Economic impact of cruise industry using regional input-output analysis: a case study of Incheon

Asian countries are witnessing a newly emerging cruise industry. This study presents a methodology for estimating various aspects of the cruise industry's economic impact using regional input-output (I-O) analysis. The methodology is applied to a study of the Port of Incheon (POI) that highlights the effects on both the regional and national economies as well as the interaction between the two regarding production induction, employment, and value added. The effects are analyzed under both the current situation and a scenario that includes development of shopping centers and amenities in Incheon in the future. The overall economic impact of the cruise sector on Incheon is relatively small compared to the impact on well-established cruise markets. This is because POI functions as a port of call for cruise lines, instead of a base port or home port, and earns cruise-related revenue mostly from the expenditures of passengers and crews. Moreover, cruise ship visits to POI mostly benefit the Seoul economy in terms of added value and job creation. The development scenario provides much greater economic benefits to Incheon and therefore justifies future development by POI and the city government.