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Jul 16

Port Everglades racing Port of Miami to be No. 1 cruise base

BY MARTHA BRANNIGAN

For decades, Miami has claimed the title Cruise Capital of the World, cultivating a picture-postcard image of majestic ships gliding past downtown towers, glitzy Star Island and glamorous South Pointe.

Yet now Miami is on the verge of being outflanked by Port Everglades, its neighbor 28 miles to the north, better known for its praying mantis-like cargo cranes and unsightly oil tank farm.

If current trends continue as expected, Port Everglades will bypass the Port of Miami in cruise business by 2012, an unthinkable scenario until recently. In 2000, the Port of Miami had twice as many cruise travelers as Port Everglades.

It is a high-stakes competition that goes beyond bragging rights as the world’s largest cruise port. The cruise industry means thousands of jobs and millions in tourist dollars for Miami-Dade and Broward, whose county governments have committed millions to port infrastructure to ensure they remain competitive.

The shift is due, in part, to a newly aggressive pitch by Broward officials for business. Also in the mix: consternation from cruise operators over a billion-dollar project to build a tunnel connecting Watson Island and the port, which they fear will bring headaches for them and passengers.

“The competition has gotten more steep. And it’s real, it’s significant,” Port of Miami Director Bill Johnson recently told the Miami-Dade County Commission, concerned over a recent spate of gains by Fort Lauderdale.

Johnson says much of the port’s value comes from its less glamorous but more voluminous cargo operation. And indeed, Miami’s cargo business contributed $15 billion to the economy, according to the port, compared to $2 billion from its cruise business.

But Miami’s sun-and-fun image is not built on cargo containers stacked at the port.

BIG PUSHStewart Chiron, a Miami cruise expert and CEO of cruiseguy.com, said Port Everglades has simply become more aggressive, “as evidenced by the huge increase at one port and the decrease at the other.”

Fort Lauderdale’s big push for cruise ships will bring an estimated 3.2 million passengers this fiscal year, up 31 percent from 2006, while Miami’s traffic has sputtered after reaching 4.1 million passengers in fiscal 2008.

Among the shifts in the seas:

• In April, Miami’s Carnival Corp. agreed to funnel 25.5 million passengers through Port Everglades over the next 15 years in exchange for upgrades to four passenger terminals. That contract will produce an estimated $500 million in port revenue.

• Days later, Royal Caribbean International said its 3,634-passenger Liberty of the Seas will make its home at Port Everglades instead of Miami when it returns from Europe next year.

That will trim Royal Caribbean International’s Miami presence to a single, 28-year-old ship — the 2,744-passenger Majesty of the Seas. That’s down from four ships this year.

• Royal Caribbean decided to home-port the world’s two biggest cruise ships at Port Everglades. The 5,400-passenger Oasis of the Seas began sailing in November 2009, generating buzz, and sister ship Allure of the Seas will begin year-round Caribbean cruises in December.

Clinching those deals was key for Port Everglades, particularly since cruise lines expect to slow their fleet expansion in coming years, with much of the growth heading to new markets outside the Caribbean, like Europe and Asia.

“Bill Johnson and I have this friendly competition going,” said Port Everglades Director Phil Allen, flashing a grin. “We realized in Broward if we were going to continue to compete in the Caribbean, we better go after the Oasis.”

He initially saw the quest for Oasis as a long shot.

“Everyone was saying: `Oh, in Miami, Royal Caribbean’s headquarters is just right down the street.’ We made a very aggressive run at it.”

DOMINO EFFECTThe cruise business carries big financial stakes that go beyond the journey at sea. Cruise passengers account for an estimated one of every seven leisure travelers arriving at Miami International Airport, according to Port of Miami officials. And they are major bookers of hotel rooms.

“I don’t think for a minute that Miami is out of the game,” said Miami’s Johnson, a veteran county employee who took charge of the port four years ago. “Travel the world, and people know Miami as a brand.”

Miami can boast of a deal to home-port Norwegian Cruise Line’s new $1.2 billion Epic, a 4,100-passenger vessel expected to be the year’s hottest ship when it debuts in July. Even so, the splashy vessel will spend May to November of 2011 in the Mediterranean, not Miami. Meanwhile, Celebrity Cruises’ newest ship, the Eclipse, will sail from Miami from November through April 2011-12.

Some cruise business that could be Miami’s is going beyond Fort Lauderdale, too. Carnival Cruise Lines considered putting its newest, largest ship, the Carnival Dream, in Miami, but that high-profile vessel wound up going to Cape Canaveral last fall.

Port Everglades’ gains helped energize negotiations between Carnival Corp. and the Port of Miami, and Miami-Dade County executives recently reached a cruise terminal agreement that extends Carnival Corp.’s commitment to the Port of Miami to 2018, five years beyond an existing contract.

Last week, the Miami-Dade County Commission approved the pact, which ensures Carnival’s long-term commitment and increases the guaranteed revenue it will bring Miami.

“We’re confident we’re going to have stability there at the port with Carnival,” County Manager George Burgess said.

Royal Caribbean Cruises Ltd.’s level of commitment is less clear. Richard Fain, chairman and CEO of Royal Caribbean Cruises Ltd., declined to comment on its future plans to sail from Miami, nor would he say whether Royal, which owns several brands including Celebrity Cruises and Azamara Cruises, intends to keep its headquarters at the port after its building leases expire in 2011 and 2014.

Burgess and Johnson are confident Miami-Dade will cement deals on both fronts, and the port plans to spruce up some of Royal’s facilities. “We need to roll up our sleeves and negotiate with Royal, just like we did with Carnival,” Burgess said.

TUNNEL WORRIESOne challenge for Miami is assuaging concerns among cruise lines that construction of a port tunnel, a $1 billion project just under way, will disrupt their operations.

In a May 5 letter, Carnival Corp. chairman and CEO Micky Arison told Miami-Dade Mayor Carlos Alvarez the cruise giant will hold the county responsible if tunnel construction disrupts cruise operations — and asked for a disaster plan. That plan “should include the purchase by the County of insurance to cover the business interruption and other losses of its Port clients,” he wrote.

Mayor Alvarez invited Carnival executives to meet with county and tunnel officials, and said written details on the project’s insurance and safeguards are forthcoming.

Port Everglades director Allen said congestion at the Miami port and anxiety about the tunnel have helped steer business to Port Everglades, which lies at the end of a broad highway and is an easy shot from Fort Lauderdale-Hollywood International Airport.

“The Port of Miami has been abused by Miami-Dade and the city of Miami for years,” Allen said, citing poor planning in erecting AmericanAirlines Arena and a row of new condo towers along Biscayne Boulevard, where they aggravate port congestion.

Still, much of Port Everglades’ growth seems tied to its willingness to reach. When Royal Caribbean was scouting for a home port for Oasis, the Miami-based cruise company got a mild reception in Miami, where port officials say the gargantuan vessel would have taken up two terminals.

Port Everglades didn’t have a suitable facility either for the groundbreaking ship, which was 40 percent bigger than anything built before it. But Port Everglades offered to turn its aging Terminal 18 into a state-of-the-art cruise facility.

Royal Caribbean’s CEO Fain, known as a perfectionist, pressed for assurances that passengers boarding Oasis could zip from curb to ship within 15 minutes. No cruise line had ever tried to funnel 5,400 people on to a ship before, and Royal Caribbean wanted the experience to be hassle-free.

Allen went back to the Broward commission, which agreed to double the terminal budget to $75 million from $37.4 million originally envisioned. Royal, in turn, promised to send even more passengers to Port Everglades to compensate for the extra cost of the 5.5-acre super terminal, which has 90 ticket counters.

The verdict: Cruise expert Chiron recently took an Oasis cruise and clocked his boarding time at Port Everglades at “seven minutes from curb to ship.”

At the Port of Miami, officials are devising plans to maintain their ranking. A key focus: completing a new 35-year master plan by fall that includes ideas for a new passenger terminal that could serve multiple cruise lines and provide room for growth.

“This is a very competitive business, and for those who are asleep at the wheel, the business will bypass you,” Johnson told county commissioners. “I assure you, I guarantee you, I promise you: This port administration is not asleep at the wheel.”

via Port Everglades racing Port of Miami to be No. 1 cruise base – International Business – MiamiHerald.com.