The private-public sector Cruise Ship Task Force is recommending the V.I. government forgo increased cruise ship fees in favor of an agreement with major lines to increase their traffic into the territory over the next five years.
The group delivered its report Monday to the Legislature. It will require action by the Legislature, the governor, the Port Authority and the West Indian Co. Ltd.
The report outlines an agreement with the cruise industry, which was negotiated over the past year, as the task force also gathered data on cruise traffic and revenues.
Key points of the "Long Term Operating Agreement" are:
* A five-year term, from May 2001 through April 2006.
* Using the 1998 passenger count, summer traffic on St. Croix would increase by 25 percent over each previous year, and summer traffic on St. Thomas would increase by 10 percent over each previous year. (The summer period is May 1-Sept. 30.)
* Starting Oct. 1, St. Croix would receive four cruise ship calls per week for the winter season (Oct. 1-April 30) and a 25 percent increase in the number of cruise passengers each year thereafter.
* The V.I. Port Authority would select a member of the Florida-Caribbean Cruise Association to "commit to the incremental passenger flow to support VIPA's ability to finance" Crown Bay development.
* The FCCA cruise lines would "entertain funding participation in charitable programs within the U.S. Virgin Islands and special events targeted to cruise ship passengers."
Although not part of the agreement, the report states that FCCA cruise lines "acknowledge the policy" of the V.I. government to promote the purchase of Cruzan Rum and some are negotiating with the company to purchase on board supplies.
Also independent of the agreement is an arrangement by the FCCA to contribute $100,000 over a four-year period to a scholarship program to be administered by the V.I. government.
The task force was created in response to a government proposal in early 1999 to raise the per passenger fee by $2.50 from the existing $7.50 to $10.
Opponents of the measure – and the task force – argued that the move would boomerang. The Virgin Islands already has one of the highest rates in the region. Only four of the 29 Caribbean destinations charge more. Cruise lines, they say, would probably pull out, or at least cut back the number of their visits in response to increased fees.
Moreover, the report cited figures showing that the region's market share of cruise business is declining, reducing its clout in the industry. In 1998, the Caribbean share in the world market fell to "an historic low" of 52 percent. It is expected to be less than 50 percent when figures for 1999 are in.
John P. de Jongh Jr., president of the St. Thomas-St. John Chamber of Commerce, and Senate President Vargrave Richards co-chaired the task force.
Government members were Sen. Lorraine Berry, James O'Bryan, assistant to the governor, Pamela Richards, assistant commissioner of Tourism, and, from semi-autonomous agencies, Gordon Finch, Port Authority executive director, and Edward Thomas, WICO president.
FCCA representatives were Matthew Sams, Holland America Lines, Stephen Nielsen, Princess Cruise Lines, Michael Ronan, Royal Caribbean Cruise Lines, and Michele Paige, FCCA president.
