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How Will Loss Of Cruise Ships Impact Local Economy?

Audio

Aired 1/31/11

Carnival Cruise Lines recently announced that the locally-based ship, the Spirit, will be leaving San Diego in 2012. The Spirit is the second locally-based Carnival ship to recently announce it is leaving San Diego. We speak to KPBS Reporter Tom Fudge about why these cruise lines are leaving San Diego, and the impact their departure could have on the local economy.

Carnival Cruise Lines recently announced that the locally-based ship, the Spirit, will be leaving San Diego in 2012. The Spirit is the second locally-based Carnival ship to recently announce it is leaving San Diego. We speak to KPBS Reporter Tom Fudge about why these cruise lines are leaving San Diego, and the impact their departure could have on the local economy.

Guest

Tom Fudge, KPBS Reporter, and author of the "On-Ramp" blog on KPBS.org.

Read Transcript

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

MAUREEN CAVANAUGH: What better place to start a cruise vacation than San Diego? Some cruise lines are answering Bayonne, New Jersey? I'm Maureen Cavanaugh, coming up on These Days, San Diego's cruise ship industry is taking a bit hit from both the economy and stories of drug cartel violence in Mexico. We'll hear what KPBS blogger Tom Fudge found out about the cruise blues. Then a live performance from a chamber music ensemble created by two young members of the San Diego symphony. They're working to bring the excitement back to classical music of that's all ahead this morning on These Days. First the news.

I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. Downtown San Diego's new cruise ship terminal on Broadway pier is big, it's beautiful, and some of the time, it's empty. The hole cruise industry has been going through some rough seas lately, the most recent blow being carnival cruise lines decision to mull another ship from home port in San Diego. KPBS reporter Tom Fudge looked into the problem plaguing the local cruise sympathy for a post on his blog, on-ramp. He joins us on the phone this morning, he's had nursing a cold. Good morning, Tom.

FUDGE: Good morning, Maureen, sorry I couldn't join you.

MAUREEN CAVANAUGH: We have a little problem with your line. I wonder if you could come back to us, Tom?

FUDGE: Yes, I think I could.

MAUREEN CAVANAUGH: Okay. Well, you're a little loud, and there's a lot sound on your line, but we'll do the best we can, how's that?

FUDGE: Okay, okay.

MAUREEN CAVANAUGH: This has been I bad month for the local cruise ship business? Hi, Tom? We have lost Tom Fudge. I think we have to take a short break and try to get Tom Fudge back on the line. He's nursing a cold, we are nursing our electronics here on KPBS. You're listening to These Days on KPBS.

I'm Maureen Cavanaugh, you're listening to These Days on KPBS. And we resume or try to resume our talk with KPBS reporter Tom Fudge, he's looked into the cruise blues affecting San Diego's cruise ship industry, and he's joining us on the phone this morning. Good morning, Tom.

FUDGE: Good morning, Maureen. And I hope you can hear me this time.

MAUREEN CAVANAUGH: Yes, you still sound sick, but you sound a lot better.

FUDGE: Okay, well, at least the phone is not ill.

CAVANAUGH: Now, tell us why this has been a bad month for the local cruise ship industry.

FUDGE: Well, it's been a bad month for one reason in particular, this month we got the news that carnival cruise lines is moving its second ship out of San Diego. The carnival spirit will be -- has been home ported in San Diego, and it's gonna be leaving at the beginning of next year to go to Melbourne Australia. I'm sorry. Sidney Australia to be home ported there, and this happens after last year San Diego lost it another Carnival cruise line ship, the Elation. And so as a result of losing those two ships, San Diego has lost quite a bit of business. In the meantime at the port of Los Angeles, also in Southern California, the port of LA has lost one of their cruise ships, the mariner of the seas, come has also gone elsewhere. So in general for Southern California, cruising has not been cruising very well.

MAUREEN CAVANAUGH: Yeah, and in a nutshell, why is that happening, Tom?

FUDGE: It's happening because business is bad. And if you look at San Diego, for instance, last year, business was down by about a third, compared to the previous year, and this year, they're expecting business at the port of San Diego to be down another half compared to last year. In Los Angeles, same situation. They peaked out in 2005 [CHECK AUDIO] and this year they're expecting only about 600000. By the way, the port of Los Angeles is where they film the TV show the love boat, just in case you were wondering. But there's not a lot of love in the commerce that's going on there.

MAUREEN CAVANAUGH: Well, I should be laughing, it's a big blow to the local economy isn't it?

FUDGE: It is a big blow to the local economy. The port of San Diego estimates that every port call that's a cruise ship coming into the port of San Diego has a $2 million economic impact. And that is everything from people on the cruise ships having to stay over night in hotels, a lot of that business comes from people who provision the cruise ships who provide them with flowers and food and things like that, could be even local attorneys who represent the cruise lines. So there's a big economic impact. It's a big part of our economy, a big part of our visitor economy, and I suppose people are wondering why business is so bad.

CAVANAUGH: Yeah.

FUDGE: And the reason, well, there are two reasons, there's more than one. One reason is the economy is just not been doing very well over the past couple of years, you may have heard something about that.

MAUREEN CAVANAUGH: Right. I have.

FUDGE: And the other reason is Mexico. And in fact, this is -- when you hook at the rest of the cruise ship industry, and how well it's doing, Mexico is probably reason number one. Mexico is having a tough time. Well. First of all, you have to understand that when it comes to cruises out of Southern California, Mexican -- the Mexican Riviera, or the western Mexican Riviera with its ports of Puerto Vallarta, Mazatlan, Cabo San Lucas, that's kind of the product. If you're boarding a cruise ship in San Diego, that's generally where you're going to be going of and a lot of people just don't want to go to Mexico. They had heard so much about the drug violence, they find that very intimidatingly of Mazatlan, as a matter of fact, as a port has had a lot of troubles. There have been cruise ship passengers who have been mugged in Mazatlan, who have been robbed in Mazatlan. In fact, just a week ago, the Disney and Holland American cruise lines said that they weren't going to stop in Mazatlan anymore because they were so concerned about the crime and the violence there. I think that says something about why business is bad in the cruise industry in Southern California.

MAUREEN CAVANAUGH: Now, you spoke with an official from the port up in Los Angeles about the fact that if things aren't really going well in one area, the cruise lines don't have to stay there. 92 and this is one particular, you know, we talk about outsourcing, well, I tell you what, when it comes to cruise ships, they're very easy to outsource. And so why don't we hear just a little bit from Chris Chase who's the marketing direct offer of proof at the port of LA, that's hear what he has to say about this. Oh, okay. We don't have the clips right now. I guess your phone ate them, Tom.

FUDGE: Oh, well, allow me to paraphrase Chris Chase. What he would have said if we had heard him is that these assets, these cruise ships, are enormous, very valuable assets, and they are also highly mobile. Clearly this is it true. If carnival doesn't want to have the Spirit based in San Diego, they can sail across the Pacific Ocean and be based in Sydney Australia.

MAUREEN CAVANAUGH: Right.

FUDGE: They're very valuable, they're very wig, very mobile, and if business is not good around here, they'll just go some place else.

MAUREEN CAVANAUGH: I'm told that we do have a very funny second clip that you pulled, and that goes to the fact that the cruise industry business is not down all over is it?

FUDGE: No, it is the no. As a matter of fact, the cruise business has been growing for many, many years, and the past couple of years have been no exception. If you hook at the cruise industry globally, they are adding this year approximately 15 ships of one of those ships, as a matter of fact, offers cabins that are 2500 square neat. Now -- a lot of people listening probably don't have houses, don't live in houses that are 2500 square feet. But you can get a cruise cabin that size. And, well, where are they going in let's hear from Allison DeRosa, who's a veteran travel writer in San Diego. She gives us an idea.

NEW SPEAKER: Bayonne New Jersey. Now, can you imagine choosing Bayonne New Jersey over San Diego?

MAUREEN CAVANAUGH: No, we can't.

FUDGE: Well, Allison actually can imagine that. So think about Bayonne New Jersey, the beaches aren't so good, the weather's not so good, but it's very close to big population centers, clearly, it's in north Jersey, and it's close to New York City, it's close to other big population centers, and it's close enough to the Bahamas to make the Bahamas its primary destination. This particular cruise ship that's gonna be based in Bayonne. And the Caribbean is very attractive, the weather is wonderful, obviously. And this is a great variety of ports that cruise ships can go to in the Bahamas, and Maureen, this is another problem with Mexico. We talked a little bit about the crime in Mexico. But when I was talking to Allison de-Rosa, I asked her, well, have you gone on cruises? Have you gone to the Mexican Riviera, and she said, yes, I've actually gone to the Mexican Riviera, Mazatlan, Puerto Vallarta, Cabo San Lucas, four times. And I said, well, were you gonna go again? And she said, no, I don't think so because I've kind of seen it. So this is another issue, when you look at the problems with the cruising industry in Southern California. The main product, Mexico is getting a little old. People have been there. And they're not sure they want to go there again.

MAUREEN CAVANAUGH: Well, is there hope that this will improve? That perhaps this is a cyclical problem? That cruise ships will come to San Diego in the future when the economy improves?

FUDGE: I talked to Rita Vandergaw, who is the marketing director for the port of San Diego, and she said, well, the business is cyclical, and that means when the economy improves, it'll get better. Now, somebody at the port of San Diego like that would say something like that because they want to put a positive spin on it. To some extent, what she says is true. When the economy gets better, people are gonna be in the mood to do lots of things they couldn't afford to do before, and going on cruises to Mexico or Hawaii or other places is another thing. I mean, business will pick up. But the problem that we see in Mexico is -- of the Mexican crime problem, and the fact that the ports, you know, a lot of people have been there, done that, those are gonna be things that are gonna be a little more difficult to overcome. And in the meantime, I should mention the fact that the port of San Diego now has the shiny new terminal, the Broadway terminal, they spent $28 million to build a new cruise ship terminal building, and to improve the pier. And I asked Rita Vandergaw, well, was this all a waste of money since business is down so much? And what they're trying to do is they're trying to rent that out as a venue for events. And last week, apparently Chrysler portion did rent it out to show some of their new cars to automotive journalists and they're gonna try to do that as much as they can. But there's no replacing that lucrative cruise business which, as I said, brings about $2 million to San Diego's economy for every port call.

MAUREEN CAVANAUGH: Well, if you want to read the whole story, you can go on-line, KPBS.org to the on-ramp blog. You'll find Tom Fudge's report about the local cruise industry, and the cruise blues. KPBS reporter Tom Fudge, thanks so much.

FUDGE: You're welcome.

MAUREEN CAVANAUGH: Get better.

FUDGE: I am.

MAUREEN CAVANAUGH: Okay. And if you'd like to comment on what you've heard today, you can go on line, KPBS.ORG/THESEDAYS. Coming up, classical music gets an uplift from San Diego's Art of Élan. That's next as These Days continues.

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