As thousands of Puerto Ricans continue to protest every day in Old San Juan in a collective call for Gov. Ricardo Rosselló’s resignation, concerns have arisen regarding the impact of these demonstrations on the island’s tourism economy.
The Puerto Rico Tourism Co. (PRTC), warned last week that the cruise line Royal Caribbean had canceled the programmed stops of cruises Empress of the Seas, which had 1,718 passengers, and the Harmony of the Seas, with 6,546 passengers.
According to the PRTC’s executive director, Carla Campos, these arrivals would have contributed $657,154.39 to the tourism economy.
At a later date, the official said that Royal Caribbean and MSC would cancel stops that had been scheduled for Monday. These cruises, the Celebrity Equinox and MSC Seaside, would have reportedly contributed $311,000 and $439,000, respectively.
Between these four cancellations, the economic impact is estimated to be more than $1.4 million, when comparing the data provided.
Despite continuous protests, not all cruiseships have discarded the Port of San Juan.
The official also explained that Royal Caribbean’s Freedom of the Seas and Carnival Cruise Line’s Carnival Fascination used Old San Juan as their homeport on July 21 and everything transpired “with total tranquility.”
At the time of this writing, the PRTC informed that two more cruise ships, Royal Caribbean’s Anthem of the Seas and Carnival Cruise Line’s Carnival Conquest, would not make changes to their itineraries and arrive on Tuesday to the Port of San Juan at 6:30 a.m and 12:30 p.m., respectively. As of yet, no cruise lines have reported cancellations for the current week.
Tourism Co. enacting contingency plan in light of protests
“We remain in constant communication with all government agencies to update and bolster our contingency plan, as necessary, and with our industry partners to inform them of any future occurrence,” Campos added.
Moreover, Brad Dean, CEO of Discover Puerto Rico, the island’s destination marketing organization (DMO), said in an interview with THE WEEKLY JOURNAL that the organization and its key local partners are working together to identify options and services so that cruise lines continue their scheduled stops in Puerto Rico.
“In some cases, the Tourism Co. is making accommodations in terms of special services to assist [cruise lines] and, where possible, they will make the calls, but that usually depends on the cruise ships themselves,” said Dean, whose organization is in charge of marketing Puerto Rico’s tourism qualities to foreign markets.
For example, the Muelle Panamericano is being offered as a docking alternative. However, because of its size, it cannot cater to larger cruise ships that require greater water depth to make the stop.
“Overall, Puerto Rico remains very much open for tourism. All hotels, airports, and taxi services are operating normally, as well as a broad range of tourist attractions. Flights continue to arrive each day as scheduled,” Dean affirmed.
Regarding the possible strain that protests may have on the tourism economy, Dean said that, based on information shared between its local partners, “the impact on most businesses has been limited.”
Moreover, José Caraballo Cueto, an assistant professor at the University of Puerto Rico’s Cayey campus and director of the Census Information Center (CIC by its Spanish initials), told THE WEEKLY JOURNAL that a distinction needs to be made between cruiseships that set anchor on docks one through three and the ones that stop on the other side of the bay.
The former, he said, have less impact on the tourism economy, given that they only stop on the island for a couple of hours.
Caraballo Cueto stressed that the aforementioned cruise ship cancellations do not represent a heavy blow to the macro of this economic industry.
“Those visitors’ expenses are diminutive when we compare them to the big picture... Although it is true that those visits are the sustenance of some artisans and some restaurants that are located in that area, it will not cause brutal damage to the economy,” he stated.
Caraballo Cueto also stated that locals who were interested in visiting San Juan to consume specific products or services could simply opt to visit on a more tranquil day or take their pockets elsewhere.
Thus, he explained, some individual business owners could be affected, but not the economy as a whole.
The economist also noted that tourism economy only contributes around seven percent of Puerto Rico’s gross domestic product (GDP), a number that was echoed by Dean.
“Historically, Tourism has been 6 to seven percent of the GDP, most people are surprised to see that its contribution is so small... Today it’s 6 to seven percent, but we anticipate it being much larger in the future,” Dean said.
Dean added that one of Discover Puerto Rico’s goals is to double tourism’s current impact on the economy.
“Regardless of what plays out over the next few days or weeks, tourism is the way forward for Puerto Rico,” Dean said.
For his part, Caraballo Cueto said, “there are people who have said that tourism has a lot of potential. I know it has a lot of potential, but those cruise lines are not it.”
Concerning any possible impacts these protests could have, Dean said that Discover Puerto Rico had already reported record levels of people arriving in San Juan but visiting other parts of the island, so he cannot provide a solid comparison for the last couple of weeks.
“We do believe that there are more people visiting outside the metropolitan area, which has not been disrupted for the most part by any of these events. That was happening before the events took place, so I don’t know that I can draw any comparisons from the last couple of weeks,” Dean said.
Both he and Caraballo Cueto noted that Puerto Rico needs to promote other tourist attractions and destinations beyond San Juan and the rest of the metropolitan area, which are the areas experiencing the largest demonstrations—with the largest being Monday’s general strike, which saw a blockage of the Las Américas expressway and the interrupted schedule of Plaza Las Américas, the largest shopping center in the Caribbean.
Moreover, Caraballo Cueto observed that some individuals are directly benefitting from these protests, such as Uber drivers and walking merchants who are selling Puerto Rico flags, refreshments and other items.
“In individual terms, yes, there are some business owners and employees who can be negatively impacted. Meanwhile, there are others who are benefitting from this... But in the macro, the greatest impact to the economy per se are not protests or these cruiseship cancellations,” he affirmed.
Corruption Allegations Responsible for Possible Economic Strain
Despite the ongoing emphasis on the tourism economy, Caraballo Cueto stressed that protests are not the cause of any potential economic blunder; but rather, ongoing international media coverage regarding the corruption allegations surrounding the current administration.
This, due to a profanity-laced chat in which Gov. Rosselló, key Cabinet members and individuals in the private sector incurred in such questionable conduct as discussing public policy with non-government employees and making light out of situations impacting Puerto Rico’s most vulnerable communities.
The Puerto Rico Bar Association released a statement last week indicating that this and other topics discussed provided enough reason for the Legislature to initiate an impeachment process, given that Rosselló has doubled down on retaining his title despite numerous calls for his immediate resignation.
Additionally, on July 10 federal officers issued arrest warrants for prominent officials and contractors over wire fraud, conspiracy and money laundering charges. Two of these officials included the former secretary of Education, Julia Keleher, and the former director of the Health Services Administration (ASES by its Spanish acronym), Ángela Ávila.
Caraballo Cueto said that these events, not the protests, could lead the U.S. Congress to deny Puerto Rico billions in federal funds. Specifically, he pointed to the $12 billion currently under consideration for Medicaid in Puerto Rico. He also noted that the island still requires federal funding to recover from 2017s Hurricane Maria.
“It is fair to say that Puerto Rico’s reconstruction is not even halfway... And [these events] give credit to arguments made by republicans, including [President] Donald Trump, who have never been pleased with the amount assigned for recovery. It gives credit to the argument, which they have used from the start, that we cannot give money to Puerto Rico,” the economist said.
White House Press Secretary affirms
That impact, he affirmed, should be a primary concern amid these trying times on the island.
“That is the one that worries us [economists], in terms of recovery, because you don’t need to redo the fiscal plan over those tourist visits’ cancellations. But, if Congress starts blocking aid to Puerto Rico, then perhaps the fiscal plan will have to be recalculated because it was already relying on those funds for a monumental recovery, and with that they were going to increase the government’s revenues so as to be able to pay back bondholders,” Caraballo Cueto said.
Editor's note: This story was published on the July 24 print edition of The Weekly Journal.