As the shipping industry braces for an uncertain trade environment, Cayman Islands Port Authority Director Clement Reid has a positive outlook for the cruise sector.
At the fifth annual Cayman Islands Shipping and Yachting Summit last month, Reid described cruise tourism as a “recession-proof business” with exponential growth potential compared to cargo shipping.
He projected possible growth of more than 250 percent for Cayman’s cruise arrivals over the next 20 years. By 2036, Reid anticipates Cayman could add 2.8 million passengers beyond the 1.7 million arrivals from last year.
“The cruise industry has been one of the most successful hospitality sectors over the past decades,” he said during his presentation at the Marriott Grand Cayman Beach Resort.
Globally, he forecast 2.9 percent to 6 percent annual growth in cruise passengers through 2036. In 2017, 25.3 million tourists, including 11.2 million U.S. passengers, are expected to travel by cruise.
He expects North American passengers to continue dominating the cruise market, but he also identified notable growth potential among Asian travelers.
In Cayman, he said, Carnival currently represents 51 percent of the market, compared to the company’s 48 percent share globally. Royal Caribbean is the second largest player in both Cayman and worldwide, with 23 percent and 24 percent of the market, respectively.
As vessel sizes become larger, Reid expects port capacity problems. He encourages Cayman to pursue construction of a highly debated cruise berthing facility.
Cruise vs. cargo
Reid’s cruise sector outlook contrasted sharply with the day’s analysis of the cargo shipping sector, which has faced a year of political and economic turmoil. The forum’s presenters spoke with trepidation about U.S. President Donald Trump’s contradictory messages on China, NAFTA, Russia, the Philippines and NATO, among other global players.
Karatzas Marine Advisors & Co. President Basil Karatzas said in the face of change, the industry must find the new line of order to overcome uncertainty and industry unknowns.
He described a difficult past year for the industry, which has experienced several high-profile bankruptcies and liquidations, including Hanjin Shipping and Rickmers Maritime Trust.
Karatzas provided concerning projections for trade growth as the global flow of goods recedes.
Regarding the Trump administration, he described a mixed outlook. With an uncertain road ahead, he encouraged the industry to consider three factors when it comes to predicting President Trump’s actions: what he wants to accomplish, what he says he wants to accomplish and what he can accomplish.