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Thursday, December 7, 2023
HomeCommentaryOp-edBuild to the Future, Not the Past

Build to the Future, Not the Past

When Mr. Boschulte, CEO of the West Indian Company Ltd., first presented the Long Bay Dock and Festival Park in 2014 to the community, he was not reading tea leaves, rather, he was preparing for the future growth of the cruise industry. He knew that every single ship visit to the territory was bread and butter for the Virgin Islands. 

He recognized that the future trends in the industry were directed at building Oasis mega class size ships. Not all ships are equal, and these big money ships drop millions into our economy with each call into the Port of Charlotte Amalie. When a ship docks in St. Thomas, the revenue generated benefits all three islands. That revenue stream supports our government, government jobs, and private sector employment. Mr. Boschulte foresaw that by building a third dock St. Thomas would protect its position as the premiere port in the region. He did not want to lose a single big money ship because we lacked berthing capacity. He wanted to respond to the huge demand that existed in the industry at that time for calling on St. Thomas. That demand is now in sharp decline, but it can be reversed before it’s too late.

For reasons unknown, the project was cancelled. The rest is history. St. Thomas, the once undisputed king of destinations, is now experiencing a devastating shift of mega class ships away from our port and to St. Marten. Royal Caribbean and Celebrity cruise lines have had a cumulative -36.2 % drop in calls since 2014 to our island. St. Maarten whose government invested in building an additional mega class dock capable of berthing multiple Oasis class ships in one day, are the winners. Since 2014 through 2018 they will have 905 calls. By comparison, St. Thomas will have a distant 577 calls with RCI/ Celebrity cruise lines. According to Mark T. Mingo CEO of the Port of St. Maarten, 87% of St. Maarten’s revenue comes from the cruise industry today because they prepared for the future and listened to the cruise lines and the berthing requirements for the Oasis class vessels.

The Port of Charlotte Amalie is at a crossroads. We can do nothing as some are suggesting and die a slow death as the big money ships continue to bypass our Island and reward St. Maarten. The other alternative is to build a third dock and create capacity for future growth that will support the territory for the next 20 years.

I have heard that certain board members of the West Indian Company currently do not favor building a third dock. The thinking is, that all 3 docks will be utilized in high season, however in low season the docks will sit empty, and therefore it is not needed, and unnecessary to build. This is what I call old school thinking that lacks vision and imagination, and leads to diminishing returns. Is this the path we should follow to prosperity?

No, the path forward is to build the third dock, so that we protect and retain the big money ship calls we currently have that are at risk of leaving. And as importantly, we will capture all of the new mega class ships being built, and coming on line over the next few years.

Empty docks are not a problem, but instead represent an opportunity. With the additional dock capacity we can market to niche cruise lines not currently in our market. For example the European ships that do not call here now due to the lengthy customs clearance process. Let’s work with our Delegate and U.S. Customs to solve this problem as we did successfully with the six-pack rule that was adversely affecting the marine industry. With additional capacity we will have the flexibility to provide yearlong berthing contracts to the European cruise lines and other smaller players.

 Royal Caribbean is a natural partner to build the Long Bay dock and Festival Park. Whichever major cruise lines we partner with to build this project, summer incentives can and must be built into the deal to secure guaranteed increases in ship calls during the slow summer months. Both VIPA and WICO need to benefit from the Long Bay dock deal so that neither entity is hurt financially. Build the capacity and we will fill it over time for the benefit of the Virgin Islands. Let’s think big not small.

 MSC lines has a new Mega-Class ship with 5,500 passengers being built for our region. Do we want it docking in St. Maarten on a Tuesday because Crown Bay is already occupied with the Oasis and we don’t have the space? We don’t have much time left to decide our economic destiny, before the cruise lines decide for us, and St. Thomas is just an occasional stop for Oasis class mega ships. Let’s not become a third-tier player because we lacked vision and imagination.

To our elected and appointed officials, and the respective board members of VIPA and WICO, in 2014 the path forward was not clear with respect to the cruise industries shift to mega-class ships. Today the future is clear, we need added mega-class berthing capacity to secure our economic well-being. Ship calls represent a guaranteed revenue stream for our cash strapped government. Ship Calls equal Jobs and taxes.

Taxi drivers, sales people, business owners, restaurants, servers, tour operators, coral world, mountain top, paradise point tramway, local art and craft vendors, retail shops, rental cars, wholesalers, boat excursions, fishing charters, and countless other members of the community livelihoods depend directly or indirectly on the cruise industry. Ship calls are the bread and butter of our and economy.

Let’s build to the future not the past.

Editor’s note: Filippo Cassinelli runs A.H. Riise Mall on St. Thomas, which has been in his family since 1928.

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  1. The title for this last installment in the series by Mr. Cassinelli is most apt, primarily because building for the future requires two extremely important things; (i) a vision of the future; and (ii) objectivity in decision making.

    Tourism is a very fragile industry, and in the Caribbean, prone to disruption from internal and external sources. One could add that the industry is also quite fickle, a perception underscored by the use of terms such as ‘tired destination’, ‘tourist reef’, and ‘destination branding’. There are numerous stories of tourists leaving destinations because the destination quality had become degraded by, guess who, the tourists. Given the fragility of the sector, and the clear need to make the Virgin Islands economy more resilient (or as some would say, more diversified), what is the vision of development for the U.S. Virgin Islands? What is the vision of tourism? What is the role of tourism in the future development of the U.S. Virgin Islands? It may be useful to ask and answer some of these questions as we focus on a sub-sector of the tourism industry, the cruise sub-sector.

    Mr. Cassinelli, like most commentators on Caribbean tourism, use data that reference the whole sector (such as global travel trends) or regional comparisons. In discussions and commentaries on the tourism sector in the U.S. Virgin Islands, I have yet to hear data on the economics of the sector: actual spending by visitors, cost of local support services, leakages (incentives, subsidies, external purchase of goods and services, lost tax revenue from points of sale, etc.), cost of infrastructure construction and maintenance, losses from theft by cruise passengers, and more. You get the picture?

    To build for the future, we should know what future we want. Let’s have that discussion. Then the approach to the development of the tourism sector may become clearer, and the community can move towards the unity of purpose that so many seek.