Ports of Call: Competing for Cruisers

Ports go all-out to make their facilities more passenger-friendly

Valetta Malta Cruise

By Wendy Laursen 2015-03-10 11:39:47

(Article originally published in Jan/Feb 2015 edition.)

***From Jan-Feb 2015 Edition of The Maritime Executive magazine***

When Adam Goldstein, President and COO of Royal Caribbean Cruises, said that “Cruise passengers are more interested in destinations than ships,” he probably wasn’t talking about cruise terminals, but terminal operators are determined to make their mark on the passenger experience.

It is the antiquity of the Valletta Waterfront that is drawing people to Malta, says Stephen Xuereb, CEO of Valletta Cruise Port, the operator of the Valletta Cruise Terminal. The row of 19 historical warehouses that line the harbor front appears like a fortress rising above the sea and instantly transports visitors to the majestic past.

In 2014, 530,000 cruise passengers from 380 cruise ships passed through the port, and those numbers will increase in 2015 and 2016. In an innovative move, Valletta Cruise Port played host last September to a private event that took three years to plan and involved over 900 workers. German investment marketing company Deutsche Vermögensberatung chartered four AIDA cruise ships to bring 7,000 guests to celebrate its 40th anniversary. The success of this venture is likely to inspire more corporate outings and make the harbor a venue for an array of attractions.

The Sky’s the Limit

Dubai is playing the environmental card. It aims to attract 20 million tourists a year by 2020, and global terminal operator DP World has just completed the brand-new Hamdan Bin Mohammed Cruise Terminal at the Mina Rashid Complex. The terminal is the world’s largest covered cruise facility, capable of welcoming 14,000 passengers a day and enabling the port to serve up to seven cruise vessels at a time and more than 25,000 passengers in its three terminals.

The new terminal was built using recycled materials. Features include a Green Wall Shade System to reduce solar ingress, controlled LED and daylight illumination. It also provides bicycle and electric car parking with charging stations. “The building is eco-friendly and sustainable in line with Dubai’s green building initiative,” says H.E. Sultan Ahmed bin Sulayem, Chairman of DP World. “Over 75 percent of the building’s structure was sourced from warehouses demolished during the building of our new container terminal in Jebel Ali, Dubai.”

The expansion came in response to requests from cruise lines. “The new terminal will strengthen Dubai’s position as a global city and the premier cruise hub in the Middle East,” Sulayem added. “Our investment in expanding cruise-handling capacity and building this facility at Mina Rashid aims to position the city as a leading tourist destination. It also supports growth in the tourism sector and the emirate’s economy by making Dubai a base for cruise tours visiting other ports in the UAE and the Gulf, the Maldives and as far away as Mumbai, India.”

Keeping up with demand and maintaining premium passenger service can come at a significant cost. Singapore Cruise Centre (SCC) was voted Asia’s leading cruise port at the 21st Annual World Travel Awards last year. Competition was stiff, and SCC earned the award largely because of a $14 million transformation of its HarbourFront Cruise & Ferry Terminal to expand passenger space and streamline throughput.

The terminal is used by around five million passengers each year. “With such a high usage pattern, there was no room for compromises, and we even sacrificed retail revenue for the sake of freeing up more space for passengers,” said SCC Chairman Soo Kok Leng.

The changes meant 26 percent more space for passenger operations. “SCC has significantly transformed this terminal,” Leng added, “which will leave a deep impression on first-time and repeat visitors. This was no easy task as we were operating within a fixed footprint of 12,800 square meters.” In addition to reducing the space allocated to revenue-generating shops, the replanning involved moving staircases and relocating air-conditioning units.

And it’s not just the facilities that are the focus of spending. Carnival Australia has developed 50 new destinations in the Australia Pacific region, and in Australia alone there will be 38 maiden port calls to regional centers such as Busselton, Eden and Geelong. The tropical city of Cairns attracts the highest spending rate in Australia ($165 per day from international passengers), and Yorkeys Knob, one of the nearby beachside towns with a population of just 3,000, has had a $1.8 million upgrade to improve mooring facilities for cruise ship tenders.

Where the Cruisers Are

Competition for cruise ship visits and passenger money is fierce among U.S. ports, and Mike McLaughlin, Director of Cruise and Maritime Operations at the Port of Seattle, says even the fact that the local football team has been doing well lately can help attract cruise passengers. The city is the gateway for Alaskan cruising with a choice of 11 different ships, and this remains a growing market for the port. But currently most business is homeport business.

“Looking at our book of business for 2015, we have 102 vessels scheduled, and there are only a couple of them that are port of calls,” says McLaughlin. “Where we see the opportunity to expand economic value in the community is to attract more port-of-call business where the ship can spend the day and the guests can enjoy everything that Seattle has to offer.”

The port-of-call business is limited to available berth slots, mainly mid-week. However, there are plans for introducing a new three-to-five-day cruise from Seattle to Vancouver and Victoria and back. This could have a late afternoon departure on Sunday after the regular Alaska cruises have departed.

Seattle’s first terminal was designed for 1,200-passenger ships, and the port has been growing its facilities. But to take the next market step to 4,500-passenger ships, as McLaughlin would like, will take broader engagement from the city: “Optimistically, we’d like to think we’ll see one of the brands introduce a large ship on the West Coast in the next couple of years.” This seems likely considering Cruise Lines International Association (CLIA) figures indicating that about 47 percent of the 21.31 million cruise passengers that embarked from ports around the world in 2013 did so from a U.S. port. And they spent an average of $126.93 each port day.

The Port of Galveston ranks as the fourth busiest cruise port in the U.S. based on embarkations, and Carnival Cruise Line will add a third year-round cruise ship to its Texas fleet this month, marking the first time a cruise line has deployed three year-round ships in the state of Texas. But Florida is the real hub for cruisers with 62 percent of all U.S. passengers boarding in Florida’s five cruise ports of Miami, Port Everglades, Port Canaveral, Tampa and Jacksonville.

Port Canaveral’s new Cruise Terminal 1 received its first ship last December and will serve as home to Royal Caribbean International’s fleet, including Enchantment of the Seas, Explorer of the Seas, Freedom of the Seas and the new Quantum of the Seas. Port Canaveral is planning four new terminals in the next 10 years with two of them budgeted within the next five years. This is expansion with a capital “E”!

Passenger moves at Port Everglades topped four million in 2014. The Fort Lauderdale-area port has consistently ranked among the top three in the world, and its 20-year plan estimates that it will reach 5.6 million passenger moves by 2033.

“Cruise Capital of the World”

But it is Miami that is breaking records. Known as the “Cruise Capital of the World,” PortMiami set a new world record by processing approximately 4.8 million multi-day cruise passengers in the fiscal year ended September 30, 2014.

On Sunday, January 4, 2015, PortMiami experienced one of the cruise season’s busiest days with nine cruise ships lined up and nearly 42,000 passengers processed. “Our cruise facilities are the most modern in the world, providing a quick and easy boarding and departure experience,” says Port Director Juan M. Kuryla.

PortMiami is second only to Miami International Airport as the most powerful economic engine in South Florida, and many of its current cruise partners are expanding their operations in 2015. Carnival Cruise Lines’ Carnival Splendor recently started sailing year-round from Miami. AIDA Cruise Line is adding three cruise ships to its line-up, and Costa Cruises will introduce a second seasonal vessel to Miami, the Costa Mediterranea.

The PortMiami Tunnel was completed last August and has proven to be a bigger success than expected. The tunnel enables cruise passenger and truck traffic to avoid downtown Miami entirely and reach the port faster. “The new direct access to the interstate highway system boosts PortMiami’s competitive advantage while eliminating traffic congestion on downtown Miami streets. It’s a win,” says Kuryla.

“PortMiami continues to work hard to maintain its worldwide standing as the ‘Cruise Capital of the World,’” he adds. “The port team understands the importance of customer service and making an outstanding first impression. The cruise lines and their passengers are vital to the continued growth and development of the tourism industry in Miami-Dade County, and we want passengers to begin their vacation experience the minute they arrive at our port.” – MarEx 

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The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.