Report reveals cruise industry misleads Key West residents about economic benefits

Expert finds few benefits to local economy; analysis comes just weeks before November 3 vote on 3 local referendums

KEY WEST — A new report, “The Economics of Cruise Tourism in Key West: Behind the Cruise Industry’s Propaganda Veil”, released today by environmental advocacy group Stand.earth, finds that the cruise industry has misled Key West residents about the economic benefits that cruise tourism has delivered to the city.  

• Read the report: https://www.stand.earth/publication/markets-vs-climate/carnivals-cruise-pollution/economics-cruise-tourism-key-west

The report was authored by Martha Honey, Ph.D., Director Emeritus of the Center for Responsible Travel (CREST), and CEO of Responsible Travel Consulting. The report was commissioned by Stand.earth.

The report comes just weeks before a November 3 vote on three referendums that would limit the number of passengers disembarking from cruise ships to a total of 1,500 people per day, prohibit cruise ships with a capacity of 1,300 or more people from disembarking, and give priority to cruise lines with the best environmental and health records.  

“The cruise industry’s misleading claims are shameful. The people of Key West deserve to know the truth: the city generates far more revenue from people who visit town and stay overnight. Rather than subsidizing the cruise industry, Key West would be wise to limit low-value, large-scale cruise tourism and invest in expanding its lucrative overnight tourism industry,” said Kendra Ulrich, Shipping Programs Director at Stand.earth.

Key findings of the report: 

• To maximize revenue into the local economy, Key West should focus on strengthening higher value stayover tourism rather than low value cruise tourism. “Stayover” tourists in Key West and other ports spend far more per day and per visit than cruise tourists. Cruise passengers and crew account for well under 10% of total tourist spending in Key West, while land-based visitors account for over 90%. The picture is similar in the Caribbean as whole: in 2015, stayover visitors generated 12.5 times more than cruise passengers ($27.6 billion compared to $2.4 billion). 
• Onshore passenger spending in Key West is far lower than what cruise industry-sponsored studies suggest.  While industry studies claim per passenger spending in Key West ranges from $55 to $127, a 2005 independent study commissioned by City of Key West found that cruise passengers spent just $32.10 onshore ($43 adjusted for inflation). Key West ranks near the bottom in passenger onshore spending compared with other Caribbean and US ports. 
• There is no evidence to support the cruise industry’s claim that passengers on Caribbean cruises ‘convert’ into longer term, higher value, stayover visitors in Key West or the Caribbean. Cruise passengers are far more likely to take their next vacation on another cruise.
• The dockage fees, disembarkation fees, and security fees paid to the City of Key West do not fully cover the expenses associated with operating the cruise ports, and the balance is subsidized by taxpayers. 
• Key West tour operators and retail stores must pay a hefty commission to do business with the cruise lines. Through this lucrative but little known ‘pay to play’ commission system, any tours sold or shops advertised on board ships as “preferred” businesses must split their sales with the cruise lines. Ports throughout the Caribbean are estimated to lose close to $275 million a year in sales revenue which instead goes as commissions to the cruise lines.

“The cruise industry paints a rosy economic picture, but the reality is cruise tourism provides much less than it claims to Key West,” said Dr. Martha Honey, author of the report.

Martha Honey, Ph.D. is Director Emeritus of the Center for Responsible Travel (CREST) and CEO of Responsible Travel Consulting. She has published scores of books, articles, and studies on ecotourism, impact tourism, cruise and resort tourism, climate change, and certification issues. Over the last 15 years, she has conducted numerous field and desk-based studies of cruise tourism and is editor of Cruise Tourism in the Caribbean: Selling Sunshine, published in 2019 by Routledge (London and New York). 

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Media contact: Jim Ace, Shipping Campaigner, Stand.earth, jimace@stand.earth, 360-734-2951 x202

Dr. Martha Honey is available for interviews