Royal Caribbean this year opened CocoCay on the island formerly known as Little Stirrup Cay, in the Bahamas. Operating on land, the cruise line had leased the sleepy locale within the Berry Island chain before announcing in March 2018 that it would be subject to a US$250 million transformation. CocoCay has created a great new drawcard for Royal Caribbean and has added another destination to the Bahamas’ many tourism attractions, but controversy has also raged.
It surrounds whether CocoCay should truly be considered a Bahamas destination in light of Royal Caribbean’s exclusive use of the island. Also whether the Caribbean family can trust cruise lines with use of sovereign territory, or whether these are the early days of a worrying new trend.
The Drawcards of CocoCay
CocoCay is a cutting-edge island of commercial attractions. From massive water slides and zip-lines, to wave pools, swim-up bars and private cabanas, CocoCay has something for every Royal Caribbean visitor to enjoy.
For many prospective passengers weighing up which cruise line to choose for a trip through the region, the lure of access to CocoCay offers Royal Caribbean a major selling point. Though CocoCay has won the lion’s share of headlines in this space lately, Royal Caribbean is not the only cruise line to operate a private island, nor even the only one in the Bahamas. CocoCay is joined by Half Moon Cay (AKA Little San Salvador Island) purchased by Holland America Line, Great Stirrup Cay held by Norwegian Cruise Line, and Castaway Cay, now in the hands of The Walt Disney Company.
The Business of Buying in the Caribbean
The purchasing power of a global corporation like Disney Cruise Line offers some perspective. The Disney Group earned US$59.43 billion revenue in 2018, clocking $12.6 billion of that in profits. Not only was this up on figures for the previous year ($55.14 billion and $8.98 billion respectively) but it represented a record profit all over. By way of contrast, the Bahamas’ annual GDP during 2017 was US$12.16 billion.
These numbers evidence that there can be no comparison between the wealth of a global corporation and a small Caribbean nation. Of course, making direct comparisons isn’t appropriate. After all, Disney does not boast a navy like the Royal Bahamas Defence Force, and the Bahamas does not operate theme parks around the world. But comparisons and contrasts must be considered when they surround the growing reach and ambition of corporate cruise lines globally, and especially among regions with many smaller nations, like the Caribbean.
In this scenario, the potential for immense economic benefits is offset by the risks of imbalance in the relationship, to the detriment of a nation and its citizens, ie the parties who ultimately should reap the first and largest benefit from their land and its development.
Working the Holidays
The advent of projects like CocoCay can certainly bring more revenue to the national coffers but does this ultimately translate into the best model of revenue dispersion for a nation?
Governments can champion more revenue around budget time (and doubtless put forward a new policy or infrastructure upgrade, based on the extra income, to sell with glitzy PR) but, if the end result is fewer cruise passengers visiting tourism providers at the grassroots level, then the risk grows that cruise line-only islands begin to look less like an economic boon for a nation, and more like a cancer that eats away at the profits tourism providers once relied on.
Public and Private Partnerships
New developments can drive new interest in visiting a destination. With plane travel, save for a stopover or two in an airport, the end-destination is always the locale for primary spending of the tourism dollar. However, many cruise passengers will happily visit an island like CocoCay alongside other destinations, aiding the flow-on effect of the tourism dollar. But recent research indicates that cruise passengers are spending more money onboard cruise ships, at stores and casinos, and less money in the actual cruise destinations.
One benefit of cruise-line islands has already been seen this month. While the carnage of Hurricane Dorian has been harrowing, the ongoing presence of Royal Caribbean, via CocoCay, ensured it would be present as a stakeholder in hurricane preparations, and thereafter in the management of recovery and return to trading. Were it not for CocoCay, such resources would not be on-hand, and administration in such events would typically reside with public authorities alone.
Individuals and Corporations
Private island ownership and use in the Caribbean isn’t new. Many celebrities, such as Richard Branson and Johnny Depp, have expanded their real estate portfolios with private island ownership. But the private use of an island by a visiting celebrity — even when allowing for their entourage and collection of A-list friends — is unlikely to render the environmental damage that mass commercial use of an island could do.
The concerns voiced surrounding the acquisition and private use of islands by cruise lines has come alongside numerous pollution scandals in the industry, from the use of fuel with excessive sulphur levels, to the $40 million fine levied on Princess Cruises in the US in 2016 for the use of a ‘magic pipe’ to illegally dump fuel in the ocean.
There is no suggestion here that any illegal conduct is currently occurring among any of the privately used islands listed in this article. Yet, many in the Caribbean family watch the growth of infrastructure in these privately held islands, with optimism about the economic benefits it can bring, but anxiety about the long-term damage any mismanagement could cause.
A Private Issue for the People
It is estimated that there are over 7,000 islands within the Caribbean archipelago. It’s no quip to suggest that many Caribbean nations would hardly notice if a small number were to be leased away for a couple of decades. And doing so could help drive new development of infrastructure, economic growth and stronger ties between tourism departments and cruise lines in a region of hot competition.
However one looks at such a dynamic, the agreement to lease comes with a substantial weight behind it, even if the territory involved is small. Indeed, any time a nation travels this path in any commercial venture, it can raise the same questions and anxiety surrounding security that the establishment of a foreign power’s military base can generate.
For the Caribbean this issue is particularly vivid. Local governments and business communities recognise that the future must involve the pursuit and greater anchoring of global commercial links within the region in order to maintain economic growth, and build upon it further. Yet should this progress come at the expense of territorial sovereignty, especially when coupled with concerns surrounding citizenship by investment programmes, then support for such a course of action would be limited.
In any future arrangements with cruise lines for private islands, the challenge for regional leaders is to make the case that deals can be done without risking or diminishing territory. This will please the optimists but, watching operations on islands currently in private use, will it be enough to dispel anxiety?
