Private Islands in the Caribbean Owned by Cruise Lines

Private Cruise islands in the Caribbean

Note: Figures are estimated average number of visitors per year. Ocean Cay opened in December 2019 and visitors figures are capacity estimates.

The acquisition of Great Stirrup Cay by Norwegian Cruises in 1977 marks the beginning of a trend where large cruise shipping lines secure private islands (or beaches) for their exclusive use. The acquisition usually takes the form of a long-term lease (up to 99 years according to international law) or an exclusive use agreement for specific periods. This has particularly taken place in the Caribbean and for the following reasons:

  • Revenue capture. Private islands are part of the trend pursued by cruise lines to internalize their sources of revenue. Since the cruise line owns all the amenities of the private island, they can capture all the revenues generated by these amenities (e.g. food, drinks, activities). They thus try to include their private island as a port of call in as many itineraries as possible.
  • Alternative port call. The majority of the private islands are located in the Bahamas, a night sailing away from the major Miami cruise hub (or other Floridian cruise ports), for which they can conveniently be used as first or last port of call during a cruise and as an alternative if the itinerary needs to be modified (e.g. inclement weather). They can thus be easily included in cruise itineraries as a last-minute change in ports of call.
  • Exclusivity. The cruise lines effectively market private islands as exclusive locations that their customers can only access and are closed to the general public (or the local population). There are thus perceived as less crowded and safe locations, which has an appeal to many cruisers.
  • Beach experience. Many cruisers expect a beach experience, particularly since the Caribbean is known as a region offering a wide variety of beaches. However, many ports of calls along Caribbean itineraries are cities and towns that do not have high-quality beaches in close proximity or require transportation (an excursion) to access. As such, the private beach is advertised as part of the experience where cruisers can disembark right at the amenity with minimal effort. The amenity is also comprehensive, with a wide array of services and entertainment options being offered.