Sponsored By

PortMiami seeks fees relief for cruise linesPortMiami seeks fees relief for cruise lines

Miami-Dade County commissioners are considering giving cruise lines a break from their guaranteed minimum payments at PortMiami during the pandemic shutdown and recovery period.

Anne Kalosh, Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

October 20, 2020

2 Min Read
Credit: Seatrade Cruise News

A proposal before the commission today would authorize the county mayor to negotiate and execute amendments to preferential berthing rights agreements and cruise terminal usage agreements, providing for a two-phase coronavirus recovery period.

Estimated impact to the county

Such amendments would have an estimated fiscal impact to the county of $68.5m for the first phase of the recovery period, calculated as from March through November 2020. If the no-sail order is extended, the impact would continue at approximately $7m per month until the commencement of the second phase of the recovery period. After that, the impact would be approximately $7m per month, subject to reduction based on the duration of the second phase of the recovery period and passenger volumes.

Cruise revenues average $7m per month

In a memo, Deputy Mayor Jack Osterholt noted cruise revenues are seasonal but, on average, total approximately $7m per month in guaranteed net cruise fees and approximately $1m in ancillary cruise-related revenues such as ground-transportation fees.

In the event there is no sailing by any line in the second phase of the recovery, the port could forgo the approximately $7m in monthly guaranteed revenues for 24 months, Osterholt said. However, it's expected that lines will resume sailing as soon as permitted, and they will be required to compensate the county based on their actual port usage.

$114m in unrestricted reserve

Osterholt said the port can meet all its financial obligations without further dipping into unrestricted reserves even if cruises were not to resume, until April 18. After that, PortMiami would need to take additional measures, including the extension of austerity measures and/or further use of the $114m in unrestricted reserve balance available at the start of fiscal 2020-21.

Should cruises not resume for an extended period, the unrestricted reserves would be sufficient to meet the port's cash requirements for operating expenses, including debt service, through September 2022, though at that point, the port would likely miss debt service coverage ratios, Osterholt said.

Read more about:

PortMiami

About the Author

Anne Kalosh

Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

Anne Kalosh covers global stories, reporting both breaking and in-depth news on cruising's significant people, places, ships and trends. A sought-after expert on cruising, she has moderated conferences around the world, including the high-profile State of the Industry panel at Seatrade Cruise Global. She created and led the acclaimed itinerary-planning case study for Seatrade's cruise master classes held at Cambridge and Oxford universities. She has been the cruise columnist for AFAR.com, and her freelance stories have appeared in a wide range of publications, from The New York Times to The Miami Herald.

The latest cruise news, analysis and more straight to your inbox
Get the free newsletter read by industry experts

You May Also Like