Cruise Lines Chart a New Course

Getting a fix on the health of the local cruise ship industry is, in part, a matter of deciding how far to look ahead – or behind. Glancing back to 2004, for instance, reveals a picture of New Orleans as one of the most robust passenger cruise ports in the country. It’s a memory that makes it hard for the local hospitality businesses to accept today’s more difficult times.

On the other hand, by looking three or four years into the future one can see a cruise industry that’s building new ships and expanding ports of call throughout the world. Given New Orleans’ many attractive attributes for tourists and leisure travelers, that future offers local businesses considerable hope.

For the moment, though, the local passenger cruise industry must content itself with a performance that might best be termed as “sturdy.”

Two sizable passenger vessels currently call New Orleans home. Carnival Cruise Lines’ Fantasy continues its year-round, four-and-five-day sailings between the Crescent City and several Western Caribbean destinations. Norwegian Cruise Lines’ Spirit embarks from New Orleans each weekend during the October-March season on its way to Mexico’s Caribbean coast. Port of New Orleans Cruise and Tourism Director Robert Jumonville says business for both companies is brisk.

“The Fantasy and the Spirit have been operating at almost 100 percent occupancy,” he says.

The Carnival and Norwegian lines represent two-thirds of the cruise industry’s big-name troika, which also includes Royal Caribbean Lines. While all three had busy schedules in and out of New Orleans in 2004, events of August 2005 disrupted the business drastically. During a Hurricane Katrina-induced hiatus that reached into 2006, all three lines vowed they would return to Louisiana. However, resuming their previous full schedules proved more difficult than they had expected. Potential visitors around the world received mixed signals regarding New Orleans’ readiness to receive them and as a result, the local passenger cruise industry had to settle into a slow recovery mode.

The three big lines did return to the city in 2006, but last year Royal Caribbean moved its Grandeur of the Seas from New Orleans to Tampa, Fla., and while the company initially committed to replacing Grandeur with its Rhapsody of the Seas, that ship ultimately went to the Far East instead.

The choppy resumption of service didn’t stop the Port of New Orleans from proceeding with planned expansions of its cruise facilities. The port last year completed the $37 million build-out of a passenger terminal at Erato Street. Combined with the existing Julia Street terminal, this enabled faster turnarounds and better passenger service, and gave New Orleans a theoretical handling capacity of four ships weekly, assuming two departing on Saturday and the other two on Sunday. (Currently, the Fantasy operates on a staggered schedule of Monday and Thursday departures.)

Meanwhile, the port also remained committed to developing a new passenger terminal at a site downriver from its traditional embarkation point next to Riverwalk Marketplace.

Redevelopment of unneeded wharf space at Poland Street, just downriver from the French Quarter, had been on the port’s capital improvements agenda since long before Hurricane Katrina. Not surprisingly, the post-Katrina environment put the brakes on the project. Today however, Jumonville says design work for the terminal is complete and bidding on construction could open in the spring. When complete, the facility will expand weekly simultaneous handling capacity by two ships.

As the planning continues though, the port and local hospitality businesses also must consider how changing trends – both short and long term – may affect New Orleans’ passenger cruise industry. For the immediate future, one problem is weakness in the value of the U.S. dollar relative to the Euro and other overseas currencies. “The cruise lines can send a ship over to Europe and price an inexpensive cruise by taking advantage of the weak dollar,” Jumonville says.

In addition, there’s some evidence that the popularity of cruising to existing Caribbean ports has waned. “There’s a perception that the Caribbean isn’t where you want to be during hurricane season,” Jumonville notes.

Many cruise lovers also have already visited Caribbean destinations and are becoming more interested in Europe and the Far East. “The industry believes there’s a need to develop more ‘marquis’ ports in the Caribbean,” to expand beyond traditional targets such as the Cayman Islands, Jamaica and Cozumel, he says.

Nevertheless, Jumonville is confident that the local passenger cruise business will remain on course toward a full recovery. The port expects that close to 500,000 passengers will cross local wharves in the current fiscal year, with approximately that same number in the following year.

Thereafter, barring a drastic economic downturn, passenger numbers should climb right along with growth in the overall tourism industry, he says.

“I think the prospects are very good. Local tourism has rebounded a lot quicker than anyone expected,” Jumonville says. He notes that Carnival Cruises held its quarterly sales conference in New Orleans in September and that during the meeting the company extended its berthing agreement with the port through October 2010.

The local cruise ship industry is still a long way from meeting its 2004 record of 734,000 passengers but the growing numbers of visitors to the city will help spread the word that New Orleans is ready and anxious to show visitors a good time. That, says Jumonville, plays into the biggest advantage New Orleans has over other cruise ship ports.

“We have an edge over Tampa, Galveston and even Miami to some degree and that’s the fact that New Orleans adds another dimension to a cruise,” he says. In short, cruise ship passengers here don’t merely enjoy an on-board experience; they also get a landside experience that includes some of the finest food, music and entertainment in the world.

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