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Growth and challenges ahead for Caribbean cruise ports

PHOTO: TOM STIEGHORST CRUISE_SCG_Caribbean_infrastructure.jpg
From left, Carlos Torres de Navarra, Joseph Boschulte, Luis Ajamil, Rick Sasso
Caribbean cruise ports stand to grow their passenger volumes coming out of the pandemic, but growth will be uneven, with destinations within three to four days' sail of Florida continuing to make gains.

That was the consensus of a panel on ports in the Caribbean and Mexico at Seatrade Cruise Global.

Premium on safety and staying close to home

The premium on safety and staying close to home that has been evident in cruising during the pandemic will continue, thanks to geopolitics and the invasion of Ukraine, said Luis Ajamil, president and CEO, Bermello Ajamil & Partners, a leading port engineering firm.

'Our perspective is that everything is lined up for a really heavy concentration of traffic into the safe markets,' Ajamil said. 'There’s no safer market now than the Caribbean and North America coming out of (Florida).'

Ajamil went on to say that the Florida homeports are ready to handle new growth. 'The destinations — some are being built, some have been there for many, many years and now what they really need is to freshen up.'

Fuel cost spike

But cruise lines will need to compensate for the elevated cost of fuel due to the Russia-Ukraine war, which they typically do by either cutting destinations from itineraries or slowing the ships down to be more efficient, he said.

'It’s anybody’s guess how long fuel is going to hang around at $130 a barrel,' he said.

The short cruise market comprised about 38% of passengers departing from Florida ports, and that increased during the pandemic, but now stands to grow even more partly because bigger ships are being devoted to short cruises, said moderator Carlos Torres de Navarra, president, Todena LLC, a Coral Gables consulting firm.

Big-ship challenges

The pandemic accelerated the retirement of aging ships, such as Carnival Cruise Line’s Fantasy class built in the 1990s, which had often been deployed into the Bahamas. Bigger, newer ships mean more passengers but also can translate into berthing and crowding issues for destination ports set up for the older tonnage.

'If you put an Oasis (class ship) into the short cruise market, and it's twice a week, that’s almost a million passengers (a year) right there,' Ajamil said.

Use of off-peak days urged

For ports beyond the three-/four-day sailing range, greater utilization of off-days is the holy grail, given the high costs of financing and building new berths.

Joseph Boschulte, tourism commissioner in the US Virgin Islands, said St. Thomas is always chock-full on Tuesdays and Wednesdays, which correspond to the arrival of ships from Florida on seven-night itineraries. He would welcome more business from European ships homeported in the Southern Caribbean that can fill in the off days.

Boschulte said he’s also trying to persuade cruise lines to visit St. Croix as well as St. Thomas. 'Guests may have a better experience because it is new to them,' he said.

Challenges for homeporting further south

Homeporting more ships further south in the Caribbean would open up possibilities for islands more distant from Miami, but the challenges have not gotten any easier for homeporting in St. Thomas or San Juan, panelists agreed.

Boschulte said the Virgin Islands don’t have enough hotel rooms to accommodate all the passengers who would arrive pre-cruise or want to stay post-cruise. Ajamil said that even larger San Juan doesn’t have the airlift to handle big ships.

Rick Sasso, chairman of MSC Cruises USA, said homeporting for bigger ships would have to rely on charter flights to bring passengers from North America. But he said MSC’s new Explora Journeys luxury brand, with smaller vessels, is planning some homeporting in San Juan.

Cruising's value proposition

Sasso said the cruise industry across the board, but especially in the Caribbean, is going to benefit from the growing disparity between land lodging prices and cruise prices.

'Try to book a hotel that you booked last year for $300; it’s now $500,' Sasso said. 'And you may not get the room. Well, the cruise industry is going to be a huge benefactor of that. People are going to say "I’m not going to do that for a week when I can go on a cruise for 1,200 bucks."'

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