BREA
Business Research & Economic Advisors

The Contribution of the North American Cruise Industry to the U.S. Economy in 2008

Prepared for:

Cruise Lines International Association June 2009

Business Research & Economic Advisors P.O. Box 955 Exton, PA 19341

Cruise Lines International Association

2008 U.S. Economic Impact Analysis

Table of Contents
EXECUTIVE SUMMARY .............................................................................................. 2 THE CONTRIBUTION OF THE NORTH AMERICAN CRUISE INDUSTRY TO THE U.S. ECONOMY ........................................................................................................................ 5 THE CONTRIBUTION OF THE NORTH AMERICAN CRUISE INDUSTRY TO INDIVIDUAL STATE ECONOMIES...................................................................................................................... 9 SECTION I: IMPACT OF THE NORTH AMERICAN CRUISE INDUSTRY ON THE U.S. ECONOMY IN 2008 ..................................................................................... 14 SPENDING IN THE U.S. ECONOMY GENERATED BY THE CRUISE INDUSTRY .................... 21 Direct Economic Impacts in the United States During 2008.................................... 24 Indirect and Induced Economic Impacts in the United States During 2008 ............ 36 Total Economic Impacts in the United States During 2008 ..................................... 39 SECTION II: THE CONTRIBUTION OF THE NORTH AMERICAN CRUISE INDUSTRY TO THE U.S. ECONOMY BY STATE IN 2007.................................... 43 ECONOMIC IMPACTS IN THE TOP TEN STATES................................................................ 44 Florida ...................................................................................................................... 46 California.................................................................................................................. 49 Alaska........................................................................................................................ 51 New York................................................................................................................... 53 Texas ......................................................................................................................... 55 Hawaii....................................................................................................................... 57 Georgia ..................................................................................................................... 59 Washington ............................................................................................................... 60 Illinois ....................................................................................................................... 62 Massachusetts ........................................................................................................... 63 ECONOMIC IMPACTS IN THE REMAINING STATES ........................................................... 66 APPENDIX I – STATE IMPACT METHODOLOGY ............................................................... 68 APPENDIX II – INDIVIDUAL STATE TABLES .................................................................... 72 SECTION III: GLOBAL INCOME OF THE NORTH AMERICAN CRUISE INDUSTRY IN 2007 ..................................................................................................... 100 GROSS REVENUES ........................................................................................................ 100 OPERATING EXPENSES ................................................................................................. 102 ADMINISTRATIVE EXPENSES ........................................................................................ 102 DEPRECIATION AND AMORTIZATION............................................................................ 103 OPERATING INCOME .................................................................................................... 103 EXPANSION OF THE NORTH AMERICAN FLEET THROUGH 2011 ................................... 104

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Executive Summary
On a global basis, the North American cruise industry experienced a deceleration in capacity growth during 2008. On a net basis, the North American fleet increased by two ships. During 2008, eight new ships were added to the fleet while six were sold and/or redeployed from the North American market. The new ships ranged in size from Royal Caribbean’s 3,534-passenger Independence of the Seas to Silversea’s 132-passenger Prince Albert II. In total the eight new ships added 20,722 lower berths for an 8-ship average of 2,590 lower berths. The six ships that were removed from the North American market had a combined capacity of 10,031 lower berths and, thus, on net the industry saw its lower berth capacity increase by 4.1 percent during 2008 to 270,664 lower berths. While still positive, this was the third year in a row in which the growth in capacity decelerated. As indicated in Table ES-1, the growth of available bed days increased by 6.1 percent in 2008, the same rate of growth as in 2007. Passenger carryings increased to 13.05 million guests from 12.56 million in 2007; however the annual rate of growth declined from 4.7 percent in 2007 to 3.9 percent in 2008. The average length of a cruise also increased from 7.1 days in 2007 to 7.2 days in 2008 while the capacity utilization dropped from 105.5% in 2007 to 104.2% in 2008. With the increase in the average length of a cruise, global passenger bed days1 increased slightly faster than passenger carryings, 4.8% versus 3.9%.
Table ES-1 – Global Summary Statistics for the North American Cruise Industry, 2005 - 2008
2005 Capacity Measures Number of Ships Lower Berths Available Bed Days (Millions) Global Passengers Global Passengers (Millions) Global Passenger Bed Days (Millions) Capacity Utilization (Bed Days) Gross Revenues ($ Billions) Gross Revenues per Passenger Gross Revenues per Passenger Cruise Day 145 225,364 75.26 11.18 77.71 103.3% $ 19.17 $ 1,715 $ 247 $ $ $ 2006 151 244,271 79.92 12.00 83.05 103.9% 20.64 1,720 249 $ $ $ 2007 159 259,973 84.80 12.56 89.45 105.5% 22.82 1,817 255 $ $ $ 2008 161 270,664 89.96 13.05 93.75 104.2% 24.88 1,907 265 Average Annual Growth 2005 2006 2007 4.3% 2.4% 7.6% 3.1% 5.2% 13.8% 10.4% 8.2% 4.1% 8.4% 6.2% 7.3% 6.9% 7.7% 0.3% 0.7% 5.3% 6.4% 6.1% 4.7% 7.7% 10.6% 5.7% 2.7% 2008 1.3% 4.1% 6.1% 3.9% 4.8% 9.0% 5.0% 4.0%

Number of ships and lower berths are for CLIA ocean-going vessels only. Bed day figures are for CLIA member lines only. Source: Business Research & Economic Advisors and Cruise Lines International Association

1 Passenger bed days are the number of days that all berths were occupied during 2008. For example, a single passenger on a 7-day cruise represents one passenger carrying and 7 passenger bed days.

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On the financial front, the industry was able to increase revenues per passenger cruise day by 4.0 percent. Combining that increase with the increase in the average length of a cruise, gross global industry revenues increased by 9.0 percent during 2008 to $24.9 billion. The impact of the North American cruise industry in the United States was not quite so positive in the United States. First, the cruise industry continued to increase its European presence. Second, the dollar continued to decline throughout most of 2008 which favored dollar-denominated cruises relative to land-based vacations in Europe. Third, the industry also increased the number of Caribbean ports used for cruise embarkations. As a result, the United States not only continued to experience a decline in its share of global cruise activity but experienced an actual decline in the number of passengers embarking from U.S. ports. During 2008 passenger embarkations at U.S. ports totaled nearly 8.96 million, a 2.4 percent decline from 2007 and a 69 percent share of global embarkations (see Table ES-2).
Table ES-2 – Operating Statistics of the North American Cruise Industry in the United States, 2005 – 2008
2005 Carryings (Millions) Global Passengers Passengers Residing in the U.S. U.S. Embarkations Industry Spending in U.S. ($ Billions) Cruise Lines Goods and Services Capital Expenditures (incl. net interest) Passengers and Crew Wages & Taxes Paid by Cruise Lines Total U.S.-based Spending 11.18 9.06 8.61 $ 14.99 $ 11.76 $ 10.11 $ 1.65 $ 3.23 $ 1.19 $ 16.18 2006 12.00 9.36 9.00 $ 16.37 $ 12.89 $ 11.08 $ 1.81 $ 3.48 $ 1.27 $ 17.64 2007 12.56 9.45 9.18 $ 17.37 $ 13.74 $ 11.84 $ 1.90 $ 3.63 $ 1.33 $ 18.70 2008 13.05 9.29 8.96 $ 17.80 $ 14.40 $ 12.37 $ 2.03 $ 3.40 $ 1.27 $ 19.07 Annual Percent Change 2005 2006 2007 2008 6.9% 9.0% 6.3% 10.4% 9.9% 8.0% 22.9% 12.1% 6.8% 10.0% 7.3% 3.3% 4.5% 9.2% 9.6% 9.6% 9.5% 7.8% 6.9% 9.0% 4.7% 1.0% 2.0% 6.1% 6.6% 6.8% 5.3% 4.2% 4.3% 6.0% 3.9% -1.7% -2.4% 2.5% 4.8% 4.5% 6.7% -6.2% -4.4% 2.1%

Source: Business Research & Economic Advisors and Cruise Lines International Association

As recently as 2004, U.S. ports accounted for 77 percent of global passengers. There are several factors which have caused the decline in passenger embarkations from U.S. ports. 1. As indicated above, the North American cruise industry is continuing to increase its presence throughout Europe. In 2008, the industry deployed more than 60 ships with a combined capacity of 71,300 lower berths. This represented a 14 percent increase from 2007 and a 62 percent increase from 2005. 2. Hurricanes continued to disrupt cruise itineraries in the Caribbean. In particular Hurricane Ike disrupted both cruise destinations and homeports. The hurricane severely damaged the retail facilities at the port in Grand Turk (Turks & Caicos) closing the port for nearly one month while the hurricane ultimately made landfall in Galveston shutting down the port’s cruise terminal for nearly two months.

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3. Perhaps, most important to the decline in U.S. embarkations was the redeployment of Pride of Hawaii and the Pride of Aloha by NCL from Hawaii. As a result, embarkations in Hawaii declined by more than 200,000 accounting for 75 percent of the net decline in passenger embarkations at U.S. ports. The growth of U.S. resident cruise passengers has been steadily declining for the past 5 years and it also finally turned negative in 2008. Most of the decline took place during the second half of 2008 as the U.S. and global economies weakened and ultimately entered the worst recession in 25 years. This growth has steadily slowed from 13.9 percent in 2004 to -1.7 percent in 2008. Similarly, the growth in spending by the industry and its passengers in the United States has also slowed, increasing by just 2.1 percent to $19.07 billion in 2008. This was the weakest growth in domestic spending since BREA began compiling these statistics. The $15.67 billion in expenditures by the cruise lines for wages, taxes and goods and services accounted for 82 percent of the direct spending and was an increase of 4 percent from 2007. This was the weakest growth in cruise line expenditures since 2001 and was brought about by the 4.4 percent decline in wages and taxes paid the cruise lines in the United States. This drop is directly related to the redeployment of the two NCL ships from Hawaii and the replacement of their U.S. crew. The $3.4 billion in passenger and crew spending for transportation, accommodations, food and other retail accounted for the remaining 18 percent and declined by 6.2 percent from 2007. This decline was the result of a 2.0 percent decline in passenger and crew visits and a 4.2 percent decline in the average expenditure per visit. Again, the drop in Hawaii embarkations and their high level of per diem spending was a major cause in the decline in the average expenditure per visit. The major characteristics of the cruise industry’s activity during 2008 are as follows: By year-end 2008, the cruise industry’s fleet showed a net increase of 2 vessels to 161 vessels with a combined capacity of 270,664 lower berths (see Table ES-1). During 2008, the industry carried an estimated 13.05 million passengers on cruises around the globe. This represented a 3.9 percent increase from the previous year.

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Data published by Cruise Lines International Association (CLIA) shows that an estimated 9.3 million U.S. residents took cruise vacations throughout the world and accounted for 70 percent of the industry’s global passengers. An estimated 8.96 million cruise passengers embarked on their cruises at U.S. ports during 2008, accounting for 68 percent of global embarkations and represented a 2.4 percent decrease from 2007. Florida, whose ports handled approximately 5.1 million embarkations, accounted for 57 percent of all U.S. cruise embarkations). The cruise lines and their passengers directly spent $19.07 billion on goods and services in the United States, a 2.0 percent increase over 2007. The cruise lines spent $15.67 billion while passengers and crew spent $3.4 billion.
Figure ES-1 – U.S. Embarkations by Port, 2007 and 2008

2,250 2,000 1,750 1,500

Thousands

1,250 1,000 750 500 250 ‐

2007

2008

The Contribution of the North American Cruise Industry to the U.S. Economy
As discussed above, the North American cruise industry experienced mixed results for 2008. As indicated in Table ES-3, passenger embarkations at U.S. ports declined by 2.4 percent in 2008 to 8.96 million. This decline followed the trend of declining growth in passenger embarkations at U.S. ports that has been in place since 2004 which finally turned negative in 2008. The decline in embarkations resulted in a reduced rate of growth in passenger and

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cruise line spending. After increasing by 10.0 percent in 2005, 9.0 percent in 2006 and 6.0 percent in 2007, growth in total industry spending fell to 2.1 percent in 2008, and totaled $19.07 billion for the year.
Table ES-3 – Economic Contribution of the North American Cruise Industry, 2005 - 2008
2005 U.S. Passenger Embarkations (Millions) Direct Economic Impacts Passenger and Cruise Line Spending ($ Billions)* Employment Wages and Salaries ($ Billions) Total Economic Impacts Total Output ($ Billions) Employment Wages and Salaries ($ Billions) 8.61 2006 9.00 2007 9.18 2008 8.96 Average Annual Growth 2005 2006 2007 6.3% 4.5% 2.0% 2008 -2.4%

$ 16.18 142,720 $ 5.19

$ 17.64 153,863 $ 5.74

$ 18.70 158,376 $ 6.01

$ 19.07 155,020 $ 6.14

10.0% 5.6% 8.1%

9.0% 7.8% 10.7%

6.0% 2.9% 4.6%

2.1% -2.1% 2.2%

$ 32.43 330,346 $ 13.52

$ 35.73 347,966 $ 14.73

$ 38.01 354,690 $ 15.44

$ 40.24 357,710 $ 16.18

7.9% 4.6% 8.8%

10.2% 5.3% 9.0%

6.4% 1.9% 4.8%

5.9% 0.9% 4.8%

* Includes wages and salaries paid to U.S. employees of the cruise lines.

The expenditures by the cruise lines and their passengers and crew generated employment, income and other economic benefits throughout the U.S. economy. These economic benefits of the North American cruise industry arise from five principal sources: spending by cruise passengers and crew for goods and services associated with their cruise, including travel between their places of residence and the ports of embarkation and pre- and post-cruise vacation spending; the shoreside staffing by the cruise lines for their headquarters, marketing and tour operations; expenditures by the cruise lines for goods and services necessary for cruise operations, including food and beverages, fuel, hotel supplies and equipment, navigation and communication equipment and so forth; spending by the cruise lines for port services at U.S. ports-of-embarkation and ports-of-call; and expenditures by cruise lines for the maintenance and repair of vessels at U.S. shipyards, as well as capital expenditures for port terminals, office facilities and other capital equipment. The total contribution of the cruise industry to the U.S. economy is the sum of the direct and indirect economic impacts. The direct impacts consist of the expenditures made by the cruise lines and their crew and passengers during the course of providing or taking cruises. These included cruise line expenditures for headquarters operations, food and beverages provided onboard cruise ships and business services such as advertising and marketing. AdBusiness Research and Economic Advisors Page 6 June 2009

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ditionally, cruise passengers and crew purchase a variety of goods and services including clothing, shore excursions and lodging as part of their cruise vacation or as part of a pre- or post-cruise stay. These types of expenditures are included in the direct cruise industry expenditures. The expenditures of cruise line vendors and those businesses that provide the goods and services to passengers and crew generate the indirect impacts. For example, food processors must purchase raw foodstuffs for processing; utility services, such as electricity and water, to run equipment and process raw materials; transportation services to deliver finished products to the cruise lines or wholesalers; and insurance for property and employees. The major economic impacts of the cruise industry during 2008 as shown in Table ES-3 were as follows: Cruise passenger embarkations at U.S. ports declined by 2.4 percent during 2008 and totaled 8.96 million. The $19.07 billion in direct spending by the cruise lines and their passengers was a 2.0 percent increase over 2007 and generated 155,020 direct jobs paying $6.14 billion in wages and salaries. The industry spent $10.17 billion in the core cruise travel sector, primarily transportation services and passenger and crew spending. This spending generated 113,510 jobs and wage income of $4.19 billion. (see Table ES-4) The cruise lines directly employed an estimated 30,600 U.S. residents as shore-side staff and crew members, and paid them wage income of $1.2 billion. Cruise passengers and crew spent $1.7 billion in non-transportation expenditures creating an estimated 21,281 jobs in the retail trade, restaurant and lodging industries. These jobs generated $494 million in wage income. Cruise lines spent another $8.9 billion for goods and services from suppliers in the United States in support of their global cruise operations. This spending created an estimated 41,510 jobs in virtually all industries and generated over $1.96 billion in wage income. Including the indirect economic impacts, the spending of the cruise lines and their crew and passengers was responsible for the generation of $40.2 billion in gross output in the United States, a 5.9 percent increase over 2007. This, in turn, generated 357,710 jobs throughout the country paying a total of $16.2 billion in wages and salaries.

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Table ES-4 –Direct Economic Contribution of the North American Cruise Industry in 2008
Direct Spending $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 10,165 1,718 3,299 3,107 2,041 8,905 68 4,478 1,004 116 277 1,271 219 349 517 321 403 555 24 215 988 2,578 1,420 42 172 944 19,070 18,678 17,643 2.1% Wage Income $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,185 494 2,055 1,135 502 1,958 10 614 94 32 32 17 53 71 113 80 122 199 5 37 225 868 469 10 64 325 6,143 6,010 5,744 2.2%

Sector

Employment

Core Cruise Travel Sector Passenger & Crew Spending Port Services & Cruise Lines Transportation Services Air Transportation Cruise Industry Suppliers Agriculture, Mining, Utilities & Construction Manufacturing Food & Beverages Apparel & Textiles Chemicals & Plastics Petroleum Refining Fabricated Metal Products Industrial Machinery Ship Maintenance & Repair Computers & Electronic Equipment Other Manufacturing Wholesale Trade Other Transportation Services Information Services Finance, Insurance, Real Estate & Leasing Services & Government (ex. Lodging & Travel Services) Professional, Scientific & Technical Services Administrative & Waste Management Services Arts, Entertainment & Recreation Other Services & Government Total - 2008 Total - 2007 Total - 2006 Percentage Change from 2007

113,510 21,281 52,219 28,590 11,420 41,510 329 11,141 2,374 856 420 146 1,108 1,212 1,759 992 2,274 3,163 41 502 3,353 22,981 14,337 205 1,571 6,868

155,020 $ 158,376 $ 153,863 $ -2.1%

These total economic impacts affected virtually every industry in the United States. Over 60 percent of the $40.2 billion in total gross output and 40 percent of the 357,710 jobs generated by the direct and indirect impacts of the cruise industry affected seven industry groups as follows: Nondurable Goods Manufacturing Professional & Technical Services2 Travel Services3 Durable Goods Manufacturing Financial Services4 Airline Transportation
2

$5.7 Billion in Output $4.8 Billion in Output $4.2 Billion in Output $3.4 Billion in Output $2.4 Billion in Output $2.1 Billion in Output

14,627 Jobs 32,546 Jobs 54,442 Jobs 15,522 Jobs 11,576 Jobs 6,942 Jobs

Includes such services as legal services, advertising, management consulting, engineering and architectural services and computer consulting services.
3 4

Includes travel agents, ground transportation services and US-based shore excursions. Includes banking, investment and insurance services.

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Wholesale Trade

$2.0 Billion in Output

14,792 Jobs

Table ES-5 –Total Economic Contribution of the North American Cruise Industry in 2008

Sector
Agriculture, Mining, Utilities & Construction Manufacturing Food & Beverages Apparel Printing Chemicals & Plastics Petroleum Refining Fabricated Metal Products Industrial Machinery Transportation Equipment Computers & Electronic Equipment Other Manufacturing Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Accommodations & Food Services Performing Arts & Amusements Other Services & Government Total - 2008 Total - 2007 Percentage Change from 2007

Industry Output $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3,594 9,111 1,535 267 375 1,097 2,055 615 553 892 802 920 2,810 5,616 1,012 4,073 14,021 4,828 4,295 2,039 337 2,522 40,239 38,007 5.9%

Employment 7,192 30,153 4,375 2,821 1,949 2,885 816 4,036 2,208 3,388 3,266 4,409 35,295 67,301 3,427 17,082 197,260 32,546 61,856 38,112 6,270 58,476

Wage Income $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 563 1,821 188 120 112 227 57 210 131 230 303 243 1,586 3,204 255 1,117 7,638 2,510 1,943 775 199 2,211 16,184 15,437 4.8%

357,710 $ 354,690 $ 0.9%

The Contribution of the North American Cruise Industry to Individual State Economies
The economic impact of the North American cruise industry spread into every state economy. Cruise passengers came from every state and the cruise lines made purchases in support of their operations in just about every state. The principal location factors that influenced the economic impacts by state were: cruise lines headquarters and other facilities, ports-of-embarkation and ports-of-call, place of residence of cruise passengers, and place of business of cruise industry vendors. As discussed above, nearly 9.0 million cruise passengers began their cruises from U.S. ports in 2008. As indicated in Table ES-6, the top fifteen U.S. cruise ports accounted for 94 percent of 2008 embarkations. This represented an increase of two percentage points from

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2007. As also shown in the table, the top 15 share has been fluctuating between 92 and 94 percent over the past several years.
Table ES-6 – U.S. Embarkations by Port, 2005 - 2008
Port
Miami Port Canaveral Port Everglades Los Angeles New York San Diego Galveston Seattle Honolulu Long Beach Tampa Alaska New Orleans Cape Liberty Mobile All Other Ports United States Top 15 Ports Share of the U.S. Florida Ports Share of the U.S. 2005 1,803,000 1,234,000 1,283,000 615,000 382,000 234,000 531,000 337,000 236,000 363,000 408,000 164,000 308,000 147,000 88,000 479,000 8,612,000 8,045,000 93.4% 4,875,000 56.6% 2006 1,866,000 1,396,000 1,145,000 592,000 512,000 180,000 617,000 382,000 318,000 378,000 457,000 178,000 72,000 160,000 99,000 649,000 9,001,000 8,253,000 91.7% 4,994,000 55.5% 2007 1,893,000 1,298,000 1,289,000 581,000 537,000 341,000 523,000 386,000 382,000 370,000 367,000 189,000 258,000 139,000 130,000 501,000 9,184,000 8,553,000 93.1% 4,977,000 54.2% 2008 2,109,000 1,226,000 1,293,000 599,000 524,000 397,000 377,000 435,000 157,000 365,000 382,000 185,000 179,000 160,000 146,000 424,000 8,958,000 8,388,000 93.6% 5,110,000 57.0% 2005 3.1% 1.1% -3.1% 30.9% -30.2% 35.3% 22.1% 15.8% 38.0% -1.1% 6.0% 0.6% -5.8% N/A 205.6% -23.0% 6.3% 5.6% 1.8% Growth 2006 2007 3.5% 1.4% 13.1% -7.0% -10.8% 12.6% -3.7% -1.9% 34.0% 4.9% -23.1% 89.4% 16.2% -15.2% 13.4% 1.0% 34.7% 20.1% 4.1% -2.1% 12.0% -19.7% 8.5% 6.2% -76.6% 258.3% 8.8% -13.1% 12.5% 31.3% 35.5% 4.5% 2.6% 2.4% -22.8% 2.0% 3.6% -0.3% 2008 11.4% -5.5% 0.3% 3.1% -2.4% 16.4% -27.9% 12.7% -58.9% -1.4% 4.1% -2.1% -30.6% 15.1% 12.3% -15.4% -2.5% -1.9% 2.7%

Source: U.S. Cruise Ports and MARAD, U.S. Department of Transportation

Florida remains the center of cruising in the United States, accounting for 57 percent of all U.S. embarkations. Passenger embarkations in Florida increased by 133,000 in 2008 with gains in Miami, Port Everglades and Tampa partially offset by losses in Port Canaveral and Jacksonville. As a result of the net increase, Florida increased its share of national embarkations by nearly three percentage points. California’s ports (Los Angeles, Long Beach, San Diego, and San Francisco) boarded 1.44 million passengers for their cruises, or 16 percent of all U.S. cruise embarkations, a slight increase from 2007. The major economic impacts of the cruise industry by state during 2008 as shown in Table ES-7 were as follows: The economic impacts were concentrated in 10 states. These states accounted for 78 percent of the cruise industry’s direct purchases in the United States and 81 percent of the total employment and income impacts. Total cruise passenger and crew visits to Florida totaled 7.5 million in 2008, a 5 percent increase from 2007. Combined, passengers, crew and cruise lines directly spent $6.3 billion in the state in direct spending, accounting for more than 33 percent of the industry’s direct expenditures. This spending generated 128,910 jobs paying $5.5 billion in income. In addition, the state

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of Florida, the home of corporate or administrative offices for most of the cruise lines, accounted for just over 45 percent of the cruise lines’ U.S.-based employment during 2008. California, like Florida, hosts both cruise line headquarters and ports-ofembarkation. During 2008, cruise passenger and crew visits totaled 1.8 million. With just under 12 percent of the industry’s direct expenditures, California businesses received $2.2 billion in direct industry spending which in turn generated 49,682 jobs paying nearly $2.6 billion in wage income. Alaska benefits from the cruise industry primarily as a destination market. During 2008, the cruise industry produced 5.8 million passenger and crew visits to Alaska destinations a 4.3 percent increase from 2007. Thus, the state primarily benefits from cruise passenger spending for shore excursions, preand post-cruise stays, food and beverages and general retail. Because of this spending, Alaska accounted for 6.5 percent of the industry’s direct spending with $1.2 billion in expenditures generating 25,697 full- and part-time jobs paying $1 billion in wage income. An estimated 753,000 passengers and crew visited New York during 2008, a decline of 6.8 percent from 2007. New York accounted for 6.0 percent of the industry’s direct expenditures with just over $1.1 billion in direct spending. These expenditures generated an estimated 13,536 jobs paying $783 million in income. With just over $1.1 billion in direct spending and 18,674 jobs paying $944 million in income, Texas accounted for approximately 5.8 percent of the industry’s national economic impact. Due to the redeployment of ships throughout the Gulf coast ports and the closure of the Port of Galveston due to Hurricane Ike, passenger and crew visits to Texas ports declined by 30 percent in 2008 to 476,000 total visits. The state of Washington is the location of cruise line administrative facilities and an expanding port-of-embarkation in Seattle. During 2008 an estimated 625,000 passengers and crew visited Seattle, a 15 percent increase over 2007. With $760 million in direct spending and 18,726 jobs paying $874 million in income, Washington accounted for approximately five percent of the industry’s national economic impact. As a result of the strong growth in passenger embarkations in Seattle, the state’s ranking rose from eighth in 2007 to sixth in 2008. While Georgia has no direct cruise operations, it is a major source market for cruise passengers, making it a net exporter of cruise passengers, and also supports the industry with a wide range of goods and services. As a result of the activity of the cruise industry, Georgia businesses received $663 million, or 3.5 percent of the direct expenditures generated by the cruise industry in the United States. These direct expenditures generated total economic im-

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pacts of 8,902 jobs and $435 million in income throughout the Georgia economy during 2008. With the redeployment of the Pride of Hawaii and the Pride of Aloha from Hawaii during 2008, passenger and crew visits to Hawaii destinations declined by nearly 60% to 590,000 total visits. Direct spending by the industry in Hawaii fell to $545 million, a decline of nearly 25 percent, and generated 15,851 jobs (including the U.S. crew employees of NCL America) paying $467 million in income. As a result, Hawaii’s state ranking fell from sixth in 2007 to eighth in 2008. The impacts in the remaining states were primarily generated by cruise passenger spending for air travel and cruise line purchases from vendors located in each of the states.

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Table ES-7 – Total Economic Impact of the North American Cruise Industry by State, 2008

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Section I: Impact of the North American Cruise Industry on the U.S. Economy in 2008
Over the past several years, we have noted the decline in the growth of passenger embarkations at U.S. ports. During 2007, the 9.2 million U.S. embarkations accounted for just over 73 percent of the industry’s global embarkations, down from a 75% share in 2006. As shown in Table 1, not only has that trend continued, but the absolute number of embarkations at U.S. ports declined by 2.5% to just under 9.0 million. This decline was not only limited to U.S. ports but was felt by other North American ports, including Vancouver and San Juan. As a consequence, passenger embarkations at all North American ports declined by 2.8% from 10.2 million in 2007 to 9.9 million in 2008. This was the first decline in passenger embarkations in North America and the U.S. since BREA began collecting such figures in 1997.
Table 1 – Global Embarkations of the North American Cruise Industry, 2005 - 2008
Port
Florida Miami Port Everglades Port Canaveral Tampa Jacksonville California Los Angeles Long Beach San Diego San Francisco New York Other U.S. Ports Galveston New Orleans Alaska Seattle Boston Baltimore Houston Philadelphia Honolulu Cape Liberty Mobile Remaining U.S. Ports United States Canada Vancouver Other Canada Ports San Juan North America Rest of the World Total 2005 4,875,000 1,803,000 1,283,000 1,234,000 408,000 147,000 1,301,000 615,000 363,000 234,000 89,000 382,000 2,054,000 531,000 308,000 164,000 337,000 80,000 67,000 99,000 50,000 236,000 147,000 88,000 (53,000) 8,612,000 455,000 435,000 20,000 581,000 9,648,000 1,852,000 11,500,000 2006 4,994,000 1,866,000 1,145,000 1,396,000 457,000 130,000 1,241,000 592,000 378,000 180,000 91,000 512,000 2,254,000 617,000 72,000 178,000 382,000 62,000 59,000 53,000 52,000 318,000 160,000 99,000 202,000 9,001,000 423,000 402,000 21,000 555,000 9,979,000 2,021,000 12,000,000 2007 4,977,000 1,893,000 1,289,000 1,298,000 367,000 130,000 1,334,000 581,000 370,000 341,000 42,000 537,000 2,336,000 523,000 258,000 189,000 386,000 57,000 61,000 27,000 30,000 382,000 139,000 130,000 154,000 9,184,000 477,000 462,000 15,000 534,000 10,195,000 2,367,000 12,562,000 2008 5,110,000 2,109,000 1,293,000 1,226,000 382,000 100,000 1,436,000 599,000 365,000 397,000 75,000 524,000 1,888,000 377,000 179,000 185,000 435,000 69,000 50,000 10,000 14,000 157,000 160,000 146,000 106,000 8,958,000 427,000 406,000 21,000 521,000 9,906,000 3,100,000 13,006,000 2005 1.8% 3.1% -3.1% 1.1% 6.0% 30.1% 18.8% 30.9% -1.1% 35.3% 4.7% -30.2% 23.2% 22.1% -5.8% 0.6% 15.8% -20.0% -36.2% 19.3% 72.4% 38.0% N.A. 205.6% -19.3% 6.3% 0.2% -0.2% 11.1% 29.1% 7.2% 0.3% 6.0% Growth 2006 2007 2.4% -0.3% 3.5% 1.4% -10.8% 12.6% 13.1% -7.0% 12.0% -19.7% -11.6% 0.0% -4.6% 7.5% -3.7% -1.9% 4.1% -2.1% -23.1% 89.4% 2.2% -53.8% 34.0% 4.9% 9.7% 3.6% 16.2% -15.2% -76.6% 258.3% 8.5% 6.2% 13.4% 1.0% -22.5% -8.1% -11.9% 3.4% -46.5% -49.1% 4.0% -42.3% 34.7% 20.1% 8.8% -13.1% 12.5% 31.3% -481.1% -23.8% 4.5% 2.0% -7.0% 12.8% -7.6% 14.9% 5.0% -28.6% -4.5% -3.8% 3.4% 2.2% 9.1% 17.1% 4.3% 4.7% 2008 2.7% 11.4% 0.3% -5.5% 4.1% -23.1% 7.6% 3.1% -1.4% 16.4% 78.6% -2.4% -19.2% -27.9% -30.6% -2.1% 12.7% 21.1% -18.0% -63.0% -53.3% -58.9% 15.1% 12.3% -31.2% -2.5% -10.5% -12.1% 40.0% -2.4% -2.8% 31.0% 3.5%

Source: Port Authorities, MARAD and Business Research and Economic Advisors

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The decline in North America was more than offset by the 31 percent increase in passenger embarkations in the Rest of the World which experienced an increase from 2.4 million in 2007 to 3.1 million in 2008. As a result, global embarkations of the North American cruise industry rose by 3.5 percent from 12.6 million in 2007 to 13 million in 2008. As indicated in Table 2, the decline in activity in North America can be directly traced to the deployment strategy of the North American cruise lines. The share of the global capacity deployed in the Caribbean and the Bahamas has declined from 46.4 percent in 2005 to 37.3 percent in 2008. During 2008, the bed day capacity deployed in the Caribbean, the Bahamas and Hawaii declined by a combined 8.2 percent while the capacity in Alaska remained virtually unchanged. At the same time, the capacity in Europe and All Other markets rose by 10.7 percent and 15.8 percent, respectively. Europe’s market share has steadily increased from 19.8 percent in 2005 to 25.9 percent in 2008.
Table 2 – Destination Bed Day Capacity of the North American Cruise Industry, 2004 – 2008 Millions of Bed Days

Destination Caribbean Percent Change Share of Total Bahamas Percent Change Share of Total Alaska Percent Change Share of Total Hawaii Percent Change Share of Total Europe Percent Change Share of Total All Others Percent Change Share of Total Total Percent Change
Source: CLIA

2004 31.21 40.4% 3.66 4.7% 5.91 7.6% 2.63 3.4% 17.26 22.3% 16.63 21.5% 77.30

2005 31.45 0.8% 40.7% 4.40 20.2% 5.7% 6.42 8.6% 8.3% 2.91 10.6% 3.8% 15.26 -11.6% 19.8% 16.79 1.0% 21.7% 77.23 -0.1%

2006 31.96 1.6% 39.2% 6.07 38.0% 7.5% 6.36 -0.9% 7.8% 2.89 -0.7% 3.5% 17.30 13.4% 21.2% 16.87 0.5% 20.7% 81.45 5.5%

2007 32.16 0.6% 35.8% 4.63 -23.7% 5.2% 6.93 9.0% 7.7% 3.83 32.5% 4.3% 21.55 24.6% 24.0% 20.61 22.2% 23.0% 89.71 10.1%

2008 30.79 -4.3% 33.5% 3.48 -24.8% 3.8% 6.97 0.6% 7.6% 3.03 -20.9% 3.3% 23.86 10.7% 25.9% 23.86 15.8% 25.9% 91.99 2.5%

Within North America there were some fairly dramatic shifts in passenger embarkations, some permanent and others temporary. First, and foremost, NCL made a permanent strategic decision to reduce its presence in Hawaii. The Pride of Hawaii was moved from Hawaii and redeployed in Europe in February as the Norwegian Jade while the Pride of Aloha was rede-

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ployed to Miami as the Norwegian Sky sailing on 3- and4-day itineraries to the Bahamas. As a result, embarkations in Hawaii declined by more than 200,000 accounting for 75 percent of the net decline in passenger embarkations at U.S. ports. In aggregate, embarkations at Florida ports rebounded from a weak 2007. Miami led the way with an 11.4 percent increase and was followed by Tampa and Port Everglades with respective increases of 4.1 and 0.3 percent. This growth was partially offset by declines at Port Canaveral and Jacksonville. California ports experienced a 7.5% increase in passenger embarkations in 2008 and continued to increase their market share. During 2008, 1.44 million passengers boarded cruises at California ports, up from 1.33 million in 2007. San Francisco led the state with a 78 percent increase, followed by San Diego with a 16 percent increase and Los Angeles with an increase of 3.1 percent. Long Beach experienced a decline of 1.4 percent, the second year in a row that embarkations fell.
Figure 1 - Distribution of Global Embarkations - 2008

Rest of the World 24%

Miami 16% Port Everglades 10%

San Juan 4%

Canada 3% Other U.S. Ports 16%

Port Canaveral 9% New York 4% Tampa 3%

San Diego 3%

Long Beach 3%

Los Angeles 5%

Source: Port Authorities, MARAD and Business Research and Economic Advisors

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Passenger embarkations at New York’s two cruise terminals declined by a modest 2.4 percent to 524,000 passengers. New York’s share of global embarkations remained at about 4.0 percent. The remaining U.S. ports, accounted for a combined 14.5 percent of global embarkations in 2008 up from 18.6 percent in 2007. Passenger embarkations at these ports totaled 1.9 million which represented a 19 percent decline from 2007. However, there were considerable differences in growth among these ports. Hurricanes continued to disrupt cruise itineraries in the Caribbean. In particular Hurricane Ike disrupted both cruise destinations and homeports. The hurricane severely damaged the retail facilities at the port in Grand Turk (Turks & Caicos) closing the port for nearly one month while the hurricane ultimately made landfall in Galveston shutting down the port’s cruise terminal for nearly two months. As a result embarkations at Galveston declined by 28 percent from 523,000 in 2007 to 377,000 in 2008. Similar declines were experienced in New Orleans (-31 percent), Baltimore (-18 percent), Houston (-63 percent), Philadelphia (-53 percent) and, as discussed previously Honolulu with a 59 percent decline. Many of these declines, especially those at Gulf Coast ports, are the result of the elimination North American cruise itineraries in favor of European cruises, especially during the summer months. On the positive side, Seattle benefitted from a shift of turnaround cruises from Vancouver and experienced a 12.7 percent increase in embarkations from 386,000 in 2007 to 435,000 in 2008. Embarkations also increased in Boston (21 percent), Cape Liberty (15 percent) and Mobile (12 percent). The remaining ports in North America, primarily Vancouver and San Juan, handled just under one million cruise passengers in 2008, a 6.2 percent decline from 2007. Vancouver experienced a 12 percent decrease in passenger embarkations as several ships redeployed their homeport operations for Alaska cruises to Seattle. San Juan experienced a decline in passenger embarkations for the third consecutive year, 2.4 percent in 2008, 3.8 percent in 2007 and 4.5 percent in 2006. Embarkations in the rest of the world, primarily Europe and the Mediterranean, totaled 3.1 million during 2008, a 31 percent increase from 2007, and accounted for 23.8 percent of

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global embarkations, up from 18.8 percent in 2007 and 16 percent in 2005. As noted earlier, the North American cruise industry is rapidly expanding their deployment in Europe and the Mediterranean, especially during the Caribbean low (summer) season. As shown in Table 3, nearly 9.3 million, or 71.5 percent of the global cruise passengers, lived in the United States during 2008. This represented a 1.7 percent decrease from 2007. However, this growth was by no means uniform. Of the nine regions, four (New England, East North Central, West South Central and Mountain) experienced single-digit gains. The remaining five regions (Middle Atlantic, South Atlantic, East South Central, West North Central and Pacific) experienced single digit losses during 2008.
Table 3 – U.S. Cruise Passengers by Place of Residence, 2005 – 20085
Regions New England Middle Atlantic South Atlantic East North Central East South Central West North Central West South Central Mountain Pacific United States Puerto Rico Canada North America Rest of the World Total World 2005 773,000 1,217,000 3,096,000 695,000 248,000 287,000 818,000 539,000 1,392,000 9,065,000 121,000 486,000 9,672,000 1,509,000 11,181,000 Passengers 2006 2007 713,000 1,174,000 3,290,000 704,000 245,000 323,000 906,000 558,000 1,445,000 9,358,000 126,000 594,000 10,078,000 1,928,000 12,006,000 645,000 1,105,000 3,276,000 735,000 269,000 311,000 968,000 588,000 1,555,000 9,452,000 119,000 676,000 10,247,000 2,315,000 12,562,000 2008 670,000 1,054,000 3,200,000 737,000 256,000 289,000 981,000 620,000 1,487,000 9,294,000 89,000 711,000 10,094,000 2,912,000 13,006,000 2005 8.5% 13.4% 34.2% 7.7% 2.7% 3.2% 9.0% 5.9% 15.4% 81.1% 1.1% 4.3% 86.5% 13.5% 100.0% Share of the U.S. 2006 2007 7.6% 12.5% 35.2% 7.5% 2.6% 3.5% 9.7% 6.0% 15.4% 77.9% 1.0% 4.9% 83.9% 16.1% 100.0% 6.8% 11.7% 34.7% 7.8% 2.8% 3.3% 10.2% 6.2% 16.5% 75.2% 0.9% 5.4% 81.6% 18.4% 100.0% 2008 7.2% 11.3% 34.4% 7.9% 2.8% 3.1% 10.6% 6.7% 16.0% 71.5% 0.7% 5.5% 77.6% 22.4% 100.0%

Source: Cruise Lines International Association

As shown in Figure 2, the South Atlantic region is the single largest source of passengers, accounting for 34 percent of all U.S.-resident passengers. For the first time in more than a decade, the South Atlantic region experienced a decline in resident cruise passengers. This decline was concentrated in Georgia, Maryland and North Carolina.
5 The definitions of the nine census divisions are as follows: New England: Connecticut, Maine, Massachusetts, New Hampshire, Vermont and Rhode Island Middle Atlantic: New Jersey, New York and Pennsylvania South Atlantic: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia East North Central: Illinois, Indiana, Michigan, Ohio and Wisconsin East South Central: Alabama, Kentucky, Mississippi and Tennessee West North Central: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota West South Central: Arkansas, Louisiana, Oklahoma and Texas Mountain: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming Pacific: Alaska, California, Hawaii, Oregon and Washington.

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The highest growth, 5.4 percent, occurred in the Mountain region which saw resident cruise passengers increased from 588,000 in 2007 to 620,000 in 2008. Since the Mountain region is one of the smaller regions in terms of population the 5.4 percent increase only generated an additional 32,000 cruisers.
Figure 2 – Distribution of U.S. Cruise Passengers by Place of Residence - 2008

Pacific 16% Mountain 7%

New England 7% Middle Atlantic 11%

West South Central 11%

West North Central 3% South Atlantic 34% East North Central 8%

East South Central 3%

Source: Cruise Lines International Association

The remaining three regions that experienced single digit growth in 2008, New England, East North Central and West South Central, gained a combined total of 40,000 cruisers. The gains were concentrated in the New England and West South Central regions which accounted for 95 percent of the increase in passengers from the three regions. The West South Central region is the fourth largest source market among the nine regions, accounting for 10.6 percent of U.S.-resident cruise passengers while the New England region is the sixth largest source market. The East North Central region accounted for 8 percent of cruise passengers residing in the United States. The remaining four regions of the country (Middle Atlantic, East North Central, East South Central and Pacific) experienced a combined loss of 154,000 cruisers in 2008. In aggregate,

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they accounted for 33 percent of U.S.-resident cruise passengers in 2008. The Pacific region, which lost 68,000 resident cruise passengers, is the second largest source market in the U.S. and like the South Atlantic region experienced its first loss in more than a decade. The losses were concentrated in California and Oregon. The Middle Atlantic, which lost 51,000 resident cruise passengers, is the third largest source market and lost cruise passengers for the fourth consecutive year. The East North Central and East South Central regions lost a combined 35,000 resident cruise passengers and continued a declining trend that began in 2005. While we have had only one year of decline in resident cruise passengers and embarkations in the United States, the declining trend in growth and market share has been in place for several years. The losses experienced during 2008 can be partly traced to a faltering economy during the second half of 2008 but may also be reflective of a longer term impact resulting from an increasing redeployment of cruise ships from the North American market. Nonetheless, even though the U.S.’s share of global passengers is declining on a year-over-year basis, it is the dominant source of cruise passengers for the North American fleet, accounting for 72 percent of all passengers. In addition, U.S. passengers come from all regions of the country with passenger growth reflecting both the changing deployment strategy of the cruise industry and the underlying population growth in each region. The number of cruise passengers that reside in the United States is greater than the number of cruise passenger embarkations from U.S. ports. Consequently, U.S.-resident cruise passengers also provide an economic stimulus to embarkation ports outside the United States. Finally, with nearly 9 million cruise embarkations from U.S. ports in 2008, the North American cruise industry is a source of significant economic activity in the U.S. economy. In fact, the U.S. economy is the recipient of the majority of the industry’s global economic impact. Our analysis of the industry’s operating and administrative expenses shows that nearly 70 percent of the industry’s non-wage expenditures are made with U.S.-based businesses.

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Spending in the U.S. Economy Generated by the Cruise Industry
Business Research and Economic Advisors (BREA) conducted a survey of the member cruise lines of the Cruise Lines International Association (CLIA) that provides the basis for our estimates of the industry’s 2008 expenditures for the operating and administrative expense categories outlined in Table 4. These data were collected for global payments and payments made to U.S. businesses. Surveys were returned for 13 cruise lines. These cruise lines were: Carnival Cruise Lines, Celebrity Cruises, Costa Cruise Lines, Crystal Cruises, Cunard Line, Disney Cruise Line, Holland America Line, Norwegian Cruise Line, Oceana Cruise Line, Princess Cruises, Regent Seven Seas Cruises, Royal Caribbean International, and Seabourn Cruise Line. Combined, these cruise lines accounted for approximately 88 percent of the industry’s gross revenues and 90 percent of its passengers.
Table 4 – Operating and Administrative Expense Categories

Source: Business Research and Economic Advisors

In addition to the aggregate revenue and expense data, more detailed data on vendor purchases in 2007 were obtained from a smaller group of cruise lines. Vendor-specific data were obtained from the following cruise lines: Carnival Cruise Lines, Royal Caribbean International, Celebrity Cruises, Cunard Line, Holland America Line and Princess Cruises. These six

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cruise lines accounted for approximately 85 percent of the industry’s non-wage U.S. operating and administrative expenses. These data were then aggregated by industry group and state and used to estimate total cruise industry expenditures by industry. These detailed expenditures totaled $5.6 billion and accounted for 60 percent of the estimated $9.4 billion that the North American cruise lines spent with U.S. businesses (excluding travel agent commissions). The vendor purchases were aggregated into 95 industry sectors consistent with the 2008 U.S. input/output accounts. The economic benefits that accrue to the U.S. economy arise from five principal sources: spending by cruise passengers and crew for goods and services associated with their cruise, including travel to the port of embarkation and pre- and post-cruise vacation spending, onshore tour excursions, food and beverages and other retail; expenditures by the cruise lines for goods and services necessary for cruise operations, including food and beverages, fuel, vessel maintenance and repair, ship’s supplies and so forth; spending by the cruise lines for port services at U.S. ports-of-embarkation and ports-of-call; the shore-side staffing by the cruise lines for their headquarters and marketing operations; and capital expenditures for facilities constructed in the U.S., including port terminals, office facilities, and other capital equipment. As shown in Table 5, the cruise industry spent an estimated $12.4 billion for goods and services with U.S. businesses during 2008. This represents a 4.5 percent increase over similar expenditures in 2007 and 22 percent more than was spent in 2005. Excluding wages and salaries of its employees, the North American cruise industry spent approximately 75 percent of its global operating and administrative expenses with U.S. businesses.
Table 5 – U.S. Expenditures ($ Billions) of the North American Cruise Industry, 2005 – 2008
2005 U.S. Purch ases of the Cruise Lines Goods and Services Capital Equip ment (incl. net interest) Passengers and Crew Expenditures Wages & Taxes Paid by Cruise Lines T otal U.S.-based Spendin g $ 11.76 $ 10.11 $ 1.65 $ 3.23 $ 1.20 $ 16.20 2006 $ 12.89 $ 11.08 $ 1.81 $ 3.48 $ 1.27 $ 17.64 2007 $ 13.74 $ 11.84 $ 1.90 $ 3.63 $ 1.33 $ 18.70 2008 $ 14.40 $ 12.37 $ 2.02 $ 3.40 $ 1.27 $ 19.07 An nual Percent Change 2005 2006 2007 2008 9.9% 8.0% 22.9% 12.1% 7.7% 10.2% 9.6% 9.6% 9.5% 7.8% 6.0% 8.9% 6.6% 6.8% 5.3% 4.2% 4.3% 6.0% 4.8% 4.5% 6.2% -6.2% -4.4% 2.1%

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Source: Business Research and Economic Advisors

Cruise passengers and crew added $3.4 billion in spending with U.S. businesses. Approximately 34 percent of these expenditures represented airfares that were directly purchased by passengers. Of the remaining passenger and crew expenditures, 24 percent were spent on food and beverages and lodging. Entertainment, local transit, retail purchases and sightseeing accounted for the remaining expenditures. Passenger expenditures, excluding airfares, were made at the U.S. ports-of-embarkation and ports-of-call. Estimated passenger and crew spending for 2008 was just over 6 percent lower than the 2007 estimates. The decline in passenger and crew spending was driven primarily by the decline in passenger embarkations at U.S. ports, especially in Hawaii which has among the highest per passenger expenditure rates. This is primarily due to the large percentage of passengers that purchase pre- and post-cruise vacation packages in Hawaii. As will be discussed later in this report, the average spend per passenger and crew visit also fell by nearly 7 percent during 2008. Passenger and crew spending estimates were based on data collected from various research reports prepared by BREA and other researchers for the following ports: Port Everglades, Port of Miami, Port of New Orleans, Port of New York, Port of Philadelphia, Port of Tampa, Port of San Diego, Port of Los Angeles and Hawaii and Alaska portsof-call. Per passenger spending estimates for the ports-of-embarkation were used to estimate total passenger spending at each of the ports. The average for the ports was then used to estimate total passenger spending for all other passenger embarkations.6 The North American cruise lines spent an estimated $2.0 billion for capital expenditures (including net interest) during 2008, a 6.2 percent increase over 2007 and 22 percent more than was spent in 2005. Vessel maintenance and drydock fees at U.S. shipyards accounted for nearly half of the cruise industry’s capital expenditures in the United States. The remaining half of the capital expenditures was made for machinery and equipment, including computer and telecommunications equipment, and buildings.

6 Per passenger spending estimates were segmented by passengers who stayed overnight either prior to or after a cruise and those passengers who arrived on the day of the cruise.

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Thus, the North American cruise industry and its passengers and crew spent a total of $17.8 billion for goods and services provided by U.S. businesses, a 2.3 percent increase over similar expenditures in 2007 and a 19 percent increase over 2005. In addition to the direct purchase of goods and services from U.S. businesses, the cruise industry made combined payments of $1.27 billion in wages (including benefits) to its employees and taxes to federal, state and local governments in the United States. Wage and benefit payments accounted for about 80 percent of the total. The tax payments consisted primarily of employer contributions to Social Security and sales and property taxes to state and local governments. This represented a 4.4 percent decrease from 2007 and a 6 percent increase since 2005. Including wages and taxes, the North American cruise industry and its passengers made total payments of nearly $19.1 billion to U.S. businesses, U.S.-resident cruise line employees and U.S. taxing jurisdictions. This was a 2.1 percent increase over total industry spending in 2007 and an 18 percent increase over 2005 industry expenditures.

Direct Economic Impacts in the United States During 2008
The direct economic impacts of the cruise industry in the United States are derived from a broad range of activities including: port services and cruise industry employment; transportation of cruise passengers from their place of residence to the ports of embarkation; travel agent commissions; spending for tours and pre- and post-cruise stays in U.S. port cities; passenger and crew spending for retail goods in U.S. port cities; and purchases of supplies by the cruise lines from U.S. businesses. As shown in Table 6, the North American cruise industry and its passengers and crew spent $19.1 billion in the United States during 2008. A 2.1 percent increase from 2007. Spending in the core cruise travel sector totaled $10.2 billion while the cruise industry purchased an additional $8.9 billion in goods and services from its suppliers. As a result

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of this spending, an estimated 155,020 full and part-time jobs7 were generated, paying wages of $6.1 billion during 2008.8 Despite the 2.1 percent increase in direct industry expenditures, the direct employment impact declined by 2.1 percent. This is the result of two factors. First, the mix of industry spending shifted from the relatively high labor intensive industries associated with passenger spending, such as lodging, retailing, etc., to the more capital intensive sectors associated with cruise line purchases of goods and services. Second, overall labor productivity increased in all sectors, reducing the number of employees per dollar of final demand. This increase in labor productivity and a shift to more capital intensive industries resulted in an increase in direct wage income even as direct employment declined.
Table 6 – Direct Economic Impacts of the Cruise Industry in the United States – 2008
Direct Spending $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 10,165 1,718 3,299 3,107 2,041 8,905 68 4,478 1,004 116 277 1,271 219 349 517 321 403 555 24 215 988 2,578 1,420 42 172 944 19,070 18,678 2.1% Wage Income $ Millions

Sector

Employment

Core Cruise Travel Sector Passenger & Crew Spending Port Services & Cruise Lines Transportation Services Air Transportation Cruise Industry Suppliers Agriculture, Mining, Utilities & Construction Manufacturing Food & Beverages Apparel & Textiles Chemicals & Plastics Petroleum Refining Fabricated Metal Products Industrial Machinery Ship Maintenance & Repair Computers & Electronic Equipment Other Manufacturing Wholesale Trade Other Transportation Services Information Services Finance, Insurance, Real Estate & Leasing Services & Government (ex. Lodging & Travel Services) Professional, Scientific & Technical Services Administrative & Waste Management Services Arts, Entertainment & Recreation Other Services & Government Total - 2008 Total - 2007 Percentage Change from 2007
7 8

113,510 21,281 52,219 28,590 11,420 41,510 329 11,141 2,374 856 420 146 1,108 1,212 1,759 992 2,274 3,163 41 502 3,353 22,981 14,337 205 1,571 6,868

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

4,185 494 2,055 1,135 502 1,958 10 614 94 32 32 17 53 71 113 80 122 199 5 37 225 868 469 10 64 325 6,143 6,010 2.2%

155,020 $ 158,376 $ -2.1%

Throughout this report all employment impacts are the sum of full- and part-time jobs.

These figures include the U.S. employees of the cruise lines and the industry’s trade associations and their wage income.

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Source: Business Research and Economic Advisors

Despite the decline in the direct employment impact in 2008, the North American cruise industry’s direct contribution to the U.S. economy has grown significantly since 2000. The direct spending by the cruise industry has increased by $8.8 billion, an increase 85 percent. Similarly, the direct employment contribution has increased by nearly 60,000 jobs, an increase of 62 percent (see Figure 3).
Figure 3– Direct Cruise Industry Expenditures and Employment, 1997 - 2008

25 158,376 142,720 20 155,020

180,000 160,000 140,000 120,000

$ Billions

15 67,859

95,592

100,000

$14.7

$16.2

$17.7

10

$18.7

$19.1
2008

80,000 60,000 40,000 20,000 0

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Direct Cruise Expenditures (Left) Direct Cruise-related Employment (Right)

$6.2

$7.1

Source: Business Research and Economic Advisors

The Core Cruise Travel Sector in the United States The core cruise travel sector in the United States, which includes the cruise lines, airlines, travel agents, port service providers and local businesses, such as hotels and restaurants that are directly impacted by passenger and crew spending, received an estimated $10.2 billion in direct spending by the cruise lines and their passengers and crew in 2008. This was virtually unchanged from 2007. This, in turn, supported the employment of an estimated 113,510 workers, a decline of 3 percent, and $4.2 billion in wage income, unchanged from 2007. The core cruise travel sector accounted for 53 percent of the direct spending by the cruise industry, 73 percent of the direct employment, and 68 percent of the direct wage income. Industry expenditures in the core cruise sector and their economic impacts have steadily increased since 2000. Over the eight-year period, core cruise travel spending has more than doubled

Business Research and Economic Advisors

$8.1

5

$10.3

$11.0

$12.0

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from $4.9 billion, while the direct employment and wage impacts have increased by 73 percent and 120 percent, respectively.

Figure 4 – Distribution Cruise Travel Sector Direct Spending - 2008

Core Cruise Sector Expenditures $10.2 Billion

Air Transportation $2.04 20%

Passenger & Crew Spending $1.72 17%

Transportation Services $3.11 31%

Port Services & Cruise Lines $3.30 32%

Source: Business Research and Economic Advisors

Port Services and Cruise Lines in the United States Cruise lines and port service providers are the leading component of the core cruise sector, accounting for 32 percent of cruise industry spending in this sector (see Figure 4). This segment of the core cruise sector includes three primary components: i) expenditures with port service providers, ii) the direct U.S.-based employment and wages of the cruise industry and iii) the cruise industry trade association employment and income. Port service providers at each of the embarkation ports and ports-of-call in the United States provide a broad range of services including tugboat and piloting services, port agents, stevedores, passenger reception services, warehousing and other material handling services. Secondly, all of the major North American cruise lines maintain administrative and marketing offices throughout the United States. While Florida hosts the majority of cruise headquarters, cruise line offices are also located in California, Washington and New York. Addition-

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ally, the lines also maintain marketing and telephone centers in several other states, including Colorado and Kansas, and also have tour operations and support staff in Alaska and Hawaii. These employees and their wages are included in this sector. Third, industry trade associations maintain staff in Alaska, Florida, Washington and Virginia. As with the cruise lines, the employees of these associations and their wages are also included in the core cruise travel sector. During 2008, the cruise industry spent $3.3 billion on such port services. This represents a three percent decrease from 2007. The decline in these expenditures is the net effect of a 6 percent decline in industry wages and salaries, the costs associated with warehousing and material handling services and passenger based-fees at U.S. turnaround ports which were partially offset by an increase in average port fees and other passenger and crew transportation services. As a result of these expenditures, port service providers, the cruise lines and their trade associations provided 52,219 full- and part-time jobs, a decline of 7.6 percent from 2007, paying an annual income of $2.1 billion, a decline of 3 percent from 2007. On an industry basis, all of these jobs are found in the water transportation industry. The cruise lines account for approximately 60 percent of the employment and wage impacts in the industry. The remaining 40 percent of the impacts occur principally with port authorities with additional impacts affecting ship agents, stevedoring firms and other water transportation services, such as pilots and tugboats. Transportation Services in United States The second largest component of the core cruise travel sector is transportation services which accounted for 31 percent of cruise industry spending in this sector. This primarily includes travel agents and tour operators. Payments to travel agents throughout the U.S. accounted for about 50 percent of the total, or $1.6 billion. While tour operators, principally in U.S. destinations in Hawaii and Alaska, but also in other port cities, accounted for 25 percent of the total. The remaining 25 percent was paid to businesses providing trucking, courier and other miscellaneous transport services. U.S. businesses in this sector received $3.1 billion in spending by the cruise lines and their passengers. This is a 3.7 percent increase over 2007. While U.S. embarkations declined, port

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of call visits at U.S. ports did increase by about 1.0 percent. In addition, those U.S. residents that did purchase European cruises primarily used U.S.-based travel agents. As a consequence total payments to tour operators and travel agents did increase from 2007. Our cruise line survey indicated that the industry paid an average commission rate of approximately 15 percent of net cruise fares.9 Overall, BREA estimated that the cruise industry spending for transportation services was responsible for the generation of 28,590 jobs in the transportation services sector, an increase of 6.1 percent over 2007, paying $1.14 billion in wage income, an increase of 7.6 percent. Travel agents accounted for nearly 65 percent of the direct employment and wage impacts in the transportation services sector while tour operators and other providers of transportation services each accounted for about 17.5 percent of the direct effects. The high proportion of impacts on travel agents reflects the fact that the United States is primarily a source market rather than a destination market. Air Transportation Services in United States The third largest component of the core cruise travel sector is air transportation which accounts for another 20 percent of cruise industry spending in this sector. The percentage of passengers arriving by air at the ports-of-embarkation remained stable in 2008 at approximately 60 percent. At the same time the average airfare declined by about 2.5 percent to approximately $380 per passenger. As a result, cruise passengers who flew to their port city spent an estimated $2.04 billion on air transportation, a 4.2 percent decline from 2007. These expenditures produced 11,420 jobs in the United States, a 2.5 percent decline from 2007, with total wage income of $502 million, a 1one percent decline from 2007. Passenger and Crew Spending in United States The final component of the core cruise travel sector is the spending of cruise passengers and crew for a variety of retail, dining, local transit and lodging services.10 First, as previously discussed, nearly 9.0 million passengers embarked on cruises at U.S. ports. Second, the industry
Net cruise fares exclude all onboard revenues and revenues received from passengers for air travel, travel insurance, pre- and post-cruise vacations and all port charges, taxes and fees assessed to passengers. 10 Passenger and crew expenditures for sightseeing and shore excursions are included in the Transportation Services category of the core cruise travel sector.
9

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generated approximately 5.5 million visits at U.S. ports-of call, most of which were in Alaska, Hawaii and Key West. Finally, crew aboard cruise ships visit both ports-of-embarkation and ports-of-call. The combined spending of passengers and crew totaled an estimated $1.7 billion in the United States during 2008, virtually unchanged from 2007. These expenditures accounted for 17 percent of cruise industry spending within the core cruise travel sector. This spending was responsible for the generation of 21,281 jobs in United States, a decline of 2.6 percent from 2007, paying annual wages of $494 million, a 1.2 percent increase from 2007. On an industry basis, the employment and wage impacts were concentrated in the accommodation, food and beverage service and retail industries. The accommodation and food and beverage service industries each accounted for about 45 percent of the employment and wage impacts while the retail trade industry accounted for the remaining 10 percent of the direct impacts. Adding in the cost of shore tours, which was included in Transportation Services, passengers and crew spent an nearly $2 billion in port cities throughout the United States. This represents a decline of 8.3 percent from 2007. As shown in Table 7 and Figure 5, embarkation passengers accounted for 53 percent of the total spending with $1.06 billion in 2008. Based upon the passenger survey data referenced previously, about 38 percent of embarking passengers stayed one of more nights at a port city and spent a total of $878 million during their visits. On average, these overnight cruise visitors spent $257 per visit. The average length of stay of these passengers was approximately 1.1 nights. All of these figures show a significant decline from 2007. The average length of stay declined by nearly 10 percent, while the average spend per passenger also fell by 10 percent. Combining this with the nine percent decline in passengers with an overnight stay, the total spend by these passengers, $878 million, declined by 18 percent from 2007. Most of this decline can be traced to the redeployment of the NCL ships from Hawaii and the subsequent decline in passenger boardings.
Table 7 – Passenger and Crew Expenditures in the United States – 2008

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Visits Embarkation Passengers Overnight Stays Day of Cruise Arrivals Port-of-Call Passengers Crew Total 8,958,485 3,419,414 5,539,071 5,469,041 5,821,558 20,249,084 $ $ $ $ $ $

Spending 1,061,374,134 877,738,837 183,635,297 676,841,731 255,456,101 1,993,671,966

Spending per Visit $118.48 $256.69 $33.15 $123.76 $43.88 $98.46

Source: Business Research and Economic Advisors

Embarking passengers who arrived at the port city on the day of their cruise spent an average of $33.15. Most of these expenditures were for local transit, parking and limited food purchases. In total, we estimated that these passengers spent just over $184 million during 2008, an increase of 10 percent from 2007. This increase is primarily the result of an increase in the average spend per passenger and a 2.5 percent increase in the number of passengers arriving on the day of their cruise. This suggests that an increasing proportion of passengers decided against a pre-cruise vacation. Relative to 2007, the average per visit expenditure by embarking passengers fell from $135.36 in 2007 to $118.48 in 2008, a decline of 12.5 percent. The average expenditure of day of arrival passengers actually increased by 7.5 percent while the average spend per visit by those passengers with overnight stays declined by 10 percent. However, a significant component of that decline is the result of a decline in the average length of stay from 1.25 nights in 2007 to 1.1 nights in 2008. The average declined as embarkations increased in port cities with relatively low average stay lengths, such as San Diego, and fell in those port cities with high average stay lengths, especially Honolulu. On a per night basis, embarking passengers in 2008 actually spent 2.5 percent more in 2008, $233.63 versus $227.90.
Figure 5 – Distribution of Passenger and Crew Spending in the United States - 2008

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Total Passenger and Crew Spending $2.0 Billion

Crew 13% Port‐of‐Call Passengers 34%

Overnight Stays 44%

Day of Cruise Arrivals 9%

Source: Business Research and Economic Advisors

BREA also estimated that the cruise industry generated approximately 5.5 million port-ofcall visits.11 Nearly 70 percent of these visits were made to ports in Alaska, but cruise ships also make calls at other ports throughout the United States including Hawaii, Key West and many of the East and West Coast ports. Survey data for port-of-call passengers indicated that the typical port-of-call passenger spent an average of $124 per visit. Consequently, we have estimated that these passengers spent $677 million in the United States during 2008, or 34 percent of the total passenger and crew spending. The average spend per port-of-call visit declined only slightly, 0.8 percent, from 2007. Finally, crew aboard the cruise ships will disembark at both ports-of-embarkation and portsof-call. We estimated that over 5.8 million crew visits were made at U.S. port cities with an average per crew expenditures of $43.88 per visit, a decline of 1.8 percent from 2007. Consequently, crew spent an estimated $255 million in the United States during 2008, or 13 percent of the total expenditures of passengers and crew.
Table 8 – Estimated Onshore Spending Generated by a 2,500-Passenger Cruise Ship – 2008

11 Since individual passengers will make several port-of-call visits on any itinerary, passenger visits are approximately three times greater than the number of passengers taking cruises to U.S. ports-of-call.

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Onshore Visits Homeport Cruise Visit Passengers with Overnight Stays Passengers Arriving on Day of Cruise Crew Port-of-Call Cruise Visit Passengers Crew
Note: Visits have been rounded to nearest ten. Source: Business Research and Economic Advisors

Spending $ $ $ $ $ $ $ 332,750 256,693 49,729 26,329 320,256 293,927 26,329

Spending per Visit $ $ $ $ $ 333.73 256.69 33.15 $43.88 167.64 123.76 $43.88

1,000 1,500 600 2,375 600

Another way to view passenger and crew spending is in terms of the onshore spending generated by a typical or average cruise ship call. As shown in Table 8, we have estimated that a 2,500-passenger ship generated an average of approximately $333,000 in passenger and crew onshore spending per call in the homeport city during 2008, a decline of 7.0 percent from 2007. A similar ship making port-of-call visits generated an average of approximately $320,000 in passenger and crew onshore spending per U.S. port call, an increase of 0.6 percent from 2007. Other Direct Impacts in the United States – Cruise Line Expenditures During 2008, U.S. businesses outside the core cruise travel sector received $8.9 billion in direct spending by the cruise lines. These expenditures generated an estimated 41,510 jobs in the nation paying wage income of $1.96 billion. Expenditures with suppliers increased by 5.1 percent from 2007; however, due to a shift in industry mix and productivity gains, the employment impact among cruise industry suppliers only increased by 0.6 percent while the income impact increased by 5.8 percent. Since 2000, cruise industry expenditures with their suppliers in the United States have nearly doubled. Table 6 shows the direct impacts of these expenditures by the cruise lines on major business sectors of the U.S. economy. These economic impacts by sector are as follows: Professional, Scientific and Technical Services ($1.4 billion in direct expenditures, 14,437 jobs, and $469 million in wage income): comprised of a very broad range of business services, including legal, accounting and consulting services; advertising, promotional and marketing agencies; computer hardware and software consulting; and security and manpower services. The cruise industry increased their expenditures with these service providers by 2.3 percent from 2007. The subse-

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quent employment impact declined by 0.6 percent while the income impact increased by 5.9 percent.
Figure 6 – Distribution of Direct Expenditures to Cruise Industry Suppliers - 2008
Spending with U.S. Cruise Industry Suppliers $8.9 Billion
Other Services & Government 11% Recreational Services 2% All Other 1%

Professional & Technical Services 16% Manufacturing 51% Financial and Leasing Services 11% Information Services 2% Wholesale Trade 6%

Source: Business Research and Economic Advisors

Petroleum Refining ($1.3 billion in direct expenditures, 146 jobs and $17 million in wage income): the refining of petroleum products used to power the cruise ships and lubricate engines and equipment. Due to the dramatic increase in oil prices during 2008, expenditures for petroleum products had the highest rate of increase in 2008, 39 percent. However, the employment and wage impacts in this high productivity industry only increased by 3.5 and 6.2 percent, respectively. Food and Beverages $1.0 billion in direct expenditures, 2,374 jobs, and $94 million in wage income): cruise line purchases of alcoholic and nonalcoholic beverages and food consumed on the cruise ships by passengers and crew. The cruise industry increased their expenditures on food and beverages by 4.2 percent in 2007. The direct employment impact in this industry rose by 1.2 percent while the income impact increased by 1.1 percent. Finance, Insurance, Real Estate and Leasing ($988 million in direct expenditures, 3,353 jobs, $225 million in wage income): banking and brokerage services; vessel, passenger travel and employee health insurance; real estate services and the leasing of property and equipment. Spending with financial service providers increased by 1.0 percent over 2007 expenditures. Due to productivity gains the employment impact was virtually unchanged from 2007 while the income impact increased by 2.7 percent. Wholesale Trade ($555 million in direct expenditures, 3,163 jobs, and $199 million in wage income): primarily includes the wholesale distribution and warehousing costs associated with the purchase and delivery of manufactured products consumed and/or used aboard the cruise ships. Expenditures among whole-

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salers increased by 3.3 percent from 2007 while the employment and wage impacts increased by 8.0 and 12.4 percent respectively. Ship Maintenance and Repair ($517 million in direct expenditures, 1,759 jobs and $113 million in wage income): includes cruise ship maintenance and repair by all of the cruise lines at U.S. shipyards and the construction of support vessels, such as lifeboats and passenger tenders. Cruise industry expenditures for ship repair and maintenance in the U.S. rose by 12.6 percent in 2008. The direct employment impact increased by 14.7 percent while the income impact saw a 4.0 percent increase. Industrial Machinery ($349 million in direct expenditures, 1,212 jobs, and $71 million in wage income): includes heavy equipment used to power the cruise ships such as boilers and turbines, elevators and parts, printing equipment, kitchen and restaurant equipment and plumbing and water treatment equipment. Direct expenditures in this industry rose by 10.4 percent while the direct employment and wage income impacts increased by 6.3 percent and 11.0 percent, respectively. Computers and Electronic Equipment ($321 million in direct expenditures, 992 jobs and $80 million in wage income): includes the manufacture of computers, lighting equipment, audio-visual products and communication and navigation equipment. The cruise industry had an increase of 5.9 percent in its expenditures for computers and electronic equipment. As a result, the direct employment impact in this industry increased by 2.1 percent and the wage income impact rose by 6.7 percent. Fabricated Metal Products ($219 million in direct expenditures, 1,108 jobs, and $53 million in wage income): includes a variety of hard goods, such as doors and fixtures in cabins and cruise quarters, security equipment, fabricated products used in equipment and storage facilities on the cruise ships, etc., and tools used aboard cruise ships during repair and maintenance of the vessels. Direct expenditures in this industry remained virtually unchanged from 2007 while the direct employment impact declined by 4.5 percent and the wage impact remained unchanged. Arts, Entertainment and Recreation ($172 million in direct expenditures, 1,571 jobs and $64 million in wage income): includes the purchase of art work for cruise ships, the hiring of designers, entertainers and crew for shows aboard cruise ships and other recreational activities on and off the cruise ships. Cruise industry expenditures for entertainment services declined by 9.0 percent in 2008. The direct employment impact declined by 11.8 percent while the wage income impact rose by 3.2 percent.

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Indirect and Induced Economic Impacts in the United States During 2008
The indirect economic benefits derived from the cruise industry result in part from the additional spending by the suppliers to the cruise industry. For example, food processors must purchase raw foodstuffs for processing; utility services, such as electricity and water, to run equipment and process raw materials; transportation services to deliver finished products to the cruise lines or wholesalers; and insurance for property and employees. The U.S. input/output table and multipliers were used to estimate the indirect impacts.12 The input/output table reflects the inter-industry links among industries in the U.S. economy. Use of the U.S. input/output table permits the estimation of the additional economic impacts that the direct spending by the cruise industry, its passengers and its suppliers has on all other industries in the U.S. economy. In addition to the indirect impacts generated by the purchase of business goods and services by cruise industry suppliers, the employees of the cruise lines and their suppliers generate additional economic benefits through their purchases of consumer goods and services including such goods as autos, food, clothing, furniture, health care and so forth. The input/output analysis implied that the direct spending of the North American cruise industry generated another 202,690 jobs in the United States through the indirect spending by businesses and employees, an increase of 4.4 percent from 2007. In addition, these jobs generated just over $10.0 billion in wage income for these workers, an increase of 11.8 percent over 2007. As shown in Table 9, the indirect economic impacts touch virtually every industry in the nation.
Table 9 – Indirect and Induced Economic Impacts of the Cruise Industry in the United States – 2008

12

Bureau of Economic Analysis, Annual Input/Output Accounts for the U.S. Economy, 2008.

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Sector

Cruise Industry Direct Spending $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 69 4,580 1,004 126 105 277 1,251 219 399 532 371 296 712 5,451 215 988 7,055 1,420 2,981 1,536 172 946 19,070 18,678 2.1%

Employment

Wage Income $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 546 1,207 95 87 89 196 33 158 48 117 203 181 1,332 720 220 892 5,122 1,516 769 338 154 2,345 10,039 9,427 11.8%

Agriculture, Mining, Utilities & Construction Manufacturing Food & Beverages Apparel & Textiles Paper & Printing Chemicals & Plastics Petroleum Refining Fabricated Metal Products Industrial Machinery Transportation Equipment Computers & Electronic Equipment Other Manufacturing Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Accommodations & Food Services Performing Arts & Amusements Other Services & Government Total - 2008 Total - 2007 Percentage Change from 2007

6,865 19,010 2,001 1,965 1,468 2,465 617 2,928 725 1,619 2,099 3,123 30,303 15,888 2,922 13,728 113,974 15,946 22,806 18,909 4,700 51,613

202,690 $ 198,814 $ 4.4%

Source: Business Research and Economic Advisors

The Services & Government sector was the most significantly impacted sector within the nation. This sector accounted for more than half of the indirect employment and wage impacts. The indirect impacts of cruise industry spending generated 113,974 jobs in the Services and Government sector paying $5.1 million in wage income. The indirect employment impacts in this sector rose by 2.3 percent while the income increased by 11 percent from 2007. Within the Services & Government segment, approximately 98 percent of the employment and income impacts were in the services industry, while federal, state and local government agencies accounting for the remaining two percent. Within the Professional, Scientific and Technical Services subsector, the indirect impacts added 15,946 jobs, a 6.2 percent increase over 2007, and $1.5 billion in wage income, an increase of 13 percent from 2007. These impacts resulted from business demand for a variety of services, including legal and accounting services, consulting services, especially computer consulting and advertising and other business services. Another 22,806 jobs and $769 million in income were generated in the Administrative and Waste Management Services subsector. The respective percentage changes from 2007 for

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the employment and wage income impacts were -5.1 and 2.7 percent. This sector is comprised of establishments that provide routine support activities for the day-to-day operations of other businesses. These include such activities as temporary help services, document preparation services, telephone call and answering services, security services, travel agents and tour operators and sanitary services to name a few.
Figure 7 – Distribution of Indirect Employment Impacts - 2008

Indirect Employment Impacts 202,690 Jobs

Other Services & Government 26% Accommodations & Food Services 10%

All Other 3%

Manufacturing 10%

Wholesale & Retail Trade 15%

Transportation 8%

Administrative & Support Services 12%

Information Services 1% Financial and Leasing Professional & Services Technical Services 7% 8%

Source: Business Research and Economic Advisors

The Accommodations and Food Services subsector, hotels and restaurants, benefited from the creation of an estimated 18,909 jobs and $338 million in wage income. These impacts are primarily due to the travel and dining requirements of day-to-day business operations, as well as consumer vacation travel. The indirect employment impact rose by 2.9 percent from 2007 and the income impact increased by 7.6 percent. The indirect impacts measured in the Other Services subsector are primarily personal, health, amusement and entertainment, and educational and social services that are generated by the spending of households whose income is directly and indirectly generated by the cruise industry. With respective indirect employment and income impacts of nearly 51,613 jobs and $2.3 billion, the indirect employment impacts increased by 4.4 percent from 2007 while the income impacts rose by 9.5 percent.

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Just over 30,300 indirect jobs, 15 percent of the total indirect employment impacts, with an annual income of $1.3 billion were generated in the Wholesale & Retail Trade sector because of cruise industry spending in 2008. Relative to 2007, the indirect employment impacts in this sector fell by 1.8 percent while the wage income impacts declined by 0.1 percent. The wholesale trade subsector accounted for approximately 40 percent of the indirect employment impacts and 60 percent of the wage income impacts in the two subsectors. The higher income share reflects the higher average wage in the wholesale trade industry. The Transportation sector remained an important sector within the nation with 15,888 indirect jobs, eight percent of the total indirect employment impacts, paying $720 million in wages. This reflects the strong inter-industry linkages within the transportation 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. The indirect employment impacts in this sector increased by 6.3 percent from 2007 while the income impacts increased by 3.2 percent. Finally, the indirect impacts of cruise industry spending generated 19,010 jobs within the Manufacturing sector during 2008, 10 percent of the total indirect employment impacts and a 7.5 percent increase over 2007. These jobs paid $1.2 billion in annual income, an increase of 10.8 percent from 2007. The majority of the employment impacts were spread among nine industries with the employment impacts ranging from 617 jobs in the petroleum refining industry to 2,928 jobs in the fabricated metals industry. Combined, these nine industries (shown in Table 9) accounted for 84 percent of the indirect impacts in the Manufacturing sector.

Total Economic Impacts in the United States During 2008
Even though the North American cruise industry provides a service that is considered an import to the U.S. economy, it is responsible for considerable domestic economic activity. As noted previously the industry directly spent $19.1 billion in the United States in 2008. As shown in Table 10, this spending generated $40.2 billion in total industry output among U.S. businesses during 2008, an increase of 5.9 percent from 2007. The $40.2 billion in total industrial gross product resulted in the employment of 357,710 workers, an increase of 0.9

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percent from 2007, and $16.1 billion in wages and salaries, an increase of 4.8 percent over 2007, throughout the U.S. economy.
Table 10 – Total Economic Impacts of the Cruise Industry in the United States – 2008

Sector
Agriculture, Mining, Utilities & Construction Manufacturing Food & Beverages Apparel Printing Chemicals & Plastics Petroleum Refining Fabricated Metal Products Industrial Machinery Transportation Equipment Computers & Electronic Equipment Other Manufacturing Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Accommodations & Food Services Performing Arts & Amusements Other Services & Government Total - 2008 Total - 2007 Percentage Change from 2007

Industry Output $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3,594 9,111 1,535 267 375 1,097 2,055 615 553 892 802 920 2,810 5,616 1,012 4,073 14,021 4,828 4,295 2,039 337 2,522 40,239 38,007 5.9%

Employment 7,192 30,153 4,375 2,821 1,949 2,885 816 4,036 2,208 3,388 3,266 4,409 35,295 67,301 3,427 17,082 197,260 32,546 61,856 38,112 6,270 58,476

Wage Income $ Millions $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 563 1,821 188 120 112 227 57 210 131 230 303 243 1,586 3,204 255 1,117 7,638 2,510 1,943 775 199 2,211 16,184 15,437 4.8%

357,710 $ 354,690 $ 0.9%

Source: Business Research and Economic Advisors

Since 2000, the total economic impact of the North American cruise industry has increased significantly. Total output supported by the cruise industry has increased by 124 percent over the eight year period. As a result of the increased output, the cruise industry’s total employment and wage impacts have increased by 39 percent and 86 percent respectively. Virtually all sectors of the economy were affected by the North American passenger cruise industry. The industries that were most significantly affected included: Air Transportation Travel Agents Advertising Food Processing Ship Maintenance and Repair Petroleum Refining

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Business Services Wholesale Trade However, many other industries were affected in some form, including lodging, insurance, telecommunications, retail trade and many others.
Figure 8 – Distribution of Total Employment Impacts - 2008

Source: Business Research and Economic Advisors

As shown in Table 10 and Figure 8, the Transportation Services sector accounted for the most total jobs generated by the North American cruise industry. Just over 67,300 jobs, accounting for 19 percent of the total employment impact, were generated in this sector. These jobs, in turn, generated $3.2 billion in wages. The Professional, Scientific & Technical Services and the Other Services & Government subsectors accounted for 9 and 17 percent, respectively, of all (direct and indirect) jobs generated in the United States by the spending of the cruise industry and its passengers and crew. Combined, these two subsectors generated 91,022 jobs and $4.7 billion in wages during the year as a result of the spending by the North American cruise industry. Over $9.1 billion in output was generated in the Manufacturing sector. The Manufacturing sector accounted for eight percent of the total jobs, over 30,100, and 11 percent of the in-

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come, $1.8 billion, generated by cruise industry spending. The impacts were split evenly between nondurable and durable goods industries. Finally, the Wholesale & Retail Trade sector accounted for 10 percent of the total employment impact of the cruise industry having generated just under 35,300 jobs and $1.6 billion in income as a result of the expenditures of the North American cruise industry.

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Section II: The Contribution of the North American Cruise Industry to the U.S. Economy by State in 2008
The national economic contributions discussed in the previous section also had an effect on individual state economies. The direct economic contribution of the cruise industry and its passengers and crew was allocated to each state based on several criteria. First, vendor purchases by industry were allocated to each state based upon a sample of state- and industryspecific vendor purchases obtained from the cruise lines. Second, wages and salaries of shoreside employees of the cruise lines were allocated to each state based upon the location of administrative facilities as provided by the cruise lines. Third, national travel agent commissions were allocated to each state based upon the place of residence of cruise passengers. Fourth, air transportation spending was assigned to each state based upon a combination of the residence of passengers and the ports of embarkation of passengers. Fifth, cruise passenger and crew expenditures were allocated to states based upon embarkation and arrival data. The total economic contribution in each state was estimated by using state- and industryspecific multipliers obtained from the Bureau of Economic Analysis. These multipliers reflect the industry and wage structure in each state. As a consequence, the direct and indirect economic contributions estimated for each state reflect the nature of vendor purchases by the cruise industry, the place of residence of cruise passengers, the regional distribution of cruise embarkations and port-of-call visits and the economic structure of each state. As shown in Figure 9, our analysis shows that the North American passenger cruise industry affects every state economy. The contributions result, in part, from the direct spending of the cruise lines for goods and services used to support their cruise operations. These range from the purchase of food and beverages, to ship maintenance and refurbishment to engineering, insurance and management consulting services. Economic contributions are also generated by other components of what we have called the core cruise travel sector. These include the commissions received by travel agents from the cruise lines, airfares received by airlines from cruise passengers and fees received by port authorities and port service providers.

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Figure 9 – Direct Expenditures of the North American Cruise Industry by State - 2008

Source: Business Research and Economic Advisors

Economic Impacts in the Top Ten States
As shown in Table 11, all states had some direct expenditures generated by the North American cruise industry in 2008. This ranged from a high of $6.3 billion in Florida to a low of $3 million in Wyoming. The top 10 states accounted for 78 percent of the direct expenditures of the cruise industry (See Figure 10), a decline of one percentage point from 2007. Of the top 10 states, seven (Florida, California, Texas, Alaska, New York, Washington and Hawaii) had significant cruise ports. Of these, Alaska was primarily a destination rather than a homeport state while Hawaii served as both a cruise origination and destination market. The other three states (Georgia, Illinois and Colorado) had no cruise ports but were significant source markets for cruise passengers and provided vendor support for cruise and cruise tour operations.

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Table 11 – Direct Expenditures of the North American Cruise Industry by State – 2008
Rank Rank 2008 2007
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1 2 3 4 5 8 7 6 9 10 11 13 12 14 15 16 17 18 19 20 21 22 23 25 24 26 Direct Purchases ($ Millions) $6,307 $2,239 $1,240 $1,143 $1,101 $760 $663 $545 $499 $445 $434 $387 $368 $265 $214 $201 $186 $183 $169 $163 $153 $153 $143 $122 $114 $88 Share of the U.S.

State

State

Rank Rank 2007 2006
27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 27 33 28 29 30 31 32 34 35 36 37 41 38 39 40 43 42 44 45 46 47 48 49 50 51

Direct Purchases ($ Millions) $78 $66 $60 $60 $54 $51 $50 $45 $41 $33 $30 $29 $29 $26 $25 $22 $22 $19 $12 $8 $7 $6 $6 $5 $3 $19,070

Share of the U.S.

Florida California Alaska New York Texas Washington Georgia Hawaii Illinois Colorado Massachusetts New Jersey Pennsylvania Indiana North Carolina Michigan Missouri Ohio Arizona Louisiana Maryland Virginia Connecticut Alabama Minnesota Oregon

33.1% 11.7% 6.5% 6.0% 5.8% 4.0% 3.5% 2.9% 2.6% 2.3% 2.3% 2.0% 1.9% 1.4% 1.1% 1.1% 1.0% 1.0% 0.9% 0.9% 0.8% 0.8% 0.7% 0.6% 0.6% 0.5%

South Carolina Nevada Tennessee Kentucky Utah Kansas Wisconsin New Hampshire Dist. of Columbia Iowa Oklahoma Maine Mississippi Delaware Rhode Island Nebraska Arkansas New Mexico Idaho West Virginia North Dakota Montana South Dakota Vermont Wyoming U.S. Total

0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Source: Business Research and Economic Advisors

Figure 10 – Distribution of Direct Expenditures of the North American Cruise Industry by State - 2008
Total Direct Expenditures of the N.A. Cruise Industry, 2008 U.S. Total = $19.1 Billion

Alaska 6% California 12%

New York 6%

Texas 6%

Hawaii 3%

Georgia 3% Washington 4% Illinois 3% Colorado 2%

Florida 33%

All Other States 22%

Source: Business Research and Economic Advisors

The following sections provide a summary of the characteristics of cruise-related activity in each of the top ten states.

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Florida
As has been discussed previously in this report, Florida is certainly the cruise capital of the United States, if not the world. As shown in Table 12, just over 5.1 million passengers boarded their cruises form one of Florida’s five cruise ports (Port of Miami, Port Everglades, Port Canaveral, Port of Tampa and Port of Jacksonville)13. While these ports primarily offer cruises to the Bahamas, the Caribbean and Central America, cruises that originate in Florida travel to ports around the world.
Table 12 – Summary of 2008 Cruise Industry Impacts – Florida

Florida Pas senger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) 5,110,000 2,300,000 7,466,000 $ 6,307 128,910 $ 5,480

Share of the U.S. 57.0% 24.7% 36.9% 33.1% 36.0% 33.9%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Given the proximity of cruise homeports in Florida and the Gulf Coast and cruise destinations to Florida residents, the state also led the nation in resident cruise passengers with 2.3 million resident passengers, 25 percent of all U.S. resident cruise passengers. With more than twice as many embarkations as resident passengers, the cruise industry in Florida is a net generator of tourism activity in the state. Relative to 2007, Florida experienced a solid increase in both passenger embarkations and resident cruise passengers. Passenger embarkations rose by 2.7 percent while resident cruise passengers increased by 1.1 percent. As a result, Florida’s share of passenger embarkations rose by 3 percentage points from 54 percent in 2007 to 57 percent in 2008 while its share of resident cruise passengers remained virtually unchanged.

Key West is a port-of-call for Caribbean cruises and thus does not generate passenger embarkations. However, passenger and crew intransit visits and spending are included in the state visit and spending estimates.

13

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Including homeport and intransit calls, cruising at Florida ports generated an estimated 7.5 million passenger and crew visits, accounting for nearly 37 percent of all passenger and crew visits in the United States. These visits produced an estimated $817 million in passenger and crew onshore spending, or slightly more than $109 per visit. Total passenger and crew spending in Florida increased by 6.1 percent from 2007. Florida is not only the center for cruise originations; it is the center of just about all aspects of the cruise industry. Carnival Corporation & plc and Royal Caribbean Cruises, Ltd., which combined, control three-fourths of the North American cruise industry’s capacity, have their headquarters in Miami. Norwegian Cruise Line also has its U.S. headquarters in Florida as do other cruise lines. Overall, these operations had nearly 14,000 employees, approximately 45 percent of the total employment of the cruise lines throughout the United States. With the removal of the U.S.-flagged ships from Hawaii, total employment by the cruise lines declined by more than 13 percent. As a consequence, Florida’s share of cruise line employment rose by nearly 5 percentage points. This was the first increase in share in several years. As a result of the activity of the cruise industry, Florida businesses received $6.3 billion, or one-third of the direct expenditures generated by the cruise industry in the United States. This represented a 4.3 percent increase over 2007. Tourism-related businesses in addition to the cruise lines, such as travel agencies, airlines, hotels, restaurants and providers of ground transportation were certainly the main beneficiaries of the cruise industry. These tourismrelated industries received approximately $2.5 billion, or nearly 40 percent of the industry’s direct expenditures in Florida. Another $852 million, or 13 percent of the total, was spent with businesses in five additional business segments, food processors and chemical manufacturers, including, paints, pharmaceuticals and cleaning supplies, within the manufacturing sector; and advertising agencies, management and technical consulting companies and manpower agencies in the nonmanufacturing sector. Due to the absolute scale of the industry, direct expenditures in Florida impacted just about all segments of the economy, including recreation and amusement establishments, wholesalers of products purchased by cruise lines, manufacturers of communications and navigation equipment, producers of machinery and equipment such as engine parts, boilers, laundry equipment and computers, manufacturers of fabricated metal products such as locks and security equipment and business service providers such as interior designers and computer services consultants.

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Finally, these direct expenditures generated total economic impacts of 128,910 jobs and $5.5 billion in income throughout the Florida economy during 2008. Florida’s total employment impact increased by 1.9 percent as a result of the 4.3 percent increase in direct spending and increases in labor productivity. The total wage impact increased by 5.2 percent as labor productivity gains resulted in increased wages. These impacts accounted for 36 percent of the national employment impact and 34 percent of the national wage impact.

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California
With respect to the cruise industry, California is very similar to Florida only on a smaller scale. The state has four major cruise ports in Los Angeles, Long Beach, San Diego and San Francisco that combined generated 1.4 million passenger embarkations during 2008, 16 percent of total U.S. embarkations. Cruise itineraries primarily include ports along the Pacific coast of Mexico, but also include cruises through the Panama Canal, to Hawaii and Alaska.
Table 13 – Summary of 2008 Cruise Industry Impacts – California

California Pas senger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) 1,436,000 1,203,000 1,782,000 $ $ 2,239 49,682 2,571

Share of the U.S. 16.0% 12.9% 8.8% 11.7% 13.9% 15.9%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Resident cruise passengers in California accounted for about 13 percent of U.S. resident passengers and totaled 1.2 million during 2008. Thus, California was a net importer of cruise passengers. Relative to 2007, California experienced a 7.7 percent increase in passenger embarkations but a 6.2 percent decline in resident cruise passengers. San Francisco experienced a 79 percent increase in embarkations to 75,000 in 2008. It was followed by San Diego with a 16 percent increase and Los Angeles with 3.1 percent gain. These gains were only partially offset by the 1.4 percent decline in Long Beach. As a result, California’s share of passenger embarkations increased by 1.5 percentage points while its share of resident cruise passengers declined by 1.3 percentage points. Including homeport and intransit calls, cruising at California ports generated an estimated 1.8 million passenger and crew visits, accounting for nearly 9 percent of all passenger and crew visits in the United States. These visits produced an estimated $149 million in passenger and crew onshore spending, or just over $83 per visit. Total estimated spending by passengers and crew increased by 14 percent from 2007.

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Again, like Florida, California is the home of headquarters and support facilities for several cruise lines including Princess Cruises and Crystal Cruises. Overall, the industry had approximately 1,700 employees, or about 5.5 percent of total employment of the cruise lines throughout the United States. As a result of the activity of the cruise industry, California businesses received $2.2 billion, or just under 12 percent of the direct expenditures generated by the cruise industry in the United States. This represented a 2.7 percent increase over 2007 which matched the rate of cruise industry expenditures throughout the United States. Tourism-related businesses, such as travel agencies, airlines, hotels, etc., received more than $779 million, or 35 percent of the industry’s direct expenditures in California. Another $744 million, or 34 percent of the total, was spent with businesses in five additional business segments, food processors, ship repair companies and petroleum refiners within the manufacturing sector; and advertising agencies and insurance companies in the nonmanufacturing sector. Direct expenditures in California also impacted many other industries throughout the state including business service providers such as computer services, software consulting and marketing, legal services, apparel manufacturing and the entertainment and amusement industry, including artwork and producers of musical and theatrical shows. Finally, these direct expenditures generated total economic impacts of 49,682 jobs and $2.6 billion in income throughout the California economy during 20087. As a result of productivity gains, California’s total employment impact declined slightly by 0.6 percent. The total wage impact increased by 7.8 percent as labor productivity gains resulted in increased wages. These impacts accounted for nearly 14 percent of national employment impact and 16 percent of the national wage impact.

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Alaska
Alaska is the premier cruise destination market in the United States. During 2008, Alaska ports received about 3.9 million cruise passenger visits, 70 percent of all port-of-call cruise passenger visits at U.S. ports.14 The state does have homeporting operations as well, and generated 184,500 embarkations on turnaround cruises between Alaska and Vancouver, Canada. The cruise lines also maintain significant tour operations in the state and employed an annual average of approximately 4,500 full- and part-time employees during the year. During the peak season, the cruise lines employed more than 6,000 workers and averaged about 3,200 full time equivalent employees in the state during the year.
Table 14 – Summary of 2008 Cruise Industry Impacts – Alaska

Alaska Pas senger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) 184,500 25,000 5,769,000 $ $ 1,240 25,697 1,007

Share of the U.S. 2.1% 0.3% 28.5% 6.5% 7.2% 6.2%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Alaska is one of the least populous states in the nation and thus resident cruise passengers in the state only totaled 25,000 and accounted for 0.3 percent of U.S. resident passengers during 2008. Thus, Alaska was a net importer of cruise passengers. Relative to 2007, Alaska experienced a 2.1 percent increase in passenger embarkations and a 2.5 percent increase in cruise passenger visits. As a result, Alaska’s share of passenger embarkations and intransit passenger visits remained virtually unchanged. Including homeport and intransit calls, cruising at Alaska ports generated an estimated 5.8 million passenger and crew visits, accounting for over 28 percent of all passenger and crew visits in the United States. These visits produced an estimated $584 million in passenger and crew onshore spending, or just over $101 per visit.

14 Since individual passengers will make several port-of-call visits on any itinerary, passenger visits are approximately three times greater than the number of passengers taking cruises to U.S. ports-of-call.

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Alaska ranked third in cruise industry direct expenditures with $1.2 billion, or 6.5 percent of the direct expenditures generated by the cruise industry in the United States. This represented a 1.6 percent increase over 2007. Tourism-related businesses, such as tour operators, airlines, hotels, etc., received approximately $854 million, slightly less than 70 percent of the industry’s direct expenditures in Alaska.15 Another $98 million was spent with businesses in five additional business segments, food processors within the manufacturing sector; and construction firms, employment agencies, trucking companies and utilities in the nonmanufacturing sector. Finally, these direct expenditures generated total economic impacts of 25,697 jobs and $1 billion in income throughout the Alaska economy during 2008. Alaska’s total employment impact increased by 2.2 percent while the wage impact increased by 1.9 percent as a result of the increases in direct cruise activity in the state. These impacts accounted for 7.2 percent of national employment impact and 6.2 percent of the national wage impact.

15

Excludes the wages and salaries paid to cruise line employees in the state.

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New York
New York is primarily a place of embarkation for cruises to Canada, Bermuda, the Bahamas and the Caribbean. While the cruises to Canada and Bermuda are seasonal (Spring through Fall months), cruises to the Bahamas and the Caribbean are offered on a year-round basis. The City of New York saw 524,000 passenger embarkations during 2008, 5.8 percent of total U.S. embarkations. The Manhattan Cruise Terminal handled approximately 75 percent of the passengers while the Brooklyn Cruise Terminal, processed the remaining 25 percent.
Table 15 – Summary of 2008 Cruise Industry Impacts – New York

New York Passenger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ 524,000 436,000 753,000 1,143 13,536 $ 783

Share of the U.S. 5.8% 4.7% 3.7% 6.0% 3.8% 4.8%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Resident cruise passengers in the state accounted for 4.7 percent of U.S. resident passengers and totaled 436,000 during 2008. In addition to the state of New York, the New York source market also includes Connecticut, New Jersey and parts of Pennsylvania. As a result, New York was a net importer of cruise passengers. Relative to 2007, New York experienced an 8.9 percent decrease in passenger embarkations and a 1.8 percent decline in the number of resident cruise passengers. As a result, New York’s share of passenger embarkations decreased by five-tenths of a percentage point while its share of resident cruise passenger declined by two-tenths of a percentage point. Including homeport and intransit calls, cruising at New York ports generated an estimated 753,000 passenger and crew visits, accounting for 3.7 percent of all passenger and crew visits in the United States. This was a 6.8 percent decline from 2007. These visits produced an estimated $39 million in passenger and crew onshore spending, or just over $51 per visit.

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New York ranked fourth in cruise industry direct expenditures with $1.1 billion, or 6.0 percent of the direct expenditures generated by the cruise industry in the United States. Direct cruise industry expenditures in the state increased by 1.4 percent from 2007. Tourism-related businesses, such as travel agencies, airlines, hotels, etc., received approximately $280 million, slightly less than 25 percent of the industry’s direct expenditures in New York. Another $379 million, 33 percent of the direct expenditures, was spent with businesses in five additional business segments, food processors, textile and apparel manufacturers, and pharmaceutical companies within the manufacturing sector; and advertising agencies and financial services companies in the nonmanufacturing sector. The remaining 42 percent of direct expenditures in New York also impacted many other industries throughout the state including law firms, insurance companies, business service companies such as computer services, software consulting and marketing, manufacturers of fabricated metal products such as locks and security equipment, petroleum refiners and performing arts and amusement establishments. Finally, these direct expenditures generated total economic impacts of 13,536 jobs and $783 million in income throughout the New York economy during 2008. These impacts accounted for 3.8 percent of national employment impact and 4.8 percent of the national wage impact.

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Texas
Texas ports are primarily ports of embarkation for cruises to the western Caribbean. Texas’ two principal cruise ports, Galveston and Houston, generated 387,000 embarkations during 2008, 4.3 percent of total U.S. cruise embarkations. While the Texas ports have been among the fastest growing cruise ports in the United States, combined embarkations at the two ports have declined for two successive years. In 2007 embarkations declined by nearly 18 percent and declined by another 30 percent in 2008. The decline in 2008 was primarily the result of the closure of the Port of Galveston following Hurricane Ike. However, the redeployment of cruise ships from the Western Caribbean to Europe has also played a significant role in the reduction in embarkations from the Texas ports. As a result, Texas’ ranking for direct expenditures has fallen from third in 2006 to fifth in 2008.
Table 16 – Summary of 2008 Cruise Industry Impacts – Texas

Texas Passenger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ 387,000 788,000 476,000 1,101 18,674 $ 944

Share of the U.S. 4.3% 8.5% 2.4% 5.8% 5.2% 5.8%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Resident cruise passengers in Texas accounted for 8.5 percent of U.S. resident passengers and totaled 788,000 during 2008, an increase of 3.8 percent from 2007. Thus, Texas was a net exporter of cruise passengers. Relative to 2007 and as noted above, Texas experienced a 30 percent decline in passenger embarkations and a 3.8 percent increase in resident cruise passengers. As a result, Texas’ share of passenger embarkations declined by 1.7 percentage points while its share of resident cruise passengers increased by one-tenth of a percentage point. Combining passenger and crew visits during cruise ship calls, cruising at Texas ports generated an estimated 476,000 passenger and crew visits, accounting for 2.4 percent of all passenger and crew visits in the United States. Again, this represented a 30 percent decline from

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2007. These visits produced an estimated $33.8 million in passenger and crew onshore spending, or nearly $71 per visit. Texas ranked fifth in cruise industry direct expenditures with $1.1 billion, or 5.8 percent of the direct expenditures generated by the cruise industry in the United States. This was a 3.9 percent increase from 2007 and was primarily the result of increased spending for travel by resident cruise passengers and increased spending by the cruise lines for fuel and other lubricants. Tourism-related businesses, such as travel agencies, airlines, hotels, etc., received approximately $490 million, 44 percent of the industry’s direct expenditures in Texas. Another $279 million, 25 percent of direct expenditures in the state, was spent with businesses in five additional business segments, food processors and petroleum refiners in the manufacturing sector; and advertising agencies, insurance carriers, and management and technical consulting companies in the nonmanufacturing sector. The remaining 31 percent of direct expenditures in Texas also impacted many other industries throughout the state including food processors, wholesalers of products purchased by cruise lines, apparel manufacturers, software publishers and companies that manufacture and distribute communication and navigation equipment. Finally, these direct expenditures generated total economic impacts of 18,674 jobs and $944 million in income throughout the Texas economy during 2008. These impacts accounted for 5.2 percent of national employment impact and 5.8 percent of the national wage impact.

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Hawaii
With the deployment of U.S.-flagged cruise ships in Hawaii by NCL America, the state has been one of the fastest growing cruise destination markets in the United States. However, beginning in 2007, NCL America began the process of redeploying its ships to other markets. In 2008, NCL redeployed of Pride of Hawaii and the Pride of Aloha from Hawaii. As a result passenger embarkations in Hawaii declined by nearly 60 percent during 2008 to 157,000 passengers. This decline in Hawaii accounted for nearly 75 percent of the net decline in cruise passenger embarkations among all U.S. ports. The Hawaii-based cruises and those that originated in other locations generated an estimated 590,000 cruise passenger and crew visits at Hawaiian ports-of-call.16 Relative to 2007, Hawaii experienced approximately a 66 percent decrease in passenger and crew visits. These passenger and crew visits accounted for just 2.9 percent of all cruise passenger and crew visits at U.S. ports, down from 8.4 percent in 2007. These passenger and crew visits generated an estimated $229 million on onshore expenditures, or just over $388 per visit. Total expenditures by passengers and crew declined by an estimated 50 percent from 2007. This high expenditure rate is due to the fact that the cruises that originate in Honolulu visit other Hawaii ports-of-call and so when combined with pre- and post-cruise stays, the average cruise passenger spends 9.8 days in Hawaii, 6.3 days for the cruise and 3.5 days for pre- and postcruise stays.17
Table 17 – Summary of 2008 Cruise Industry Impacts – Hawaii

Hawaii Passenger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ 157,000 18,000 590,000 545 15,851 $ 467

Share of the U.S. 1.8% 0.2% 2.9% 2.9% 4.4% 2.9%

Source: Cruise Lines International Association and Business Research and Economic Advisors

16 Since individual passengers will make several port-of-call visits on any itinerary, passenger visits are approximately three times greater than the number of passengers taking cruises to U.S. ports-of-call. 17 Annual Visitor Research Report, 2007, Department of Business, Economic Development and Tourism, State of Hawaii.

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Hawaii is a small island state and thus resident cruise passengers in the state only totaled 18,000 and accounted for 0.2 percent of U.S. resident passengers during 2008. Thus, Hawaii was a net importer of cruise passengers. Hawaii’s expenditure ranking dropped from sixth in 2007 to eighth in 2008 with $545 million in direct cruise industry expenditures, or 2.9 percent of the direct expenditures generated by the cruise industry in the United States in 2008. Tourism-related businesses, such as tour operators, airlines, hotels, etc., received approximately $382 million, about 70 percent of the industry’s direct expenditures in Hawaii.18 Another $36 million was spent with businesses in five additional business segments, petroleum refiners and food processors within the manufacturing sector; and insurance companies, advertising agencies and health service providers in the nonmanufacturing sector. Finally, these direct expenditures generated total economic impacts of 15,851 jobs and $467 million in income throughout the Hawaii economy during 2008. As a result of the decline in direct cruise activity in the state, Hawaii’s total employment and wage impacts each decreased by 31 percent. These impacts accounted for 4.4 percent of national employment impact and 2.9 percent of the national wage impact.

18

Excludes the wages and salaries paid to cruise line employees in the state.

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Georgia
While Georgia has no direct cruise operations, it is a major source market for cruise passengers, making it a net exporter of cruise passengers. It also supports the industry with a wide range of goods and services. Resident cruise passengers in Georgia totaled 273,000 during 2008, 2.9 percent of U.S. resident passengers and a 19 percent decline from 2007.
Table 18 – Summary of 2008 Cruise Industry Impacts – Georgia

Georgia Passenger Embarkations Resident Cruise Passengers Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ $ N.A. 273,000 663 8,902 435

Share of the U.S. N.A. 2.9% 3.5% 2.5% 2.7%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Cruise industry expenditures in Georgia declined by 2.0 percent in 2008 to $663 million, or 3.5 percent of the direct expenditures generated by the cruise industry in the United States. Since Georgia is a source market for cruise passengers, tourism-related businesses, such as travel agencies, airlines, hotels, etc., accounted for 17 percent of the industry’s direct expenditures in the state, or $111 million. More than $176 million was spent with businesses in the top five support industries, food processors and computer and electronic equipment manufacturers within the manufacturing sector; and advertising agencies, insurance companies and management and technical consultants in the nonmanufacturing sector. Direct expenditures in Georgia also impacted many other industries throughout the state including telecomm companies, other financial services, software publishers and textile and apparel manufacturers. Finally, these direct expenditures generated total economic impacts of 8,902 jobs and $435 million in income throughout the Georgia economy during 2008. Georgia’s total employment impact declined by 2.0 percent as a result of the shift in the mix of direct spending and increases in labor productivity while the total wage impact declined by 0.5 percent. These impacts accounted for 2.5 percent of national employment impact and 2.7 percent of the national wage impact.

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Washington
With respect to the cruise industry, Washington is similar to Florida only on a smaller scale. The state has only one major cruise port, Port of Seattle, which had 435,000 passenger embarkations during 2008, 4.9 percent of total U.S. embarkations. The Seattle cruises were destined for the Alaska cruise market and also included at least one visit to a Canadian port. After increasing by 18 percent in 2005, 11 percent in 2006 and 3.5 percent in 2007, embarkations in Seattle increased by 12.7 percent in 2008. Thus, the Port of Seattle has been steadily increasing its presence in the Alaskan cruise market.
Table 19 – Summary of 2008 Cruise Industry Impacts – Washington

Washington Passenger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ 435,000 186,000 625,000 760 18,726 $ 874

Share of the U.S. 4.9% 2.0% 3.1% 4.0% 5.2% 5.4%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Resident cruise passengers in Washington totaled 186,000 during 2008, 2.0 percent of U.S. resident passengers and a 2.8 percent increase from 2007. Thus, Washington was a net importer of cruise passengers. Also, Holland America Line has its corporate headquarters in Washington. The cruise line operations also include Westours, a tour operator that primarily offers tours in Alaska. Combining passenger and crew visits during cruise ship calls, cruising at the Port of Seattle generated an estimated 625,000 passenger and crew visits, accounting for 3.1 percent of all passenger and crew visits in the United States. These visits produced an estimated $35 million in passenger and crew onshore spending, or nearly $56 per visit. As a result of the activity of the cruise industry direct cruise industry expenditures in Washington increased by 12.5 percent to $760 million, or 4.0 percent of the direct expenditures generated by the cruise industry in the United States. Tourism-related businesses, such as

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travel agencies, airlines, hotels, etc., received more than $214 million, or 28 percent of the industry’s direct expenditures in the state. Another $228 million was spent with businesses in five additional business segments, food processors and ship repair companies within the manufacturing sector; and advertising agencies, engineering and design companies and management consulting firms in the nonmanufacturing sector. Direct expenditures in Washington also impacted many other industries throughout the state including law firms, insurance carriers, business service providers such as computer services, software consulting and marketing, and other financial service companies. Finally, these direct expenditures generated total economic impacts of 18,726 jobs and $874 million in income throughout the Washington economy during 2008. As a result of the increases in direct cruise activity in the state, Washington’s total employment impact increased by 12 percent while the wage impact increased by 15 percent. These impacts accounted for 5.2 percent of national employment impact and 5.4 percent of the national wage impact.

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Illinois
While Illinois has no direct cruise operations, it is a major source market for cruise passengers, making it a net exporter of cruise passengers. It also supports the industry with a wide range of goods and services. Resident cruise passengers in Illinois totaled 299,000 during 2008, an increase of 12 percent from 2007 and accounting for 3.2 percent of U.S. resident passengers.
Table 20 – Summary of 2008 Cruise Industry Impacts – Illinois

Illinois Passenger Embarkations Resident Cruise Passengers Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ $ N.A. 299,000 499 7,158 364

Share of the U.S. N.A. 3.2% 2.6% 2.0% 2.2%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Cruise industry expenditures in Illinois increased by 2.5 percent in 2008 to $499 million, or 2.6 percent of the direct expenditures generated by the cruise industry in the United States. Since Illinois is source market for cruise passengers, tourism-related businesses, such as travel agencies, airlines, hotels, etc., accounted for 25 percent of the industry’s direct expenditures in the state, or $126 million. Approximately $121 million was spent with businesses in the top five support industries, food processors, paper manufacturers, and apparel and textile firms within the manufacturing sector; and advertising agencies and insurance companies in the nonmanufacturing sector. Direct expenditures in Illinois also impacted many other industries throughout the state including management and technical consultants, video and music production companies, paint and chemical manufacturers, business service providers such as computer services, software consulting and marketing. Finally, these direct expenditures generated total economic impacts of 7,158 jobs and $364 million in income throughout the Illinois economy during 2008. As a result of the increases in direct cruise activity in the state, Illinois’ total employment and wage impacts increased by 7.0 and 11.0 percent respectively. These impacts accounted for 2.0 percent of national employment impact and 2.2 percent of the national wage impact.

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Colorado
Like Illinois and Georgia, Colorado has no direct cruise operations but it is a source market for cruise passengers, making it a net exporter of cruise passengers. It also supports the industry with a wide range of goods and services. Resident cruise passengers in Colorado totaled 71,000 during 2008, a 3.5 percent decline from 2007 and accounting for 0.8 percent of U.S. resident passengers.
Table 21 – Summary of 2008 Cruise Industry Impacts – Illinois

Colorado Passenger Embarkations Resident Cruise Passengers Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ $ N.A. 71,000 445 2,753 153

Share of the U.S. N.A. 0.8% 2.3% 0.8% 0.9%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Cruise industry expenditures in Colorado increased by 1.8 percent in 2008 to $445 million, or 2.3 percent of the direct expenditures generated by the cruise industry in the United States. Since Colorado is a relatively small source market for cruise passengers, tourismrelated businesses, such as travel agencies, airlines, hotels, etc., accounted for 6 percent of the industry’s direct expenditures in the state, or $26 million. Approximately $108 million was spent with businesses in the top five support industries, rail transportation equipment manufacturing within the manufacturing sector; and wholesale trade, advertising agencies, accounting and insurance companies in the nonmanufacturing sector. Direct expenditures in Colorado also impacted many other industries throughout the state including management and technical consultants, telecommunications, banking, apparel manufacturers, and commercial printing. Finally, these direct expenditures generated total economic impacts of 2,753 jobs and $153 million in income throughout the Colorado economy during 2008. The total employment impact in Colorado declined by 1.1 percent from 2007 while the total wage impact increased by 3.4 percent. These impacts accounted for 0.8 percent of national employment impact and 0.9 percent of the national wage impact.

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Massachusetts
The cruise port in Massachusetts is both a port-of-embarkation and a port-of-call for cruises to Canada and Bermuda. The cruises to Canada and Bermuda are seasonal (Spring through Fall months). Cruise ships sailing from Boston carried 69,000 passengers during 2008, less than one percent of total U.S. embarkations. Resident cruise passengers in the state accounted for 5.1 percent of U.S. resident passengers and totaled 478,000 during 2008.
Table 22 – Summary of 2008 Cruise Industry Impacts – Massachusetts

Massachusetts Passenger Embarkations Resident Cruise Passengers Total Passenger & Crew Visits Direct Expenditures ($ Millions) Total Employment Impact Total Wage Impact ($ Millions) $ $ 69,000 478,000 243,000 434 6,352 367

Share of the U.S. 0.8% 5.1% 1.2% 2.3% 1.8% 2.3%

Source: Cruise Lines International Association and Business Research and Economic Advisors

Over the past several years passenger embarkations in Boston had been in decline, but that was reversed in 2008 with a 21 percent increase. With the increase in embarkations and portof-call visits, total passenger and crew visits to Massachusetts increased by 10 percent in 2008 to 243,000, accounting for 1.2 percent of all passenger and crew visits in the United States. These visits produced an estimated $18.8 million in passenger and crew onshore spending, or slightly more than $77 per visit. Cruise industry direct expenditures in Massachusetts increased by 6.5 percent in 2008 and totaled $434million, or 2.3 percent of the direct expenditures generated by the cruise industry in the United States. Tourism-related businesses, such as travel agencies, airlines, hotels, etc., received approximately $238 million, or 55 percent of the industry’s direct expenditures in Massachusetts. Another $127 million, 29 percent of the direct expenditures, was spent with businesses in five additional business segments, food processors and petroleum companies within the manufacturing sector and advertising agencies, insurance agencies and management consulting firms in the nonmanufacturing sector. The remaining 16 percent of direct expenditures in Massachusetts also impacted many other industries throughout the state

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including law firms, business service companies such as computer services, software consulting and marketing, manufacturers of textile and apparel products, and educational and training institutions. Finally, these direct expenditures generated total economic impacts of 6,352 jobs and $367 million in income throughout the Massachusetts’ economy during 2008. These impacts accounted for 1.8 percent of national employment impact and 2.3 percent of the national wage impact.

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Economic Impacts in the Remaining States
The direct expenditures generated by the North American cruise industry and their total economic impacts in each of the states in 2008 are shown in Table 22. As discussed above, the magnitude of the economic impacts in each state is dependent upon the scope of cruise operations, if any, the number of resident cruise passengers and the value of vendor purchases. The 40 states and the District of Columbia outside the top ten states accounted for 22 percent of the cruise industry’s direct expenditures. Most of the states outside of the top ten are source markets for cruise passengers and vendor goods and services. Some states, such as New Jersey, Pennsylvania and Louisiana, have cruise operations, as well. These three states ranked 12th, 13th and 20th respectively in terms of direct industry expenditures during 2008. Indiana and North Carolina, which ranked 14th and 15th respectively, were major source markets for both passengers and services supplied directly to the cruise industry. .

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Table 23 – Total Economic Impact of the North American Cruise Industry by State, 2008

Source: Business Research and Economic Advisors

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Appendix I – State Impact Methodology
As described in Section I of this report, member cruise lines of CLIA were asked to provide data on aggregate domestic and international expenditures for their operating and administrative expenses. Responses were obtained from 13 cruise lines19 representing approximately 90 percent of the passengers carried by the North American cruise industry during 2008. These data were used to develop the estimates of the overall spending of the cruise industry in the United States. As indicated in Section I, we estimated that the industry spent $19.1 billion on goods and services in the United States. Of this total, approximately $8.9 billion represented direct payments by the cruise lines to U.S. suppliers for operating and administrative goods and services. The remaining $10.2 billion represented expenditures by passengers for air travel and other goods and services, wage payments to the U.S. resident employees of the cruise lines and their associations, and port-related expenses and travel agent commissions paid by the cruise lines. In addition to the aggregate revenue and expense data for 2008, more detailed data on vendor purchases in 2007 were obtained from a smaller group of cruise lines.20 These data were then aggregated by industry group and state and used to estimate total cruise industry expenditures by industry. These detailed expenditures totaled $5.6 billion and accounted for 66 percent of the estimated $8.5 billion that the North American cruise lines spent with U.S. businesses in 2007. These data listed the type of commodities and services that were purchased, as well as the location of the vendors. As a result, we were able to establish industryand state-specific shares for the cruise industry purchases. Using these shares, the national direct vendor purchases for 2008 were allocated to the corresponding industries in each state.

19 These cruise lines were: Carnival Cruise Lines, Celebrity Cruises, Costa Cruise Lines, Crystal Cruises, Cunard Line, Disney Cruise Line, Holland America Line, Norwegian Cruise Line, Oceana Cruise Line, Princess Cruises, Regent Seven Seas Cruises, Royal Caribbean International and Seabourn Cruise Line. 20 Vendor-specific data were obtained for the following cruise lines: Carnival Cruise Lines, Royal Caribbean International, Celebrity Cruises, Cunard Line, Holland America Line and Princess Cruises. These six cruise lines accounted for approximately 85 percent of the industry’s non-wage U.S. operating and administrative expenses.

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The $10.2 billion in core cruise travel expenditures were allocated to each state using data on the place of residence of cruise passengers and passenger embarkations as described in Section I of this report. During 2008, the cruise industry spent $3.3 billion for port services and wages of their U.S.-resident employees. The $1.2 billion in wages of the employees of the cruise lines were allocated to each state based upon information received from the cruise lines. The remaining $2.1 billion in U.S. port service expenditures were allocated to each state based upon its share of U.S. passenger and crew visits. For example, Florida, which accounted for 37 percent of total passenger and crew visits to U.S. ports, was allocated $777,000 in port service spending. The $2.0 billion in air transportation expenditures was split in half, one half representing the origination of air travel and the other half representing the destination of air travel. The origination half of air travel expenditures were allocated to each state based upon its share of U.S.-resident cruise passengers. Thus, Massachusetts, which accounted for 5.1 percent of U.S. passengers by place-of-residence, was allocated $51 million for the origination component of air travel spending. Massachusetts also accounted for about 0.8 percent of U.S. cruise embarkations and thus was allocated another $8 million for the destination component of air travel spending. Thus, Massachusetts received a total allocation of approximately $59 million in direct air transportation expenditures. The $3.1 billion in U.S. transportation services expenditures consists of $650 million in expenditures for passenger shore excursions and $2.4 billion for travel agent commissions and other miscellaneous ground transportation services, such as bus service between airports and cruise terminals. Since travel agent commissions accounted for more than 98 percent of the $2.4 billion, the total was allocated to each state based upon its share of U.S. passengers on a place-of-residence basis. Thus Texas, which accounted for 4.3 percent of U.S.-resident cruise passengers, was allocated approximately $103 million in transportation service expenditures. The allocation of the $650 million in expenditures for shore excursions is discussed below. Finally, the $1.7 billion in passenger and crew spending and the $650 million in shore excursion expenditures were allocated to each state based upon each state’s embarkations, split between overnight stays and day of cruise arrivals, estimated port-of-call arrivals and estimated crew visits. Total U.S. spending for the four categories was reported in Table 6 in Sec-

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tion I. When possible, survey data were used to estimate spending for each category for each state. For example, survey data representing the four primary cruise ports in Florida indicated that 40 percent of embarking cruise passengers stayed one or more nights in the port city and that these passengers spent an average of $256 during their stay. Thus, 2.0 million (0.4 x 5.01 million) cruise passengers were estimated to have spent $512 million on lodging, food, entertainment, etc. in Florida during 2008. The remaining 3.01 million Florida cruise passengers (day of cruise arrivals) spent an average of $47.25 per passenger for a total of $142 million. An estimated 875,000 passengers visited Florida ports as port-of-call or intransit passengers. These passengers spent an average of $62.25 per visit, resulting in total expenditures of $54.5 million. Finally, crew spent an average of $44.05 on each call to a Florida port. An estimated 2.46 million crew visited Florida during 2008 and spent $108.4 million. Thus, we have estimated that passengers and crew spent approximately $817 million in Florida during 2008, 41 percent of total passenger and crew spending in the United States. By comparison, passengers and crew were estimated to have spent $39 million (2.0 percent of total U.S. spending by passengers and crew) in New York during 2008. Just over 55 percent, $22 million, was spent by embarking passengers who spent one or more nights in New York City. Passengers who stayed overnight in New York spent an average of just over $367 during their stay which averaged 2.1 nights. Alaska received an estimated 4.1 million cruise passenger visits during 2008. This includes approximately 185,000 passengers who either embarked or disembarked on their cruise in Alaska. Cruise passengers spent an average of $138.80 per visit. Thus, we have estimated that $569 million was spent by cruise passengers visiting Alaska ports. An estimated 1.7 million crew visits generated another $15.4 million, or $9.05 per visit. Thus, cruise passengers and crew spent a total of $584 million in Alaska, accounting for 29 percent of total passenger and crew spending in the United States. Passenger and crew expenditures were allocated to the remaining states using average per visit spending estimates from all available surveys.

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Thus, the $19.1 billion in U.S. expenditures paid by the North American cruise industry and its passengers and crew were allocated among all states and the District of Columbia. The total value of the direct spending by state is shown in Table 11 in Section II. The direct spending data by industry in each state are shown in the individual state tables in Appendix II that follows. The industry direct expenditure data in each state was then converted to value-added using national ratios of value-added to output for each industry. While these ratios varied by industry, the $19.1 billion in national direct expenditures was equivalent to $9.9 billion in valueadded. Using industry- and state-specific ratios of compensation-to-value-added, implied compensation in each industry and state was estimated for the direct expenditures. The direct employment impacts resulting from the direct industry spending were estimated by dividing the wage compensation estimates by industry- and state-specific annual compensation rates. All of these data were obtained from the Bureau of Economic Analysis (BEA). The direct employment estimates were then multiplied by the BEA employment multipliers to generate the estimates of the total employment contribution of the cruise industry by state and industry. Finally, the employment estimates were multiplied by average annual compensation rates to estimate the total effect on wage compensation in each state. The total employment and wage contribution of the North American cruise industry by state and industry are shown in Appendix II. The estimated direct and total economic impacts at the state level were controlled to sum to the national economic impacts on an industry-by-industry basis. Thus, the estimated state economic impacts for direct purchases, employment and wage income sum to the national impacts.

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Appendix II – Individual State Tables
Figure 11 – Total Employment Impact of the North American Cruise Industry by State - 2008

Source: Business Research and Economic Advisors Figure 12 – Total Income Impact of the North American Cruise Industry by State - 2008

Source: Business Research and Economic Advisors

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Table 24 – Total Economic Impacts – Alabama - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total

Direct Purchases ($1,000) $ $ $ $ $ $ $ $ $ $ $ $ $ $ 38 32,266 12,370 19,896 2,895 45,332 74 6,723 34,661 5,910 22,552 101 6,098 121,989

Total Total Wages Employment ($1,000) 51 332 199 133 200 425 11 75 1,036 119 481 144 292 $ 2,130 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2,335 17,205 11,023 6,181 7,203 13,090 638 3,529 32,712 9,249 11,611 5,839 6,013 76,712

Source: Business Research and Economic Advisors

Table 25 – Total Economic Impacts – Alaska - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 49,049 61,825 52,163 9,662 83,004 648,121 1,438 7,626 388,977 5,281 14,051 3,584 366,061 1,240,042

Total Total Wages Employment ($1,000) 1,316 601 90 511 1,850 11,574 122 250 9,984 754 634 1,409 7,187 25,697 $ $ $ $ $ $ $ $ $ $ $ $ $ 181,269 26,549 4,601 21,948 65,033 423,115 7,245 11,929 291,944 55,265 22,768 57,257 156,654

$ 1,007,084

Source: Business Research and Economic Advisors

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Table 26 – Total Economic Impacts – Arizona - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 15 2,375 634 1,741 162 39,718 14,727 9,522 102,151 9,872 80,688 1,165 10,426 168,671

Total Total Wages Employment ($1,000) 46 166 127 39 307 527 55 154 2,392 227 1,370 291 504 3,647 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2,407 11,058 9,163 1,895 13,643 19,743 3,244 7,620 86,270 18,130 42,160 13,129 12,851 143,985

Source: Business Research and Economic Advisors

Table 27 – Total Economic Impacts – Arkansas - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 3,421 2,678 743 176 4,045 2,590 11,766 2,253 9,455 58 21,998

Total Total Wages Employment ($1,000) 8 54 20 34 24 35 1 21 255 22 185 25 23 398 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 275 2,172 952 1,220 839 1,745 70 797 6,837 1,574 3,897 893 473 12,735

Source: Business Research and Economic Advisors

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Table 28 – Total Economic Impacts – California - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 1,414 686,688 525,324 161,364 118,162 534,580 35,166 78,289 784,333 168,345 426,274 8,694 181,020

Total Total Wages Employment ($1,000) 1,231 5,549 2,818 2,731 5,679 7,256 756 2,429 26,782 5,399 8,391 4,991 8,001 49,682 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 74,434 368,994 220,298 148,696 277,565 295,230 70,412 178,622 1,305,936 551,779 283,438 236,341 234,378 2,571,193

$ 2,238,632

Source: Business Research and Economic Advisors

Table 29 – Total Economic Impacts – Colorado - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 16 303,585 293,940 9,645 45,560 17,447 1,767 9,087 67,173 48,359 18,306 54 454 444,635

Total Total Wages Employment ($1,000) 51 211 105 106 489 403 38 288 1,273 352 375 212 334 2,753 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,615 18,333 8,043 10,290 27,857 15,314 2,999 16,116 66,098 35,982 12,229 9,153 8,734 153,332

Source: Business Research and Economic Advisors

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Table 30 – Total Economic Impacts – Connecticut - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 62,822 2,117 60,705 1,739 9,844 1,793 26,399 40,173 14,457 23,445 1,916 355 142,770

Total Total Wages Employment ($1,000) 10 330 287 43 132 77 14 120 766 142 300 195 129 1,449 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 901 24,765 20,791 3,974 7,189 3,814 1,031 13,333 40,235 16,765 10,627 9,189 3,654 91,268

Source: Business Research and Economic Advisors

Table 31 – Total Economic Impacts – Delaware - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 425 266 159 31 2,369 23 12,836 10,133 2,529 7,304 300 25,817

Total Total Wages Employment ($1,000) 1 11 4 7 13 10 1 21 158 25 93 16 24 215 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 83 740 296 444 586 815 75 1,317 6,712 2,524 2,989 713 486 10,328

Source: Business Research and Economic Advisors

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Table 32 – Total Economic Impacts – District of Columbia - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 14 12 2 1 776 0 1,511 38,761 9,815 1,829 326 26,791 41,063

Total Total Wages Employment ($1,000) 2 4 1 21 121 39 26 16 40 149 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 32 53 16 37 83 293 102 2,053 16,261 5,472 1,032 740 9,017 18,877

Source: Business Research and Economic Advisors

Table 33 – Total Economic Impacts – Florida – 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 5,032 1,556,276 834,529 721,747 306,421 2,472,822 20,343 41,484 1,904,734 286,041 810,768 79,858 728,067 6,307,112

Total Total Wages Employment ($1,000) 1,631 8,742 5,543 3,199 13,628 30,822 1,005 5,168 67,914 8,899 23,656 12,366 22,993 128,910 $ $ $ $ $ $ $ $ $ $ $ $ $ 64,740 458,404 299,410 158,994 574,003 1,492,985 62,965 281,314 2,545,630 718,097 715,147 532,617 579,769

$ 5,480,041

Source: Business Research and Economic Advisors

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Table 34 – Total Economic Impacts – Georgia - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 28 192,235 118,058 74,177 27,844 37,741 42,875 39,344 322,727 31,559 108,474 5,974 176,720 662,794

Total Total Wages Employment ($1,000) 171 1,107 533 574 1,012 609 167 701 5,135 731 1,745 791 1,868 8,902 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,397 65,746 35,219 30,527 50,816 28,835 12,948 41,854 228,880 65,344 57,568 33,723 72,245 435,476

Source: Business Research and Economic Advisors

Table 35 – Total Economic Impacts – Hawaii - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 390 31,123 29,663 1,460 18,925 278,264 29 2,029 214,293 1,727 4,591 7,414 200,561 545,053

Total Total Wages Employment ($1,000) 131 223 38 185 789 9,273 59 190 5,186 456 598 886 3,246 15,851 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,003 9,226 2,128 7,098 29,889 218,922 3,440 10,184 189,251 38,032 17,911 37,596 95,712 466,915

Source: Business Research and Economic Advisors

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Table 36 – Total Economic Impacts – Idaho - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 748 501 247 35 1,934 21 1,400 7,681 3,069 4,522 90 11,819

Total Total Wages Employment ($1,000) 7 11 5 6 14 19 1 11 135 23 84 13 15 198 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 190 576 331 245 476 717 38 439 4,389 1,642 2,001 420 326 6,825

Source: Business Research and Economic Advisors

Table 37 – Total Economic Impacts – Illinois - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 12 181,383 100,003 81,380 26,344 43,299 30,621 46,703 170,847 53,869 105,790 8,337 2,851 499,209

Total Total Wages Employment ($1,000) 55 1,169 624 545 783 572 129 391 4,059 698 1,844 806 711 7,158 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,094 72,807 41,034 31,773 40,957 26,691 8,701 27,907 182,984 74,161 56,548 34,049 18,226 364,141

Source: Business Research and Economic Advisors

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Table 38 – Total Economic Impacts – Indiana - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 6,547 4,435 2,112 746 8,951 341 13,012 235,889 6,670 20,860 828 207,531 265,486

Total Total Wages Employment ($1,000) 35 535 376 159 328 199 18 126 2,609 174 473 345 1,617 3,850 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2,024 35,856 25,791 10,065 12,381 8,371 928 6,427 106,470 12,471 12,143 13,527 68,329 172,457

Source: Business Research and Economic Advisors

Table 39 – Total Economic Impacts – Iowa - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 2,809 2,736 73 23 3,528 38 15,913 11,043 2,563 8,448 32 33,354

Total Total Wages Employment ($1,000) 3 32 13 19 21 25 2 54 205 18 146 20 21 342 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 150 1,590 739 851 732 950 86 2,847 5,874 1,174 3,564 716 420 12,229

Source: Business Research and Economic Advisors

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Table 40 – Total Economic Impacts – Kansas - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 292 3,676 1,501 2,175 602 20,207 3 6,303 19,885 4,985 13,701 1,114 85 50,968

Total Total Wages Employment ($1,000) 48 225 130 95 217 687 27 106 882 138 299 215 230 2,192 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2,891 11,837 7,041 4,796 8,342 21,310 1,909 4,974 31,053 9,352 8,630 8,110 4,961 82,316

Source: Business Research and Economic Advisors

Table 41 – Total Economic Impacts – Kentucky - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 9,572 8,892 680 1,124 4,661 2,330 5,637 36,216 17,838 10,796 7,582 59,540

Total Total Wages Employment ($1,000) 16 105 46 59 70 68 14 38 591 107 225 71 188 902 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 741 5,634 2,891 2,743 2,680 3,413 614 2,083 19,635 8,112 5,142 2,665 3,716 34,800

Source: Business Research and Economic Advisors

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Table 42 – Total Economic Impacts – Louisiana - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 47 44,964 14,443 30,521 4,997 43,792 757 5,323 63,605 5,728 28,662 29,215 163,485

Total Total Wages Employment ($1,000) 140 327 200 127 305 610 19 88 1,679 174 541 280 684 3,168 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 12,045 19,238 10,626 8,612 10,487 22,301 927 3,845 52,430 11,365 14,561 10,014 16,490 121,273

Source: Business Research and Economic Advisors

Table 43 – Total Economic Impacts – Maine - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 1 9,501 867 8,634 2,622 3,219 102 2,530 11,418 1,625 3,781 6,012 29,393

Total Total Wages Employment ($1,000) 12 71 45 26 67 34 3 20 303 27 63 47 166 510 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 314 3,363 2,099 1,264 2,011 1,147 140 1,055 8,149 1,883 1,789 1,810 2,667 16,179

$

Source: Business Research and Economic Advisors

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Table 44 – Total Economic Impacts – Maryland - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 12 27,856 20,720 7,136 4,092 28,617 5,908 10,894 75,705 20,040 42,046 10,048 3,571 153,084

Total Total Wages Employment ($1,000) 14 157 62 95 192 232 22 150 1,373 240 592 298 243 2,140 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 865 9,429 4,563 4,866 8,931 11,285 1,857 9,694 65,100 23,087 20,343 13,650 8,020 107,161

Source: Business Research and Economic Advisors

Table 45 – Total Economic Impacts – Massachusetts - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 15 42,289 10,959 31,330 5,141 79,761 1,623 20,203 284,666 109,313 156,702 7,453 11,198 433,698

Total Total Wages Employment ($1,000) 45 427 259 168 457 666 46 588 4,123 773 1,880 846 624 6,352 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2,440 32,932 22,027 10,905 23,955 31,314 3,930 55,923 216,404 91,091 69,983 38,121 17,209 366,898

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 46 – Total Economic Impacts – Michigan - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 59,840 52,182 7,658 10,648 14,644 1,586 31,670 82,260 24,484 36,803 95 20,878 200,648

Total Total Wages Employment ($1,000) 24 400 217 183 264 123 17 175 1,584 267 566 233 518 2,587 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,363 26,095 16,435 9,660 12,625 7,394 1,041 9,166 70,295 26,938 19,564 9,698 14,095 127,979

Source: Business Research and Economic Advisors

Table 47 – Total Economic Impacts – Minnesota - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 0 9,116 3,815 5,301 636 10,011 3,840 16,673 73,420 9,874 23,106 173 40,267 113,696

Total Total Wages Employment ($1,000) 20 186 107 79 170 101 22 233 1,114 163 383 180 388 1,846 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,161 11,747 7,323 4,424 7,954 5,589 1,359 15,150 50,186 15,996 11,687 7,835 14,668 93,146

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 48 – Total Economic Impacts – Mississippi - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 13,521 1,448 12,073 359 3,834 33 2,844 8,731 1,589 7,136 6 29,322

Total Total Wages Employment ($1,000) 11 105 80 25 29 26 2 22 214 20 135 26 33 409 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 408 4,478 3,558 920 952 954 73 811 5,904 1,237 2,968 938 761 13,580

Source: Business Research and Economic Advisors

Table 49 – Total Economic Impacts – Missouri - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 0 30,309 28,503 1,806 503 10,792 1,009 10,463 132,687 9,696 25,321 110 97,560 185,763

Total Total Wages Employment ($1,000) 29 336 157 179 296 168 30 373 2,094 272 499 337 986 3,326 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,677 17,803 8,967 8,836 11,757 8,049 1,761 17,135 88,486 23,124 14,101 13,494 37,767 146,668

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 50 – Total Economic Impacts – Montana - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 153 144 9 14 1,081 40 1,079 3,573 1,070 2,481 22 5,940

Total Total Wages Employment ($1,000) 3 3 1 2 7 9 1 10 71 9 43 9 10 104 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 155 137 58 79 232 326 26 340 1,983 513 971 289 210 3,199

Source: Business Research and Economic Advisors

Table 51 – Total Economic Impacts – Nebraska - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 4 1,648 1,429 219 37 5,089 483 8,105 6,996 2,068 4,925 3 0 22,362

Total Total Wages Employment ($1,000) 7 42 18 24 50 106 7 54 240 38 100 49 53 506 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 314 2,001 906 1,095 1,766 4,270 371 2,512 8,393 2,702 2,715 1,887 1,089 19,627

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 52 – Total Economic Impacts – Nevada - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 3,853 2,218 1,635 710 12,771 1 4,426 44,289 5,705 30,359 8,225 66,050

Total Total Wages Employment ($1,000) 8 38 17 21 51 69 3 29 698 48 475 34 141 896 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 596 1,776 1,005 771 2,247 3,092 185 1,489 24,864 4,820 13,281 1,670 5,093 34,249

Source: Business Research and Economic Advisors

Table 53 – Total Economic Impacts – New Hampshire - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 17,962 17,941 21 2,281 5,105 104 3,809 15,457 2,348 12,611 457 41 44,718

Total Total Wages Employment ($1,000) 5 100 29 71 61 34 3 25 289 31 146 63 49 517 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 257 4,938 1,957 2,981 3,112 1,459 187 1,709 12,115 2,964 5,234 2,593 1,324 23,777

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 54 – Total Economic Impacts – New Jersey - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 4,530 68,180 39,910 28,270 8,963 129,627 8,384 25,903 140,940 34,329 86,081 272 20,258 386,527

Total Total Wages Employment ($1,000) 43 615 272 343 742 1,411 85 371 3,547 687 1,356 713 791 6,814 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3,129 48,485 19,357 29,128 41,777 58,156 7,489 30,573 184,064 76,437 50,460 32,968 24,199 373,673

Source: Business Research and Economic Advisors

Table 55 – Total Economic Impacts – New Mexico - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 438 246 192 14 3,173 1 1,672 13,224 4,321 8,822 1 80 18,522

Total Total Wages Employment ($1,000) 8 9 5 4 17 18 2 15 213 31 139 19 24 282 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 617 385 255 130 578 754 68 569 7,809 2,561 3,997 688 563 10,780

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 56 – Total Economic Impacts – New York - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total
Source: Business Research and Economic Advisors

Direct Purchases ($1,000) $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,288 158,996 106,157 52,839 25,192 186,224 5,754 303,372 461,748 131,553 168,339 6,492 155,364 1,142,574

Total Total Wages Employment ($1,000) 92 1,026 520 506 1,185 2,135 145 1,315 7,638 1,323 2,378 1,819 2,118 13,536 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,763 66,445 34,903 31,542 59,825 85,304 12,849 154,311 397,500 153,629 91,843 76,498 75,530 782,997

Table 57 – Total Economic Impacts – North Carolina - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 70,051 61,543 8,508 5,097 21,662 5,193 23,278 88,623 21,443 65,301 327 1,552 213,904

Total Total Wages Employment ($1,000) 35 380 135 245 236 179 29 147 1,770 238 1,098 192 242 2,776 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,304 21,644 8,439 13,205 10,006 7,828 1,784 8,306 61,739 18,746 29,591 7,912 5,490 112,611

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 58 – Total Economic Impacts – North Dakota - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 28 226 218 8 3 1,288 116 1,279 3,694 638 3,040 7 9 6,634

Total Total Wages Employment ($1,000) 3 4 2 2 9 8 1 11 82 7 57 10 8 118 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 175 181 94 87 318 301 48 374 2,169 393 1,241 350 185 3,566

Source: Business Research and Economic Advisors

Table 59 – Total Economic Impacts – Ohio - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 28,425 6,446 21,979 2,835 17,876 1,759 28,632 103,584 21,985 42,168 305 39,126 183,111

Total Total Wages Employment ($1,000) 27 440 308 132 282 170 21 196 1,906 295 792 298 521 3,042 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,881 28,730 21,214 7,516 11,852 8,374 1,201 9,893 74,657 23,207 21,286 11,914 18,250 136,588

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 60 – Total Economic Impacts – Oklahoma - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 9 5,039 4,757 282 755 4,862 10 4,467 15,250 3,873 11,351 17 9 30,392

Total Total Wages Employment ($1,000) 24 41 21 20 45 41 4 40 334 40 206 42 46 529 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2,487 1,977 1,084 893 1,607 2,221 190 1,449 10,517 2,645 5,358 1,502 1,012 20,448

Source: Business Research and Economic Advisors

Table 61 – Total Economic Impacts – Oregon - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 1,364 19,997 8,317 11,680 2,480 16,310 504 5,451 42,306 5,246 36,477 229 354 88,412

Total Total Wages Employment ($1,000) 135 306 197 109 287 507 21 103 1,475 194 690 278 313 2,834 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,089 17,363 12,194 5,169 13,047 15,717 1,332 5,032 52,202 14,830 18,234 11,400 7,738 108,782

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 62 – Total Economic Impacts – Pennsylvania - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 3 94,097 33,718 60,379 11,252 59,854 1,015 29,633 171,908 79,969 84,933 3,836 3,170 367,762

Total Total Wages Employment ($1,000) 66 896 563 333 559 661 43 405 3,435 642 1,396 823 574 6,065 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,473 54,479 35,025 19,454 24,609 27,517 2,778 25,458 151,506 60,696 42,218 34,458 14,134 290,820

Source: Business Research and Economic Advisors

Table 63 – Total Economic Impacts – Rhode Island - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 2,187 200 1,987 271 5,602 4,221 12,647 1,604 10,863 82 98 24,928

Total Total Wages Employment ($1,000) 5 36 27 9 22 44 2 20 262 21 173 40 28 391 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 143 1,840 1,342 498 934 1,298 137 1,089 8,812 1,766 4,722 1,609 715 14,253

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 64 – Total Economic Impacts – South Carolina - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 11 13,428 4,468 8,960 1,500 23,769 262 5,184 34,018 4,941 26,372 7 2,698 78,172

Total Total Wages Employment ($1,000) 27 209 109 100 133 272 8 51 880 78 520 90 192 1,580 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 994 11,209 5,767 5,442 4,723 9,228 416 2,634 26,204 5,545 13,153 3,563 3,943 55,408

Source: Business Research and Economic Advisors

Table 65 – Total Economic Impacts – South Dakota - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 249 226 23 23 790 2,228 2,538 596 1,829 113 5,828

Total Total Wages Employment ($1,000) 4 2 2 6 6 10 52 5 30 8 9 78 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 9 196 108 88 204 221 15 367 1,443 310 726 265 142 2,455

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 66 – Total Economic Impacts – Tennessee - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 4,248 3,808 440 66 9,862 2 9,295 36,743 11,313 23,779 1,651 60,216

Total Total Wages Employment ($1,000) 6 111 52 59 79 94 5 91 615 90 355 77 93 1,001 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 204 6,079 2,985 3,094 3,248 4,481 286 4,665 22,448 6,668 9,944 3,336 2,500 41,411

Source: Business Research and Economic Advisors

Table 67 – Total Economic Impacts – Texas - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 102 390,724 206,387 184,337 47,020 296,948 15,695 38,359 312,408 66,118 192,002 3,275 51,013 1,101,257

Total Total Wages Employment ($1,000) 863 2,112 1,385 727 2,098 3,245 218 1,127 9,011 1,249 3,392 1,724 2,646 18,674 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 132,776 141,983 95,112 46,871 101,201 122,946 15,218 69,622 360,144 116,097 109,831 69,793 64,423 943,890

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 68 – Total Economic Impacts – Utah - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 895 543 352 111 7,732 35 23,766 21,244 4,240 16,631 367 6 53,781

Total Total Wages Employment ($1,000) 10 54 32 22 66 67 7 110 540 65 320 71 84 854 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 636 2,718 1,753 965 2,451 3,454 325 4,724 16,780 4,677 7,726 2,403 1,974 31,088

Source: Business Research and Economic Advisors

Table 69 – Total Economic Impacts – Vermont - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 440 272 168 18 663 133 1,246 2,466 874 1,551 41 4,966

Total Total Wages Employment ($1,000) 1 5 3 2 4 5 1 6 38 5 20 7 6 60 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 37 294 188 106 153 201 40 309 1,306 414 531 230 131 2,340

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 70 – Total Economic Impacts – Virginia - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 33 40,343 9,311 31,032 1,627 27,131 706 9,911 72,891 28,769 37,826 1,612 4,684 152,642

Total Total Wages Employment ($1,000) 21 238 167 71 172 265 21 441 1,352 295 604 180 273 2,510 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,051 12,858 9,174 3,684 7,072 10,970 1,822 25,843 64,877 31,206 18,591 7,323 7,757 124,493

Source: Business Research and Economic Advisors

Table 71 – Total Economic Impacts – Washington - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 4,294 214,388 71,281 143,107 19,699 260,692 4,267 12,866 243,476 83,660 67,883 5,701 86,232 759,682

Total Total Wages Employment ($1,000) 714 1,942 1,282 660 2,020 4,787 215 577 8,471 1,685 1,598 1,970 3,218 18,726 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 23,233 132,180 94,884 37,296 93,745 179,517 20,593 33,918 390,805 153,611 58,747 84,418 94,029 873,991

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 72 – Total Economic Impacts – West Virginia - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 120 120 0 1,640 1,650 5,061 1,351 3,699 11 8,471

Total Total Wages Employment ($1,000) 6 9 5 4 9 16 1 10 106 11 70 13 12 157 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 325 568 305 263 295 499 30 439 2,946 656 1,588 448 254 5,102

Source: Business Research and Economic Advisors

Table 73 – Total Economic Impacts – Wisconsin - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 4,846 3,094 1,752 377 6,569 29 15,243 23,061 6,581 15,953 193 334 50,125

Total Total Wages Employment ($1,000) 8 112 63 49 65 67 4 97 497 60 294 74 69 850 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 401 6,436 3,793 2,643 2,460 2,783 218 4,754 16,144 4,727 6,963 3,034 1,420 33,196

Source: Business Research and Economic Advisors

Business Research and Economic Advisors

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Table 74 – Total Economic Impacts – Wyoming - 2008

Sector Agriculture, Mining, Utilities & Construction Manufacturing Nondurable Goods Durable Goods Wholesale & Retail Trade Transportation Information Services Finance, Insurance, Real Estate & Leasing Services & Government Professional, Scientific & Technical Services Administrative & Waste Management Services Health, Education & Social Services Other Services & Government Total $ $ $ $ $ $ $ $ $ $ $ $ $ $

Direct Purchases ($1,000) 59 59 0 560 498 1,854 624 1,228 2 2,971

Total Total Wages Employment ($1,000) 3 1 1 2 6 4 29 4 18 2 5 45 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 275 57 17 40 77 229 6 138 807 227 436 61 83 1,589

Source: Business Research and Economic Advisors

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Section III: Global Income of the North American Cruise Industry in 2008
As part of its annual economic impact analysis of the North American cruise industry, BREA collected a variety of financial and operational data from individual cruise lines. These data have been aggregated and adjusted to develop industry-wide estimates of revenues and expenses. As indicated below, the industry has been able to grow its total revenues every year since 1997 even in years in which it faced a challenging demand environment.

Gross Revenues
Figure 13 – Global Cruise Revenues ($ Billions)
$30.00

$24.88 $25.00 $22.82 $20.64 $20.00 $16.85 s n o $15.00 i l l i B $11.00 $10.00 $7.79 $9.10 $13.83 $14.28 $14.73 $19.17

$13.49

$5.00

$‐ 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: Business Research and Economic Advisors

As shown in Figure 13, global cruise revenues have continued to increase annually. BREA has estimated that the 13.05 million global passengers of the North American cruise industry generated $24.9 billion in gross revenues21 in 2008. This represents a 9.0 percent increase in revenues from 2007. The revenue growth was the result of the 3.9 percent increase in passengers and a 5.1 percent increase in average gross revenue per passenger. This was the fifth
21 Gross revenues include fares paid by passengers for the cruise, including air transportation, insurance, and shore tours if purchased through the cruise lines; immigration, customs, and departure fees paid by passengers; and onboard revenues for such categories as food and beverages, casinos and entertainment, gifts, photos, telecommunications and other onboard goods and services.

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consecutive year in which per passenger revenues increased after falling for two consecutive years beginning in 2002 (see Table 75). Figure 13 highlights the increase in revenue growth between 1997 and 2007. As can be seen in the figure, the growth in revenues between 2004 and 2007 is similar to the industry’s revenue growth prior to 2001. Between 1997 and 2000, estimated cruise industry revenues increased by 73 percent, or 20 percent per year. Between 2000 and 2003, the three-year growth rate slowed to 9.2 percent, or 3 percent per year. In the five years after 2003, gross revenues increased by 69 percent, or 11.1 percent per year.
Table 75 – Global Income and Expenses of the North American Cruise Industry - $ Billions
2004 Global Passengers (Millions) Global Passenger Cruise Days (Millions) Gross Revenues ($ Billions) Gross Revenues per Passenger Gross Revenues per Passenger Cruise Day Total Operating Expenses Share of Gross Revenues Total Adminstrative Expenses Share of Gross Revenues Depreciation & Amortization Share of Gross Revenues Operating Income Share of Gross Revenues 10.46 72.23 $ 16.85 $ 1,610 $ 233 2005 11.18 77.71 $ 19.17 $ 1,715 $ 247 $ $ $ 2006 12.00 83.11 20.64 1,720 248 $ $ $ 2007 12.56 89.45 22.82 1,817 255 $ $ $ 2008 13.05 93.75 24.88 1,907 265 16.88 67.8% 2.88 11.6% 3.11 12.5% 2.01 8.1% Average Annual Growth 2005 2006 2007 6.9% 7.6% 13.8% 6.5% 5.8% 14.0% 0.2% 5.4% -7.4% 17.9% 3.6% 18.1% 3.8% 7.3% 6.9% 7.7% 0.3% 0.7% 11.1% 3.2% 9.6% 1.8% 9.6% 1.8% -12.7% -19.0% 4.7% 7.6% 10.6% 5.7% 2.7% 12.9% 2.1% 5.1% -4.9% 9.0% -1.5% 4.7% -5.3% 2008 3.9% 4.8% 9.0% 5.0% 4.0% 12.7% 3.4% 2.0% -6.4% 11.8% 2.5% -10.3% -17.7%

$ 10.47 $ 11.93 $ 62.1% 62.3% $ 2.33 $ 2.45 $ 13.8% 12.8% 1.98 $ 2.33 $ 11.7% 12.2% 2.07 $ 2.45 $ 12.3% 12.8%

13.26 $ 64.2% 2.69 $ 13.0% 2.56 $ 12.4% 2.14 $ 10.4%

14.97 $ 65.6% 2.82 $ 12.4% 2.79 $ 12.2% 2.24 $ 9.8%

$

$

Source: Business Research and Economic Advisors

Following the moderation in revenue growth in 2006 to 7.7 percent, growth once again increased at a double-digit rate, 10.6 percent, in 2007. However, with the onset of global recession during the second half of 2008, revenue growth once again began to moderate and as a result growth in gross revenues for the complete year fell to the single-digits. As indicated in Table 76, the industry experienced a sharp increase in capacity during 2006 with a net increase of six cruise ships and an 8.4 percent increase in lower berths to nearly 244,471 lower berths. The rate of expansion moderated in 2007 with the addition of eight cruise ships but only a 6.4 percent increase in lower berths to nearly 260,000 berths. The reduction in the growth in lower berths that occurred even as the net increase in ships increased during 2008 was the result of the addition of smaller luxury cruise ships. With the increase in the average length of a cruise, available bed days increased by 6.1 percent to nearly 90 million bed days.

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Table 76– Global Capacity Statistics for the North American Cruise Industry, 2004 - 8
2004 Capacity Measures Number of Ships Lower Berths Available Bed Days (Millions) Global Passengers Global Passengers (Millions) Global Passenger Bed Days (Millions) Capacity Utilization (Bed Days) 139 220,187 69.95 10.85 73.88 105.6% 2005 145 225,364 75.26 11.18 77.71 103.3% 2006 151 244,271 79.92 12.00 83.11 104.0% 2007 159 259,973 84.80 12.56 89.45 105.5% 2008 161 270,664 89.96 13.05 93.75 104.2% Average Annual Growth 2005 2006 2007 4.3% 2.4% 7.6% 3.1% 5.2% 4.1% 8.4% 6.2% 7.3% 6.9% 5.3% 6.4% 6.1% 4.7% 7.6% 2008 1.3% 4.1% 6.1% 3.9% 4.8%

Number of ships and lower berths are for CLIA ocean-going vessels only. Bed day figures are for CLIA member lines only. Source: Business Research & Economic Advisors and Cruise Lines International Association

Operating Expenses
As shown in Table 75 and Figure 14, global operating expenses, which increased by 12.7 percent in 2008 and totaled an estimated $16.9 billion, 68 percent of gross revenues. Since the growth in operating expenses was higher than the growth in gross revenues, operating expenses’ share of revenues increased by nearly two percentage points. Nearly 60 percent of operating expenses are accounted for by five categories: fuel, cost of sales (primarily travel agent commissions), crew wages and salaries, food and beverage provisions, and port charges. During 2008, only two components of operating expenses increased more rapidly than revenues. These were fuel costs, which increased by nearly 42 percent, and food and beverage expenses which increased only slightly faster than revenues at 9.5 percent. Thus, it is really the increased cost of fuel that drove operating revenues to increase faster than revenues.

Administrative Expenses
Estimated administrative expenses totaled $2.9 billion during 2008, or 12 percent of gross revenues. This was a 2.0 percent increase over administrative costs incurred during 2007. The two principal categories of administrative expenses are advertising and promotion and shoreside wages and salaries. Combined, these two categories accounted for nearly twothirds of administrative expenses. Both of these components of administrative expenses increased more slowly than gross revenues. Spending for advertising and promotion increased by 1.2 percent while spending for shoreside staffing increased by 6.4 percent.

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Figure 14 – Distribution of Global Cruise Industry Revenues, 2008

Gross Revenues = $24.9 Billion
Depreciation & Amortization 12% Total Adminstrative Expenses 12% Operating Income 8%

Total Operating Expenses 68%

Source: Business Research and Economic Advisors

Depreciation and Amortization
BREA has estimated that depreciation and amortization of physical assets, primarily cruise ships, but also including office buildings and other capital equipment, totaled $3.1 billion, or 12 percent of gross revenues, during 2008. This represents an 11.8 percent increase over 2007. As a result of the introduction of the large number of more expensive cruise ships beginning in 1998, depreciation expenses have steadily increased on an annual basis. With an anticipated increase in capacity growth over the next several years, we anticipate that depreciation and amortization changes will steadily increase their share of expenses through the near future.

Operating Income
Subtracting the three expense categories from gross revenues, BREA has estimated that the North American cruise industry generated operating income of $2.01 billion during 2008, 8 percent of gross revenues. This represents a decrease of 10.3 percent from the previous year.

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Expansion of the North American Fleet Through 2011
As discussed previously, the North American cruise industry experienced a sharp increase in its capacity in 2007, experiencing a net increase of eight new ships and 18,371 lower berths.22 As indicated in Table 77, by the end of 2009, the year in which this report is being written, another seven ships with more than 15,000 lower berths will be added to the North American fleet. The net additions of cruise ships will remain at seven or eight ships for the next two years, but lower berths will increase by 23,020 in 2010 with the arrival of Royal cribbean’s 5,400-passenger Oasis of the Seas. The increase in lower berths will drop back to 16,274 in 2011 as no mega-ship is planned for introduction during the year. While it is likely that additional newbuilds will be announced for 2012, at a minimum the North American fleet will increase by 26 ships, a 16 percent increase from 2008, and 65,243 lower berths, a 24 percent increase. The higher growth for lower berths results from the continuation of the industry trend to build ever larger cruise ships.
Table 77 – Planned Additions to Lower Berth Capacity, 2009 Through 2012

Year
2008 Totals Net Additions - 2009 2009 Totals Net Additions - 2010 2010 Totals Net Additions - 2011 2011 Totals Net Additions - 2012 2012 Totals Change from 2006 Average Annual Change

Net Additions Vessels Lower Berths 161 7 168 8 176 7 183 4 187 26 6.5 270,664 15,037 285,701 23,020 308,721 16,274 324,995 10,912 335,907 65,243 16,311

Source: Cruise Lines International Association and Business Research and Economic Advisors

The distribution of the new cruise ships by line and size is shown in Table 78. Over the four-year period from 2009 through 2012, 32 new ships with 77,362 lower berths will be introduced to the North American fleet. Thus, the average new ship will have 2,261 lower berths. By comparison the average ship in the 2008 fleet had 1,681 lower berths. The new

22 The net increase of eight vessels was the result of the introduction of 13 new cruise ships and the removal/redeployment of five operating vessels.

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cruise ships will range in size from the 210-berth Pearl Mist being built by Pearl Seas Cruises to Royal Caribbean’s 5,400-berth Oasis of the Seas and its sister ship the Allure of the Seas.
Table 78 – Planned Gross Additions to Lower Berth Capacity, 2009 Through 2012
Cruise Line
Carnival Celebrity Costa Cunard Disney Holland America MSC Norwegian Oceania Other Princess Royal Caribbean Total Withdrawals & Adjusts Net Additions Less than 1000 1,000 - 1,999 2,000 - 2,999 3,000 - 4,999 7,304 11,400 4,520 2,092 5,000 2,106 7,650 2,520 2,446 10,800 2,446 2,520 32,768 23,828 10,800 9,024 5,000 and Over Total 7,304 11,400 13,544 2,092 5,000 2,106 10,950 4,200 2,520 2,446 0 10,800 72,362 7,119 65,243 Number of Ships 2 4 5 1 2 1 4 1 2 8 0 2 32 6 26 Average Capacity 3,652 2,850 2,709 2,092 2,500 2,106 2,738 4,200 1,260 306 N/A 5,400 2,261 1,187 2,509

3,300 4,200

Other: Pearl Seas Cruises, Seabourn, and Silversea Source: Cruise Lines International Association and Business Research and Economic Advisors

The new mega ships, 3,000 or more lower berths, will account for 28 percent of the number of new ships but 48 percent of the gross increase in lower berths. Royal Caribbean’s two ships alone will accounts for 15 percent of the increased gross capacity. Another 33 percent of the increased capacity will come from ships with between 3,000 and 4,999 lower berths. New ships with between 2,000 and 2,999 lower berths will account for 45 percent of the planned increased capacity between 2009 and 2012. Most of these ships will have 2,500 or more lower berths. Six of the cruise lines, Carnival, Celebrity, Disney, MSC, NCL and Royal Caribbean, will only be adding new ships with a capacity of 2,500 or more lower berths. All of the Carnival and Royal Caribbean new ships and the one NCL ship will all exceed 3,000 lower berths. Three cruise lines, Celebrity, Costa and MSC, will each add four or more cruise ships and each line will add more than 10,000 lower berths. Combined the three lines will account for nearly half of the gross additions to the North American fleet. Carnival and Royal Caribbean will each add two new ships with a combined capacity of 18,104 lower berths, 25 percent of the industry’s total planned increased. Royal Caribbean with its two Genesis-class ships will lead the industry in the average size of a newbuild at 5,400 lower berths. Finally, Princess Cruises is the only major cruise line with no planned additions through 2012.

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BREA
Business Research and Economic Advisors

BREA specializes in custom market analyses for clients throughout the private and public sectors. These unique market analyses integrate economic, financial, and demographic trends with primary market research, proprietary client data, and advanced statistical and modeling techniques. This approach results in comprehensive and actionable analysis, databases and models designed to support planning, sales and marketing and public relations within client organizations. BREA’s principals each have more than 25 years of experience in consulting and forecasting with a wide range of international product and service companies, including consumer products, leisure, retailing, gaming, business services, telecommunications, utility and financial services. Their consulting assignments provide critical analysis and insight into market dynamics, product demand, economic trends, consumer behavior and public policy. BREA’s approach to market analysis focuses on determining market or product characteristics that can be summarized by three attributes: size, share, and growth. Since studies are designed to meet the specific needs of each client, they can incorporate many dimensions of the market and include a variety of ancillary services. To carry out this market analysis, BREA provides the following services: Market Research: design and implementation of primary market research instruments using telephone, mail and intercept surveys. Test instruments are designed to collect information on product demand, attributes of consumers and users, perceived product attributes and customer satisfaction. Segmentation Analyses: segmenting demand attributes by product line, consumer demographics (age, income, region, etc.) and business characteristics using market research, government statistics and proprietary databases. Statistical and Econometric Modeling: developing quantitative models relating market and product demand to key economic factors and demographic market/consumer attributes. Models can be used for forecasting, trend analysis and divergence/convergence analysis. Market Studies and Trend Analyses: detailed descriptions of markets (defined as products, regions, industries, consumer segments, etc.) and comprehensive analyses of underlying market forces (such as economic and financial conditions, competitive environment, technology, etc.). Economic Impact Studies: thorough analysis of industries and consumption behavior and their contribution to or impact on national and regional (state, metropolitan areas, counties, etc.) economies.

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