Over the past 30 years, Rotterdam has spent millions of euros of public money to attract cruise ships, partly by investing in infrastructure, partly by covering the yearly losses of running the cruise terminal. My research has shown that the regional economic benefits of cruise calls in Rotterdam are much smaller than claimed by the city of Rotterdam and by Cruise Port Rotterdam (CPR), the organisation that runs the cruise terminal and is tasked with attracting cruise ships. I also uncovered many other myths that are part of the official story meant to sell cruise ships to Rotterdam.
I do not usually research a topic that is so close to home. Most of my research has been abstract in nature, studying the relationship between the strategic use of information and the design of decision-making processes and governance structures. I have applied my insights to monetary policy committees and editorial boards. But cruise ships? Decision making by the city of Rotterdam? Never. This changed when I moved to the Wilhelminapier in 2016, close to the cruise terminal. Cruise ships are among the largest seagoing vessels in the world and use enormous amounts of dirty fuel, also when they are moored at the terminal.
'I was struck by claims in the press about the economic importance of cruise calls'
I started collecting information on the cruise ships calling in Rotterdam. Even the most basic information surprised the civil servants with whom I shared it, as it contradicted their assumptions. Until then, they probably got their information from CPR and the Rotterdam Port Authority (RPA).
My data showed that CPR had grown their business over the period 2015-2020, with cruise calls going up from 40 to 100, by attracting older ships that were more polluting by an index introduced by port authorities, the Environmental Ship Index. Port fees are lower for (cruise) ships with a good score, but this carrot had not brought about the desired result in Rotterdam.
'Academics have a role to play in informing the general public and decision makers, and in debunking myths'
I was struck by claims in the press about the economic importance of cruise calls. CPR and the port alderman made ever increasing claims as to the ‘economic contribution’ of cruise ships to Rotterdam, at some point reaching 1,000,000-1,200,000 euro per call. This number was higher than the total expenditures of cruise liners, passengers and crew as reported in a 50-page report on the economic effects commissioned by the city of Rotterdam and RPA, 290,000 euro per call. When I asked the alderman how he came up with the one million figure, he wrote that CPR had shared it with him ‘confidentially’. CPR never replied to my requests for information on how they came up with their numbers. In any event, using data from Statistics Netherlands, I estimated that net profits and wages equaled about 40,000 Euros per call. Does that mean that closing the cruise terminal would lead to a loss of 40,000 Euro per call? No. Given the tight labour market and the resulting constraints on firms, these net profits and wages would be earned anyway by working for a different employer or by servicing other ships. But Rotterdam would be spared significant damage due to air and water pollution.
Information control by the government
Governments, democratically elected ones included, want to firmly control the information that is shared and used in decision-making processes. This holds at the national level, think of Schiphol, the childcare benefits scandal, Groningen natural gas, but also at the local level. Vested interests are keen on protecting their interests, have a horizon that is beyond the next elections, and operate in tandem with governments. Academics have a role to play in informing the general public and decision makers, and in debunking myths.
Did the story of the economic contribution of the cruise end here? No. Recently, the new port alderman sent an economic impact report drafted by CPR to the city council. In the accompanying letter, the alderman wrote he passed on the report ‘to inform the council as completely as possible.’ The economic contribution had by now reached 1,200,000-1,700,000 euro per call. What he did not write, was that he had sent the CPR report for a second opinion to the authors of the 2018 report. The second opinion questions essentially all figures in the CPR report.
Bauke Visser is Professor of Economics of Decision-Making Processes. He conducts theoretical, empirical and experimental research into decision-making processes. He started the website www.havenstad.org to provide facts and debunk myths about cruise ships in Rotterdam.