GALVESTON — Fifteen years ago this week, the Carnival Cruise Lines vessel Celebration made its inaugural voyage from the island, launching what would become — to everyone’s surprise — one of the most important industries for the Port of Galveston.
When the Celebration sailed that day, no one knew Galveston would become home to the fourth busiest cruise port in the United States or that revenues from cruise ships and related business would make up 57 percent of the port’s projected $32 million in revenues this year. Nor did anyone suspect the position the port would be in today as it grapples with having to find space for all the passenger liners wanting to sail from island docks.
“I don’t think we had any idea back then,” Port Director Michael Mierzwa said. “I think we were just so excited to get cruises here.”
But if port officials and islanders were surprised by the success of the cruise industry here, so were the cruise lines, Wharves Board of Trustees Chairman Benny Holland Jr. said. Before 2000, port officials and residents had worked for years with scant luck to lure the passenger vessels.
When lines did take an interest in Galveston, they saw the historic seaport city as an experimental market, a place to send smaller, older ships replaced by larger, newer ones in more lucrative markets. But the ships filled fast, Holland said.
“The market in Texas was untapped,” Holland said.
In 15 years, the port has seen 2,643 ship calls from 18 different cruise ships boarding 7 million passengers.
Success has come with some growing pains and expense, however.
Success means work
With every announcement of another, larger ship planning to sail from Galveston, came the need to expand terminals.
“Cruise lines come to us and say, ‘Congratulations, we’re going to bring you a bigger ship, and by the way’ — in the case of Carnival Magic in 2010 — ‘we need improvements, the terminal is going to be too small,’” Mierzwa said.
And since 2000, the port has invested more than $85 million in cruise facilities and is in debt to the tune of about $51 million.
The port has been embroiled in legal fights with private business also competing for market share in the profitable business of charging cruise passengers to park. And port managers are under intense pressure from Carnival Cruise Lines and Royal Caribbean, who are unhappy the port hasn’t met contractual agreements to complete expansion of Cruise Terminal No. 2. The expansion was halted by design issues and is expected to be complete by March. The cruise lines have insisted the port take temporary measures, including procuring a 10,000-square-foot, air-conditioned tent to make passengers more comfortable as they wait to board ships. The port has agreed to accommodate those requests.
Worth the effort
Despite the growing pains, the port and the city aren’t complaining about the cruise business. The industry has nearly universal support on the island, where last year cruise passengers spent $46 million onshore, according to a report commissioned by the Park Board of Trustees, which oversees tourism efforts.
The port’s investment has been worth it and the port’s governing boards through the years have made tough decisions to keep the cruise industry going, Mierzwa said.
When the port early on needed to make improvements to accommodate larger ships, the Wharves Board of Trustees approved the spending.
“It was courageous,” Mierzwa said. “It was a lot of money with no understanding of how successful it might be. And they continue to make those decisions today.”
The port last year took out a $13 million loan to finance expansion of the second cruise terminal. And port officials hope to develop a third cruise terminal in the future as it continues to count its cruise successes.
But it’s still risky business, Holland said.
“Cruising is a volatile industry,” Holland said. “If people quit coming, the ships will pull out tomorrow.”
Cruise ship terminals have a single purpose and can’t be easily modified to become cargo facilities, Holland said. But Holland said the trustees made the right decisions by investing in cruising.
“We just had to take a gamble that cruise lines were going to stay, and we feel they are, or we wouldn’t have spent so much money,” Holland said.
Last year, about 640,000 people embarked at the port. This year, island cruise ships are expected to carry more than 824,000 passengers, an increase of 28 percent.
The future flotilla
Carnival Cruise Lines will reposition Carnival Breeze to replace Carnival Magic and Carnival Liberty to replace Carnival Triumph in Galveston next year, joining Carnival Freedom, which arrived on the island in February. With Carnival Breeze, Carnival Liberty and Carnival Freedom, Galveston will be home to three of the line’s most innovative ships offering the widest array of cruise durations and itineraries to destinations in the Caribbean.
Disney Cruise Line will return to Galveston for the holiday season in 2015. Beginning Nov. 6, Disney Cruise Line will offer a seven-night itinerary on the Disney Wonder to the Bahamas, which will include stops in Key West, Fla; Nassau, Bahamas; and Disney’s private island, Castaway Cay through January 2016.
While the cruise industry has gotten bigger on the island, so have the ships. Consider that the Celebration, which started it all on Sept. 30, 2000, was 722 feet long. On Nov. 13, Royal Caribbean’s Liberty of the Seas will replace the cruise line’s Navigator of the Seas. Liberty will be the largest cruise ship sailing from Galveston at 1,112 feet in length. The Liberty of the Seas will offer seven-night Western Caribbean cruise itineraries.
Words of thanks
“A special ‘Thank You’ to Carnival Cruise Lines and Royal Caribbean Cruises for choosing Galveston as a cruise homeport and for entrusting us with their newest and most innovative ships in order to offer our cruise guests a unique opportunity to visit exotic ports of call in the Caribbean and the Bahamas,” Mierzwa said. “In addition, I would like to thank our cruise partners — the cruise lines’ shore staff, the International Longshoremen’s Association, federal agencies such as Customs and Border Protection and the U.S. Coast Guard and the tremendous support from the local community throughout the years.”
Reach reporter Laura Elder at 409-683-5248 or firstname.lastname@example.org.