Micronesia Cruise Association sets sail on big opportunities
Is Micronesia the new frontier? Just how viable is it to homeport a cruise ship in Guam? And how big of a boost would it be to the local tourism industry? A team of experts will be here this month to help answer all those questions.
The idea of a Guam-based boat that will make weekly trips throughout Micronesia was first pitched several years ago by the Association of Pacific Island Legislatures. They thought it would be a great way to capitalize on the relatively untapped natural beauty of the islands.
So the Micronesia Cruise Association was formed to develop a plan. Now, legislative tourism chair Senator Tina Muna Barnes wants to rekindle the effort, gathering the main stakeholders for roundtable talks.
MCA president Gerry Perez explains some of the past challenges, telling KUAM News, "It's really not likely for any of the big four companies - whether its Carnival, Royal Carribean, Norwegian Line or Star, or even MSC - to homeport an asset in Micronesia. Because what's happening in the last four years is that we're going through an era of backfilling and consolidation in existing primary markets that are already under pressure."
Perez says faced with marginal returns in recent years, the major cruise lines have chosen to focus on the well-established destinations they are currently serving. Perez added, "We have no critical mass to support a sustained industry development. We have scattered and unbundled attractions. Our shore income opportunities are limited or non-existent, thereby not making us an attractive destination for operators."
So Perez says it will take the concerted effort of all the island governments to create the conditions needed to attract an investor, noting, "The fundamental strategy that the MCA is encouraging in the region is to create supply concentration and clustering of port visits. In order to do that, our recommendation of course is to see if we can homeport a vessel in Guam, as some of you have already recognized that as a desirable initiative. Concession can be turned into a major opportunity at minimal cost or low cost to the islands. And this is kind of like our preferred option. If you look at the landscape and talk to the people in the industry."
The MCA says to facilitate the creation of a concession, island governments should form a special purpose entity and try to raise money from development banks, federal grants, or private capital. To make sure they're taking the right approach, officials are enlisting some expert advice.
The Guam Visitors Bureau, through the Pacific Asia Travel Association, has asked for a task force that will be here this month to assess the possibilities. GVB marketing manager Pilar Laguana told KUAM News, "This is a very unique benefit of being a member of PATA. And as a government entity such as the Guam Visitors Bureau, we have this opportunity to request for a task force regarding any discipline in tourism. And so in this case we thought we could take advantage of our cruise initiative and see what we can learn from world experts."
The task force will examine whether an inter-island cruise itinerary is viable. It will look at potential demand from international source markets, and an ideal marketing strategy. Laguana says they hope to have the report done in time for PATA's annual summit meeting to be hosted by Guam in May.
"It is understood that our task force's recommendation will be used as a foundation to market the homeporting concept as a regional opportunity for cruise lines and operators seeking new and unexplored destinations," Perez continued. "Additionally, we understand that the final report will outline a recommended business model reflecting the costs and economic details pertinent to the cruise lines."
Officials believe that even a single cruise ship homeported here will have a significant impact on the local economy. It means having 50,000 cruise passengers a year, versus the 2,000 or 3,000 we typically get. "So instead of us getting our two or three or maybe four a year, we can actually have 52 calls because of our homeport. There's also local employment, and supply chain benefits, which is much more significant than an ad hoc occasional call port vessel," he said.
Guam Economic Development Authority boardmember Monte Mesa says GEDA has also been studying the potential of a fly and cruise opportunity, saying, "With the homeporting of a small cruise ship here, could enhance again the attractiveness of the region. Because not just cruise ships coming in for port calls, but for people to fly in to Guam and cruise Micronesia. The same way that they would do in the Carribean."
GVB deputy manager Telo Taitague says she and Mesa have already met with two interested parties. She says the operators would use a porting system called tethering. It doesn't require a dock, and provides more flexibility. "Monte Mesa and I had a meeting with one of them. And it's a great potential. we don't have to use the port, they're going to a different area," she explained, adding, "A lot of infrastructure it would not be needed. So we're really happy about that."
Taitague says the task force should have preliminary findings before it leaves. The report could determine a lot about the future of a homeported cruise ship here, as she said, "Once this report comes out, that's what most industries are looking for. They're looking for the specifications, the policies, the ability to provide a good business opportunity. And its incentives that we need most especially to encourage these cruiseliners to come to Guam."