Case Study Essays

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Costs and Benefits of Cruise Ship Tourism in Victoria
April 2011
Overview of a report prepared by Dr. Brian Scarfe for the James Bay Neighbourhood Association.
For full report see Environment page at www.jbna.org
James Bay Neighbourhood Association
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Overview Cruise Ships: Costs/Benefits page
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Overview
A new study reveals that cruise ship tourism in Victoria, British Columbia, has a zero or negative net socio-economic impact. The significant costs that burden residents and taxpayers exceed the benefits enjoyed by local cruise ship servicing companies, a small portion of the local business community, and the Greater Victoria Harbour Authority
(GVHA), owner of the cruise ship terminal and waterlots.
While economic benefits are generated by cruise line, passenger, and crew member expenditures, social and environmental costs result from marine effluents, traffic congestion, traffic noise, road repairs, atmospheric emissions, and public subsidies. Estimated economic benefits amount to at most $24 M, while estimated costs are at least $28 M.
The study analysis is based on 2009 cruise ship activity in Victoria; however, the pattern in
2010 was similar. From May through September, there were over 100 days with ships in port.
"Home port" cities like Seattle and Vancouver reap higher cruise tourism benefits than "portof- call" cities like Victoria. In 2008, Vancouver with 259 cruise ship calls received 90% of the estimated BC economic impact while Victoria with 201 “port-of-call” visits received 8%.
Two companies dominate Victoria cruise ship activity. Carnival Corporation generates 61% of the visits through three subsidiaries, while Royal Caribbean Cruise Lines generates 25% of the visits through two subsidiaries. Other cruise lines generate the rest of the visits. Western
Stevedoring Co. Ltd., which operates the Ogden Point terminal for GVHA, and CVS Cruise
Victoria, which operates the downtown shuttle bus service, are wholly owned by a Seattlebased enterprise. Much of the ‘local’ profit, along with cruise industry profits, flows south.
The study indicates that cruise tourism in Victoria is at best a marginal economic activity benefiting a few while imposing costs on the community. This is in contrast to “lower profile” services such as the M.V. Coho which brings substantial economic benefits to
Victoria with few attendant costs.
The conclusions indicate that the following actions are needed:
1. Create a Victoria-First approach to cruise tourism. The Province, City and GVHA need to cease being subservient to the cruise ship industry.
2. Change Victoria’s primary role from a net “port-of-call” loser to a net “home port” beneficiary, while greatly limiting the “port-of-call” role.
3. Ensure, through public policy, that those benefiting from cruise tourism create solutions to address the social and environmental costs they impose on others.
4. Establish passenger movement strategies and enforceable local standards to minimize the negative impact of on-shore transportation related to cruise ship passengers.
5. Impose cleaner cruise ship fuel standards in Victoria, through GVHA contractual power, and stage/limit cruise ship visits so that pollution levels are within World
Health Organization (WHO) guidelines.
6. Impose a Provincial cruise ship passenger levy to fund solutions to identified social and environmental costs including pollution of Canadian waters beyond Victoria.
The study titled “Victoria as a Port-of-Call: the Costs and Benefits of Cruise Ship Visits” was prepared by Dr. Brian L. Scarfe, a well-known economist, for the James Bay Neighbourhood
Association (JBNA). The full report is available at www.jbna.org.
Overview Cruise Ships: Costs/Benefits page
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Methodology
The methodology used for the study was that of multiple accounts analysis, where the
accounts…