Golden goose or Trojan horse? Cruise ship tourism in Pacific development

Golden goose or Trojan horse? Cruise ship tourism inPacific development

Cluny MacphersonMassey University, Albany Campus, PB102-904, North Shore MSC, Auckland, New Zealand.

Email: [email protected]

Abstract: Pacific governments seeking to expand national economies are increasingly looking totourism to provide revenues. At the same time, companies that operate cruise ships are searching fornew destinations for increasing numbers of larger, faster ships which they are launching to cater forsteadily increasing demand for cruises. The Pacific region appeals to both companies and passengersas a cruise destination. This coincidence would, at first glance, seem to provide an opportunity fora mutually beneficial relationship between companies and governments in the region. But little ispresently available to those in the Pacific who must decide what role this form of tourism might playin their future. This paper reviews some of the environmental, economic and societal impacts ofcruise ship tourism and concludes that, managed effectively, this form of tourism can yield higherreturns with lower risks than some alternatives and could form a part of a sustainable tourism policy.

Keywords: cruise lines, development, tourism

Introduction

Pacific governments are under increasing pres-sure to identify new sources of revenue. This isgenerated, in part, by internal factors, such asgrowing populations with rising material aspi-rations, in part, by aid donors (Slatter, 2006),and in part, by external pressures exertedby climate change (Sem, 2006). Tourism hasbecome a preferred source of additionalrevenue, and tourist development strategiesfeature prominently in both national andregional development plans. Expansion pro-grams typically focus on increasing the rangeof land-based tourism activities by addingniche products such as eco-tourism, adventuretourism, historical and cultural tourism, to con-ventional hotel-based tourism.

The focus on land-based tourism is hardlysurprising: it has a range of well-understoodenvironmental, economic and societal impactswhich governments can identify and weigh informulating national tourism plans. The expan-sion of land-based tourism typically incurs costsfor physical infrastructural developments suchas extensions to water and energy reticulationsystems and airports and road networks. Expan-

sion also often requires the extension of associ-ated government services such as tourism,immigration, customs, bio-security, airportmanagement and police. Less frequently con-sidered is a form of tourism which is likely toexpand in the Pacific, and whose impacts areless well-documented and consequently lesswell-understood: ship-based tourism. Thisarticle explores some of the forces generatingincreasing demand for ship visits in the region,and some issues which Pacific governmentsmay need to consider when evaluating thepotential costs and benefits of this activity, andformulating strategies to manage it. It contendsthat cruises can, if managed effectively, providea useful addition to Pacific tourism strategies.

Escalating demand for Pacific cruisedestinations

Cruise ship tourism is increasing globally.Between 1989 and 1999, the numbers ofpassengers carried rose from 4.02 million to8.74 million per year, and industry forecastsare for some 20.7 million passengers by 2010(World Travel and Tourism Council, 2002: 43).

Asia Pacific Viewpoint, Vol. 49, No. 2, August 2008ISSN 1360-7456, pp185–197

© 2008 The AuthorJournal compilation © 2008 Victoria University of Wellington

doi: 10.1111/j.1467-8373.2008.00369.x

mailto:[email protected]

This forecast expansion will come from continu-ing demand in the USA, growth in the Europeanand Australasian markets, and in the largelyuntapped ‘Asian’ markets. The demand isreflected in high occupancy rates,1 and ininvestment in new larger ships by the corpora-tions which dominate the industry. This expan-sion is exemplified in a new generation ofships such as the 160 000 tonne, US$800 M,‘Freedom of the Seas’ (see: http://www.freedomoftheseas.com/) which has, since 2006,carried 3634 passengers in search of adventure.From 2009, even larger ships such as the224 000 tonne US$1.1 B ‘Genesis’ will carrymore than 6000 passengers on cruises.

This growth is unlikely to stop: larger shipsoffer new economies of scale, which lead toreductions in the cost of cruises, which, in turn,open up new markets. The rapid growth ofmiddle classes in the economies of East andSouth Asia, which is already evident in the esca-lating expenditure in mainly regional tourism,has the capacity to generate significant addi-tional demand for cruise ship tourism. Thisexpanding demand has ‘knock on’ effects.Increasing numbers of larger, faster ships arecausing congestion in ‘traditional’ cruiseregions, the Caribbean and Mediterranean,which are now crowded, have little sparecapacity and are increasingly difficult to secure.This increased traffic is generating demand fornew, less-congested ports, but not any port willdo. New ports need to be in locations whichcan be readily marketed.2

The Pacific region offers a range of such ports,from larger cities like Auckland, Sydney, Mel-bourne and Honolulu to smaller port towns likeSuva, Apia, Nouméa, Pape’ete, Hilo, andLautoka, all of which have varying degrees oftourism infrastructure. These destinations offercruise lines a range of the shore excursions onwhich they depend to supplement decliningrevenues from the sale of cruises in an increas-ingly competitive market.

The Pacific region has undeveloped potential.Secondary ports can and are being added toPacific cruise itineraries as improved propulsiontechnologies allow larger ships to enter,manoeuvre in, and leave smaller ports safelywithout tugs. The range of potential destinationsis being further expanded by using ships’tenders, which require less sophisticated birth-

ing facilities, to land passengers in remote loca-tions while ships either anchor or use dynamicpositioning systems to hold a position offshore.This trend renders the draft of ever larger shipsirrelevant, and is allowing companies to extendtheir range of Pacific destinations beyond tradi-tional port towns. The inclusion of these stopsmay increase the appeal of cruises to sectors ofthe market that seek new ‘unique’ destinations.The Pacific already offers visits to such remotedestinations as Ouvea, Lifou, Borabora andRaiatea, and atolls such as Christmas Island inKiribati. This trend continues: between 2005and 2006, P & O increased the number of SouthPacific ports from 23 to 38, and it is currentlyexploring a further 12 potential destinations(Islands Business, 2005).

The range of Pacific attractions is potentiallygreater still. Additional possibilities come fromso-called ‘cruise-by tourism’, which involvescruising through scenic areas and past pointsof natural or historical interest. This involvesslowing a ship while an ‘expert’ presents a livecommentary identifying points of historical andnatural interest. While these entail little extracost to the line, they offer passengers a breakand an additional ‘destination’ or ‘highlight’without the inconvenience of disembarkation.3

Pitcairn Island, the active volcanoes of Hawaii,the volcanic White Island and southern soundsof New Zealand are used to add ‘attractions’,without the security risks and costs of berthageincurred by port calls.

Potential passengers are more likely to takecruises in regions which are considered secure.Pacific states are considered politically stable,and unlikely to harbour protest or terrorist ele-ments.4 The Pacific has an enviable image forstability and security which is increasinglyrecognised by tourism operators. The Vice-President of the Singapore-based WarwickHotel chain, which is seeking to expand opera-tions in the Pacific,5 summed this view up inrecent comments:

The South Pacific is one of the safest places youcan travel to, it has a rich culture, mothernature beauty and the genuineness of thepeople is just incredible. You don’t see anyculture like what you see in the South Pacificany more in the world. It’s a great businessopportunity, it is a very safe place and has notbeen touched. (Baselala, 2006: 36)

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Passengers are more likely to take cruises inregions where people are considered ‘friendly’and where safe, spontaneous encounters withlocal people are readily available. In thisrespect, smaller Pacific states benefit from theheavy promotion of tourism in the Hawaiianislands as a ‘Pacific Island experience’. The mar-keting of Pacific destinations as an extension ofthe ‘Hawaiian experience’, ensures that Pacificdestinations beyond Hawaii benefit by associa-tion. They have an additional advantage whichis that, in many places, more ‘authentic’ culturalexperiences are readily available and relativelyinexpensive.

Additionally, there is unmet demand from atourist market sector which is currently notwell-served by airlines in the Pacific. This com-prises well-informed visitors who intend, ini-tially at least, to visit the Pacific only once,seeking a ‘variegated experience’ of the region.They may wish to visit, for instance, Melanesia,Micronesia and Polynesia, or a mix of porttowns and more remote destinations. At present,airline connections and scheduling, and highairfares in the region prevent people movingaround inexpensively within the region. Areport on a December 2006 conference onPacific tourism noted that:

Hundreds of millions of tourism dollars are lostevery year simply because a tourist who, forinstance, is after a variegated South Pacificcultural experience simply cannot hop from,say, Noumea to Apia or from Port Vila toNuku’alofa, or from Port Moresby to Tarawawithout flying circuitously and at great expenseof both money and time. Not many tourists inthis century have that kind of time to spend,even if they have the money. (Islands Business,2007)

Shipping companies can move this group ofpeople around within the region efficiently andrelatively inexpensively and can provide arange of destinations and types of local encoun-ters. From the tourist’s point of view, the attrac-tion of such arrangements is that they involveless time, less risk, and involve a singlepayment.

These perceptions are understood by cruise-line planners, aware that the image of thePacific region appeals to the cruising populationseeking a secure, warm, welcoming, destination

away from the rigours of Northern Hemispherewinters, and the risks of living in large citieswith rising crime rates. The Pacific region isalready attracting a steadily increasing numberof ships from Europe, the USA and Australasia(Islands Business, 2005). However, the intrinsicappeal of the region is only partly the attractionof the Pacific: there are other operational incen-tives to expand activity in the region. Pacificports also appeal to the shipping companiesbecause they are relatively secure, have lowerport charges, have unused capacity, are typi-cally close to port towns and are developingphysical and organisational infrastructure tomeet the new needs of international shipping.

Constraints on Pacific cruising

The demand for cruising in the Pacific in tradi-tional cruise markets has been limited by thedistance to the ocean from the European andEast Coast US ports in which many passengersembark. Faster ships are shortening the voyageto the Pacific, but increasing delays at thePanama Canal are offsetting these gains, and thetime taken to reach the Pacific remains a disin-centive to Pacific cruises from the East Coastports. While ‘fly-cruise packages’, which allowpassengers to join Pacific cruises in West CoastUS ports and at some ports in Asia and Australa-sia, have overcome some of these issues, longflight times to embarkation points remain a dis-incentive to many, particularly to older, travel-ers. Two factors seem likely to remove somecurrent constraints on demand.

With the increase in the capacity of thePanama Canal from 2015, saving the 8000 nau-tical mile voyage around the Cape, it will bemuch quicker, and more convenient, to takeships into the Pacific Ocean. While canal transitcosts are expected to increase, these will beoffset by the larger numbers of passengers onthe new ships which will be able to use theexpanded Panama Canal. Once in the Pacific,the relatively short distances between theislands allow ships to reach a number of venueson a single trip without long unbroken periodsat sea.

More importantly, however, the growth ofpotentially large markets closer to the Pacific, asa consequence of rapid economic growth inSouth and East Asia, growing interest in the

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region beyond Asia and may create demand fortravel within the Pacific region. Such a demandcould well lead to the expansion of Asianregional cruise lines to provide Pacific cruisesfor the new and increasingly affluent ‘Asian’cruise market and produce an increasingdemand for new destinations in the Pacificregion.

But consumer demand alone cannot guaran-tee company interest in the Pacific. Cruise com-panies have operational requirements that have,until recently, rendered a number of Pacificports ineligible for visits, for operational andsafety reasons. However, this situation is chang-ing. A series of port physical infrastructureimprovements, funded often by aid donorsseeking to encourage small states to export, andrecent port security enhancements, required ofnations trading with the USA, have made Pacificports larger, safer and more secure. Manage-ment of Pacific ports is also being developedwith training grants from aid donors. Trainingprogrammes for port personnel in the 22 statesof the South Pacific Community have been insti-tuted recently by the Regional Maritime Pro-gramme (SPCRMP) to increase awareness ofinternational standards and compliance (Tabu-reguci, 2006).

Coming ready or not

For all of these reasons, the Pacific has becomeincreasingly attractive to the companies whichoperate the cruise ships. Between 2005 and2006, for instance, P & O line increased thenumber of visits to Ouvea from nine to twentyand the number of Australian visitors from14 000 to 32 000 from the 100 who currentlyvisit the island (Islands Business, 2005). For thesame reasons, the Pacific is likely to becomemore attractive to companies. Yet the Pacificgovernments and agencies that managetourism, which have to decide how to respondto shipping companies’ overtures, have littleavailable analysis of the costs and benefits ofengagement with the industry. As a conse-quence, such discussions that do occur typi-cally focus on the impact of visits on localculture, rather than its role in development.

This article contends that this may be anunhelpful focus. It may be more productive toconsider whether this industry can, as suggested

by Baldacchino, be more productively regardedas a type of hinterland, and a potential sourceof revenue, which can be cultivated and‘managed’ by small states (Baldacchino, 2006).Many Pacific states have already diversifiedtheir revenue sources by exploiting ‘extra-territorial’ resources through supply of labourmigrants to metropolitan labour markets(Bertram and Watters, 1985, 1986; Bertram,1986), sailors to international merchant fleets(Borovnik, 2006), the sale of surplus telecom-munication capacity and provision of off-shorebanking and trust services to commercial enter-prises around the Pacific Rim. An effectivelymanaged cruise ship tourism programme canbe usefully viewed as simply another extra-territorial ‘hinterland’, to be exploited to in-crease the range of resources and diversifyrevenue sources available to governments.

This raises the question of how to identify therelative costs and benefits of exploiting thisextra-territorial ‘hinterland’. Can the costs andbenefits of cruise ship tourism be identified, andcan these realistically be managed by Pacificstates to ensure that the former are minimisedand the latter are maximised? For the purposesof this analysis,6 generic environmental, eco-nomic and societal impacts will be consideredseparately, and will be compared with compa-rable impacts of land-based, resort hotel-typetourism, which is typically considered the ‘stan-dard’ model for tourism development in thePacific.

Environmental impacts

Cruise ship operations have two sets of environ-mental impacts: those connected with the pres-ence and operation of ships within a state’sterritorial waters, and those connected with pas-sengers’ activities on shore. The government’sroles in these areas differ and each of theseareas will be considered separately here.

Around the 1992 Earth Summit in Rio deJaneiro, environmental protection organisationshighlighted the environmental costs of tourismin general. Among specific issues raised aboutcruise ships was the amount of waste dis-charged, both legally and illegally, by ships (seeRobertsen, 2007; Uebersax, 1996). Those cam-paigns, and pressure to find new passengers andports, both of which are increasingly aware of

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environmental risks and costs, provided theimpetus for formulation of new environmentalpolicy by the cruise industry. Cruise lines simplycould no longer afford to ignore these environ-mental issues as they might once have done.

Management and mitigation ofoperational impacts

The European and US ports in which moderncruise ships typically operate are imposingsteadily higher environmental performancestandards. The International Maritime Organisa-tion and maritime nations have since developeda comprehensive set of environmental stan-dards and requirements. These are embodied inthe International Convention for the Preventionof Pollution from Ships (MARPOL) and Interna-tional Safety Management Code for the SafeOperation of Ships and for Pollution Prevention(ISM Code). Additionally, in July 2001, the Inter-national Council of Cruise Lines’ (ICCL) 16member lines7 committed themselves to a seriesof initiatives aimed at minimising waste streamsin existing vessels while seeking, by ship designand operation, to ‘minimize their impact on theenvironment’ (International Council of CruiseLines, 2005: 1) and to audit waste managementand discharge procedures.

As a result, modern ships are increasinglyself-contained ‘systems’, and typically havesmall ecological footprints. Ships carry theirown fuel, produce their own fresh water, andprovide energy, waste disposal and sewagesystems, and manage their security and bio-security. While ships take on fuel and water anddischarge waste where facilities are available,they do not require water or fuel supplies andtransfer facilities to make a stop. Modern shipscan desalinate their own water8 and generatetheir own power and require no on-shoreenergy supplies.9 While they can dispose ofwaste where facilities are available, they do notrequire these to make a stop.10 Reduction andrecycling of on-board waste, and compactorsallow ships to discharge solid waste less fre-quently and at larger ports where disposal facili-ties are available. Ships’ grey water systemshave been steadily improved to meet the highstandards imposed by European and US domes-tic ports, and modern ships no longer needto discharge large amounts of untreated or

partially treated waste into onshore systems inports or at sea.

These enhanced environmental design trendsand on-board conservation practices haveincreasingly been incorporated into cruisecompanies’ publicity and marketing strategies.Companies have begun publicising their effortsto become greener through both design andoperation. Lines are, for instance, now invitingpassengers to join the line in minimising theships’ impact on the world’s oceans by reducinguse of bleaches and water. These practices arenot entirely altruistic: when passengers reducethe amount of water consumed and laundrygenerated to lessen their impact on the environ-ment, they also reduce some of the costs to theline of desalinisation and of laundry operations.Companies which wish to capture the ‘green’sector of the market cannot afford to ignore orbacktrack on these standards.

For Pacific states with limited physical infra-structures, cruise ships may be attractive alter-natives to building and expansion of hotels,which typically require significant additionalinfrastructural investment to mitigate environ-mental risk. Pacific governments that seek tomitigate the environmental impact of cruiseships can do so by limiting entry to vessels thatdo not conform to standards imposed by Euro-pean and US ports.

A less widely publicised environmental risk isthe exposure to the consequences of shippingaccidents within territorial waters. Pacific gov-ernments, with limited resources available,environmental remediation may be quite justi-fiably concerned with the consequences ofexposure to this risk. While the environmentalrisks of having ships in territorial waters cannever be entirely eliminated, as the sinking of amodern cruise liner in the Greek Isles in 2007demonstrated, this risk is declining as a conse-quence of two sets of factors: increasing inter-national surveillance and regulation of maritimesafety, and growing concern about safety in thecruise market.

Ship safety is now tightly regulated by theInternational Convention for the Safety of Life atSea (SOLAS), which sets standards for ‘hullstructure, watertight integrity, structural require-ments, equipment requirements for lifesaving,firefighting, and vessel control, and require-ments pertaining to the safe navigation of the



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ship’ (US Coastguard, 1998: 1). All ships of USRegistry, and all ships picking up passengers inUS ports, must be certified annually by the USCoastguard. In addition to the internationalrequirements imposed on cruise ships bySOLAS, international regulations and ships’insurers ‘require compliance with stringentregulations regarding structural fire protection,firefighting and lifesaving equipment, watercraftintegrity and stability, vessel control, navigationsafety, crewing and crew competency, safetymanagement and environmental protection’(US Coastguard, 1998: 1).

Shipping companies, seeking to manage theirinsurance costs, and to attract the increasinglyrisk-averse travelling public in a highly competi-tive market, are acutely conscious of the conse-quences of negative publicity of any shippingaccidents and especially those which resultin environmental degradation. The collectiveeffect of these factors is to minimise risk tocountries whose waters ships enter; to ensurethat ships are insured in the event of accidentsand that small states do not face the costs ofsalvage and environmental damage. Pacificgovernments seeking to mitigate operationalrisks can do so by ensuring that only ships thatcomply with these construction, operationaland safety standards are permitted to enter ter-ritorial waters or land in a jurisdiction. This is arelatively straightforward procedure.

Management and mitigation ofonshore impact

A second set of environmental impacts associ-ated with cruises results from the activities ofpassengers on shore. These vary with thenumbers that go ashore. The numbers of passen-gers on ships currently operating in the Pacificvary from 300 on small, boutique ships such asthose operated by the Seabourn Line, to 2500on large ships such as those operated byHolland America Line, and 3200 on the largestCunard liners. Numbers will, however, increaseas larger ships begin to cruise into the Pacific.Not all passengers, however, go ashore: anumber remain on board in port for health andother reasons. In destinations where ships’tenders take passengers ashore, less mobilepeople will choose not to disembark andembark from ships’ tenders in all but the

calmest of seas. Others, for whom the voyage isthe experience, routinely remain on board inports. Thus, ‘affinity groups’ who hold ‘confer-ences’ or organise tournaments of various typeson board use the ship primarily as a platform forthose activities and have little interest in theports visited. This passenger figure is, however,offset by the numbers of crew members who goashore. However, crew usually go ashore forshort periods between shifts and primarily touse cheaper land-based telephones to callfamily and do shopping, which limits the dis-tance they can go on shore. Nevertheless, thetotal potential impact remains significant.

The total impact of all ships can be readilycontrolled by fixing the timing, frequency andduration of visits. On-shore environmentalimpacts vary with the size and organisation ofthe location can be controlled by restrictions onthe number of visits permitted in any givenperiod, and by regulation of on-shore activity.Destinations where there is significant infra-structure might manage more frequent visits andlarger visitor numbers without disruption. Insmaller destinations, where ship visits createsome social and economic disruption, thenumber and frequency of visits can be limitedso that this effect is minimised. Where stateswish to impose more control, state visitorauthorities can control on-shore impact of visi-tors by establishing the passenger mixes onvarious cruises, the likely impact of the variousmixes offered by companies, and select theoptimum mix for a destination.

Those who go ashore fall into two categories:those taking ships’ shore excursions, and thosewho make independent arrangements. Theimpacts of the former group can be managed,within targets set by government, by state visitorauthorities and the port agents who negotiate therange and price of on-shore excursions. Thesecond group of passengers comprises ‘inde-pendent travellers’ who do not take organisedtours. This group comprises those who walkaround towns on their own, visiting food andhandicraft markets, local restaurants, monu-ments and museums. These people often travelin small groups and seek to avoid the ‘touristspots’, thus effectively taking pressure offpopular destinations, which are most threatenedby large numbers of visitors. Shipping compa-nies typically provide a shuttle bus service from

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the wharf to various points in town for thesepeople. This typically produces some conges-tion around drop-off/pickup points, an effectreferred to as a ‘passenger bubble’ (Jaakson,2004), but this can be mitigated by controllingcoach sizes and scheduling during a visit andincreasing the number of drop-off points.

A second group of ‘independent travellers’typically seeks to get beyond the port town andthe better known destinations provided by shoreexcursions, and visit ‘villages’ and beaches tomeet ‘local people’. These travellers often travelin twos and fours and engage a single taxi to getaway from other passengers, and to meet localpeople. This pattern effectively disperses touristsand reduces pressures on the most popular des-tinations, which they often seek to avoid, andgenerates significant revenues for smaller taxioperators. The growth of a well-organised, reli-able taxi industry that can take on this businesscould give cruise planners the confidence toengage more widely with this sector.

State visitor authorities that want to manageflows to attractions to restrict environmentaldamage can do so by controlling the number oflicensed operators, restricting the range of tours,and limiting numbers of places sold on thosetours. Visitor authorities can also manage therange of activities offered to lines to distributeopportunities between larger and smaller com-mercial and private operators. These arrange-ments can effectively distribute the passengers’impact across a range of activities, provided bya range of suppliers, and reduces undue pres-sure on the sought after sites. Thus, for instance,on Rapanui (Easter Island), commercial opera-tors offer guided coach tours to archaeologicalsites, while smaller private farmers offer guidedhorse-back tours, which succeed because of thenovelty, while the government puts on tours tothe library and museum. Apart from managingthe environmental impacts, these sorts ofarrangement also distribute tourism expenditureand revenues over a number of sectors andmaximise its multiplier effect in ways discussedbelow.

The on-shore impact can be distributedbeyond port areas. Large vessels can, and do,use ships’ tenders to land passengers in moreremote locations using local wharves, thus dis-tributing the environmental impact over a widerrange of destinations. Smaller cruise ships

serving the ‘explorer’ market take smallernumbers of people on shore in inflatablelanding craft for managed ‘cultural visits’ andprovide remote locations with alternativesources of income. These have very limitedimpacts on local ecosystems, since the attrac-tion to the visitors lies in experiencing the wayof life of the villagers and no additional facilitiesor imported foods are required to service thismarket sector. In still other places, such asPitcairn Island, passengers remain on ship andthe island population is brought to the ship tomeet passengers, sell handcrafts, and provide‘folkloric’ performances and lectures about thedestination. This allows passengers to meet andtalk with Pitcairn Islanders, buy local products,and see ‘cultural performance’ without creatingany environmental pressures on the island itself.

However, governments and visitor authoritiesmay wish to do more than minimise pressure onthe physical environment. Governments mayalso be able to extract a premium from shipvisits to support their own environmental activi-ties such as conservation and heritage protec-tion. This can be achieved either directly,through charges for ship visits, or indirectly,through levies on shore-based tourism operatorsor through combining these. The opportunityto extract income from cruises to supportconservation-oriented activity can, in turn,mitigate domestic pressure, which leads tothe destruction of rain forest and mangroveswamps, and over fishing of lagoons. Some vil-lages, for instance, are creating marine reserves,in which cruise passengers are allowed to divefor a fee, which offsets loss of income fromfishing and draws attention to the possibilities ofmarine conservation and the importance ofbiodiversity. Others have created aerial walk-ways through rainforest canopy which provideviews of forest flora and fauna, and have pro-vided accommodation for overnight stays in theforest canopy. These activities attract passen-gers, generate educational possibilities and thecontinuing income from these activities offsets,and can eventually exceed, the one-off returnsfrom forest removal.

An even more valuable opportunity may lie inthe educational possibilities of such visits.Pacific states, and small island developing soci-eties in general, while significantly impacted byclimate change (Sem, 2006), typically have dif-



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ficulty in drawing attention to the environmen-tal consequences of climate change and over-exploitation of fisheries in international forums.Ship visits offer these states an opportunity tobring relatively large numbers of people fromhigh income nations face-to-face with thehuman consequences of global warming. Onemight be sceptical about the educational possi-bilities of these visits, but they represent anopportunity that might not otherwise be avail-able to small nations to influence potentialopinion leaders.

Visits provide an opportunity to educate sig-nificant people on the linkages between climatechange, reef degradation and coastal erosionand their human consequences on coastalcommunities. The visits offer an opportunity todemonstrate the environmental and social con-sequences of bottom trawling and unrestrictedlong-lining on the onshore fisheries and thosewho depend on it. New technologies allowdivers in the sea in Pacific ports to use audio-visual links to relay graphic images and com-mentary on reef and fish health to passengerssitting in the comfort of the ship’s theatre. Pas-sengers are able to see the ecological conse-quences of global climate and of over-fishing ona large screen, to ask questions about theseeffects and to have these answered with illustra-tions by the divers. This type of activity canproduce, at least, more awareness and, at best,effective advocacy.

In an increasingly environmentally awaredeveloped world, more questions are beingraised about the ‘carbon costs’ of varioushuman activities. While these are presentlydirected primarily at carbon costs of the produc-tion and transportation of food, ‘food miles’,they are now being extended to the environ-mental costs of travel and tourism. As the costsof various types of travel are increasinglyexpressed in terms of the amount of carbonproduced by any given traveller in given activi-ties, it may be that ‘environmentally aware’ trav-ellers will seek to reduce the amount of carbonwhich they produce in leisure travel.11 They maydo this by calculating the amount of carbonconsumed in various forms of travel and optingfor those which are more ‘carbon-efficient’. Inthe leisure market, where time pressures are lesssignificant, this may result in some increase inthe size of this relatively more carbon-efficient

cruise market and some decline in the numberof leisure air travellers.

The environmental impacts on tourism in thePacific will not however be confined to theamount of carbon emitted by tourists gettingthere. The United Nations’ Inter-GovernmentalPanel on Climate Change has outlined some ofthe anticipated consequences of climate changefor Pacific states (Sem, 2006: 168–170). Theseinclude fresh water shortages, coastal degrada-tion and increasing numbers of hurricaneswhich have consequences for local agriculture,and which may, collectively, make some formsof land-based tourism environmentally unsus-tainable in small Pacific states and may compro-mise certain coastal land and attractions. Evenif that were not the case, the perception ofincreased risks of visiting regions knownincreasingly for their climatic volatility, maydeter risk-averse tourists.

Furthermore, if the costs of increased carbonproduction have to be met by small Pacificstates, many of which are signatories to theKyoto Agreement, with limited resources,certain forms of land-based tourism, which gen-erate relatively more carbon, may have highercosts and may be less attractive, than cruise shiptourism in which the costs of carbon productionare borne by the cruise lines.

Economic impacts

While environmental impacts are clearly impor-tant for small islands with fragile ecosystems,economic impacts are equally important forsmall states with limited natural resource stocks,growing populations with rising aspirations and,in many cases, few outlets for surplus popula-tion. While cruise ship visits do not generatethe permanent full-time employment, and theincome taxes, associated with land basedtourism, they do offer a range of economicopportunities that, if managed effectively, canyield both additional government revenues andincome to populations at large. These opportu-nities can be divided into those that accrue, asrevenues, directly to the government as theowner of infrastructure and collector of taxesand rents, and those that accrue to the localcommercial sector for the provision of goodsand services. In terms of economic impact, shipcruising compares favourably with land-based

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tourism and can generate revenues for both thegovernment and the local population.

Infrastructure costs of ship visits are relativelylow because ships use, primarily, existing physi-cal and organisational infrastructure: wharves,port facilities and management. Increasing thenumber of passenger ship visits can, withminimal additional costs, take up under-utilisedport capacity, and increase the rate of returnon investment in existing facilities. Increasingnumbers of ship visits can also generate newbusiness for shore-based marine industries, cur-rently serving mainly freight lines, which canprovide a range of the same, or additional,services to passenger shipping companies.Increased volumes of business can generateadditional investment in these service compa-nies and expansion of the range of servicesavailable may, in turn, generate more visits.

Ship-based tourism incurs fewer costs andlower financial risks than land-based hotel andmotel tourism for governments. This is particu-larly true where governments have to borrow toinvest, or to offer incentives to the private sectorto invest, in the building and operation of shore-based accommodation. Investment in shore-based accommodation capacity is typicallyaccompanied by the costs of continuous provi-sion of, at least, electricity, water and seweragefor the facilities; the associated costs of mainte-nance, and of servicing debt for these. Thesecosts continue even when, for reasons beyondthe government’s control, the market isdepressed and when the costs of its capitalinvestments exceeds the return from the asset.The provision of these services for hotels cangenerate political criticism from sectors of thelocal population towards their governments forspending money on providing, and subsidising,these services for visitors before they are avail-able to nationals.

By comparison, all of the cost of providingaccommodation for cruise visitors is effectivelyborne by the ship operator. The costs of provi-sion of electricity, water and waste disposal aremet by the ship operator as they are needed. Thedebts and debt-servicing charges, and the costsof under-utilisation of plant are also borne bythe ship operator. Thus, the spending capacity ofcruise ship tourists is delivered to the govern-ments at minimal cost, and with limited finan-cial and political risk.

The same is true of the marketing costsincurred in attracting tourists to the Pacific.Small states are faced with significant costs inmarketing their destinations in tourism industryfairs in major markets. There, they oftencompete for the attention of the tourism whole-salers, with larger states that have larger market-ing budgets and expertise, and with a number ofother small states that have similar ranges ofattractions. To succeed in these wholesalemarkets, they typically have to engage withmarketing companies which have no directcommercial interest in success of a campaignand do not bear the costs of failure. The highcosts and the uncertain returns of marketingsmall destinations in highly competitive, largemarkets entail a significant financial risk togovernments.

By contrast, in the case of cruise ship tourism,the costs of market research and developmentare borne by shipping companies. The costs ofpromoting destinations are also borne entirelyby the cruise operators who have significantbudgets and experience in these markets. Thesecruise lines have a vested commercial interest insuccessful promotion of Pacific destinations,since they alone bear the costs of failure tosecure passengers for scheduled journeys. Fur-thermore, cruise companies, which are alwaysworking to extract maximum revenue per pas-senger on shore excursions and are trying tosecure repeat business, have a vested interest inworking with governments and tourist authori-ties to identify the most profitable opportunitiesfor both parties.

The second economic benefit of cruise shiptourism accrues to the local population for theprovision of goods and services by everyonefrom individual sellers of handicrafts to provid-ers of tours and provisions. On Pacific cruises,passengers routinely spend, on shopping andincidental purchases, in the region of US$90–120 on shore per day. On a ship with 2000passengers, this represents a possible return tosmall vendors of between US$180 000 andUS$240 000 over some 8–10 hours. What isremarkable in the Pacific is that passengers rou-tinely return to the ship complaining that theycould not spend money which they hadplanned to because the range or volume ofgoods and services were not available. Thisunmet demand is not lost on small producers



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and food sellers who have under-estimated theinterest in their handicrafts and have found thattheir goods are rapidly sold out and sales oppor-tunities are lost.

The returns to onshore businesses can beincreased by systematic planning of this com-mercial activity. The greatest developmentalbenefits are likely to accrue where governmentagencies identify opportunities to increase themultiplier effect of tourism, and then use regu-lation and incentives to encourage local busi-nesses and shipping lines to provide a range ofactivities which ensure that benefits flow intothe more remote sectors of the economy. Insome Pacific states, national competitions, suchas the Teuila Festival in Samoa, are used toidentify competent, authentic, village perfor-mance troupes, which are then offered oppor-tunities to perform both on the wharves as theships arrive and on ships shortly before theydepart. These groups perform on a rotation,which ensures that funds flow to each of thevillages from which the groups come, and arenot monopolised by commercially organised,hotel-based, tourism-oriented performancegroups.

Markets for arts and handicrafts, and foodstalls selling local foods can also do brisk busi-ness. The best revenues typically flow to theenterprises that take stalls on the pier beside theship, or in nearby markets. Passengers browseand buy in these areas on the way off the shipand again, often, on the way back, because theycan take their purchases back to the shipquickly and easily. Some like to have made theirsouvenir purchases before they leave the wharfarea so that they are free to do other thingswithout worrying about gift-buying. Othersprefer to make their purchases after they havebeen around and are convinced that the wharfmarket represents good value. Still others usetheir last hours on the pier talking to locals andspending the last of their local currency at thesestalls. These competing preferences ensure thatthere is a sustained demand at the shore-sidemarkets throughout the ships’ stay.

These shore-side markets provide opportuni-ties for state-owned enterprises selling postagestamps and coins, commercial enterprisesselling local telephone calling cards, smallerenterprises selling hand-printed sarongs, shirts,music CDs and DVDs of local scenes, and indi-

viduals entertaining and selling a range ofhandicrafts and local food such as chilled drink-ing coconuts, fresh fruits and island barbecue.At present, many passengers return to the shipfor meals and do not buy and try local food soldon the pier. This is, in many cases, because theyare too cautious in buying food. In practice,they do not wish to lose any part of their cruiserecovering from food poisoning and simply donot know whether it is safe to eat local food.However, passengers are more willing to buywhen they can see how food is stored, preparedand served. Successful vendors are well awareof this and go to lengths to be seen to be offeringa safe encounter with local taste. Micro credithas been, and could be more widely, used tobuy or hire the polystyrene storage bins, plasticgloves, cling wrap and other things that reduceresistance to experiment.

Governments, through tourism agencies andships’ port agents, are free to vary the marketmix to ensure that benefits flow to a range ofenterprises and to ensure that reliable, honesttraders, selling acceptable products are thefirst and last people the passengers encounterat pier-side markets. Visitors’ bureaux, ships’agents and cruise planners can work together torotate and distribute opportunities to ensure thatan appropriate mix is available for differenttypes of ship and that less-experienced vendorshave advice on how best to market theirproduce and services and access to the credit toallow them to take fuller advantage of theopportunity.

Additional business is available to existingport town markets which, in the Pacific, areoften near the pier. This is generated by runningregular shuttle buses to local produce andhandicraft markets where passengers can buyfood, clothes and handicrafts and return directlyto the ship with their purchases. These localmarkets, and selected ‘unique’ products, areoften promoted by ship cruise personnel in ‘portbriefings’ and become ‘highlights’ for indepen-dent travellers. Additional business is generatedas passengers returning with purchases frommarkets attract disembarking passengers’ inter-est and lead them to markets in search of similarproducts.

Commercial opportunities need not be con-fined to urban areas around larger ports. In loca-tions where passengers are tendered ashore, a

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range of community groups are routinelyoffered an opportunity to perform, in rotation,on or near the jetty, and to keep any giftsmade to groups by audiences during theirperformance slot. Thus, primary school groups,women’s committees, youth and church groupscan be allocated time slots in which to raisefunds for their various activities. These pro-grammes work best, according to those whoorganise these visits, where the various groups’items are clearly differentiated from oneanother, where an ‘interpreter’ is on hand andwhere there is an opportunity for some ‘audi-ence interaction’. While ‘authentic’, local per-formance is a high priority for passengersseeking ‘folkloric experiences’, they do notexhaust the range of revenue generatingservices.

Even at more remote locations, where visitorsare landed by tender, opportunities for commu-nity groups to raise funds from the sale of localcraft production. Indeed, many well-travelledpassengers prefer to buy objects which havebeen produced by the seller on the grounds thatthe profit goes directly to the seller, and thatthey secure a more ‘authentic’ artefact forwhich they are prepared to pay higher prices.Some smaller destinations now organise handi-craft production around ship visit schedules sothat a wide range of quality commodities isavailable on ship visit days. Groups seeking toraise funds for community activity may rou-tinely include handicraft production as a signifi-cant element in their fund-raising programmes.To emphasise the ‘authenticity’ of the productson sale, artisans are stationed, at work, on thepier. Visitors who see the effort invested in theproduction process, and talk to the producersseem keen to buy these artefacts for that reason.

Further opportunities are available to farmerswho can supply fresh local produce to ships.Ships often promise passengers ‘special regionalmenus’ for which local produce is required.Restaurant personnel from the ship visit localproduce markets and produce suppliers con-tracted by ships’ agents and can purchase sig-nificant amounts of fresh fruit, fish and meat.Ships’ personnel, ever concerned about theprospect of outbreaks of food-poisoning, areextremely demanding and reluctant to takerisks. But larger local producers, accustomed toselling to demanding, quality-conscious cus-

tomers such as hotel chains, can sell significantamounts of product to ships.

The economic opportunities which cruiseships present vary with the cruise type and pas-senger mix. Certain fixed benefits such as ber-thage, stevedoring, wharf management fees andvisitor levies are fixed and flow to governmentsor their port companies. The amount and move-ment of additional economic benefits depend tosome extent on planning to ensure the highestpossible multiplier effect and programmingvisits to ensure the widest possible distributionof revenue among local businesses.

Societal impacts

The societal impacts of cruises vary from placeto place but can, if understood, be managed. Ingeneral, societal impacts are limited becausevisits are typically short and involve relativelysmall numbers of passengers, who are landedover time rather than at once. The impact can befurther limited by regulating the numbers andtiming of visits to avoid disruption of social andeconomic cycles.

Societal impacts will, however, vary from onecruise type to another. Longer cruises are mar-keted to older, higher income retirees andcouples who will typically prefer safer, morecomfortable, organised tours which are over-seen by ship’s staff who will ensure that they arereturned to the ship in time to depart. Thosewho seek contact with local people are morelikely to buy the shore excursions whichprovide for structured encounters in ‘villagevisits’ that offer opportunities for interaction insuch rituals as ‘kava ceremonies’, ‘earth ovencooking’ and ‘fish drives’. While these areexpensive, they provide the required humancontact with limited risk. Some older, moreindependent tourists are prepared to take ahigher level of risk and may seek out morespontaneous contact with locals, either in porttowns or in villages beyond, but there are typi-cally fewer in this category and they are limitedby the amount of time available on a typicalvisit and are, to some extent, ‘managed’ by thetaxi drivers whom they enlist to advise them onwhat to do.

The shorter, less expensive cruises marketedto youth and young families on tighter budgetswill typically have more independent travellers



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among the passengers. These lower cost cruisesalready form a segment of the existing Pacificcruise market, and, as this market sector isdeveloped in Europe by such operators aseasyCruise (see for instance http://www.easycruise.com) (Gross, 2007), more suchoperators may seek to enter the Pacific. Visitorson these cruises will typically walk about townand use only bars and beaches and buy smallnumbers of inexpensive souvenirs. The main dif-ference is the length of time spent ashore bypassengers with easyCruise placing people onshore up to 18 hours while other lines typicallyallow passengers ashore for up to 10 hours.12

While these passengers may not be particularlyinterested in encounters with local culture, theywill also have relatively limited impact on it.

Many passengers deliberately seek out‘authentic’ cultural experience, and some formof ‘indigenous’ cultural performance on visitsand expect to pay for these. These can be pro-vided by a variety of village organisations atrelatively low cost which are offset by significantreturns.Thus, villages can provide such activitiesas ‘morning tea with the village women’ whoprovide morning tea demonstrate handicraftsand entertain; ‘fishing with the men of thevillage’ who take parties to visit village fish trapsor netting and then cook and share the fish withthem; ‘visit to the village gardens’ in whichvisitors are shown a range of food and medicinalcrops and their uses. This activity can be com-bined with day stays in village-owned, beach-side houses such as the ‘beach fales’ of Samoa.

Still, passengers often comment, in cruiseevaluations, on the shortage of organised oppor-tunities for ‘cultural encounters’, and suggestextending the range. Numbers express thedesire for ‘authentic’ activities in villages inwhich there is spontaneity and unstructuredhuman interaction. Port lecturers on Pacificcruises report a steady stream of requests for‘cultural encounters’ such as kava ceremonies,weaving circles, canoe building and tattooing,but note that ships’ agents claim that these aredifficult to arrange in advance. Yet, many ofthese activities are routinely occurring in vil-lages and involve relatively little modification toallow passengers to participate. This representsan opportunity from which local populationscan, with minimal additional cost, derive sig-nificant income from ongoing village activity

without ‘bastardising’ cultural activity in theprocess.

Conclusions

The demand for cruises into the Pacific is likelyto grow significantly as popular cruise destina-tions become increasingly congested, over-commercialised and expensive, and passengersand cruise-lines seek out new, less-crowdedand less commercialised ports and destinations.If the Pacific states wish to engage with this formof tourism, for reasons set out above, it is impor-tant to identify and minimise potential costs andto identify and maximise benefits. To maximisethe returns of engagement, it is important totreat the industry as a hinterland, and to exploitit systematically. If a government decides toengage with the cruise industry, it can usefullytreat it as a series of markets which can beidentified, and systematically cultivated, tomaximise the revenues extracted from visits.The optimum mix and scheduling of cruises willvary from one place to another, but will begenerally one which generates revenue for gov-ernment and distributes revenues as widely aspossible throughout the population. Whilegenerating all-important revenues, governmentsneed to also consider the environmental andsocietal costs of cruises and to minimise theseso that the industry is not permitted to destroythe very features which attract people to it.

Notes

1 In 1999, ships had 194 360 000 beds available andachieved 97.66% occupancy, 50.89 million bed nightsfor the year (World Travel and Tourism Council,I.F.o.T.O., International Hotel and Restaurant Associa-tion, International Council of Cruise Lines, 2002).

2 Part of this demand is being met in the Caribbean asshipping lines acquire their own islets or atolls andcreate shore-based facilities to which passengers canbe lightened for recreation on pristine beaches staffedby attentive company staff and without the inconve-nience of port clearance requirements or security risk(Robertsen). But this type of arrangement cannot satisfypassengers who seek contact with local people andculture as part of the tour experience.

3 There are other opportunities in the South Pacific, mostnotably the Antarctic, but mounting opposition totourism ‘on the ice’ may prevent shipping companiesfrom adding this to their itineraries.

4 Recent domestic political instability is bound eventu-ally to influence shipping companies’ risk assessments.

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http://www

Recent riots in the Solomon Islands, Tonga and militarycoups in Fiji will undoubtedly raise questions about thesecurity of passengers in these ports because, as Chand(2007) notes: The region is often seen as one frombeyond its boundaries.

5 This involves a F$170 M expansion of operations in Fijiand Vanuatu, and into Samoa, Cook Islands and Tonga.

6 This is based, in part, on observations made on some25 cruises between 10 and 31 days in the Pacificregion between 1991 and 2007 on the ships of threelines. The author was engaged as a shipboard lecturerand had extensive formal and informal contact withpassengers and cruise staff, and crew over this time.

7 These include all of the world’s major cruise lines andaccount for over 95% of the cruise ship fleet tonnage.

8 This is significant because small Pacific states withrapidly growing urban populations frequently havewater shortages and do not have surpluses of watereven for sale.

9 This capability is significant because the ships requiresignificant amounts of power and small states, whichdepend on expensive diesel generated power and typi-cally have no surplus generating capacity, would beseriously inconvenienced if they were required toprovide power.

10 This capability is significant because ships generatesignificant amounts of organic and inorganic waste,some of which can pose risks to islands that havefragile ecosystems and lack the specialised facilities todispose of a range of material safely.

11 Airlines, conscious of the increasing significance ofthis phenomenon, are already publicising their currentand planned measures to reduce emissions, and allow-ing passengers buying tickets to purchase carboncredits to offset the costs of their travel (see for instancehttp://www.virginblue.com).

12 Ships may make stops of up to 36 hours in larger portswith significant international airports and large hotels,such as Auckland and Sydney, where ships disembarkand embark passengers and entertainers.

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Documents

Golden goose or Trojan horse? Cruise ship tourism in Pacific development