This story first ran in The Macdonald Notebook in December.

By Andrew Macdonald

While the movement of container boxes in the Port of Halifax is the heart of the port’s economy, a bright light is the cruise ship industry.

This week the Karen Oldfield-led Halifax Port Authority reported another record cruise season, which runs from April to the first week of November.

“It is another record cruise season for the Port of Halifax. In 2018, Halifax received 316,869 guests on 198 vessel calls,” noted port authority spokesperson Lane Farguson.

“This is an eight per cent increase in the number of cruise guests over 2017 and a 14 per cent increase in the number of vessel calls,” he added.

Prior to this, 2017 had been the busiest year for cruise calls in Halifax for both passenger visits and vessel calls.

Most of the cruise ships depart New York, and sail for seven days or so around the East Coast. Ships that call Halifax, also call Sydney, Charlottetown, Saint John, as well as Quebec and Montreal.

In Halifax, the cruise ships have direct economic impacts for tour operators and providers, tourism agencies, cruise vendors, restaurant staff and owners, shopkeepers, as well as gallery owners.

To understand the positive economic impact of the cruise ship industry in Halifax, the province and Atlantic Canada, I was directed by Catherine McGrail, associate VP strategy and innovation at the port, to a 2017 economic impact study by Business Research & Economic Advisors.

“Cruise activity at Atlantic Canada ports generated significant economic activity throughout the economy on both an industry and regional basis,” says the report.

This involves direct spending in a port call by cruise passengers, and also cruise line spending for goods and services necessary for cruise line operations, including food and beverages, fuel, vessel maintenance and repair, and ship supplies.

“During 2016, a reported 398 cruise ship calls were made at cruise ports in Atlantic Canada (and) nearly 575,000 passengers arrived in the Atlantic during the six month cruise season,” the study found.

“This was a 10.5 per cent decrease from the 643,000 passengers in 2012, and a 41 per cent increase from the 410,000 passengers in 2013, and an increase of seven per cent since 2014.”

Most of the cruise ship passengers visiting Halifax come from the U.S. Eastern Seaboard, mostly New Yorkers and Bostonians, says McGrail.

But, in 2016, the study found that 27,400 people originated on cruise ships from Atlantic Canada, a 16 per cent increase since 2012.

“Two provinces, Nova Scotia and New Brunswick, accounted for 70 per cent of the Atlantic Canadian passengers in 2016.”

In 2016, cruise ship-related spending totalled $103 million in Atlantic Canada, says the study. This involved $50 million being spent in 2016 by cruise lines in the region. Total passenger expenditures in the region tallied $44 million, and crew members spent a total of $9 million.

The study noted that cruise ships purchase a variety of goods and services in support of their cruises, including food and beverages, hotel supplies, bunker fuels, and utilities while in port, while passengers and crew members buy retail products.

Total spending of $103 million in 2016 represents an increase of 20 per cent on all spending in 2012, which then totalled $86 million.

In 2016, the international shipping lines spent $50 million on businesses operating in the Atlantic.

Broken down, that meant that $7 million that year was spent on businesses offering admin and professional services, operating expenses of $43 million, $5 million on food and beverage spending, and $3 million on regional travel agent commissions (spent by the 27,000 Atlantic Canadians buying cruise packages).

Regional ship agents, stevedores, passenger and crew onshore transportation accounted for $26 million in spending during the year of the study.

Passenger spending involved lodging, tours and onshore transportation, food and beverages, and other retail purchases.

In 2016, of the 576,000 passengers visiting Atlantic Canada, 92 per cent disembarked and toured the regional ports during the ship calls.

“Cruise passengers spent $42.8 million on goods and services throughout Atlantic Canada in 2016, for an average per passenger expenditure of nearly $81 million.

Sydney and Halifax accounted for $23.7 million in passenger spending or 55 per cent of all regional cruise passenger visits.

The Port of Saint John saw passenger spending reach $10.9 million on onshore spending, while Charlottetown had the highest passenger spending of an average of $100, for a total of $6.1 million in onshore spending.

In Halifax, passengers spent $8.9 million on local tours and transportation. The king of the local Halifax tour industry is Dennis Campbell’s Ambassatours. Passengers spent $3.1 million on food and beverages, and a further $6.5 million on ‘other retail’ purchases.

“Retail goods, such as clothing and souvenirs accounted for 34 per cent of passenger expenditures, while food and beverages accounted for the remaining 15 per cent of passenger expenditures.”

Also, a significant cruise spinoff is the actual crew member visits and spending at each Atlantic Canada port of call. An estimated 107,951 crew member visits resulted in spending of $8.5 million.

The study found that meant $5.1 million in crew member spending in Halifax alone in 2106, representing 60 per cent of the regional staffing expenditures.

“The major difference between crew and passenger spending,” the report found, “is that tours only accounted for six per cent of crew expenditures, while tours absorbed 51 per cent passenger expenditures.”

Of the $44 million crew spent in Halifax during the study year, $2.1 million consisted of food and beverage purchases.

While most passengers arrive from a port departure in New York or Boston, the Atlantic Canada air industry saw some passengers fly to the region in 2016, spending $400,000 on airline seats, while the 27,000 regional passengers spent $300,000 on travel insurance, the study reports.

The total spent on cruise-related business in 2106, as I reported above tallied $103 million, representing a significant industry sector.

Broken down, spending by the cruise industry in this region on the goods-producing sector, tallied $23 million, a 23 per cent share of all expenditures.

The cruise lines spent $22 million in the manufacturing sector, and wholesale and retail trade spending accounted for $2 million.

The manufacturing spending in the region by the cruise lines involved food and beverage spending, and even crew uniforms, ropes, as well as linen and bedding.

The cruise lines also purchased machinery and equipment, including equipment for parts for engines HVAC, galley equipment and parts for ship engines, communication and navigation equipment, as well, found the study.

Of the $103 million spent by cruise lines in Atlantic Canada, that accounted for the creation of 790 full and part time jobs in the region—or a spend on payroll of $30.2 million.

Halifax and Sydney accounted for $63.8 million of the $103 million total spent in the region by the cruise-related industry. That meant $2.6 million spent in those two ports for food and beverage purchases.

There were 238,217 passenger visits to Nova Scotia in 2016, and they spent $8.9 million in Halifax and Sydney on tours and onshore transportation.

In those two ports, crew staff tallied 104,368 arrivals, and of that figure 44,356 did onshore visits, spending $2.1 million on food and beverage and a total of $1.6 million on other retail spending.

The industry spent $45 million on the transportation and warehousing sector in 2016 in the region.