like hotels. Cruise lines, in return, get benefits such as tax breaks from Caribbean governments that distort markets as governments subsidize cruise lines over local companies that do not enjoy the same tax relief. Furthermore, cruise lines pay little to no U.S. taxes due to loopholes, leaving them to take full advantage of their profits, while local businesses do not receive this kind of bailout. Caribbean countries are not only losing opportunities to build their domestic industries, but are also not taking advantage of tourism to employ their citizens.
Furthermore, the Caribbean is the single sub-region that suffers the most from climate change due to their position at sea and blue economies that constantly depend on climate conditions and endangered ecosystems. Meanwhile, the cruise lines not only make disproportionate gains, but just one large cruise ship can burn about 66,000 gallons of diesel a day, further exploiting the ecosystems of the Caribbean and setting back environmental protection programs. Oftentimes, environmental damage acts as a tradeoff for industrial growth, where many avoid environmental and safety regulations by simply paying more. Royal Caribbean has abstained from air pollution reduction and advancing safe sewage systems that destroy Caribbean maritime ecosystems. In 2019, Carnival Cruise pled guilty to dumping copious amounts of plastic waste and oil on the Bahamas’ shores. Furthermore, Carnival admitted to having fabricated waste records and sent crews to make temporary adjustments to environmental violations before inspections. This is just one example of the many instances where cruise lines have neglected environmental regulations.
The islands should cautiously consider the economic gains they receive by engaging so heavily with cruise lines. The Caribbean needs to redirect their focus towards a more sustainable development model that can effectively utilize tourism, while investing in the diversification of other industries. The Caribbean is home to fast-growing industries that can flourish if foreign investment is incentivized—like high-tech agribusiness and renewable energy. The private sector also has potential to grow if certain barriers are removed, for example, tax breaks currently given to cruise companies can be given to investors in other fields. Currently, Caribbean states are engaged in a race to the bottom, where their workers are underpaid, their markets are limited, and few regulations protect workers, the private sector, or even the environment. Collective action with clear enforcement measures can stop cruise lines from dictating the future of Caribbean development.
