Port Cities Fret Over Taxpayer-Funded Terminals for Cruise Ships

Feb. 22, 2013 -- Controversy roils the waters of the Charleston, S.C., harbor and others in the US. At issue: Is the ever-expanding cruise ship industry a cost or benefit to port cities? And how much should taxpayers chip in for port facilities versus what they can expect in return?

Since 2010 the 2,000-passenger Carnival Cruise ship Fantasy has been based in Charleston at a terminal, which, according to the Post & Courier, is now considered old and outdated. Under debate is whether a new, $35 million cruise ship terminal should be built.

Opposing the new terminal is Cruise Control, a preservationist group, as well as individual citizens who object to cruise ships' noise and pollution. One Charleston resident whose home sits near the existing terminal complains to the New York Times, "I can hear the [ship's] announcements from my house. And that black smoke. It just tumbles out of that smokestack. You should see the dust in my car."

Supporters of a new terminal argue it will make the city more attractive to more ships, and that the resulting increase in cruise ship tourism will put money in local merchants' tills. Officials for the South Carolina Ports Authority estimate cruise traffic already contributes $37 million a year to the region's economy.

Sociologist Ross Klein, a professor at Memorial University in St. John's, Newfoundland, has made cruise ships and their economic impact on ports his area of study. He tells ABC News that determining whether any given port makes (or loses) money on cruise ship tourism is "a bit of a hard one."

It depends, he says, on such variables as whether one includes the cost of the terminal and its related infrastructure, or the cost of ships' impact on the local environment and quality of life (noise, traffic congestion, more pedestrians, and more need for security, for example).

It depends, too, on the affluence of the passengers patronizing any given cruise line. "Is it the K-Mart crowd, or is it the higher end?" Klein asks. Yet even though no two lines (or ships) may be demographically equal, Klein says it's still possible to make generalizations about passenger spending.

True, local merchants do benefit from dollars spent by a ship's passengers on food, liquor, souvenirs and other indulgences. But merchants seldom get to keep the full amount. "Merchants often have to pay a cruise line to be included in shore excursions," says Klein, "or to be mentioned to passengers or to be included on a map." The result, he says, is that a cruise line typically claws back 50 to 60 percent of what passengers spend on shore.

An analysis Klein did this month for the city of Key West, Fla., compared spending by cruise ship passengers with that done by regular terrestrial toursts. Terrestrial tourists, he estimates, have a total economic impact on Key West of $659.3 million, which includes spending on lodging, bars and restaurants. Cruise ship passengers spend $23.7 million, which includes clothing, jewelry, and miscellaneous souvenirs. Of 12,194 total tourism jobs in Key West, Klein estimates that 873 can be attributed to cruise tourism.

Klein says Key West right now is "the primary fire-point, after Charleston," where locals are locked in acrimonious debate over the costs and benefits of cruise ships. "Other ports have not yet reached the point where they're saying, enough is enough"--but Key West has. Locals complain that cruise tourists float into town, flood local streets and bars, buy a few souvenirs and float back out the same day leaving their trash behind.