June 26, 2006
Ships ahoy | Organizers of a June cruise industry conference hope to lure more ships — and revenue — to Maine ports
By Sean Donahue
The most important event of Maine's 2004 cruise ship season won't be the arrival of the world's largest passenger ship, the new Queen Mary 2, in Portland in October. Nor will it be any one of the 87 scheduled ship visits to Bar Harbor this year. In fact, it won't be a cruise ship visit at all.
On June 1, Maine will host for the first time the annual Canada/New England Cruise Symposium, an industry shindig expected to attract cruise line executives, travel agents, tour schedulers, journalists and assorted other industry players to the Harborside Hotel and Marina in Bar Harbor. For two days, in between discussions on issues such as environmental regulations and marketing techniques, members of Maine's hospitality industry and state and municipal officials intend to show off everything the state can offer the cruise lines and their passengers ˆ from the de rigueur lobster bake to post-symposium trips and tours to locations along the coast.
The goal is to pack enough networking and dealmaking into those two days to pay dividends ˆ in this case, more cruise ship visits ˆ for years to come. "[The symposium] will be one big schmooze-athon for me," says Bob Hastings, executive director of the Rockland-Thomaston Chamber of Commerce. "I hope to meet every CEO from every cruise line that's there."
Excitement over the symposium is just one reason members of the tourism industry see 2004 as a crucial year for Maine's cruise market. With Portland and Bar Harbor already established ports of call, the Maine Port Authority and the CruiseMaine Coalition ˆ an assortment of towns and businesses interested in serving the cruise industry ˆ are now eyeing the hundreds of miles of coastline between those ports as viable cruise destinations. Smaller towns such as Rockland, Bath, Bucksport and Belfast are particularly interested in putting themselves on cruise ships' itineraries, inspired by the arrival last year of Connecticut-based American Cruise Line's American Eagle, a 50-passenger ship providing weekly tours of the Maine coast out of Bangor.
Cruising consistently has been one of the travel business' most successful segments, with passenger counts, which totaled 9.5 million last year, growing about 8% annually since 1980, according to the Cruise Lines International Association in New York. Cruise operators also are expected to add 10 new ships to their fleets in 2004 ˆ and since cruise operators rarely retire ships, more boats on the water means cruise lines have to find more places to visit.
Those national trends tell Amy Powers, director of the CruiseMaine Coalition, that Maine has a chance of attracting even more cruise business, particularly from small-ship, niche cruise operators. She notes that American Cruise Lines is already talking to Bangor about adding a second ship next year, and that another operator is also interested in developing a similar Maine-based coastal cruise. "To have two very successful international ferries [in Portland and Bar Harbor] and two home-port cruise operations, plus the successful port of call business from larger lines, I think would speak volumes to Maine's ability to sustain this industry," says Powers.
But even with the temporary spotlight provided by the Canada/New England Cruise Symposium, Maine is essentially vying for the cruise ships' attention with every other state that has a coastline. Powers worries that the growing popularity of destinations such as New London, Conn., as well as significant waterfront infrastructure investments during the last several years in Quebec, Halifax and St. John, New Brunswick, could lure cruise ship business away from Maine. It doesn't help that New England's overall share of the worldwide cruise business is tiny. And even though the industry trade magazine Cruise Industry News estimates that New England's market share will grow 32% in 2004, to 1.6% of worldwide cruise capacity, competition for that business will be intense.
Watching the cash register
The allure of cruise ships for towns comes down to one thing: money. Most supporters of expanding Maine's cruise business point to a 2003 report on the economic impact of cruise ship passengers in Bar Harbor, compiled by the University of Maine. Among other findings, the study reported that in 2002 the average cruise ship tourist spent $86 a day in Bar Harbor ˆ or more than $100 a day if cruise-sponsored tours are included ˆ which is more than double the estimated $40 a day the typical tourist spends in Maine .
That year, those free-spending cruise passengers accounted for an estimated 10% of the revenue earned by Bar Harbor restaurants, bars and retail stores ˆ even though they typically make up just three percent of the tourists that visit the town. Extrapolating that kind of economic impact to their own retail and restaurant businesses gets most towns excited, and those figures don't include municipal fees and spending by the cruise lines for goods and services needed for the ship itself (see "Local impact," p. 16).
"Even though our store doesn't track the percentage spent by cruise ship passengers versus other tourists, if you take any given day where there's a ship in port you're going to see some kind of increase over a normal day's revenues," says Barbara Courchesne, operations manager of the Bar Harbor Whale Watch Co. and Harbor Place, the public dock and retail facility where cruise ship tenders land. "We know when there's a ship here just by looking in the cash register."
Another attractive benefit, say would-be cruise destinations, is that cruise ships extend Maine's summer tourist season, since the majority of visits to Portland and Bar Harbor come in September and October. This year, the last ship scheduled to visit Bar Harbor leaves on November 4, the latest a cruise ship has yet stayed in Maine waters, says Amy Powers.
But even as the Maine Port Authority and the CruiseMaine Coalition team up this year to begin marketing additional coastal destinations, the groups say the economic benefits can reach beyond the port of call. Portland cruise visits regularly include bus trips to Freeport and Kennebunkport, while the Maine Port Authority is working on a new tour for this season that would fly people from Bar Harbor to Moosehead Lake for a day. "You don't have to be on the coast to get the benefits of a cruise ship," says Brian Nutter, executive director of the Maine Port Authority.
Developing those side trips is a necessity, because cruise ships won't call on a town unless it offers easy-to-sell, marquee activities that help them attract potential passengers. Acadia National Park, Freeport and Kennebunkport have the kind of national prominence that makes Bar Harbor and Portland look good on an ship's itinerary, but towns like Bucksport, Belfast and Rockland may have to work harder to define their niche.
Bob Hastings of the Rockland-Thomaston Chamber of Commerce is confident Rockland can emerge as a viable port of call, though, because he's targeting what he believes is the right portion of the market: small ship, niche itineraries like those offered on American Cruise Lines' 50 to 100 passenger vessels.
Those ships, and even ships in the 200 to 400 passenger range, are easier to handle, says Hastings, discharging just enough passengers to increase downtown business without overwhelming the town's sidewalks, restaurants or stores. Smaller ships also tend to attract a different passenger demographic, say cruise industry experts ˆ slightly older, slightly more affluent and interested in more cultural and historical destinations. That profile fits perfectly with what Hastings believes is Rockland's inherent port-of-call identity: an arts and culture destination, boasting the Farnsworth Museum and several galleries, as well as fine dining at nationally acclaimed restaurants such as Primo.
The lure of repeat visitors
Though last year's seven visits from the American Eagle helped test that theory, this year's anticipated 14 cruise ship visits will be Rockland's best chance to impress passengers and cruise operators, which is why the chamber convened a volunteer cruise committee of local business owners and residents to brainstorm ways to make the cruise visits successful. Those plans include encouraging town improvements through a loan fund offered by Union Trust in Rockland to help businesses pay for new signs, awnings and exterior paint, and other ideas aimed at keeping visitors happy, such as having German-speaking interpreters at the dock to greet the 400-passenger German tour ship Europa, expected to arrive in October.
Despite the hype that accompanies talk of cruise ships throughout much of the tourism industry, some Rockland business owners seem more realistic ˆ and patient ˆ about the potential economic impact. Steven Liberty, owner of the Navigator and Tradewinds inns in Rockland, admits that 50 or 100 cruise ship passengers on the streets once a week won't break retail sales records, and likely won't mean more than a few extra diners at the Navigator Inn's outdoor restaurant. And while he welcomes those extra dollars, he says the real allure of the cruise ships is the longer-term benefits. Industry supporters commonly cite surveys that have shown cruise passengers use their trips to identify places they'd like to visit again. "If we can eventually build up to 15 to 20 cruise ship visits a year carrying a couple hundred passengers each, we're talking about the ability to direct market our community to thousands of people who have money to travel and could come back for a longer visit," says Liberty.
As Maine works to attract more cruise ships and promote new ports as destinations, though, tourism officials and local business owners seem to understand that there can, in fact, be too much of a good thing. Maine's efforts to encourage development of the cruise ship business must also take into account the realistic number of passengers per day Maine's smaller towns can absorb without taxing local infrastructure, infuriating residents and diminishing the experience for visitors. "I believe in the tourism industry, but I understand that tourism carries with it the seeds of its own destruction," says Hastings. "You need to keep in the back of your mind, through everything you do, that you not end up creating Anyplace U.S.A., a place that's so over promoted and saturated with T-shirt shops that it becomes a kind of honkytonk caricature of itself."
Already, though, Maine has taken steps to help manage the industry's growth. Bar Harbor has a two-a-day limit on cruise ships to keep the number of visitors manageable, a measure other towns like Rockland are ready to enact if their own popularity as a port of call ever reaches a similar level. Likewise, Portland charges cruise ships a per-passenger head tax of $4.50 and uses those funds to offset the cost of maintaining infrastructure and services for the ships; Bar Harbor charges a $1,700-a-day tender landing fee for use of its municipal dock.
Cruise operators: Looking for bargains
Even then, visions of untold riches flowing into port with each cruise ship may overlook the fact that cruise ships themselves are businesses, often operated by one of the three large entities that control 85% of the entire cruise industry ˆ Carnival Cruise Lines, Royal Caribbean Cruise Lines and Star Cruises. Those businesses work hard to keep their costs down and profits up, which often means demanding discounts and other concessions from local, on-shore suppliers. Tour operators who hope to offer on-shore excursions to cruise passengers must be prepared to offer discounted rates to the cruise lines, which in turn will mark up those tours to their own customers to increase their per-passenger revenue.
"You definitely have to discount to cruise lines," says Barbara Courchesne, who partners with cruise ships to offer whale watching and day trips to their passengers. In exchange for the discount, though, she says the cruise lines will commit to a guaranteed number of tour spaces, whether it can fill them all or not. Her advice to tour operators in other Maine ports: "Be prepared to negotiate, because cruise lines don't like to spend a lot of money."
The $100-plus per day spending by each passenger also doesn't necessarily mean a windfall for every type of local merchant. In Bar Harbor, the average cruise passenger spent $20.51 on food and beverages and $22.96 on apparel, according to the UMaine study, while spending $7.43 on household items, $1.61 on transportation and $1.39 on health and beauty items.
The cruise ships themselves also have come under scrutiny for their potential environmental impact along the coast. It's a particularly tricky issue, given that cruise passengers are touted as car-free visitors who help ease congestion ˆ and emissions ˆ along Route One in the summer, even as environmental groups say that a large cruise ship produces air emissions equal to 12,000 cars a day. But industry supporters note that cruise lines are moving toward cleaner burning fuels and new ships with more efficient engines, which has made ships' wastewater discharge the most recent focus of debate in Maine and elsewhere.
Federal laws prohibit ships from discharging a host of wastes within certain distances from shore, while the cruise lines have voluntarily agreed not to discharge treated sewage within four miles of shore. But this winter the Legislature took up a bill designed to extend those restrictions to so-called gray water ˆ treated wastewater from showers, sinks and other uses ˆ prohibiting its discharge within three miles of the coast and requiring ships to pay a licensing fee that would help the state conduct inspections of ships' water treatment systems. During debate over the bill, though, tourism officials and some state legislators argued that the restrictions didn't contain exceptions for ships with advanced treatment systems, and the fees might send cruise ships looking for cheaper ports of call.
Lawmakers eventually reached a compromise, exempting ships with advanced treatment systems from the three-mile no-discharge zone, but only if they receive a discharge permit from the Maine Department of Environmental Protection. "[Cruise ships] are an expanding business, and we hope it will continue to be an expanding business," says Ted Koffman (D-Bar Harbor), who co-chairs the Legislature's Natural Resources Committee. "It makes sense that we treat them like any other municipal or business discharger that might locate on our waterfront."
By addressing such issues now, the state can help direct the cruise industry's growth here, rather than simply reacting to issues as they arise in the future. Likewise, the goal of the CruiseMaine Coalition and the Maine Port Authority is to manage the growth of the cruise business while encouraging it, and Amy Powers says she's comfortable with the potential growth rate she sees.
And if the key to a creating a successful cruise destination is making passengers feel welcome, the first step is to make cruise line operators feel welcome ˆ which is why representatives of towns that also see a big opportunity in boosting water-borne tourism will accompany Powers and the Maine Port Authority at the Bar Harbor conference next month. "We still have plenty of room along the coastline to attract cruise ships without impacting other waterfront uses," says Brian Nutter of the Maine Port Authority. "We're probably not going to put cruise ships in small places like Vinalhaven, where there's a lot of lobstering. But in places like Rockland and Camden, with a wide variety of waterfront uses, we think cruise ships can fit into those communities. That's why we put together the [CruiseMaine] coalition and that's where we're going to focus."
On June 1, Maine will host for the first time the annual Canada/New England Cruise Symposium, an industry shindig expected to attract cruise line executives, travel agents, tour schedulers, journalists and assorted other industry players to the Harborside Hotel and Marina in Bar Harbor. For two days, in between discussions on issues such as environmental regulations and marketing techniques, members of Maine's hospitality industry and state and municipal officials intend to show off everything the state can offer the cruise lines and their passengers ˆ from the de rigueur lobster bake to post-symposium trips and tours to locations along the coast.
The goal is to pack enough networking and dealmaking into those two days to pay dividends ˆ in this case, more cruise ship visits ˆ for years to come. "[The symposium] will be one big schmooze-athon for me," says Bob Hastings, executive director of the Rockland-Thomaston Chamber of Commerce. "I hope to meet every CEO from every cruise line that's there."
Excitement over the symposium is just one reason members of the tourism industry see 2004 as a crucial year for Maine's cruise market. With Portland and Bar Harbor already established ports of call, the Maine Port Authority and the CruiseMaine Coalition ˆ an assortment of towns and businesses interested in serving the cruise industry ˆ are now eyeing the hundreds of miles of coastline between those ports as viable cruise destinations. Smaller towns such as Rockland, Bath, Bucksport and Belfast are particularly interested in putting themselves on cruise ships' itineraries, inspired by the arrival last year of Connecticut-based American Cruise Line's American Eagle, a 50-passenger ship providing weekly tours of the Maine coast out of Bangor.
Cruising consistently has been one of the travel business' most successful segments, with passenger counts, which totaled 9.5 million last year, growing about 8% annually since 1980, according to the Cruise Lines International Association in New York. Cruise operators also are expected to add 10 new ships to their fleets in 2004 ˆ and since cruise operators rarely retire ships, more boats on the water means cruise lines have to find more places to visit.
Those national trends tell Amy Powers, director of the CruiseMaine Coalition, that Maine has a chance of attracting even more cruise business, particularly from small-ship, niche cruise operators. She notes that American Cruise Lines is already talking to Bangor about adding a second ship next year, and that another operator is also interested in developing a similar Maine-based coastal cruise. "To have two very successful international ferries [in Portland and Bar Harbor] and two home-port cruise operations, plus the successful port of call business from larger lines, I think would speak volumes to Maine's ability to sustain this industry," says Powers.
But even with the temporary spotlight provided by the Canada/New England Cruise Symposium, Maine is essentially vying for the cruise ships' attention with every other state that has a coastline. Powers worries that the growing popularity of destinations such as New London, Conn., as well as significant waterfront infrastructure investments during the last several years in Quebec, Halifax and St. John, New Brunswick, could lure cruise ship business away from Maine. It doesn't help that New England's overall share of the worldwide cruise business is tiny. And even though the industry trade magazine Cruise Industry News estimates that New England's market share will grow 32% in 2004, to 1.6% of worldwide cruise capacity, competition for that business will be intense.
Watching the cash register
The allure of cruise ships for towns comes down to one thing: money. Most supporters of expanding Maine's cruise business point to a 2003 report on the economic impact of cruise ship passengers in Bar Harbor, compiled by the University of Maine. Among other findings, the study reported that in 2002 the average cruise ship tourist spent $86 a day in Bar Harbor ˆ or more than $100 a day if cruise-sponsored tours are included ˆ which is more than double the estimated $40 a day the typical tourist spends in Maine .
That year, those free-spending cruise passengers accounted for an estimated 10% of the revenue earned by Bar Harbor restaurants, bars and retail stores ˆ even though they typically make up just three percent of the tourists that visit the town. Extrapolating that kind of economic impact to their own retail and restaurant businesses gets most towns excited, and those figures don't include municipal fees and spending by the cruise lines for goods and services needed for the ship itself (see "Local impact," p. 16).
"Even though our store doesn't track the percentage spent by cruise ship passengers versus other tourists, if you take any given day where there's a ship in port you're going to see some kind of increase over a normal day's revenues," says Barbara Courchesne, operations manager of the Bar Harbor Whale Watch Co. and Harbor Place, the public dock and retail facility where cruise ship tenders land. "We know when there's a ship here just by looking in the cash register."
Another attractive benefit, say would-be cruise destinations, is that cruise ships extend Maine's summer tourist season, since the majority of visits to Portland and Bar Harbor come in September and October. This year, the last ship scheduled to visit Bar Harbor leaves on November 4, the latest a cruise ship has yet stayed in Maine waters, says Amy Powers.
But even as the Maine Port Authority and the CruiseMaine Coalition team up this year to begin marketing additional coastal destinations, the groups say the economic benefits can reach beyond the port of call. Portland cruise visits regularly include bus trips to Freeport and Kennebunkport, while the Maine Port Authority is working on a new tour for this season that would fly people from Bar Harbor to Moosehead Lake for a day. "You don't have to be on the coast to get the benefits of a cruise ship," says Brian Nutter, executive director of the Maine Port Authority.
Developing those side trips is a necessity, because cruise ships won't call on a town unless it offers easy-to-sell, marquee activities that help them attract potential passengers. Acadia National Park, Freeport and Kennebunkport have the kind of national prominence that makes Bar Harbor and Portland look good on an ship's itinerary, but towns like Bucksport, Belfast and Rockland may have to work harder to define their niche.
Bob Hastings of the Rockland-Thomaston Chamber of Commerce is confident Rockland can emerge as a viable port of call, though, because he's targeting what he believes is the right portion of the market: small ship, niche itineraries like those offered on American Cruise Lines' 50 to 100 passenger vessels.
Those ships, and even ships in the 200 to 400 passenger range, are easier to handle, says Hastings, discharging just enough passengers to increase downtown business without overwhelming the town's sidewalks, restaurants or stores. Smaller ships also tend to attract a different passenger demographic, say cruise industry experts ˆ slightly older, slightly more affluent and interested in more cultural and historical destinations. That profile fits perfectly with what Hastings believes is Rockland's inherent port-of-call identity: an arts and culture destination, boasting the Farnsworth Museum and several galleries, as well as fine dining at nationally acclaimed restaurants such as Primo.
The lure of repeat visitors
Though last year's seven visits from the American Eagle helped test that theory, this year's anticipated 14 cruise ship visits will be Rockland's best chance to impress passengers and cruise operators, which is why the chamber convened a volunteer cruise committee of local business owners and residents to brainstorm ways to make the cruise visits successful. Those plans include encouraging town improvements through a loan fund offered by Union Trust in Rockland to help businesses pay for new signs, awnings and exterior paint, and other ideas aimed at keeping visitors happy, such as having German-speaking interpreters at the dock to greet the 400-passenger German tour ship Europa, expected to arrive in October.
Despite the hype that accompanies talk of cruise ships throughout much of the tourism industry, some Rockland business owners seem more realistic ˆ and patient ˆ about the potential economic impact. Steven Liberty, owner of the Navigator and Tradewinds inns in Rockland, admits that 50 or 100 cruise ship passengers on the streets once a week won't break retail sales records, and likely won't mean more than a few extra diners at the Navigator Inn's outdoor restaurant. And while he welcomes those extra dollars, he says the real allure of the cruise ships is the longer-term benefits. Industry supporters commonly cite surveys that have shown cruise passengers use their trips to identify places they'd like to visit again. "If we can eventually build up to 15 to 20 cruise ship visits a year carrying a couple hundred passengers each, we're talking about the ability to direct market our community to thousands of people who have money to travel and could come back for a longer visit," says Liberty.
As Maine works to attract more cruise ships and promote new ports as destinations, though, tourism officials and local business owners seem to understand that there can, in fact, be too much of a good thing. Maine's efforts to encourage development of the cruise ship business must also take into account the realistic number of passengers per day Maine's smaller towns can absorb without taxing local infrastructure, infuriating residents and diminishing the experience for visitors. "I believe in the tourism industry, but I understand that tourism carries with it the seeds of its own destruction," says Hastings. "You need to keep in the back of your mind, through everything you do, that you not end up creating Anyplace U.S.A., a place that's so over promoted and saturated with T-shirt shops that it becomes a kind of honkytonk caricature of itself."
Already, though, Maine has taken steps to help manage the industry's growth. Bar Harbor has a two-a-day limit on cruise ships to keep the number of visitors manageable, a measure other towns like Rockland are ready to enact if their own popularity as a port of call ever reaches a similar level. Likewise, Portland charges cruise ships a per-passenger head tax of $4.50 and uses those funds to offset the cost of maintaining infrastructure and services for the ships; Bar Harbor charges a $1,700-a-day tender landing fee for use of its municipal dock.
Cruise operators: Looking for bargains
Even then, visions of untold riches flowing into port with each cruise ship may overlook the fact that cruise ships themselves are businesses, often operated by one of the three large entities that control 85% of the entire cruise industry ˆ Carnival Cruise Lines, Royal Caribbean Cruise Lines and Star Cruises. Those businesses work hard to keep their costs down and profits up, which often means demanding discounts and other concessions from local, on-shore suppliers. Tour operators who hope to offer on-shore excursions to cruise passengers must be prepared to offer discounted rates to the cruise lines, which in turn will mark up those tours to their own customers to increase their per-passenger revenue.
"You definitely have to discount to cruise lines," says Barbara Courchesne, who partners with cruise ships to offer whale watching and day trips to their passengers. In exchange for the discount, though, she says the cruise lines will commit to a guaranteed number of tour spaces, whether it can fill them all or not. Her advice to tour operators in other Maine ports: "Be prepared to negotiate, because cruise lines don't like to spend a lot of money."
The $100-plus per day spending by each passenger also doesn't necessarily mean a windfall for every type of local merchant. In Bar Harbor, the average cruise passenger spent $20.51 on food and beverages and $22.96 on apparel, according to the UMaine study, while spending $7.43 on household items, $1.61 on transportation and $1.39 on health and beauty items.
The cruise ships themselves also have come under scrutiny for their potential environmental impact along the coast. It's a particularly tricky issue, given that cruise passengers are touted as car-free visitors who help ease congestion ˆ and emissions ˆ along Route One in the summer, even as environmental groups say that a large cruise ship produces air emissions equal to 12,000 cars a day. But industry supporters note that cruise lines are moving toward cleaner burning fuels and new ships with more efficient engines, which has made ships' wastewater discharge the most recent focus of debate in Maine and elsewhere.
Federal laws prohibit ships from discharging a host of wastes within certain distances from shore, while the cruise lines have voluntarily agreed not to discharge treated sewage within four miles of shore. But this winter the Legislature took up a bill designed to extend those restrictions to so-called gray water ˆ treated wastewater from showers, sinks and other uses ˆ prohibiting its discharge within three miles of the coast and requiring ships to pay a licensing fee that would help the state conduct inspections of ships' water treatment systems. During debate over the bill, though, tourism officials and some state legislators argued that the restrictions didn't contain exceptions for ships with advanced treatment systems, and the fees might send cruise ships looking for cheaper ports of call.
Lawmakers eventually reached a compromise, exempting ships with advanced treatment systems from the three-mile no-discharge zone, but only if they receive a discharge permit from the Maine Department of Environmental Protection. "[Cruise ships] are an expanding business, and we hope it will continue to be an expanding business," says Ted Koffman (D-Bar Harbor), who co-chairs the Legislature's Natural Resources Committee. "It makes sense that we treat them like any other municipal or business discharger that might locate on our waterfront."
By addressing such issues now, the state can help direct the cruise industry's growth here, rather than simply reacting to issues as they arise in the future. Likewise, the goal of the CruiseMaine Coalition and the Maine Port Authority is to manage the growth of the cruise business while encouraging it, and Amy Powers says she's comfortable with the potential growth rate she sees.
And if the key to a creating a successful cruise destination is making passengers feel welcome, the first step is to make cruise line operators feel welcome ˆ which is why representatives of towns that also see a big opportunity in boosting water-borne tourism will accompany Powers and the Maine Port Authority at the Bar Harbor conference next month. "We still have plenty of room along the coastline to attract cruise ships without impacting other waterfront uses," says Brian Nutter of the Maine Port Authority. "We're probably not going to put cruise ships in small places like Vinalhaven, where there's a lot of lobstering. But in places like Rockland and Camden, with a wide variety of waterfront uses, we think cruise ships can fit into those communities. That's why we put together the [CruiseMaine] coalition and that's where we're going to focus."
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