There was a lot of good news in the numbers we reported this week showing how well the cruise business is performing at the Port of Galveston.
The numbers also underscored how much the port has come to depend on that single line of business, however, and remind us there’s some urgency in the effort to diversify the port and add revenue streams.
The good news is that more than 937,000 cruise ship passengers passed through the island in 2017, up from 860,000 the year before, port officials said.
That was an increase in embarkations — the number of passengers boarding cruise ships — of almost 9 percent in one year, which is good by any measure.
The increase meant more money for the port, through the various fees it charges the cruise lines and the passengers, and it also meant almost 80,000 more people visited the island, which was a boon for local businesses related to the port only by geography.
Meanwhile, more than 113,400 passengers sailed from the port in December 2017, the biggest month ever for the port’s cruise business.
The trends have all been upward, which has shown steady growth in net numbers and profits since the cruise lines returned in 2000.
“It’s great news and there’s more on the horizon,” Wharves Board of Trustees Chairman Ted O’Rourke told a Daily News reporter. “Those numbers mean we are the fourth-biggest in the country. Maybe we will grow into No. 2?”
The strong 2017 numbers came despite several setbacks, most notably Hurricane Harvey.
The U.S. Coast Guard on Aug. 25, 2017, closed the island port to all traffic in anticipation of high winds and rain from Hurricane Harvey.
Port officials estimate 27,000 fewer cruise passengers visited because of the storm and that lost cruise-ship revenues totaled about $680,000, officials said.
Each cruise generates about $65,000 in parking and passenger fees for the landlord port, officials have said.
The port now depends heavily on revenues from cruise ships, anticipating about 55 percent of revenue budgeted for 2018 will be cruise-related.
Port officials project operating revenues of about $37.4 million in 2018 against operating expenditures of $37.2 million, according to documents.
Two things are noteworthy in those numbers. The port’s operating margins are razor thin — about $200,000 for 2018, while a seasonal blip such as happened during Harvey can cost it almost three times that amount.
Port officials are right to be optimistic about the cruise business, because all the trends are upward.
Carnival Cruise Line’s newest and largest ship, Carnival Vista, will move to Galveston on Sept. 23 and port officials recently began about $5 million in improvements to accommodate the 1,055-foot vessel.
Carnival Vista features the first IMAX theater aboard a ship, a water park and a brewery, officials said.
Carnival Vista’s arrival in Galveston could be a financial windfall for the island port, officials said.
The increased capacity of about 244 more passengers than the Carnival Breeze could result in 20,000 more passengers a year traveling to Galveston, Simons said.
At the same time though, cruise lines are highly mobile and have been fickle in the past, leaving one port for a sweeter deal somewhere else. Already, potential competitors are eyeing Galveston’s success and calculating how they might peel some of that business away.
So, port leaders should celebrate the good news of last year, and the solid forecast for this one, while they work hard to bring other lines of business and other revenue streams to the island’s docks.
• Michael A. Smith