The rapid growth of the Tampa Bay area's cruise industry may be a thing of the past. Bigger cruise ships, the height of the Sunshine Skyway bridge, the width of the bay's channel and competition from other ports are all constraints.
By STEVE HUETTEL
Published March 29, 2004
[Times photo: Bob Croslin]
The Carnival cruise ship Sensation steers into the channel on its way to Tampa Bay on March 20. When the Sensation and Carnival’s Inspiration make the 2 1/2-hour trip in or out of port, the channel is essentially closed to other traffic, causing heartburn for cargo ship operators on tight schedules.
[Times photo: Skip O'Rourke]
The Sensation heads under the Sunshine Skyway bridge in June 2003 on its way west toward Cozumel, Mexico. Today’s biggest cruise ships can’t fit under the 181-foot-high Skyway.
MIAMI BEACH - On the floor of the giant Seatrade convention, sales reps hawk every product a cruise ship operator could imagine, from frozen cocktail ChillPops to synthetic teak decks and laser shooting simulators.
But some of the hottest competition is among those providing a ship's most basic need: a place to tie up to the dock. Representatives from about 100 ports around the globe are elbow to elbow, angling for the attention of cruise line executives.
The exhibit space for Fort Lauderdale, the third-largest U.S. cruise port, looks like a living room with overstuffed furniture and a huge aerial photo of its bustling waterfront. Wanna-bes such as Gulfport, Miss., settle for modest cubicles touting local attractions.
In this universe, Tampa's port is an adolescent on a growth spurt. About 418,000 passengers took trips out of Tampa on major cruise lines last year, an increase of 53 percent since 2001. That makes Tampa the fourth fastest-growing cruise port in North America and No. 9 in total passengers.
But the rapid growth is beginning to level off as cruise lines launch fewer ships and spread their fleets among a larger number of home ports.
The big lines will sail from 30 North American ports this year as they move ships within a short drive of big population centers. Last fall, Jacksonville got its first ship, Celebrity Cruise Lines' Zenith. Mobile, Ala., joins the club in October with Carnival's Jubilee.
"The competition has increased, fostered by the cruise lines," said Andrew Moody, president of Business Research and Economic Advisers, which does research for cruise lines and ports. "They like to see that competition and need diversification of the drive-to market."
Tampa also has physical constraints to growth.
Today's biggest cruise ships can't fit under the 181-foot-high Sunshine Skyway bridge.
And Tampa Bay's main shipping channel is too narrow for vessels to safely pass Carnival's ships Inspiration and Sensation. The channel essentially is closed to other traffic as the cruise ships make a 21/2-hour trip in and out of the port, causing heartburn for cargo ship operators on tight schedules.
The federal government is studying a plan to dredge a "passing lane" along a stretch of the channel. But even if local officials persuade the Army Corps of Engineers to speed up the project and Congress to fund it, the work won't be completed until the end of the decade at the earliest.
The Tampa Port Authority expects a 3 to 5 percent increase in cruise passengers this year and in 2005, the first years of single-digit growth since 1997.
That shouldn't come as a surprise after years of rapid growth, said former port director George Williamson, who left last week for a job in the private sector after running the agency for five years.
"I don't think you can sustain 25 percent growth year in and year out," he said. "There's always competition. We're not going to lose all our ships to anyone. There are plenty to go around."
During the peak winter season, Tampa is home to six cruise ships owned by four major brands: Carnival, Holland America, Royal Caribbean and Celebrity.
Cruise lines like Tampa's location for four-day to weeklong trips to the western Caribbean and longer cruises to the southern Caribbean, said Gina Rathbun, the port's cruise marketing director.
Unlike ports with cruise terminals near gritty cargo facilities, Tampa has the Florida Aquarium and trendy shops and restaurants of the Channelside entertainment complex adjacent to where passengers board the ships.
"The real drawing card, where Tampa separates itself, is the destination experience at the waterfront," Rathbun said. "The cruise lines like the sense of arrival."
A newly built Carnival ship, the Miracle, will start sailing from Tampa in the fall when the slightly smaller Sensation relocates. Royal Caribbean may bring a larger ship in 2005. The port also is recruiting new cruise lines, Rathbun said.
"We won't see the increases we did over the last five years," she said. "But there will be increased loads with new vessels and as we move out into 2006, there's the potential for additional vessels."
Driving business
The top goal for cruise lines - repeated so often that it has become their mantra - is getting people to try a cruise vacation.
Their best strategy has been putting ships where large numbers of potential customers can drive, instead of fly, to catch a cruise. That makes a cruise cheaper and more appealing to vacationers worried about the safety or the hassle of air travel.
Carnival Cruise Lines began the concept of "close-to-home cruising" a decade ago. Its ships will sail from 19 home ports this year, and Carnival will keep looking for more, president Bob Dickinson said at the Seatrade convention this month.
"It's making crusing more accessible," he said. "We not looking at Omaha or St. Louis. But other ports will prove to be very viable as time goes on."
Tampa became one of the first drive-market ports in 1994. Carnival brought its smallest and oldest vessel, the Tropicale, for a western Caribbean route that also included New Orleans as home port. Both cities now have two large Carnival ships of their own and vessels from competing cruise lines.
Tampa's cruise passengers remain a good match for Carnival's strategy. About two-thirds drive to the port. Four in 10 live in the region stretching from northern edge of the Tampa Bay area south to Fort Myers, said Terry Thornton, Carnival's vice president of marketing and planning.
But the real up-and-comer on the gulf is Galveston, Texas. Carnival came five years ago to tap into nearby metropolitan Houston's 4.5-million residents. Its ship also ended up drawing Texans willing to drive from hundreds of miles for a voyage.
"That was the turning point," said Steven Cernak, Galveston's port director. "It opened doors no one could anticipate." Last year, some 377,000 people took cruises from Galveston - a 151 percent increase from 2001 and just 41,000 fewer than Tampa's total.
Galveston dangled a carrot to attract Carnival: a cut-rate fee of $5.75 per passenger per trip - about half what Tampa charges. As competition heats up among ports, such deals are common, said Moody of Business Research and Economic Advisors.
"The (port charges) written in black and white are like the sticker price on a car," he said. "There's water, utilities, stevedoring rates, docking . . . it's all negotiable."
Mobile spent a "significant" amount of cash to advertise the port's first year-round cruise on Carnival's Holiday starting in the fall, Thornton said.
In Tampa, Carnival Corp. brands - Carnival Cruise Lines and Holland America - receive about a 50 percent discount on docking charges and 25 cents off the $5.75 fee charged when passengers board and leave the vessel. Port officials say the deals are volume discounts based on Carnival making at least 140 cruises a year.
Such incentives aren't as important in deciding where to put a ship as a port's proximity to large population centers and popular destinations, Thornton said. Carnival tries to avoid locating a ship somewhere it might steal customers from an existing vessel, he said.
But Jacksonville officials say cruises from their port have been popular with people driving from the Carolinas and Georgia, states that traditionally feed cruise customers to Tampa.
"Folks tell us they prefer to drive to Jacksonville than any farther south," said Robert Peek, spokesman for the Jacksonville Port Authority. "When they cross the Georgia border, they want to stop at the top (of Florida) and get off in Jacksonville."
Competition among ports could get even sharper as a five-year ship building binge slows down. Major cruise lines are scheduled to launch 12 ships this year, three in 2005, five in 2006 and none in 2007.
Cernak expects cruise lines will end up with fewer but larger ships. That likely means some of the new ports won't make it, he said. But he predicts the three largest gulf ports - Tampa, Galveston and New Orleans - will be among the survivors.
Too tall, too big?
A move to bigger ships, however, could work against Tampa.
Carnival has five ships, including two 2,974-passenger Destiny class vessels, that are 26 feet too tall to pass beneath the Sunshine Skyway. The cruise line has only two new ships under contract, both Destiny class.
Royal Caribbean has seven ships that can't fit under the Skyway. Two more are on the way, including the world's largest cruise ship, dubbed the UltraVoyager.
Port officials and the cruise lines say the bridge won't inhibit the growth of Tampa's cruise business. Eighty percent of cruise ships can fit under the bridge, said Rathbun, the port's cruise marketing director.
Carnival eventually will build more ships the size of the Miracle, which is due to arrive in October, said Thornton, the line's marketing and planning vice president. The ship can clear the Skyway by 8 feet at low tide, 6 feet at high tide.
The Miracle created a stir in Jacksonville last month as it sailed beneath the Dames Point Bridge on the St. John's River with 6 feet to spare. Sheriff's deputies closed the bridge to traffic, afraid that startled motorists might collide.
Jacksonville officials had a different concern: that the bridge could limit the port's cruise business. The port's governing board last week agreed to consider a site for a new cruise terminal, one that ships can reach without going under the bridge.
"The trend in shipbuilding is bigger and bigger," port spokesman Peek said. "Our concern is not now but where we'll be in 10 or 15 years. We want to be able to handle the newer, bigger ships."
Unlike the height of the Skyway, restrictions caused by Tampa Bay's narrow shipping channel are something that can be fixed. But the solution won't be fast or cheap.
Before Carnival's Sensation arrived two years ago, safety officials decided the ship might shift sideways in bad weather and hit another vessel navigating the 500-foot-wide channel. To keep other ships at a safe distance, they ordered a buffer zone around the Sensation and later for its sister ship, Inspiration.
The rules rankled cargo ship operators, whose vessels had to wait while the cruise ships moved in and out of the port. They complained the delays cost them money.
Most of problems are now resolved by a traffic control board that decides which ship can move first if there's a conflict, said Sal Litrico, who chairs the Tampa Bay Harbor Safety Committee.
His board is deciding on restrictions for a third large cruise ship, Royal Caribbean's Splendor of the Seas, scheduled to come to the port in October. The panel may require the ship move in a convoy with other cruise vessels to minimize delays, Litrico said.
"But we've got to be careful down the road," he said. "If we get too many of these vessels, it will put pressure on the system. We've got to make it equitable."
The solution, port officials say, is to widen a 3.5-mile stretch of the channel east of the Skyway by 100 feet and create a passing lane so the big cruise ships can safely go around slower vessels or pass those coming in the opposite direction.
The problem is time. Dredging projects typically require five years of studies and two or three additional years of engineering before the first scoop of muck is dug from the bay bottom.
Port officials and Tampa Bay area members of Congress are asking the Army Corps of Engineers to accelerate the process. They estimate the dredging will cost between $15-million and $20-million.
"There's an emergency need here," said John Thorington, the port authority's government relations director. "Keeping the channel open and traffic moving is essential to business."
Twice this year, Carnival ships had to wait two hours in the gulf because they didn't arrive at a specified time to enter the channel, Thornton, the Carnival marketing executive, said. When that happens, passengers miss flights home or can't get on board as early as they want.
"It's a big problem for our guests," he said. "This is the only place we've ever run into this issue."
