July 25, 2008

Busting Borders and Betting Blackjack on Cruise Ships

By Kent Paterson
Frontera NorteSur

Long established on downtown Puerto Vallarta’s boardwalk, artist Rosa Elena Isidore paints and sells peaceful, soothing scenery on a street that’s not so tranquil anymore. As mid-day tropical sun starts to peel off the skin, cruise ship visitors swoop into downtown in air-conditioned buses equipped with video screens and ice-coolers. Navigating the cobblestone streets, which are still better suited for donkeys than autos, is a challenge amid the careening buses and the bulging waistlines of hundreds of parading foreigners.

Shepherded along by English-speaking guides, the tourists file past businesses, especially the silver and Cuban cigar stores that display logos of the cruise ship lines and discount offers.

In town for a quick look- and preferably a hefty purchase- the visitors don’t have time to chat with people like Isidore. Until the tour companies stepped in about 7 years ago, the circumstances were different, Isidore recalled. More cruise ship passengers wandered on their own, even taking time to talk with the street artist. Sitting across the street from a new Starbuck’s, Isidore said the changing nature of cruise ship tourism exemplifies Puerto Vallarta’s transformation from a fishing village into a booming international destination with high-rise condos, big box stores, traffic congestion and crime.

“It’s sad, but that’s the way things are in Puerto Vallarta,” Isidore lamented. “It used to be more of a Mexican town.”

A 34-year resident of Puerto Vallarta, California transplant R.C. Walker, along with his neighbors, has found a solution to the daily chaos that unfolds when the tour buses swamp the streets below his office. “We just don’t go downtown,” Walker said. “We try to skip it.”

Cruise ship dockings in Puerto Vallarta have soared from 144 ships carrying 164,967 passengers in 1994 to an anticipated 276 ships with 589,000 passengers in 2008, according to Mexico’s Secretariat of Communications and Transportation (SCT). The Puerto Vallarta cruise ship surge is part of an international boom. The Cruise Lines International Association (CLIA), a US-based trade industry group, reported in a 2008 market study that 9.57 million US residents traveled on cruise ships in 2007. Another 33.7 million were expected to sail the high seas on cruise lines in the next three years, CLIA projected.

Nowadays, more US citizens than ever form their impressions of foreign lands, peoples and cultures via a cruise ship experience that typically lasts only a few hours. And sometimes, as in Puerto Vallarta, what they encounter is not so much different from the landscape at home.

A Cruise Ship Mall

Completed in early 2007 with an estimated $41 million price tag, Puerto Vallarta’s new cruise ship terminal can simultaneously dock three ships. Symbolizing the importance of the project, President Felipe Calderon inaugurated a facility he said would benefit “many, many Mexicans.” According to the SCT’s projections, the expanded cruise ship tourism will generate $800 million for Puerto Vallarta during a 20-year period.

Resembling a complex of sea-faring skyscrapers protruding from Banderas Bay, the Puerto Vallarta terminal is a sprawling compound that’s shielded by fences topped with barbed wire. The Mexican navy is deployed nearby to respond to any possible terrorist attack, an issue which has grown since 9-11.

Descending onto the terminal grounds for a few hours in Paradise, cruise ship passengers quickly bump into curio shops, Internet cafes, organic coffee stands and $70 massage services. Preparing lattes at a small café, worker Karla Vianney said she is grateful for the employment opportunities Puerto Vallarta and its cruise ships offer.

Next to the terminal, Dr. Martha Rodriguez runs her dental clinic. Advertising $35 teeth cleanings, the dentist serves Filipino cruise ship workers and US tourists increasingly pressed by costs at home. After only four months on the job, receptionist Blanca Torres said she’d already become acquainted with return patients who sail down the coast for a dental tune-up. “It’s very expensive in the US,” observed the young worker .

Strategically located across the street, Wal-Mart, Sam’s Club, Liverpool beckon the non-stop global shopper. For the intrepid, drugs and sex peek around the corner, and for the truly enthralled, a Remax real estate branch can literally procure a piece or two of Mexico.

Some locals complain tourists are spending less money. An energetic man with a lot to say about the history of his home town, independent guide Felipe Ibarra said tourists are reluctant to plop down even $25 or $35 for a personalized tour of Puerto Vallarta and its environs. Lately, the dialogue between Ibarra, who counts 40 years in the business, and penny-pinching visitors has become oddly strained for a Mexican port, he said.

“I want to see Wal-Mart,” is a common refrain Ibarra said he hears from cruise ship visitors.

“You don’t have Wal-Mart in the US?”

“I want to check prices.”

At the terminal, tour buses scoop up passengers for day excursions into town or the surrounding countryside. Closer to ship, a romp on a “pirate ship” is available.

Befitting the package tourism model, many passengers’ itineraries are scheduled before they leave ship. Bus companies, many controlled by outsiders, transport guests who purchase specialized day trips in advance. Based in Leon, Guanajuato, TTUR is a leading tour operator. The firm is owned by Flecha Amarilla, one of Mexico’s flagship mass transportation companies. Another company that operates in Puerto Vallarta, Arthur’s Adventures, has its home office several hours away in Guadalajara.

Parked alongside the terminal’s driveway, independent taxi drivers and tour guides compete with the sleek tour buses. Acknowledging that he and his men have benefited financially from the terminal expansion, taxi owner Alfredo Torres said they still must struggle with the tour companies he estimated snatch 70-80 percent of the passengers who get off ships.

Complaints that the bigger tour operators suck up a disproportionate share of the cruise ship business are far from confined to Puerto Vallarta.

Although her small store is not far from Acapulco’s cruise ship terminal, Marcelina Celestino Martinez, a seller of beach attire, meets few of the visiting passengers. “Tour buses take Americans to the other side (of the city). They don’t leave the Americans here with us,” she lamented. “That’s the problem. We can’t make money from the Americans because the same ones that take them elsewhere earn a commission.”

Whether in Acapulco or Puerto Vallarta, the cruise ship experience is an increasingly managed one: pre-purchased schedules, pre-selected shops and pre-planned departure times to the next port.

Even some cruise ship passengers are taken aback by the herd tourism.

“You’re very limited in what you can do in a few hours,” said Minnesotan Chris Hanson after a quick-stop tour of Puerto Vallarta’s picturesque neighborhoods. “We haven’t seen the part where real people live.”

Once their day is finished, cruise ship travelers like Hanson are transported back to the terminal where they must run a post 9-11 gauntlet of private security guards who operate metal detectors, search bags and check ship-issued identifications before allowing the passengers back on board.

The scene in Puerto Vallarta is repeated across Mexico every day. Rated Numero Uno for cruise destinations in the world, the number of ship passengers visiting Mexican waters doubled from about 3.2 million people in 2000 to 6.4 million in 2007, according to numbers provided by the Florida Caribbean Cruise Association (FCCA), another trade industry group.

Mexico’s federal Secretariat of Tourism (Sectur), reported income from the industry rose from $201.3 million to $487.5 million in the same 7-year period. To court the tourism, the Mexican government is spending tens of millions of dollars in tax monies to construct terminals and maintain port infrastructure. Twenty two Mexican ports now host cruise ships, and federal officials have plans to make the cruise business even bigger. Politicians like Tamaulipas Governor Eugenio Hernandez want a new piece of the action.

A Big Fuss for Little Money?

For all the fuss, cash from cruise ships represents a very small portion of Mexico’s overall tourism earnings. Using bigger numbers than Mexico’s federal government, the FCCA estimated that cruise ships contributed $565 million and created 16,000 jobs in all of Mexico during 2006. Last year, however, Mexico earned $12.9 billion from international tourism and about $70 billion from national tourism, according to Sectur. Nationwide, the tourism industry as a whole employed about 2.4 million people, the federal agency reported.

Depending on the location, different studies have shown that cruise ship passengers spend $60-$80 per person on visits, though many residents of both Puerto Vallarta and another destination, Zihuatanejo, contend the real figure is much lower. This compares to Sectur’s estimate that the average, non-cruise ship international tourist spends $750 in Mexico.

In perhaps another example of sagging economic times, even the ubiquitous tour buses in Puerto Vallarta are witnessing a business downturn. According to SCT statistics, 9,518 bus tours with an average 60 passengers each were expected to run in 2008, compared with 8,569 tours with an average 72 passengers each in 2007.

Michele Paige, FCCA president, said the economic benefits of cruise tourism can’t be gauged by a single visit. A survey done for her organization reported that 86 percent of cruise ship passengers indicated they will return to Mexico for another visit, she said. Cruise ship visits should be viewed as a “viable opportunity” for an ongoing tourism that leaves money which goes “directly to the people,” Paige contended.

To date, however, no comprehensive evaluation of the public investment costs versus the overall economic benefits of cruise ship tourism has been made publicly available and widely debated. Besides the upfront-costs of infrastructure development and the ongoing costs associated with providing security, minimal information about the environmental impacts is available.

Currently, the Puerto Vallarta terminal receives between $9-10 million from the cruise ship lines for docking fees and water sales to ships, said Ivan Uriza, SCT marketing director. In 2007, the facility sold 170,284 cubic meters of water to the mammoth boats, Uriza added.

In Puerto Vallarta, the SCT maintains that it is careful to inspect boats, monitor cleanings, promote waste minimization, assure proper garbage disposal and practice waste separation for recycling.

For its part, the cruise ship industry publicly boasts of its adherence to green practices like wastewater recycling, but the big commercial ships consume scarce water resources and leave behind garbage.

Cruise ships burn fossil fuels, emit greenhouse gases and ultimately contribute to local traffic congestion. Like any big vessel, they carry invasive species that can ruin local ecosystems. And to make way for the big ships, bays are dredged.

Another down side is that the cruise business is far from a reliable source of income, operating almost like a floating runaway shop that changes schedules and routes depending on national and international market conditions. In an era of economic turmoil and escalating fuel costs, the industry’s ability to keep transporting record numbers of US passengers to Mexico could be challenged in 2008 and 2009.

In some Mexican communities, proposed cruise ship dock expansions have generated stiff opposition on both environmental and economic grounds. Opponents blocked a proposed homeport for the Mexican Caribbean island of Cozumel in 2004, and successfully halted a plan to put a large terminal in small Zihuatanejo Bay in 2008.

For Mexico’s federal government, though, the cruise ship industry is a winner. In April 2008, the Calderon administration signed an agreement with the governments of Costa Rica, El Salvador, Honduras and Nicaragua aimed at attracting even more cruise ships. A new pro-cruise ship organization uniting the countries could be launched later this year.

In a wider context, expanding the cruise industry fits into the rebirth of Plan Puebla Panama. Renamed the Mesoamerica Project at a June meeting in Mexico, the goal of the government-sponsored, multilateral plan is to hasten the economic integration of Central America and Mexico.

“Mexicanizing” Cruise Tourism

Meanwhile, tourism officials seek to “Mexicanize” the country’s cruise ship business, which until now has been virtually foreign. The new initiative will involve the construction of one or more home ports for Mexico-based ships. The SCT’s Ivan Uriza confirmed that his agency is studying the possibility of locating a home port in Puerto Vallarta. Frequently called “Arizona’s Beach” because of its proximity to Phoenix, Puerto Penasco on the Sea of Cortez is also mentioned as a possible site for a future home port.

“We want to be an attraction for the national market,” Uriza said.

In a jump start of the home port strategy, the Spain-based Pullmantur company, associated with Royal Caribbean International, is scheduled to begin sailing its “Ocean Dream” boat up and down the Mexican Pacific Riviera later this year. Promoters are specifically targeting Mexican customers, and have reportedly signed an agreement with Mexican travel agents to sell cruises.

Based in Acapulco, the 1,350 passenger ship will make a 7-day excursion with stops in Zihuatanejo, Manzanillo, Puerto Vallarta and Cabo San Lucas. Heaping praise on local officials and businessmen for landing “Ocean Dream,” Sectur Secretary Rodolfo Elizondo said the cruise ship will “strengthen the Mexican Pacific Circuit.”

Cruising on the “Ocean Dream,” passengers will have access to bars, restaurants, swimming pools, a tax-free store and a library. Mexican officials, however, downplayed the casino on the ship. Legally prohibited in Mexico, Las Vegas-style casinos are a controversial issue in the country because of fears the gaming enterprises will facilitate money-laundering and other forms of law-breaking. Since the 1990s, proposals to legalize casinos, opposed by the Roman Catholic Church and other sectors, have died in the Mexican Congress.

Nonetheless, a de-facto legalization of gaming is rapidly underway in Mexico. Issuing scores of permits in 2005, Mexico’s Interior Ministry, then headed by presidential hopeful and current Senate President Santiago Creel, eased the way for a plethora of new sports books, bingo parlors and slot machine palaces to open up across the country, though none of the new businesses approached a full-blown casino. Drawing Mexican tourists onto floating casinos would allow a new generation of gamblers to do something legally at sea they cannot do on land.

Research for this article was supported in part by the Fund for Investigative Journalism. Frontera NorteSur (FNS): on-line, U.S.-Mexico border news Center for Latin American and Border Studies New Mexico State University, Las Cruces, New Mexico.

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