Carnival Corp. Expects up to $10M Hit as Cruises Relocate from Baltimore

 

Understandability much of the focus on the recovery for the Port of Baltimore and its impact on shipping and the economy focuses on the cargo operations. While Baltimore is the country’s largest RoRo port, it is a small cruise port, yet it is already having an impact on the cruise industry.

For the past 15 years, Baltimore has been a cruise homeport hosting ships year-round. Handling more than 200,000 passengers annually before the pandemic, Baltimore benefitted strongly from travelers’ desires to board cruises closer to home and avoid airplanes. The growth in near-port cruising helped Baltimore reach nearly 450,000 passengers in 2023 with the expectation of continued strong results in 2024.

The two main cruise lines sailing from Baltimore are Carnival Cruise Line and Royal Caribbean International, both with year-round operations from the port. Last year, Baltimore also welcomed Norwegian Cruise Line with homeport sailings and the line is scheduled to return this fall for two sailing. Smaller ships, including American Cruise Lines, homeport in Baltimore seasonally. The large cruise ships sailing from Baltimore each regularly carry more than 2,000 passengers.

Speaking to investors today, Carnival Cruise Line forecasted an impact of up to $10 million on its earnings due to the disruptions in Baltimore. It is small overall for a corporation that projected $5.63 billion in EBITDA income for FY 2024. By comparison, the corporation told analysts it is now expecting the impact from rerouting cruises away from the Red Sea of approximately $130 million or $0.09 adjusted EPS through November 2024. Brands such as AIDA are deadheading their ships around Africa while cruises on other lines including Cunard are being forced to reroute.

“The city and the Port of Baltimore have been our longtime partners and a home to many loyal guests, as well as business and community colleagues,” said CEO Josh Weinstein during today’s conference call. “Fortunately, our team has quickly secured a temporary home port in Norfolk for as long as it's needed, which should help to minimize operational changes. So, we look forward to getting back to our home in Baltimore as soon as possible.”

Carnival Cruise Line’s 88,500 gross ton Carnival Legend is on a cruise that left Baltimore last weekend and is due to return on March 31. Passengers reported careful attention as the captain advised them yesterday on the tragedy with the cruise reporting the switch to Norfolk and transportation to get passengers back to Baltimore. Passengers face a 230 mile trip that could require four hours driving to return to the Baltimore cruise port.

A sister ship to the Carnival Legend, Carnival Pride is scheduled to take over the Baltimore homeport operations. The Carnival Legend departs April 15 crossing the Atlantic for a summer season in Europe. Carnival also operates from Norfork, so it has the infrastructure available to support a change in homeports on short notice.

Royal Caribbean’s 78,500 gross ton Vision of the Seas is also homeporting year-round out of Baltimore. The cruise line said its team was exploring the alternatives and it would update passengers shortly. The ship departed Baltimore on March 23 and is not due to return till April 4.

American Cruise Lines is scheduled to operate five cruises from Baltimore starting in May 2024. The company’s 90-passenger American Independence and American Star will be operating the cruises and the company reports it is exploring its alternatives. Currently, they are sailing from Washington, D.C. and they also use nearby ports such as Annapolis.

Norwegian Cruise Line is reporting that it is monitoring the situation, but it is early because its cruises were in September and October this year.