Do Cruise Ships Bring The Money?

Cruise ship terminals sound like a good idea for the local economy.... but are they?

Artist, John Wayne's, impression of proposed cruise terminal on the Gold Coast

By Ryan Pearson

With Mayor Tom Tate ‘promising’ to build a cruise ship terminal in the Seaway, I felt it prudent to have a look at the impacts similar structures have actually had on other communities worldwide. Mr Tate’s whole reason for wanting this terminal – at least his public reason – is to inject much needed tourist dollars into the Gold Coast. Forgetting about the environmental impacts of having a cruise ship terminal in the Seaway for a moment, let’s have a think about what this proposal may actually mean for the local economy.

First, let’s set the scene, the proposed location is a logistic nightmare. The Seaway is exposed to strong currents on the incoming and outgoing tides. It is also exposed to wave action (particularly at the mouth), which churns up a lot of sand. This sediment is then carried by the currents toward the broadwater. Wavebreak Island blocks the onslaught, and causes the current to turn which means that a very large proportion of this sediment load is then dumped exactly where the cruise ship terminal (and its required turning circle) is supposed to be going. It is for this reason that the proposed area is as shallow as 2m in parts, not the 16m that Mr Tate has been quoted as saying (it needs to be 9m for a cruise ship). The point of this is that in order to build the terminal in the first place, there will need to be significant dredging, and to keep it there, the dredging effort will need to be ongoing… not a cheap exercise by any means.

Economic evaluations in North America have found that under similar circumstances the tourism dollar has failed to have the desired effect, and GDP (that’s Gross Domestic Product) either stays flat or goes backwards (Loper 2005). That means, where the terminal requires significant initial investment, along with significant ongoing maintenance (dredging is about as significant as it gets), then in many cases it actually costs more money than it’s generating for the community (Loper 2005). Loper (2005) further goes on to state that “Without significant foreign investment into this infrastructure, it is questionable whether construction of large cruise ship terminals could pass a benefit-cost analysis.” Ahem… Tom Tate doesn’t have any foreign investment, he doesn’t even have any local investment with no backing from the state or federal government.

What does this mean for the Gold Coast? Monetarily, it will cost a lot to build and maintain a cruise terminal. A cost which may or may not be covered by the increased tourist dollar. It may benefit a few local businesses – particularly those that run dredging operations, or monopolise the retail market with bribes to cruise officials – but it will have significant detrimental impacts on many local businesses. The dive industry will be all but wiped out, the broadwater tourism industry will have their customers monopolised by the cruise operators, and while a select few retail locations may feel the boom, most will actually lose out… as will local customers… From personal experience in other parts of the world… when a cruise ship comes to town many businesses raise their prices considerably. Do you want to pay more just because some tourists pop in for the day? Furthermore, cruise tourist have no need for local accommodation - uh oh, all of those expensive new high rise buildings lose out too.

Anyway... outside of the economic costs, the social, cultural and environmental impacts of cruise terminals have been shown to be substantial (Murray 2005)… but I’ll look at these in another post…

For now, please read this article and have your say... the local voices should be heard!

References:

Loper C. (2005) Overview of the socioeconomic impacts of cruise tourism. In: Biennial Coastal Zone Conference, New Orleans, Louisiana.

Murray T. J. (2005) “THE IMPACT OF CRUISE SHIP TOURISMON LOCAL ECONOMIES” PANEL CZ 05. In: Biennial Coastal Zone Conference, New Orleans, Louisiana.