‘Royal Dock’ Half Way There
Port of Roatan Projected to bring in $103 million to Roatan in 2009

March 1st, 2009
by Thomas Tomczyk

[private]

Tourists walk thru a parking area of the 'Roatan Town Center.'

Tourists walk thru a parking area of the 'Roatan Town Center.'

The numbers are big. Municipality of Roatan expects to receive $609,000, Honduran Ministry of Tourism $730,000, and income from passengers and crew should surpass $103 million. These are the projected financial impact of cruise ship passengers in 2009, and 2010 looks even better. Indeed the cruise ship industry might be the savior that pulls Roatan through the global recession.

The ‘Town Center at Port of Roatan’ inaugurated in January has become a landmark to the investment in the island by Royal Caribbean and Carnival. “This is the best designed dock in Honduras, it’s a natural, deep water harbor,” said Jairo Molina, Port of Roatan General Manager. HTH Architects based in California designed ‘Town Center’ to be reminiscent of a Caribbean town feel, with large window shutters, zinc roofing, and wood arcades. Only one thing remains: finish the project.

Phase I of the Royal Caribbean’s foothold on Roatan has cost $10 million. An 11,500 square foot facility has been opened and Royal Caribbean estimates that 125 jobs have been generated, mostly for Roatan residents.

Phase II will cost around $30 million, but still awaits Ministry of Environment (SERNA) inspection and permits. Completion of the project is scheduled for 2010, with more Royal Caribbean ships being sent to Roatan.

But construction has been halted as planners face destroying or moving coral heads living in an area needed to be filled in to create the marina and retail areas. The favored plan involves moving the coral to a nearby location, an operation with a price tag of around $600,000 and no guarantee of the coral surviving.

So far seven stores, two car rental companies and bank FICOHSA – which finances the project – occupy the ‘Town Center.’ Two of the biggest stores are Diamonds International and Duty Free America. The center has currently 11,500 square feet of retail space with seven stores and two restaurants, but operates at just 30% capacity. Once phase II of the project is completed, the site will encompass around 8.7 acres and include 33,000 square feet of retail, entertainment and service facilities.

In 2008 around $67 million was generated at the dock in local spending, with an additional $2.1 million in port and passenger fees and $10 million spent as direct infrastructure investment. In total Roatan saw around $79 million from cruise ship passengers in 2008, or $1,200 per Roatanian.

One of the biggest beneficiaries of the Royal Caribbean terminal is Honduran Tourism Ministry (IHT), receiving $494,000 in 2008 fees and due to receive $730,000 in 2009. In 2005 IHT received practically nothing from the Roatan cruise ship passengers, but with so much income now flowing, keeping Roatan growing directly affects Tegucigalpa.

The numbers of visitors at the Port of Roatan in 2009 are projected to be around 404,000. These numbers however don’t reflect possible increases due to Carnival constructing its two berth facility in Dixon Cove in November.

Current studies show that disembarked tourists spend roughly $78 on excursions and purchases on the island, well below the $108 spent at an average Caribbean destination. Shore excursions and jewelry purchases make up 66% of the money spent by tourists. Molina sees a trend of passengers spending less, but this trend likely reflects the overall economic downturn in US rather than a problem with Roatan.

Roatan’s vital cruise ship industry is set to flourish, but one factor may prove a great limitation: the island’s capacity to contain its civil unrest. Roatan was hit by two strikes in 2008 and five cruise ships cancelled their Roatan visits. Royal Caribbean is concerned about Roatan’s ability to consistently deliver a product to cruise ship passengers. ‘The recent negative episodes of social unrest in the island have severely impacted the image of Roatan. Cancelling ship calls is a “Mortal Sin” for a destination!’ read a Royal Caribbean presentation shown at the inauguration of the Port of Roatan.

But if recent civil unrest can be left in the past, Roatan can continue its growth trajectory in visiting cruise shippers. In 2008 Roatan captured 6% of the Caribbean cruise ship market, or as many passengers as Guatemala and Costa Rica combined. Roatan is approaching the 700,000 cruise ship passengers that Belize receives, and could surpass Belize as soon as 2011. [/private]

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