In April, Royal Caribbean International embarked on a new tourism venture alongside the Government of The Bahamas (GOB). Construction began on the Royal Beach Club Paradise Island, a new “beach day” resort in the Bahamian capital, Nassau. set to open in 2025.
The union is central to a public-private investment, and the Bahamas will retain 49% equity in the project. Furthermore, the 17-acre site will host 2,000 visitors per day on average. One Paradise Island opens in 2025, others are expected to follow.
The New Dawn for Bahamas Tourism
The investment marks a new approach to traditional Caribbean cruises, allowing passengers to enjoy dry land without sacrificing their favorite beach resort. Meanwhile, cruise guests can select from a complete itinerary of activities, including glass-bottom boat rides, dolphin petting, or five-hour VIP villa rentals.
Bahamas Prime Minister Philip Davis’ celebratory speech at the groundbreaking ceremony resonated with Bahamians hoping to benefit economically. “Signing today’s agreement, we add another world-class experience to our tourism offerings,” Davis said. “And even more importantly, we take a bold step toward greater Bahamian empowerment in the tourism industry.”
The resort is a positive step toward giving back to the Caribbean economy. Still, while this is good news for the Bahamas’ financial outlook, the same could be said of Royal Caribbean.
Cruises Are More Popular Than Ever
One week after the initial press release, Insider Monkey published a Royal Caribbean earnings call transcript. In it, the giant cruise line’s CEO, Jason Liberty, explains how, “consistently robust bookings at much higher prices” yielded quarterly returns beyond expectations. “In the first quarter, we delivered two million memorable vacations and achieved 107% load factor at exceptional guest satisfaction scores,” Liberty allegedly says.
A load factor beyond 100% doesn’t mean Royal Caribbean cruises are overbooked, as cruise ship “occupancy” differs from “capacity.” Cruise lines base these findings on “double occupancy,” so higher load factors accommodate couples booking single-bed suites but have toddlers in tow.
Regardless, ever-inflating consumer interest means guests pay higher prices than ever for their experiences.
At least for Royal Caribbean International, post-pandemic financial recovery appears complete.
A Sea Change
Strong fiscal performance aside, the cruise ship industry has needed change for some time, especially in Europe. A Euronews article from May summarizes growing discontent among residents of the continent’s more oversubscribed coastal cities. Could we see European cruise line operators following Royal Caribbean’s lead?
European cruise line merchants — primarily those in the Mediterranean — have long vied for the annual trade of 30 million European vacationers. The Euronews report says many of the 218 cruises that sailed in 2022 stopped in hotspots like Venice, Barcelona, and Palma de Mallorca.
You Shall Not Pass
This summer, the Balearic Island capital of Palma de Mallorca is reintroducing bans on cruise ships. Initially implemented in 2022, the region allowed just three ships to dock daily. These parameters mean tough quotas on authorized passenger loads, capped at 5,000 people per docking.
In 2019, Catalan newspaper Ara spoke to Barcelona City Councilor Gala Pin, who championed banning cruise ships altogether. “It’s a plague of locusts [type of] tourism… ” said Pin. “… they devour the public space and leave.”
Venice’s well-documented reaction to hordes of tourists shows no signs of relenting. Last December, the city banned loudspeakers and tourist groups of more than 25 people. This law followed a September 2023 decision to pilot a €5 tourist charge to reduce numbers.
Europe Is Reaching Its Limit
Other European zones have also had enough. Greek Prime Minister Kyriakos Mitsotakis told Bloomberg about cruise ship reductions planned for the Greek Islands of Mykonos, Santorini, and Piraeus in 2025. The Greek Islands are a storied favorite among millions of tourists, but like many other parts of Europe, the region cannot handle more visitors.
A recent Telegraph article outlines coastal cities’ reactions to over-tourism, revealing the Caribbean as the most-used cruise ship network and the Bahamas’ proximity to Florida as its biggest selling point. Having English-speaking hosts, a safe environment, and world-class beaches means it receives one-third of the world’s cruise ship passengers.
The Nassau Effect
According to Statista, Nassau is the third-busiest port in the world. UNWTO named the Bahamas the second-most popular country among cruisers. The country’s population, just beyond 410,000 residents in 2023, means cruise passengers outnumber Bahamian locals 13 to 1.
While it isn’t clear whether Caribbean nations are eyeing European-style restrictions, Royal Caribbean must minimize its environmental and community impact. However, no such limitations are currently in place, which can only be good news for America’s millions of cruise fans.
