The terrorist attacks of 11 September, 2001, jarred the American consciousness and rendered significant lasting effects to US air travel and security.
In the wake of the horrific events in New York, Pennsylvania and Washington, DC, tourists from the US turned to familiar and safe destinations like the Caribbean. The outcome for Cayman was a marked increase in cruise passengers, even as air arrivals declined – exacerbating existing trends.
“It was a situation where all of the US people wanted to stay closer to home, and people were very scared of travelling by air,” said Robert Hamaty, President of Tortuga Rum Company. “The cruise ships actually put a plan in place to home port out of more destinations in the United States, so people could actually drive to their cruise port instead of flying.”
From 2001-2002, air arrivals in Cayman dropped by 9.4 per cent (334,000 to 303,000), but cruise arrivals increased by 29.6 per cent (1.21 million to 1.57 million). The net result was an increase in total visitor arrivals of 21.2 per cent (1.55 million to 1.88 million), according to the government’s Annual Economic Report for 2002.
The report writers attributed the increase in cruise tourism to the following factors: Proactive steps taken by government, growth of the global cruise ship market, Cayman’s strategic location and movement of cruise ships to the Caribbean from other parts of the world.
“After September 11, I think they took a lot of tonnage out of the Mediterranean because they were concerned about terrorist attacks on Mediterranean ships,” Sunset House Owner Adrien Briggs said. He added that he was hesitant to draw a correlation between the shift away from the Mediterranean and the shift toward Cayman specifically, just that fears negatively impacted Mediterranean cruise numbers specifically.
According to statistics from the Florida-Caribbean Cruise Association, the Caribbean Region (comprised of the Caribbean and the Bahamas) held a 46.6 per cent share of total bed-days in the cruise market in 2002, up from 44.5 per cent in 2001. Over the same period, the Bahamas’ share actually declined from 7.9 per cent to 4.5 per cent, while the Caribbean’s rose from 36.6 per cent to 42.1 per cent.
Using raw totals, the number of bed-days in the Caribbean rose from 21.83 million in 2001 to 26.74 million in 2002, an increase of 22.5 per cent. (From 2001-2002, the Bahamas dropped from 4.70 million bed-days to 2.88 million, a decrease of 38.8 per cent.)
From 2001-2002, bed-days in Europe rose from 4.84 million to 6.92 million, an increase of 43.1 per cent – while bed-days in the Mediterranean dropped from 7.55 million to 6.50 million, a decrease of 13.9 per cent.
Worldwide, bed-days rose 6.7 per cent from 2001 to 2002.
“Cayman benefited from cruise tourism because no US citizen wanted to go far from home, so the ideal vacation package was a cruise close to home,” Hamaty said. “The Western Itinerary became very popular because the Western Itinerary was closer to home than the Eastern Itinerary.”
The increase in cruise arrivals from 2001 to 2002 was part of a larger positive trend since 1995, when 683,000 visitors arrived in Cayman by cruise ship. However the 29.6 per cent jump from 2001 to 2002 was the largest year to year increase in cruise arrivals since at least 1992.
The biggest year for cruise arrivals was 2006, when 1.93 million visitors came to Cayman via cruise ship. Since 2002, the least number of cruise arrivals in a year was 1.52 million in 2009. Because of the increase in the average size of cruise ships, the 547 ships that visited in 2009 were the fewest since 518 called to port in 1998, bringing 871,000 passengers.
The 9.4 per cent decline in air arrivals from 2001 to 2002 was one data point in a negative trend from the peak year of 1998, when 404,000 visitors arrived in Cayman by air. The number of air arrivals bottomed out in 2005, the year following Hurricane Ivan, with 168,000 air arrivals. By comparison, about 288,000 visitors arrived in Cayman by air in 2010.
Rod McDowall, operations manager of Red Sail Sports, said the terrorist attacks had an immediate negative effect on stayover tourism, but not a lingering one. “The initial impact on Cayman’s tourism industry certainly slowed it down in the short term. There was a significant hesitation to travel on planes,” he said. “By and large, that has disappeared as a reason not to travel.”
Before the 11 September attacks, air arrivals in 2001 were more or less tracking numbers from 2000 on a monthly basis, according to Department of Tourism statistics. Actually, from January-August 2001, air arrivals had increased 1.6 per cent compared to January-August 2000.
In September 2001, air arrivals dropped 25.6 per cent from September 2000. In the final quarter of 2001, air arrivals dropped 22.7 per cent compared to the previous year, with a year-to-year decline of more than 20 per cent in each of those three months. In January 2002, air arrivals increased by 0.8 per cent compared to January 2001. Though steep decreases had levelled off somewhat, air arrivals were still trending downward overall. In the first six months of 2002, air arrivals decreased by 5.1 per cent compared to the first half of 2001.
Briggs said that when news of the attacks reached him and his business associates, they did not know to what extent it would affect tourism, but they held off on new initiatives out of caution. “When it happened, one of the things we did was whatever projects that we did have, we put on hold. We didn’t know what was actually going to happen, but we assumed the travelling public would have some problems,” he said. “Consequently, we kind of slowed down all of our projects.”
The most significant impact the terrorist attacks had on air travel arguably is on the individual level, in how airline crews and passengers must approach new security measures. Hamaty, a former commercial pilot, said when he was flying for Air Jamaica in the 1970s, crews regularly left open the cockpit door, and the captain would go back in the cabin to visit with passengers during the flight. “The whole industry has changed,” he said, referring to the locked-down and secured cockpits of today.
2001 attacks in retrospect
Overall, the increase in cruise visitors in 2002 more than made up for the decline in air arrivals, as far as economic impact. According to government statistics, total visitor spending in 2002 was $506 million, compared to $474 million in 2001. While the 2001 terrorist attacks certainly had a significant effect on Cayman’s economy, for the most part the impact was short-lived, especially when contrasted to Hurricane Ivan in 2004 and current worldwide economic woes.
Attorney Timothy Ridley, a former board chair of the Cayman Islands Monetary Authority, said, “Worldwide travel came to a grinding halt for several weeks and as did tourism. Tragic as the events were, Cayman tourism suffered less than it might as September, October and November are typically very quiet months. And when Americans did start to travel again, the Caribbean was seen as a safer alternative to other more distant locations. That said, air arrivals in 2002 were down on 2001; but cruise ship visitors increased so that total numbers markedly improved.”
He said, “The global financial services industry blinked but only for a moment, as the US authorities took immediate action to ensure that markets operated smoothly, notwithstanding the disaster. Cayman’s industry continued to hold its own, and the hedge fund business in particular maintained its upward trend. But businesses became far more aware of the need for emergency planning (underscored even more by Hurricane Ivan three years later). And international transactions became subject to even greater scrutiny to prevent terrorist financing.” Locally, the effects of the 2001 terrorist attacks were dwarfed by the destruction wrought by Hurricane Ivan, which barrelled into Cayman three years afterward, just about to the day. “Hurricane Ivan was certainly more traumatic to Cayman. It stopped us dead in our tracks,” McDowall said. Beginning in 2008, the protracted global recession has been the major factor dictating the grinding pace of Cayman’s economy.