Contribution of Cruise Tourism to the economy of Spain

Contribución económica del turismo de cruceros a España en 2008

BREA

Business Research & Economic Advisors

Contribution of Cruise Tourism to the Economies of Europe 2008

Country Report France

Prepared for

The European Cruise Council Euroyards

September 2009

BREA

Business Research & Economic Advisors

Contribution of Cruise Tourism to the Economies of Europe 2008

Country Report France

Prepared for

The European Cruise Council Euroyards

September 2009

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e-CruisesNews Septiembre 2009 • www.crucero10.comEconomic Impact of European Cruise Tourism Spain

SpainIncluding the Canary Islands, Spain is the third largest destina-tion market for cruise passengers in Europe behind Italy and Greece with some 3.6 million cruise passengers having visited Spanish ports in 2008. In addition over 1 million passengers embarked on cruises from Spanish ports in 2008, the second highest country total behind Italy. While Spain does partici-pate in all aspects of the cruise industry, passenger and cruise line spending accounts for nearly 80% of the cruise industry’s direct expenditures in Spain.

Quick Facts

Major cruise ports: Barcelona, Palma Majorca, Port Mahon, Ibiza, Valencia, Alicante, Cartagena, Malaga, Cadiz, Vigo, A Coruna and the Canary Islands, which comprise Las Pal-mas, Santa Cruz and Arrecife.

Global cruise passengers sourced from Spain: • 2005: 379,000 • 2006: 391,000 • 2007: 518,000 • 2008: 497,000

Cruise passengers embarking on cruises from Spanish ports: • 2005: 586,700 • 2006: 716,400 • 2007: 918,000 • 2008: 1,038,000

Cruise passenger visits to Spanish ports-of-call: • 2005: 2,600,000 • 2006: 2,778,000 • 2007: 3,191,000 • 2008: 3,600,000

Cruise industry expenditures in Spain: • 2005: € 683 million • 2006: € 780 million • 2007: € 947 million • 2008: €1,078 million

Total employment generated by the cruise industry: • 2005: 13,940 • 2006: 15,496 • 2007: 18,977 • 2008: 22,397

Total employee compensation generated by the cruise indus-try: • 2005: €422 million • 2006: €480 million • 2007: €601 million • 2008: €693 million

Direct Cruise Industry Expenditures

Cruise tourism generated €1.08 billion in direct expenditures in Spain in 2008, nearly 8% of the industry’s direct expenditures throughout Europe and an increase of 14% over 2007. As indicated in the following figure, these expenditures were broadly distributed across the major source segments: passen-gers, shipbuilding, cruise line purchases and compensation of cruise line employees.

Cruise Line Purchases

Cruise lines spent an estimated €442 million, 41% of the total, with Spanish businesses in support of their administrative and operating activities. As indicated in the following table expen-ditures by the cruise lines in 2008 fell slightly compared with 2007, reflecting the 4% decline in the Spanish cruise market.

These purchases included a broad range of products and ser-vices and impacted most major industries in the country. Among the major industries that were impacted by cruise tour-ism expenditures were:

Food and beverage manufacturers received €12 million in purchases for provisions consumed on board cruise ships.

Manufacturers of nondurable goods in Spain provided €86 million in goods to the cruise industry. The primary goods were bunker fuels, lubricants and other chemical products, such as paints and cleaning supplies.

Direct Cruise Industry Expenditures in Spain, 2008 €1.08 Billion

Passengers€386 36%

Ship Repair€217 20%

Emp. Comp.€33 3%

Cruise Line Purchases

€442 41%

Producers of durable goods, primarily electrical and nonelectrical machinery used onboard cruise ships and in administrative offices received €72 million from cruise lines operating in Europe.

An estimated €63 million in commissions were paid to Span-ish travel agents (included in Transportation and Utilities).

The cruise industry spent €71 million on financial and busi-ness services including: insurance, advertising, engineering and other professional services, computer programming and support services and direct mail and market research.

Direct Cruise Line Expenditures by Industry, 2007 and 2008 (Excluding Ship Repair)

Industry Expenditures(Millions)

Shareof

Total

2007 2008 2008Agr., Min. & Construction € 2 € 2 0.5% Manufacturing € 124 € 170 38.2% Food & Tobacco € 16 € 12 2.7% Nondurable Goods € 62 € 86 19.2% Durable Goods € 46 € 72 16.3% Wholesale Trade € 25 € 39 8.8% Transportation & Utilities € 167 € 128 29.1% Finance & Business Services € 94 € 71 16.2% Personal Services & Gov’t € 41 € 32 7.2% Total € 453 € 442 100%

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Cruise Passengers

Passengers spent an estimated €386 million at ports-of-embarkation and call, accounting for 36% of total cruise indus-try expenditures in Spain.

The 497,000 passengers sourced from Spain and the 1.038 million cruise passengers that embarked on their cruises from Spanish ports accounted for 56% of all passenger spending in Spain. They spent an estimated €215 million on airfares, port fees, lodging, food and beverages, excursions and other purchases at the embarkation ports.

Nearly 3.6 million cruise passengers visited Spanish ports-of-call. The top four destinations in Spain accounted for more than 75% of port-of-call visits.

• Barcelona: 925,000 • Canary Islands: 800,000 • Balearic Islands: 720,000 • Malaga: 325,000

These visits generated an additional €171 million in expen-ditures for tours, food and beverages and other merchan-dise.i

Combining the 1.038 million embarkations and the 3.6 million port-of-call visits and excluding airfares, each passenger visit at a Spanish port generated an average expenditure of nearly €66 per passenger visit.

Compensation of Cruise Line Employees

Cruise lines spent an estimated €33 million on compensation for employees who resided in Spain during 2008. These ex-penditures accounted for 3% of total cruise industry expendi-tures in the country. The cruise lines employed approximately 1,200 residents of Spain in their administrative offices and as crew onboard their ships.

Ship Repair

The cruise industry spent an estimated €217 million with Span-ish shipyards primarily for the maintenance of existing cruise ships, 20% of total cruise industry expenditures in Spain.

The Economic Benefits of Cruise Tourism

The €1.08 billion in direct cruise tourism expenditures in Spain during 2008 generated an estimated 22,397 jobs (direct, indi-rect and induced). This was an 18% increase over 2007.

i Note that the data shown here for Barcelona and the Balearics (mainly Palma) in particular exclude homeport calls.

Total Employment Impact in Spain, 2008 22,397 Jobs

Direct Jobs9,43442%

Indirect Jobs8,88640%

Induced Jobs4,07718%

Direct Economic Impacts

The direct economic impacts of the cruise industry in Spain are derived from a broad range of activities including:

port services and cruise industry employment; transportation of cruise passengers from their place of resi-dence to the ports-of-embarkation; travel agent commissions; spending for tours and pre- and post-cruise stays in port cities of Spain; passenger spending for retail goods in Spanish port cities; andpurchases of supplies by the cruise lines from businesses in Spain.

The 9,434 direct jobs that were generated by cruise-related expenditures paid €311 million in employee compensation. These jobs included the employees of the cruise lines, the di-rect suppliers to the cruise lines and the employees of those establishments that provide goods and services to cruise pas-sengers. As shown in the following table, the total direct em-ployment impact increased by 17% and the wage impact rose by 7% from 2007.

Direct Cruise Industry Economic Impacts by Industry, 2007 and 2008

Industry Direct Jobs

Direct Wages

(Millions)

Direct Jobs

Direct Wages

(Millions)2007 2008

Agric., Min. & 23 € 1 21 € 1 Manufacturing 2,479 € 83 3,138 € 98 Nondurable Goods 543 € 14 389 € 20 Durable Goods 1,936 € 69 2,749 € 78Wholesale & Retail 598 € 11 950 € 17 Transport & Util. 3,266 € 125 3,430 € 126 Hospitality 378 € 11 476 € 14 Finance & Business 1,065 € 34 1,209 € 39 All Other Sectors 236 € 25 210 € 16 Total 8,045 € 290 9,434 € 311

Includes Spanish employees of the cruise lines and their compensa-tion.

** Compensation is less than €500,000.

The direct jobs generated by the cruise industry are located on cruise ships, at manufacturing plants that provide goods con-sumed by passengers and crew on cruise ships and structural metal products and machinery used in ship building and repair, and tour operators that provide shore excursions purchased by cruise passengers.


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e-CruisesNewsBoletín informativo nº 12 - Abril 2009

www.olpress.es

MSC Cruceros reafirma su compromiso con el cliente

potenciando el servicio y la atención al pasajero La

compañía realza la Dirección de Atención al Cliente

e incorpora el Servicio de Conserjería en todos los

barcos de la compañía. Dos buenas noticias para los

amantes de la compañía de bandera italiana.

Royal Caribbean International pro-

pone para 2010 una oferta sin lí-

mites en Europa gracias al desplie-

gue de 8 de sus barcos que rea-

lizarán cruceros de 4 a 14 noches

de duración en el Mediterráneo,

Norte y Este de Europa, así como

extensiones en tierra de 3 a 5 no-

ches. Los barcos surcando aguas

europeas serán el Independence of

the Seas (clase Freedom), el mayor

barco del mundo y el que cuenta

con la mayor oferta de animación

para sus huéspedes; 3 barcos de la

clase Voyager por primera vez jun-

tos en Europa: Adventure of the

Seas –que hará su debut en Europa

posicionado en Málaga-, el Navi-

gator of the Seas y el Voyager of

the Seas; 2 barcos de la clase Bri-

lliance: el Brilliance of the Seas y

el Jewel of the Seas; y 2 barcos de

la clase Vision: el Splendour of the

Seas y el Vision of the Seas. Todos

ellos cubrirán un total de 59 iti-

nerarios por Europa, visitando 22

países y 55 puertos.

La compañía italiana MSC Cruceros, una

de las principales empresas del sector cru-

ceros en el mundo, ha potenciado la figura

de la Dirección de Atención al Cliente en

toda su flota con unas funciones muy es-

pecíficas, a la que se une también ahora un

nuevo Servicio de Conserjería. Ambos se

encuentran totalmente integrados dentro

de los servicios habituales que ofrecen to-

dos los barcos de la naviera. La consolida-

ción de la Dirección de Atención al Cliente

y la creación del Servicio de Conserjería

forman parte del firme compromiso de

MSC Cruceros con todos sus clientes. El

equipo de atención al cliente de la compa-

ñía detecta en ocasiones ciertas eventua-

lidades de los pasajeros incluso cuando el

crucero ha terminado.

MSC Cruceros apuesta por incrementar y

potenciar la atención de sus pasajeros

La compañía se posiciona fuertemente en el mercado español

Newscruises

TEAM construirá dos

pasarelas en Marsella

TEAM ha recibido un contrato de Mar-

seille Provence Cruise Terminal (MPCT)

para diseñar, construir e instalar dos pa-

sarelas de embarque de pasajeros de la

gama HYDRA para la terminal de cruce-

ros en Marsella, Francia. Dichas pasare-

las estarán operativas en 2009.

Royal y Málaga estrechan más su colaboración

Royal Caribbean y el Ayuntamiento de

Málaga han querido presentar a la pren-

sa y a la industria turística su apuesta

por la ciudad de Málaga como base de

operaciones para dos de los barcos de

la naviera. Royal Caribbean Internatio-

nal apuesta firmemente por Málaga y

muestra de ello es el posicionamiento

de dos de sus barcos en el puerto de la

ciudad. El primero, el Navigator of the

Seas, que en el otoño de 2009 realizará

Escapadas –cruceros de 5 noches-; y el

segundo, el Adventure of the Seas, que

en el verano de 2010, estará posiciona-

do durante toda la temporada realizan-

do cruceros de 7 días.

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During 2008, Spanish manufacturers employed over 3,100 workers, 33% of the direct jobs, to provide the cruise indus-try with a wide range of goods. These workers were paid €98 million in compensation which accounted for nearly 32% of the direct compensation impacts

• Durable goods manufacturers accounted for 88% of the direct manufacturing impacts in Spain. Businesses in this segment of manufacturing employed an estimated 2,749 workers in 2008 primarily in the construction of fabricated metal products and machinery. The im-pacted employees in this industry received €78 million in compensation.

• A little under 400 jobs were generated in nondurable goods industries which, in turn, produced €20 million in employee income. These workers primarily pro-duced food and beverage and other hotel items used and consumed on cruise ships.

The Wholesale and Retail Trade sector employed an esti-mated 950 workers, 10% of the direct employment impacts. These employees were paid wages and benefits of €17 mil-lion.

The Transportation and Utilities sector employed an esti-mated 3,430 workers, 36% of the total direct jobs, in support of the cruise industry. These included employees of the cruise lines, truckers who deliver goods to cruise ships, and tour operators that provide onshore excursions for cruise passengers. Also included are employees in the power gen-eration and communication industries. In aggregate these workers received €126 million in compensation, 41% of the direct compensation impacts in Spain.

An estimated 1,209 persons were employed by financial and business service providers. These included employees of in-surance companies and agencies, advertising and market re-search firms, computer programming companies, engineer-ing and management consulting firms, law firms and ac-counting agencies. Their compensation totaled an estimated €39 million.

An estimated 476 workers were employed in hotels, restau-rants and amusement enterprises as a direct result of passen-ger spending as part of their cruise vacations. These work-ers were paid an estimated €14 million in wages and bene-fits.

Finally, an estimated 231 jobs were generated elsewhere in the Spanish economy, principally personal services and gov-ernment that yielded €17 million in income. These included photographers, health care employees and social service providers among others.

Direct Employment by Sector, 2008 9,434 Jobs

3,13833%

95010%

3,43036%

4765%

1,20913%

2313%

Manufacturing Wholesale & Retail Trade Transportation & Utilities

Hospitality Financial & Business Services All Other Sectors

Indirect and Induced Economic Impacts

The indirect economic benefits derived from the cruise indus-try result in part from the additional spending by the suppliers to the cruise industry. For example, food processors must pur-chase raw foodstuffs for processing; utility services, such as electricity and water, to run equipment and process raw materi-als; transportation services to deliver finished products to the cruise lines or wholesalers; and insurance for property and employees. Consequently, the indirect jobs are generated in virtually every industry with a concentration in those industries that produce goods and services for business enterprises.

The induced economic benefits are derived from the spending activities of those directly and indirectly employed as a result of the European cruise industry. This spending supports jobs in retailing, the production of consumer goods, residential housing and personal and health services.

As indicated in the following table, an estimated 12,963 indi-rect and induced jobs were generated throughout Spain by the cruise industry in 2008. These jobs generated €382 million in employee compensation. Relative to 2007, the indirect and induced employment impacts increased by 19% and the com-pensation impacts increased by 23%.

Indirect and Induced Economic Impacts by Industry, 2007 and 2008

Industry

Indirect&

InducedJobs

Indirect&

InducedWages

(Millions)

Indirect&

InducedJobs

Indirect&

InducedWages

(Millions)2007 2008

Agric., Min. & Constr. 2,109 € 39 2,422 € 49 Manufacturing 2,203 € 58 2,582 € 68 Nondurable Goods 1,271 € 28 1,460 € 32 Durable Goods 932 € 30 1,122 € 36 Wholesale & Retail 1,005 € 18 1,213 € 22 Transportation & Util. 1,441 € 57 1,729 € 68 Hospitality 170 € 6 193 € 7 Finance & Business 1,593 € 51 1,913 € 62 All Other Sectors 2,411 € 82 2,911 € 106 Total 10,932 € 311 12,963 € 382

Transportation equipment includes shipbuilding, but also the manu-facture of other transportation equipment, such as automobiles, bus-es, trucks, airplanes, railroad stock and so on.



The indirect and induced impacts of cruise industry spending generated nearly 2,600 jobs within the Manufacturing sector during 2008, 20% of the total indirect and induced employ-ment impacts. Nearly 57% of these jobs were in nondurable goods industries, highlighting the importance of provision-ing cruise ships and the impact of the induced economic im-pacts. Impacted manufacturing employees were paid an es-timated €68 million in compensation.

The Finance and Business Services sector accounted for 15% of the indirect and induced employment impacts and 16% of the compensation impacts with an estimated 1,913 jobs and €62 million in wages and benefits. The indirect impacts measured in this sector are primarily concentrated in the insurance, legal, accounting and professional services industries.

The Transportation & Utilities sector in Spain benefited from an estimated 1,729 indirect and induced jobs, 13% of the total indirect and induced employment impacts. This re-flects the strong inter-industry linkages within the transpor-tation sector, as well as, the heavy usage of a variety of transportation services to supply businesses with their inputs and to deliver consumer goods to retail outlets. These work-ers were paid an estimated €68 million in compensation.

Combined, the Trade and Hospitality sectors benefited from 1,406 indirect and induced jobs, 11% of the indirect and in-duced employment impacts. The trade jobs were primarily among wholesale trade establishments, while the hospitality jobs were concentrated among hotels and eating and drink-ing establishments. Compensation of these workers totaled €29 million.

The remaining industries, which include Agriculture, Min-ing, Construction, Personal Services and Government bene-fited with an estimated 5,333 jobs and €155 million in em-ployee compensation.

Indirect and Induced Employment by Sector, 2008 12,963 Jobs

2,58220%

1,2139%

1,72913%

1932%

1,91315%

5,33341%

Manufacturing Wholesale & Retail Trade Transportation & UtilitiesHospitality Financial & Business Services All Other Sectors

Total Employment Impacts

As indicated in the following table an estimated 22,397 total jobs, comprising direct, indirect and induced employment, were generated throughout Spain by the cruise industry in 2008. The workers who held these jobs earned €693 million in employee compensation. The total employment impacts in Spain in 2008 increased by 18% from 2007 while the total compensation impacts rose by 15%.

Total Cruise Industry Economic Impacts by Industry, 2007 and 2008

Industry TotalJobs

TotalWages

(Millions)

TotalJobs

TotalWages

(Millions)2007 2008

Agric., Min. & Constr. 2,132 € 40 2,443 € 50 Manufacturing 4,682 € 141 5,720 € 166 Nondurable Goods 1,814 € 42 1,849 € 52 Durable Goods 2,868 € 99 3,871 € 114 Wholesale & Retail 1,603 € 29 2,163 € 39 Transportation & Util. 4,707 € 182 5,159 € 194 Hospitality 548 € 17 669 € 21 Finance & Business 2,658 € 85 3,122 € 101 All Other Sectors 2,647 € 107 3,121 € 122 Total 18,977 € 601 22,397 € 693

Includes Spain employees of the cruise lines and their compensa-tion.

Transportation equipment includes shipbuilding, but also the manu-facture of other transportation equipment, such as automobiles, bus-es, trucks, airplanes, railroad stock, etc.

Manufacturers in Spain employed 5,720 workers, 26% of the total jobs, and paid them €166 million in wages and benefits.

Finance and Business Services accounted for 14% of the total employment impacts with an estimated 3,122 jobs and €101 million in compensation.

Combined, the Trade and Hospitality sectors accounted for 13% of the total employment impacts with just over 2,832 total jobs and €60 in employee income.

Transportation & Utilities accounted for 23% of the total employment impacts with an estimated 5,159 jobs, including the administrative staff and crew of the cruise lines that re-side in Spain. These workers received €194 million in re-muneration.

An estimated 5,564 total jobs, amounting to 25% of the total employment impacts were generated in the remaining sec-tors of Spanish economy. These jobs were concentrated in the agriculture, mining, personal services and construction industries. These workers were paid €172 million in wages and benefits.

Total Employment by Sector, 2008 22,397 Jobs

5,72025%

2,16310%

5,15923%

6693%

3,12214%

5,56425%

Manufacturing Wholesale & Retail Trade Transportation & UtilitiesHospitality Financial & Business Services All Other Sectors

Thus, in Spain nearly 21 jobs were generated for every €1 mil-lion in direct cruise industry expenditures. Furthermore, the average job generated by the cruise industry paid nearly €31,000 in employee compensation.



Given the direct impacts of 9,434 jobs and €311 million in employee compensation, the effective economic multipliers for the cruise industry in Spain were 2.37 for employment and 2.23 for compensation.


Contribution of Cruise Tourism to the economy of Spain

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