NASSAU, Bahamas – The Bahamas Government is to amend the Cruise Ship (Overnight Incentive) Act, 1995, to strengthen the country’s competitive position in the cruise industry, Prime Minister the Rt Hon Hubert Ingraham told Parliament on June 29. He was debating those amendments which seems to facilitate entry into new agreements with major cruise lines, and encourage them to maintain and increase their delivery of cruise passengers to the country’s ports of call.
“My government is also pursuing the strategy of engaging a major strategic cruise line partner, with respect to the development of a new cruise port on Grand Bahama,” Mr. Ingraham told the morning session of the House of Assembly.
The Cruise Ship (Overnighting Incentive) Act was first enacted in 1995. At that time, cruise visitors to The Bahamas were experiencing a decline of 600,000 visitors. There were 2.1 million cruise visitors in 1992 compared to 1.5 million visitors in 1995 “Also at that time, hardly any cruise ship stayed in port after 5 p.m.,” he said.
“This state of affairs had a severe impact upon small businesses and downtown Bay Street businesses. “The Act was primarily intended to reverse the ongoing decline in cruise ship calls to the port of Nassau at that time.”
This decline in cruise ship calls was attributed to, among other things: The increase in departure taxes from $13,00 to $20,000; Complaints of cruising public about the deteriorated ambiance of the principal ports of call in Nassau and Freeport; and, The cost of calls to Nassau and Freeport.
Major cruise lines were repositioning their ships away from The Bahamas to other newer and less expensive ports as they sought to reduce to their operating costs, maximize their profits and increase passenger satisfaction, he said. Complaints about the ambiance of Nassau and of the industrial nature of the port in Freeport were addressed by a number of initiatives.
In Nassau, the ‘dust bowl’ left from harbour dredging was removed, a taxi call-up system and facility was put in place, and a surrey horse facility and hair braiders pavilion were constructed. The initiatives also extended to improved facilities at the Fish Fry, Potters Cay Dock and surrounding areas. In Grand Bahama, a new cruise port was developed at the Freeport Harbour and the Lucayan Marketplace was developed near the Lucayan Hotel Strip. The 1995 Act was also designed to increase the number of hours cruise ships spent in port which meant more time during which passengers could enjoy tours and amenities developed for the enjoyment of visitors.
“The impact of the enactment of the Cruise Ship (Overnighting) Incentive Act was a dramatic overall increase in cruise arrivals to The Bahamas that propelled us to become the region’s leading destination in both cruise arrivals and cumulative ship hours in domestic ports,” Mr. Ingraham said. The agreements under the Act were entered into with Royal Caribbean Cruises International (RCCL) and Carnival Corporation (CC) in January 1996 for a three-year period.
These agreements were amended with effect from January 1, 1999 for five years and renewable thereafter. In August 2007, $12 million in outstanding payments were made to Carnival Corporation and RCCL under the prevailing terms of the Act. It brought all Government obligations under the previous agreements current. The intention is to enter into new agreements, the prime minister said.
In the absence of a valid agreement, RCCL and Carnival Corporation continues to bring business to The Bahamas, while negotiations with the Ministry of Tourism on a new incentive agreement continues.
The terms agreed with Carnival Corporation in early 2008 is proposed to be the revised structure of the incentives under the amendment being proposed.
This will result in a three-tiered rebate scheme ranging from $7.50 to as high as $10 per passenger, for passengers in excess of one million, he explained.