San Diego Suffers Cruise Blues
The Broadway Pier on San Diego Bay just got a face-lift that cost $28 million. You can see it in the sleek new terminal building. Quite a contrast from the B Street pier, just a block north that still makes use of an old cotton warehouse as its terminal. Port officials say B Street will be spruced up as well. But with the cruise business being what it's been, you wonder why they’d bother.
It's been a bad month for the San Diego cruise ship business. Carnival Cruise Lines just announced it would move its San Diego-based ship, the Spirit, to Australia in 2012. This bad month follows a bad couple of years. Carnival pulled its other locally-based ship, the Elation, in 2010. San Diego saw its cruise ship port calls drop by one third last year. This year they're expecting business to be cut in half.
Rita Vandergaw, the marketing director for the Port of San Diego, gave me a tour of the new port terminal as she spoke in cheerful tones about its architecture and various uses. When I asked her about recent hard times, and the future of the cruise business, she remained cheerful.
"They'll be back!” she said. “As Arnold says, they'll be back."
We should hope so. Vandergaw said each cruise-ship port call brings an estimated $2 million to the local economy. Part of the problem with the cruise business has been the down economy. But Vandergaw, and everyone else, says a bigger problem is California's major cruise-ship destination, Mexico.
"Mexico is going though an extremely difficult time now with the crime and the uncertainty. And the cruise lines are always going to choose to take their passengers to safe destinations,” Vandergaw said.
Make no mistake, San Diego is a great place to have a cruise-ship industry. Carolyn Spencer Brown, editor-in-chief of the website Cruise Critic, calls this an ideal embarkation point for touring Mexican ports. But press coverage of Mexican drug violence has put a lot of people off, and Brown said it's not all misguided perceptions. She said cruise passengers have been mugged and robbed in Mazatlan, one of the key ports on Mexico's western “Riviera.” In fact, Mazatlan has become such a problem that Disney and Holland America cruise lines say they'll no longer go there.
If misery likes company, San Diegans will be reassured that the Port of Los Angeles is suffering as well. LA just lost its only year-round cruise ship, the Mariner of the Seas. Chris Chase is a business development manager at the Port of LA.
“In 2005, we peaked at about 2.5 million passengers,” he said. “We expect something in the neighborhood of 600,000 passengers this year.”
Chase said the thing about the cruise ship industry - when business is bad, it's easy for ships to get out of town.
"These are very, very expensive assets and they're also highly mobile, and they can move them somewhere else," he said.
And the cruise ship business is booming pretty much everywhere else. Alison DaRosa has done a lot of cruises and she's a veteran travel writer. She said the worldwide industry is adding 15 ships this year and that follows many years of expansion. When you look at the places where those new cruise ships are going to be based... let's just say it adds insult to San Diego's injured business.
"Bayonne, New Jersey! Can you imagine choosing Bayonne, New Jersey over San Diego?" said DaRosa.
Actually, she can imagine it. North Jersey is close to large population centers and it's close enough to the Caribbean to make that area, with its large diversity of ports, a primary destination. DaRosa has cruised the Mexican Riviera four times. Personally, I've never been on a cruise and I asked her why cruising is so popular.
"You know, it's just so easy,” said DaRosa. “You see some major ports in Mexico. You party hardy. You shop all you want and it's just great.”
And yet she said she wouldn't do a Mexico cruise again, not for fear of violence but because she would be visiting the same old ports, seeing the same old stuff.
The motivation to keep cruise-ship business in San Diego is clear. If each port call brings in $2 million, this fiscal year the cruise industry will have a $254 million economic impact on the region. Rita Vandergaw, of the port, said that enriches a wide variety of businesses.
"From long-shore labor that work the ships, to provisions and goods that may be purchased here and delivered to the port, to attorneys whose services may be used by the cruise lines," she said.
Vandergaw said the new cruise ship terminal on Broadway Pier can be used for other things. She said Chrysler rented the building this week to show some of its new cars to automotive journalists. Vandergaw adds the cruise ship business is cyclical, and as the economy comes back much of that cruise business San Diego has lost will also come back. But the perceptions of Mexican ports being too dangerous, and being the same old product...that will be tougher to overcome.