Early June, the German documentary maker Andreas Orth has interviewed Bauke Visser, Professor of the economics of decision-making processes at Erasmus School of Economics. Being an expert on the cruise industry, Visser gives his view on topics such as the business model of cruise liners and the consequences for the regional economic benefits for a city like Rotterdam.
One of the striking features of the cruise industry is that the sale of passenger tickets does not cover the operating costs of the main cruise line companies, Carnival Corporation & Plc, Royal Caribbean Group and Norwegian Cruise Line Holdings; the large, and largely untaxed profits that they generate, come from their onboard sales, including excursions. As Dickinson, a former CEO of Carnival, once said: ‘The ship is the attraction, not the port of call’.
Cruise line companies want to avoid that their passengers spend substantial sums of money on shore. This has at least two consequences for local cruise terminal operators, like Cruise Port Rotterdam. They must facilitate the rapid re-boarding of passengers returning from onshore excursions to promote on-board spending. They must hinder initiatives by local entrepreneurs who would like to offer services, like excursions, directly to cruise passengers. Visser has discovered in an internal report of the city of Rotterdam and the Port of Rotterdam Authority that these institutions are aware of these consequences.
Using publicly available data, Bauke Visser estimates that net income and net profit together for the Rijnmond region are about 60,000 euros per call. This contrasts starkly with the 1,000.000 euros per call figure used by Cruise Port Rotterdam in its information campaign.
Visser created a website, www.havenstad.org, to make these and other findings about the cruise in Rotterdam accessible to the general public. As a result, city council members start asking questions about the costs and benefits of cruise ships coming to Rotterdam.