Is It Worthy? Regional Economies and the Cruise Industry

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Maria B. LEKAKOU
Department of Shipping, Trade and Transport, University of the Aegean, 2 Korai St, Chios 82100, Greece
Tel.+30-22710-35275, Fax +30-22710-35299, E-mail: mlek@stt.aegean.gr

Evaggelos XIDEAS
Department of Shipping, Trade and Transport, University of the Aegean, 2 Korai St, Chios 82100, Greece
Tel.+30-22710-35275, Fax +30-22710-35299, E-mail: exideas@aegean.gr

Evaggelia S. STEFANIDAKI
Department of Shipping, Trade and Transport, University of the Aegean, 2 Korai St, Chios 82100, Greece
Tel.+30-22710-35275, Fax +30-22710-35299, E-mail: sttm03043@chios.aegean.gr

Abstract
The cruising sector is characterized as one of the most rapidly developing sectors of shipping. Greece represents one of the most popular cruise destinations in the Mediterranean region. Cruise activity in Greece has developed since the early 1930s to the top maritime tourism destination in the EU. Despite the great maritime tradition of Greece, the national economic statistics available are limited to the collection of certain data. In 2003, the Port of Piraeus hosted 543 calls by cruise ships carrying 386.000 passengers. Each of this call creates unidentified economic impacts on the local economy. The aim of this paper is to estimate the economic impacts of the cruise industry in the region of Piraeus The methodology used is based on interviews, surveys, local economic data and cruise activity statistics. Then, the impacts are quantified in terms of: Jobs, Personal income, Business revenues and State and Local taxes. The paper concludes with the estimations and comparisons to port having similar characteristics. Finally, it discusses policy implications resulting from the research findings.

Keywords: cruise sector, economic impact, the port of Piraeus.

IS IT WORTHY? REGIONAL ECONOMIES AND THE CRUISE INDUSTRY

1. INTRODUCTION

The cruise sector is considered as one of the most promising sectors of the world’s economy and in particular the fastest developing tourist sector since 1980 (Wild and Dearing 2000; Dwyer& Forsyth 1998; Marti 2003), with an average annual rate of growth 8.4% (Peisley, 2000). The evolution of the world’s cruise is, from 4.5 million in 1990 to 9.5 million in 2003, while according to the existing estimations, cruise passengers are forecasted to amount to 17million in the year 2010 (Peisley, 2000). This growth, to a large extent, results from the change of cruise companies’ strategy which have reduced cruise fare in order to stimulate demand (ICCL,2003). In the past ‘’cruise’’ was considered as a ‘’luxury product’’ because of high cost and consequently it was addressed to high incomes. Henceforth, the profile of the consumer of a cruise package has altered considerably, and for this reason on the same cruise ship people of different economic statues may co-exist. (Marti, 2003). Despite the spectacular growth of the cruise market particularly in the last decade, the favorable forecasts for future demand and the ‘’stamina’’ to random events (the terrorist strike of 11/9, SARS, the war in Iraq etc), the cruise sector has not received the required scientific attention from maritime economists (Dearing and Wild, 2000; Wie, 2003). The impacts generated by cruise activity are not limited to the country, the cruise company benefits, but much more, they are spread directly or indirectly, to countries/ regions visited by cruise ships. Up to recently the interest for the determination and quantification of these impacts to economy was limited, especially to European countries, because the so far existed studies come from America, Canada and Australia. (Klein 2003; ICCL 2003; Dwyer & Forsyth 1998). Of course, apart from the economic impacts that a national economy profits, cruise activity as every economic activity, creates social and environmental impacts as well. The most obvious are the modifications in natural and built environment: for example the port’s infrastructure serving cruise ships. Denature, can...
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