Port’s Cruising In for Bruising

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When the Disney Wonder lifted anchor from the Port of Los Angeles on Dec. 9, it sailed away with nearly a third of the port’s cruise ship traffic – and left behind further doubts about Southern California’s already struggling cruise line industry.

Disney Cruise Line, the port’s second-largest cruise operator, is moving the Wonder’s home port from Los Angeles to Miami, making it the third major cruise ship to leave Los Angeles in two years. Experts say demand is dropping due to violence in Mexico – the top destination for Southern California cruises – and a sluggish local economy. The Port of Los Angeles estimates cruise ship traffic this year to be down more than 60 percent from 2008.

What’s more, Doral, Fla.’s Carnival Cruise Lines, which subleases space at the Port of Long Beach, will move its 3,006-passenger Carnival Splendor to New York next year, replacing it with a smaller ship that will split time between Long Beach and Seattle.

“Things are ebbing,” said Mike Driscoll, editor of Cruise Week in Brookfield, Ill. “Mexico is the No. 1 issue right now. There’s a fear factor from potential travelers.”

It’s a dramatic comedown from the excitement surrounding the cruise line business here just a few years ago. In 2009, the Port of Los Angeles struck a deal with Disney to lure the 2,400-passenger Wonder. Under the deal, the port agreed to pay for $2.5 million in general improvements to the port’s cruise terminal. The Wonder began sailing from Los Angeles early last year. Also in 2009, Royal Caribbean International’s 3,835-passenger Mariner of the Seas began sailing out of Los Angeles after port officials agreed to pay for $9.4 million in new gangways to accommodate that ship. Those renovations were part of a larger $42 million upgrade of the cruise terminal completed last year.

But now the Wonder, which sailed week-long cruises to the Mexican Riviera, has left after only two years in Los Angeles. The Mariner, which was the West Coast’s largest cruise ship, moved to Galveston, Texas, last year after two years in Los Angeles. Another cruise ship, Norwegian Cruise Line’s Norwegian Star, moved to Tampa, Fla., last year.

Chris Chase, business development manager at the Port of Los Angeles, acknowledged the situation is difficult, but remained optimistic that it would turn around. He also said the improvements paid for by the port were needed anyway, and the upgraded terminal will continue to service all cruise ships there.

“We feel we’ve kind of hit the bottom of the trough at the moment,” he said. “We think we’re going start to climb our way back out in the next couple of years.”

Dwindling traffic

Though cruise ship traffic in the last fiscal year only accounted for about 2 percent of the L.A. port’s $410 million in operating revenue, officials claim each cruise ship call generates about $1 million for the local economy. There were about 100 port calls projected there this year, down from 136 last year and 265 in 2008.

The departure of Disney, which accounted for about 30 percent of the port’s cruise ship traffic last year, leaves the port with only one major cruise customer: Santa Clarita’s Princess Cruises, which will account for about three-fourths of port calls scheduled in 2013.

Princess’ contract is on holdover, and port officials are currently in negotiations with the company, Chase said. Princess did not respond to a request for comment for this article.

In Long Beach, meanwhile, the upcoming departure of the Carnival Splendor means there are no longer any year-round, weeklong cruises to Mexico from Southern California.

The 2,052-passenger Carnival Inspiration will continue to sail three-day and four-day trips to Mexico from Long Beach, according to a company spokeswoman. But the Splendor will be replaced by the much smaller 2,124-passenger Carnival Miracle, which will not be ported in Long Beach year-round.

Whether the cruise ship industry turns around at the ports depends partly on whether tourists change their perception of Mexico, Chase said.

“We’re talking to cruise line customers and talking to past customers and looking at what the potential is for the future,” he said. “But there are still some issues down in Mexico that are not really something the ports can decide.”

Disney Cruise Line spokeswoman Rebecca Peddle said the company remained open to returning to Los Angeles. She declined to comment on whether violence in Mexico played a part in the Wonder’s move.

“We make different itinerary announcements every year and guest demand plays a role in that,” she said.

Things may look bleak now, but the cruise line industry repositions its ships every year, and moves quickly if it senses an opportunity. One piece of good news is the Norwegian Star, which left last year but will be coming back to the Port of Los Angeles in the fall of next year. Norwegian did not return a request for comment.

Driscoll at Cruise Week said that more ships could follow the Norwegian back to Los Angeles one day.

“It might be because others have left, or because they’re growing and have more places they want to move their ships,” Driscoll said. “It’s a cyclical business … my guess is within a few years we may see a return to growth.”

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