ROYAL Caribbean Cruise Lines will "be back up over 800,000 passengers" brought to the Bahamas in 2011, a senior executive told Tribune Business yesterday, with the more than-100,000 increase over 2010 projections coming from the delivery of its second Oasis class vessel.

Michael Ronan, Royal Caribbean's vice-president of government relations for the Caribbean and Latin America, said the cruise line had "bottomed out" last year in terms of the number of passengers it brought to Nassau, Freeport and its Bahamian private islands, adding that from late 2010 onwards an Oasis class ship would call on Nassau every week.

Dispelling claims that Royal Caribbean was pulling its flagship vessel, Oasis of the Sea, from its Nassau itinerary, Mr Ronan said the vessel had "started to call in Nassau every other week from May as part of a transition" where it offered clients a western Caribbean cruise one week, and an eastern Caribbean cruise encompassing the Bahamas during the other.
He added that this had taken effect on May 3, 2010, and had long been planned, the cruise line having discussed its intentions with the Government and the Ministry of Tourism in advance.

To compensate, Mr Ronan said the Norwegian Epic cruise line would start calling in Nassau on Fridays from July 2010 onwards, adding: "We thought it would be a better balance for all concerned if both ships did not call on the same day."

This would continue until December 2010, when Royal Caribbean was scheduled to take delivery of another Oasis class vessel, the Allure of the Seas, sister to the Oasis of the Seas. The Allure of the Seas, Mr Ronan explained, would then "pick up the alternative week", rotating Nassau calls with the Oasis of the Seas on a schedule that would be maintained through Spring 2012.

"With the Oasis vessels, we are significantly increasing the number of passengers that are going to be coming," Mr Ronan told Tribune Business. "We will be back up over 800,000 passengers in 2011. This year, I think we will be in the 700,000 in change, because we're still waiting for the arrival of the Allure, which will put us with a full year of Oasis class ships in Nassau every week. Last year, 2009, we bottomed out."

Mr Ronan declined to comment on Royal Caribbean's position on the departure tax increases unveiled by the Government in its 2010-2011 Budget prior to the final arrangements being worked out.

These details were unveiled by Prime Minister Hubert Ingraham in the House of Assembly last night, with the Government agreeing a compromise with the Florida-Caribbean Cruise Association (FCCA) member lines that will see them pay $18 per head, rather than the initial $20 planned by government.

The Government had initially sought to impose a $5 increase, from $15 to $20, on both departing cruise and air arrivals, but the compromise will see the cruise lines split the increase into two on their passenger tickets. The existing $15 will still be marketed as departure tax, with the $3 increase referred to as a 'cruise passenger facility fee'.
The Government, Mr Ingraham said, would still get $18 per head, with a portion rebated to the cruise lines as per the Cruise Line Overnight Incentives Act once they hit their annual passenger totals.

However, the cruise lines had pledged to find another way for the Government to raise the extra $9 million it was seeking from cruise passenger departure taxes. They have promised to increase the number of passengers brought to the Bahamas by 250,000 over 2009 levels every year through 2012. In addition, they pledged to develop new opportunities for Bahamian tour operators/excursion providers.

While not commenting on the specifics, Mr Ronan said "there is a risk" to increasing departure taxes in "a very sensitive market" where consumers were looking for value and attractive prices.

Given increasing global competition, he suggested that the Bahamas "try to keep those barriers as low as you can", as "with any increase in the entrance fee to enter any country or destination, there is a risk".

Mr Ronan praised the Government's decision to invest $44 million in dredging Nassau Harbour to accommodate the Oasis class ships and other larger vessels, especially given that the widening of the Panama Canal would, by 2014, open up Pacific cruise potential.

"What you have done is very wisely invest in the future, because this project comes with 20-year window going out. You have captured immediate business, but will not have to go back in five years' time," he said.

FMI: The Tribune