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Port Tosses Lifeline to Cruise Ship Industry

Port of San Diego officials are looking to set a new course for the region’s ailing cruise ship industry, a challenge made tougher by a consultant’s prognosis that it could be 2015 before a rebound even begins.

“The cruise industry will be coming back,” said Port Commissioner Robert “Dukie” Valderrama, responding to a report issued earlier this month by the consulting firm Bermello Ajamil & Partners Inc. “We want to be prepared when it does.”

However, full recovery may take several more years. Consultants estimate that it could be the late 2020s before local cruise ship traffic returns to the peak seen in 2008 — when more then 900,000 passengers arrived and departed in 254 sailings from local docks.

At stake is the fate of a cruise ship industry that, according to a 2005 study commissioned by the port district, once had an annual impact of $300 million on the local economy, supporting 3,000 jobs. The port district estimates that each single cruise ship call provides a $2 million economic boost.

While cruise line companies have been downsizing their San Diego presence in recent years, in response to reduced consumer demand among other factors, things are not a total loss at the moment. The consultant notes that the local cruise volume this year is expected to be just over 307,000 passengers on 104 sailings, bringing a $200 million injection for the local economy.

Port officials will use the consultant’s findings to establish a plan of action to speed recovery.

Outreach Effort

Port spokesman John Gilmore said officials are reaching out to local airports, tourism agencies and chambers of commerce to help boost awareness of the local region as a prime stop for cruise travelers. A key initiative already under way involves working with tourism officials in Mexico to repair damage done to that country’s travel economy by ongoing violence linked to drug cartels.

Tourism leaders north and south of the border have said that Mexico’s coastal resorts have been unfairly tarnished by events taking place hundreds of miles away. News of the violence has created general fears among U.S. travelers about visiting Mexico during the past two years, a trend exacerbated by the general downturn in the economy.

Rita Vandergaw, the port district’s business development director who handles cruise-related programs, said Mexican officials at the federal and state level are on board for enhancements to safety, as well as updating the overall traveler experience that in some destinations hasn’t changed in nearly 30 years.

Those improvements in turn could encourage cruise lines to boost overall trip offerings on the West Coast, adding stops in San Diego and other points along coastal Baja California. “The cruise companies are not going to put their reputations or the safety of their customers at risk,” Vandergaw said.

Officials say moves to increase cruise traffic would be a boon to local waterfront-adjacent shopping venues, restaurants and tourist attractions that have traditionally drawn a large number of visitors from cruises.

Rick Ghio, president and CEO of Anthony’s Fish Grotto, a downtown San Diego mainstay for 65 years that’s been at its current location since 1966, said it is tough to gauge the direct impact of the recent decline in cruise stops, since his Harbor Drive restaurant is currently having a banner year.

Business Impact of Cruises

Steady visits to his eatery among locals, convention-goers and visitors to nearby hotels have more than made up for traffic lost from reduced cruise trips during the past two years. But he said the general impact of those cruises on his and other local businesses during the peak years was noticeable.

“There was a time years ago, especially when San Diego was a home port to the cruise lines, when we’d get lots of the cruise passengers coming over to eat, and also a lot of local people who were waiting for the arrival of their friends and relatives coming off the cruise ships,” Ghio said.

Among other recent setbacks for the local cruise industry, Carnival Cruise Lines announced in January that it would discontinue its San Diego-based services to Mexico, as it focuses its resources on the Australia market. According to the port district, the Carnival Spirit made 27 calls annually in San Diego in recent years, carrying 60,000 passengers to Mexican coastal destinations.

Carnival spokesman Vance Gulliksen said in a Sept. 21 email that following this winter’s schedule of five- and nine-day cruises from San Diego aboard the Carnival Spirit, “there are no other departures from the port scheduled at this time.”

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