opinion

The Rockland cruise ship carney

Sat, 11/04/2017 - 8:00pm

 

I have spoken to a number of fellow Rockland residents and there is pretty clear agreement about what we want for our city. We want a vibrant community with a high quality of life with well paying and secure jobs. We want the best education for our children and residents who are involved in and support the community.

We should leverage the huge advantages we have, and due to the efforts of our city officials and our chamber of commerce we have come a long way. Since many residents think that bringing in mega-cruise ships is an answer to achieving these objectives, I think it important to take a close look at the reality of the implications.

Does this indeed meet our strategic objectives?

First, let's look at our strategic advantages. We have become established as a center for the arts and culture, have an eager and willing work force, have a vibrant working waterfront, are a home port for high-end cruises and schooners, and have returned Main Street to a mecca for many up-scale coastal residents and visitors.

I don't think that the passengers themselves add to the community. They are in and out of here. Yes, some will return, but most not to stay.

The remaining arguments are largely economic. Indeed, if we could place a large turnstile at Harbor Wharf and have every cruiser insert the $85 that most surveys say these folks spend in a port of call, the city would not miss their presence.

So the arguments that I hear are:

1) they will support our main street businesses;

2) this in turn will create jobs; and

3) we will attract return visits where these tourists will spend even more dollars.

The figure of $85 is illusory.

If we look at a ship like the Jewel of the Seas with its 2,500 passengers and 700-plus crew, only 2,076 actually came on shore. Maybe it was the weather, but even it had been 2,500, the estimate was that they would spend a total of $212,500 on shore.

Pretty impressive.

They just come on shore, we give them what they are looking for, and we end up with a lot of money in our collective pockets.

I have not seen the numbers, but it was quite clear that a lot of this spending was being bused right off to Camden and elsewhere.

Let's just say 25 percent went elsewhere, to be conservative.

Three big items add up to 71 percent of the total were $20.51 spent on food, $22.96 on apparel, art and jewelry $16.47.

First what does this suggest they are buying? Maybe a lobster roll, and ice cream and a piece of fudge? Add in a T-shirt and to be extravagant, a hat? Fine art? Have a heyday in our galleries for $16! Probably a few postcards and a print of a lighthouse.

After an informal polling of some Main Street businesses, and listening to visitors when the last cruise ship was here, this estimate seems to ring true, except that most our great shops were just over the price points these tourists were looking for.

OK, so let's just say they actually did spend what the polls suggested they would.

Where does it go and how much trickles through to help our economy?

In both retail and the food businesses, the cost of goods sold (the amount that they actually pay for the raw materials or the products they sell) is around 50 percent. That largely goes elsewhere to pay for shirts, hats, and food products. Then, once all is said and done, the federal government takes about 5 percent of the total in income taxes. So the benefit of that $212,000 that actually accrues to the city is closer to $95,000.

Now about 20 percent of total sales ($42,000) will go to labor costs – jobs!

The Bar Harbor Report says that they had 62 ships in 2002 and created 275 jobs!

That sounds very significant...about four jobs per ship. But looking closely, we see that these jobs pay, on average, only $10,500 per year and can be cancelled at the whim by a cruise executive's stroke of a pen.

This is not the sort of opportunity that we mentioned as "well paying and secure jobs."

Indeed, many of these do not even accrue to our residents, but if it is like most other cruise stops, they will be populated by a curious set of tourism migrant laborers. The report points out that there is a "multiplier effect" of 1.2, meaning that of every dollar, 20 cents will be re-spent in the town. This is pitiful! Compare this to the multiplier effect of a retiree of 3.7, suggesting that the money not only stays in town, but gets re-spent almost three times.

There is something else that appears to happen in other ports around the world.

As it turns out, Royal Caribbean International, like other cruise lines, makes 27.6 percent of its income from concessions on board and on shore. It turns out that many of the new shops that crop up as cruise ship traffic increases in most ports are owned by the cruise lines themselves. Often these new shops creep into the working waterfronts. Even with our one "Jewel" of a visitor, transportation (the buses used to take people away from Rockland) was provided by a Taunton, Massachusetts, company (what we don't have any buses in our area?) and Intercruise Shore Services is owned by an English conglomerate and basically provides services at many of Royal Caribbean stops.

I was curious about this, so I asked a friend who is a former chief executive in the cruise ship industry.

He said: "Of course. The jobs are all short-term and lo- paying and often filled by migrant seasonal workers. We certainly never cared much about the communities. They are only about supporting an entertaining experience for the passengers and we tried to give them not what was there, but rather what they expected and wanted to find. Usually hats, trinkets, souvenirs and that sort of stuff. We did not care about the arts and culture that a community might find. Most lines actually own a lot of the shore-based concessions and services through shell companies."

I have not had time, I confess to independently verify much of this, but the source is very reliable.

I have tried to wade through piles of SEC reports, analyst reports, and financial statements, but it gets very complex. Royal Caribbean International, for example, is owned by Royal Caribbean Cruises Ltd (a Libyan company), which is owned by Cruise Associates (a Bahamian company), which is owned by A. Wilhelmsen AS (a Norwegian corporation), that is indirectly owned by members of the Wilhelmsen family of Norway.

Now, all along the way, each one has many subsidiaries. Royal Caribbean International alone has 73 subsidiaries! These guys are not stupid and tend not to let much money sitting on the table.

So back to Rockland. Once the cruise lines get in, the sociological literature on cruise tourism suggests that there is often short term euphoria in host communities, but which is not long-lived as the cruise lines begin to take over.

We are getting set up so that we will build out infrastructure, get excited, and open the door for another mass market adventure and opportunity for large corporate profit.

It seems one of the most convincing arguments the cruise ship industry uses in order to gain access to small harbor towns is that cruise ship passengers will return to Maine on longer vacations, stay at local hotels, perhaps eventually settle here, and in the long run bring greater income into the state.

In his article, Ship Happens, Mr. Steinberger mentions this exact same argument. However, if you look at the statistics from the Bar Harbor Study (which has similar results as the Portland Study), the typical cruise ship passengers who responded, were ages 60 and above, with 25 percent over 70!

Most of the respondents, a little less than 69 percent, were over 60 years of age and female. Only 5 percent were ages 40 and younger. On the other hand, if you study the statistics describing the profile of the type of person who is most apt to visit Maine, this group of older ladies does not fit in. "According to the Longwood study, the average Maine tourist is close to 48 years old and about 54 percent of Maine visitors are male."

Clearly, the chances of these women returning to stay in local inns and visit Rockland again are slim.

The Bar Harbor study suggests that 33 percent of respondents to their survey said they would plan on visiting Bar Harbor within two years but 31 percent planned on traveling in Maine elsewhere. This suggests that most of the return visitors will be staying only passing through, but the report also says that 35 percent of the cruise tourists fall into the demographic profile of the average Maine tourist.

There is also the issue of the distance between the cup and the lip. In other words, if someone asks how you like their fair city, you will be likely to be positive and suggest that you might return. But I would hazard a guess that perhaps only half would actually follow through.

So some math: We are saying 2,500 tourist per ship times the third who say they will return equals 833 people who say they will return.

One half will actually do so and over two years, so that's 208 return visitors per year.

The Longwood Study says that each visitor to Maine spends, on average, $38.30 per day, so that comes to net sales gain in Rockland of $7,979 per year per cruise ship. Since this is also subject to the same erosion of benefits we discussed earlier in cost of goods sold and taxes, the net benefit of return visitors to Rockland is only $3,591 per year!

So if you want to talk about the benefits of hosting cruise ships, don't talk to me about the people themselves who will not add to our community and don't talk to me about big sales numbers. These are deceiving. Don't say anything about return visitors, because it doesn't add up. Don't talk jobs, because they are low paying temporary jobs and often gobbled up by migrants.

Cruise ships don't improve our quality of life or our schools. Cruise tourists don't care about our culture or arts and these current strengths will be eroded by multitudes of ticky-tacky shops. Yachters and schooner patrons will avoid Rockland on the days the ships are in. The character of our town will be lost forever to the temptations of short term gain.

We need to grow, indeed, but let's spend some time considering the best way to do so first. I happen to believe that Rockland is better than a mass-market high volume entertainment carney. With careful planning and by working together we can craft a plan for growth that will not subvert the strengths we have but leverage them. But we need to choose because we can't have both and we certainly don't want to become addicted to a path where the benefactor can pull the plug at any time.

David Wylie is a resident of Rockland and Vinalhaven