Port’s cruise ship business worth $37M, study says

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According to a study released today, the 69 total cruise ships embarking from and making one-day stops at the Port of Charleston this year will generate 407 jobs that have average annual earnings of $39,786. The port commissioned two College of Charleston professors to determine the economic impact of its growing cruise business.

By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Feb. 2, 2010

Cruise ships embarking from and stopping for a day at the Port of Charleston this year will have a $37 million economic impact on the region, according to a new study by two College of Charleston professors.

This year 16 cruise ships will make one-day port-of-call stops in Charleston and 53 cruises will originate from the city’s port. The combined number of 69 cruise ships is up from 33 last year and 49 in 2008.

As the port’s cruise business grows to new highs, the S.C. State Ports Authority is working on a master plan for redesigning the aging downtown terminal where cruise passengers enter and leave their ships.

The ports authority commissioned College of Charleston professors John Crotts and Frank Hefner to study the ships’ impact because it had no reliable estimate of how cruises affect the local economy, State Ports Authority CEO Jim Newsome said today at a presentation of the findings.

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Read the study
Full study

The study found that the cruise business in 2010 will generate 407 jobs that have average annual earnings of $39,786.

Of those 407 jobs, about 118 are in the transportation sector, 66 are in retail, 40 are in wholesale trade, 33 are in the food and beverage industry, and about 19 are in grocery stores.

Related state sales and income taxes are estimated to be $3.5 million.

The last time a cruise ship economic impact study was performed was 2003. That year the port’s 47 cruise ships had an impact of $9.8 million.

The increase to $37 million this year is, in part, driven by the shift in the port’s cruise ship business, said Crotts, who is a professor of hospitality and tourism management in the college’s School of Business.

In the past, most of the cruise ships at the port were making port-of-calls for one day only. Now a majority of the port’s cruise business is made of cruises originating here.

Ships originating from Charleston restock locally before embarking, buying a range of goods that includes fuel, groceries, flowers and more, Crotts said. Those ships draw tourists from around the Carolinas who might spend several days in local hotels, visiting area attractions before or after their cruise.

According to the study, average spending per-person expenditures for port-of-call passengers is $43.42, compared to $66.31 for origination passengers.

Crotts and Hefner interviewed 400 passengers in November. They asked questions about their spending patterns while in Charleston. The study also reflects money that crew members and cruise lines spend locally.

The $37 million economic estimate includes direct spending as well as indirect spending needed to supply goods and services to those groups.

Passengers’ direct spending is estimated to be $5.5 million, crew member spending $2.6 million and cruise line spending $14 million.

Local port and tourism officials have said that cruise ships represent only about 1% of all tourists coming to Charleston in a year.

Crotts said 44% of the people interviewed for the study were visiting Charleston for the first time. But the odds are some of those people will return again, he said.

“As we know, Charleston is a high-repeat visitor destination,” Crotts said.

He noted that while the type of cruise ships that visit Charleston can carry around 2,000 passengers, not all of those passengers get off and explore the city and region during one-day stops. About a third of passengers stay aboard all day, he said.

About half of those getting off the ship go on organized excursions to plantations, museums and other attractions. The other half explore on their own.

Surveys showed that passengers on cruises embarking from Charleston were primarily from the Carolinas. Those cruising in for port-of-call visits were mostly from the Washington, D.C., Philadelphia and New York City metro areas.

People who live in Charleston, Berkeley or Dorchester counties and embarked on a cruise out of Charleston were not included in the impact, said Hefner, who is a professor of economics and director of the Office of Economic Analysis at the College of Charleston.

“The spending has to be additional spending brought into the community,” Hefner said.

Reach Ashley Fletcher Frampton at 843-849-3129.