Cruise Lines Contribution to Economy Boosts

The North American cruise industry generated $20.4 billion in economic activity within the United States in 2002 – nearly a ten percent increase from 2001 – according to an annual study by Business Research and Economic Advisors (BREA). Commissioned by the International Council of Cruise Lines (ICCL), the study details cruise lines’ economic contributions and examines the extensive links that cruise lines have with major U.S industries. The report cites the cruise industry’s record high for global passenger carryings in 2002 as a major factor in its increased economic activity. An estimated 9.2 million passengers took cruises worldwide during 2002, a 9.8 percent increase over 2001. Over 80 percent, or 7.5 million, of the global passengers were U.S. residents, up 10.5 percent from the previous year. Industry capacity increased 13 percent over 2001. “The cruise industry was one of the bright spots in the U.S. economy during 2002, particularly for the hard hit travel and tourism sector,” said ICCL President J. Michael Crye. “Our growth has ripple effects across the entire U.S. economy. Cruise line passengers spend money in port cities, our lines employ thousands of American residents and the industry is a significant purchaser of U.S. goods and services.” According to the report, the industry has continued to stimulate consumer demand by deploying more ships in the North American market, accelerating its move to shorter cruises and cruises that originate in drive-to markets, and lowering fares. These moves especially attracted first-time cruisers, and provided an opportunity to broaden the industry’s penetration into the vacation market. The study’s major findings include: Direct spending: $11.9 billion – resulted from cruise lines and their passengers’ direct spending in the U.S. for goods, services, wages and taxes representing more than half of the economic activity generated and an 8.8% increase over 2001. - The economic benefits arise from several principal sources: spending by passengers and crew on goods and services (travel between residence and the port, pre- and post-cruise vacation spending); cruise line shore-side staffing; spending by cruise lines on goods and services, port services and vessel maintenance and repair. - Cruise passengers and crew spent over $800 million in non-transportation expenditures creating more than 12,500 jobs in the retail trade and lodging sectors, which generated $272 million in wage income. - Since 1999, direct spending by cruise lines on U.S. goods and services has grown by more than 32 percent, while wages and taxes paid have increased by 48 percent. Jobs: The cruise industry spurred the employment of 279,112 U.S. workers – a 4.2 percent increase over 2001. These workers were paid a total $10.6 billion in wages. - Cruise lines directly employed more than 28,000 U.S. residents and paid $796 million in wage income. U.S. ports: The number of embarkations at U.S. ports increased by 10.2% and totaled 6.5 million in 2002. These accounted for 71% of global embarkations. - The average port-of-call passenger spent just over $82 per visit. - The study estimates that a 2000-passenger ship with a crew of 950 would generate approximately $180,000 in passenger and crew on-shore spending per U.S. port of call. States: The cruise industry generated economic activity in all 50 states. Ten states benefited the most from spending by cruise lines, their employees and passengers. Three out of every four dollars spent directly went to– Florida, California, New York, Alaska, Washington, Texas, Illinois, Georgia, Massachusetts and Pennsylvania.