Independent and Objective Economic Report Commissioned by Historic Charleston Foundation: The Cruise Industry in Charleston: A Clear Perspective

Publisher: Historic Charleston Foundation
Date: 02/08/2012
Website: The Cruise Industry in Charleston: A Clear Perspective (pdf)

Since early 2010, Historic Charleston Foundation has facilitated inclusive community dialogue concerning the landside impacts of the cruise industry, relating specifically to the historic district of downtown Charleston. The Foundation’s most recent advocacy work includes commissioning an independent report on the economic impacts of the cruise industry in Charleston. The report provides an objective analysis and perspective on the economic impacts of the cruise industry to the City, providing the community fact-based statistics on which to make informed decisions.

The Foundation researched economic firms in March 2011, and hired Miley & Associates, Inc., a well-known economic consulting firm in South Carolina and the author of other high profile economic impact reports. The Foundation-commissioned report is titled The Cruise Industry in Charleston: A Clear Perspective.

Recognizing the significance of the State Ports Authority to Charleston and the state of South Carolina, this report clarifies the key issues concerning the City of Charleston and its residents. This report also considers the costs of the cruise industry to the City of Charleston and provides the community with findings related to: trends in the cruise industry, its economic impacts, as well as opportunity costs and quality-of-life issues inherent to the cruise industry in Charleston’s historic district.

“Because some of the impacts accrue to surrounding cities and towns, the direct economic impact on the City of Charleston’s historic district is minor,” said Harry Miley, President of Miley & Associates, Inc. “While the State Ports Authority is a major employer in the state of South Carolina, the recommendation to limit the volume and size of the cruise industry would not affect any jobs related to the existing cruise business in Charleston today.”

The report addresses some of the benefits of the industry as well as some of the risks, such as:

–  A visitor staying in Charleston spends a longer time and more money than the typical cruise ship visitor.  If the cruise business becomes too large it could displace other visitors to Charleston.
–  The industry typically attempts to maximize the spending by the passengers onboard the ship and minimize the spending by the passengers when they are off the ship.
–  The hotels that are most impacted are not in the City of Charleston.
–  The potential for spending in the City by Carnival passengers is relatively limited due to the timing of embarking and disembarking of passengers.

“Details of the scheduling and logistics of passengers and suppliers coupled with the extremely efficient operating techniques of the cruise industry leave little room for positive economic impacts on the City,” said Miley. “This report estimates that the State Ports Authority will collect as much as $10 million in parking and head tax fees in a typical year from the cruise industry. None of these revenues goes to the City of Charleston.”

The report concludes with several recommendations:

–  The City should ensure that the cruise industry is managed and controlled, as are virtually all other attractions and activities governed by the City.
–  As a major stakeholder in the process, the City should become more involved with the negotiations with the cruise industry and the State Ports Authority.
–  The City should negotiate with the State Ports Authority and cruise industry to impose a reasonable passenger fee to help offset costs that the City may incur serving the cruise industry. With these funds, the City should create an “Infrastructure Fund” to offset the cost of infrastructure improvements that will be required for the redevelopment of the southern portion of Union Pier and the special initiatives presented in the Union Pier Concept Plan. Such improvements could benefit the cruise industry as well as other sectors of the local economy.

To read the executive summary of The Cruise Industry in Charleston: A Clear Perspective, visit www.historiccharleston.org/cruisereport. Funding for this objective report was made possible in part through a contribution by the National Trust for Historic Preservation.

The Foundation will continue to work toward the provision of a productive solution to the quality of life in Charleston as it has over the past two years on the subject. For more information and a timeline of the Foundation’s advocacy efforts, visit www.historiccharleston.org/hotissues.

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