Bursting at the Piers

Business

Though more and more cruise-ship passengers are stopping in San Diego, the onshore facilities still leave something to be desired

THOUGH THERE ARE still two hours to departure, passengers are already boarding the Carnival Spirit, a 960-foot, 88-ton, $375-million pleasure palace that was built in Helsinki, Finland, registered in Panama and home ported in San Diego. This is the start of an eight-day cruise along the Mexican Riviera, with ports of call in Manzanillo, Acapulco and Zihautanejo. But passengers eager for their leisure to begin are busy checking out the casino, the Roman spa tucked inside a gymnasium with a circular jogging track, the 1,000-seat Pharoah Theater, the video arcade and the water slide on the Spirit’s top deck.

The seven-year-old Spirit is one of Carnival’s new generation of plus-2,000-capacity cruisers, designed to accommodate increasing demand and appetites for variety. The industry’s something-for-everyone approach is paying big dividends, with more than 12.5 million cruises booked in 2007, an 8 percent growth rate, according to the Cruise Lines International Association.

“The biggest trend we see is the multi-generation vacation,” says Vicki Freed, senior vice president of Carnival Cruise Lines. “It’s like a family reunion at sea, and unlike a land-based vacation, it’s easy. There’s no bill to hassle over at dinner, and everyone has options: The kids can be in Camp Carnival, adults could be taking a wine-and-cheese appreciation class, and the grandparents could be playing bingo.”

Cruise lines have also done a good job of answering objections to the sale. “In the old days, the objection was cost, but compared to other types of vacations, we’re a much better value,” says Freed. “Vegas is $180 bucks a night, but you can get a three-night cruise for $299 with your meals included.”

The other objection was the fear among men of turning into bad imitations of Thurston B. Howell from Gilligan’s Island. Freed prefers to call it the “regimentation thing,” the idea that everyone should——or should want to——engage in traditional cruising activities, like dressing up, eating and drinking.

In fact, Norwegian Cruise Lines has built a marketing program around what it calls “freestyle cruising,” and competitors are scrambling to implement their own versions. “Freestyle is playing off that——every body does what they want when they want,” Freed says. “It doesn’t mean everybody goes to everything, but there are lots and lots of choices.”

Naturally enough, San Diego is riding this wave, as passengers have more than tripled from about 187,000 at the beginning of the decade to an estimated 700,000 in 2007. Rita Vandergaw, the Unified Port of San Diego’s executive vice president for marketing, places the industry’s regional economic impact at about $400 million, including 3,000 cruise-related jobs.

THE GOOD SHIP SAN DIEGO is actually threatened by its own success as much as anything, remarkable considering the dotcom recession of 2001, followed by 9/11. Here’s what happened: Post 9/11, the travel industry was in freefall. Remember those “Thanks for traveling” signs? Car travel was favored over air, and vacationers were suddenly willing to drive longer distances——six hours instead of three——to get out of town.

The cruise industry realized it had a potential disaster on its hands, since about 60 percent of San Diego cruisers arrive here by air. Its response was to ramp up its operations to make cruises available within a day’s drive from pretty much anywhere in the United States.

Carnival operates out of 18 North American home ports, San Diego being one of three year-round ports. The others are in relatively new markets, including Mobile, Alabama, and Jacksonville, Florida.

After travel returned to more or less normal, the cruise-ship industry found itself in prime position to take advantage of its investment in new and expanding ports, and is partnering with ports all over the world to make infrastructure improvements. Carnival has agreed to pay more than half of an estimated $23 million for a new cruise terminal at Broadway Pier. In January, Port commissioners green-lighted the project to replace the nondescript, converted cotton warehouse passengers now file through on their way to the high seas. When there are two ships in port, the Port currently makes do with a drab gray tent to process passengers.

Even with the Carnival contribution, the Port has a shortfall of about $5 million to $7 million, after contributing $3 million to $5 million of its own to the project. The Port is counting on the cash-strapped city of San Diego and/or the Centre City Development Corporation to take up the slack. At press time, a representative of the mayor’s office said Mayor Jerry Sanders hadn’t received a funding request letter from the Port, and wouldn’t comment.

As part of its deal with Carnival, the Port agreed to bring Broadway Pier online by October of this year, so the clock is ticking for the new terminal. Vandergaw says San Diego is about a decade behind in its development of cruise-ship terminals, and she ticks off a list of competing cities that are doing a better job.

“Since we started planning, Seattle has built two and is on their third,” she says. “Los Angeles and San Francisco have terminals in the works; Vancouver has built three terminals; Miami has five new terminals; and Fort Lauderdale has two new ones. We say we didn’t want to build it before they came? Well, they’re here; now we need to take care of the business.”

The Broadway cruise terminal will allow San Diego to play catch-up but will not solve the problem. To accommodate the 3,500-passenger ships coming online now, the Port will need a facility at the B Street Pier estimated to cost more than $75 million (including a seismic retrofit of roughly $25 million).

Though it’s not likely to happen, San Diego could be justified in asking for a federal handout, since cruise terminals are required to provide space for federal customs and homeland security operations. “That’s an expense we’ll work through, but it’s a major part of the development of these terminals in how much we are being asked to pay for in terms of a federal operation,” says Vandergaw. “We need the security, but there should be a balance.”

Back on the Spirit, some of the 950 crew members are hauling bags from their shopping expedition in San Diego. It’s part of an estimated $2 million economic benefit every time a cruise ship docks here, and though the Spirit is shoving off, with some 200 calls a year, it won’t be long before San Diego’s ship comes in again.

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