One of the most recent and conspicuous developments within the cruise industry has been the popularity of the mega-cruise ship. With next generation vessels slated to carry between six and eight thousand passengers, this is hugely positive for the cruise lines. Such increases in capacity can drive huge leaps in revenue, but there has been an inevitable knock-on effect on the ports and destinations that accommodate them.

PORT DEVELOPMENT

The arrival of the mega-ship has had distinct consequences on the ports they visit. Their size means they cannot easily follow older routes and they require longer, wider and deeper berths. Taller ships require higher terminal lobbies and gangways. This has resulted in cruise ports around the world rushing to update or build new vessel facilities.

“The new mega-ships cannot easily follow older routes and require longer, wider and deeper berths.”

Action, innovative solutions and investment have been necessary to improve and modernise terminals, and numerous destinations have been jostling to attract cruise lines by offering every facility needed to put their ports on cruise itineraries.

The Port Authority of Jamaica recently signed a five-year contract with Royal Caribbean Cruises Limited (RCCL) worth $16.5m. The contract demands the Port Authority maintains berthing and land based facilities and satisfies the security requirements of the International Ship and Port Facility Security (ISPS) Code.

Jamaica’s Ocho Rios Cruise Ship Terminal is now able to handle the mega-cruise ship Freedom of the Seas and the 220,000t, 6,400 passenger, Genesis-class vessels.

Ocho Rios recently posted record passenger figures, with recorded arrivals topping 390,000 since the start of the 2007. Cruise Terminal manager Dennis Richards says the company plans to increase berthing space. “By the year 2009, we should see some things being implemented. The plan is to have finger piers where we can berth up to four ships,” he says. Sorry, there are no polls available at the moment.

WORLD BANK INVESTMENT

Such facilities require large-scale investment. Fortunately, the use of new cruise terminals as a regional financial stimulus is a concept currently in vogue within the World Bank.

The International Finance Corporation (IFC), the private sector of the World Bank Group, which has previously financed the cruise terminal in Kusadasi, Turkey and two of the three ports in Cozumel, Mexico, is providing a long-term financing package to the Dominican Republic to expand, renovate and operate cruise ship terminals in Santo Domingo.

The $21m allocation is intended to drive local tourism and the local economy. It is a practice the IFC wants to continue. “We like the business. It brings people to destinations, spurs local economies and helps out the people who work there,” says IFC senior investment officer Herbert Lai. The Legend of the Seas is due to homeport in Santo Domingo for the 2007–08 winter season.

According to RCCL’s Maria Sastre, vice president of sales and marketing for Latin America and the Caribbean, “one of the primary reasons we chose to homeport a ship in the Dominican Republic was due to the port project in Santo Domingo.”

CRUISE CONTROL

Financing cruise terminals has been vital to the growth and sustainability of the cruise industry and the cruise lines have also used their own money to finance projects.

Carnival recently designed and built its own cruise terminal at Grand Turk in the Turks and Caicos islands. Carnival is also investing $50m in a new terminal, Mahogany Bay – Roatan, Honduras. The terminal will be able to accommodate two mega-ships and 7,000 passengers a day. Within five years, the terminal is expected to receive 225 cruise ship calls and 500,000 passengers annually.

The benefits of purpose built destinations are two fold: cruise brochures can fizz with interesting new destinations while the new ports are able to handle the latest ships safely, securely and with due regard to the environment.

“In New York the construction of a new cruise terminal is part of a $200m cruise renovation and expansion programme.”

These new destinations are not the only ones to benefit from investment and the desire to attract cruise traffic, with regeneration a hot topic in the United States and Europe. European cities such as Liverpool, Copenhagen, Barcelona and Venice are undergoing major upgrades and are constantly looking to enhance their attractiveness to cruise companies.

A number of US ports such as Norfolk and Miami have also invested heavily, while in New York the construction of a new cruise terminal is part of a $200m cruise renovation and expansion programme. For New York’s Mayor Bloomberg, the city will make a fine backdrop to a new generation of ‘superstar’ ships. “Norwegian and Carnival Cruise Ship lines have committed to New York as their exclusive northeastern port of call through 2017,” he says.

In essence, it appears the cruise industry is pursuing two different headings. Smaller vessels continue to provide a more traditional approach, making port calls which many have long associated with cruise holidays, while the bigger ships shift to modern, secure, purpose-built facilities where cruise companies can control growth and manage their product from quay to quay.

Add to that the excellent relations that the cruise lines generate with governments looking for financial investment, and it appears an ‘upward development spiral’ develops. The cruise ships get bigger so they need new terminals, which in turn require investment from the cruise lines that then need to generate greater funds by building bigger cruise ships. The new circle of cruising life is born.