GALVESTON

In what is some of the brightest cruise news to come out of Galveston in nearly a year, Royal Caribbean International on Wednesday said it would commence construction of its $100 million Pier 10 cruise terminal in April, while also confirming its massive Allure of the Seas ship would sail from the terminal when it’s completed in 2022.

The announcement confirmed what Port of Galveston officials have insisted for the past year: Although the pandemic dealt a significant blow to cruise company revenues, Royal Caribbean was committed to building its new terminal in Galveston at Pier 10.

“It’s a huge shot in that it will not only benefit the port, but also labor, hoteliers and others,” said Albert Shannon, chairman of the Galveston Wharves Board of Trustees, which governs the port. “It’s going to be a great boost to the economy.”

The cruise terminal news was coupled with Royal Caribbean’s announcement about the Allure of the Seas, an Oasis-class cruise ship capable of carrying 6,780 passengers.

The Port of Galveston, a landlord to cruise lines and other companies on the public docks, announced the first agreement for a new cruise terminal in December 2019. The terminal makes three for the island, home to a thriving cruise industry before the coronavirus exploded into a worldwide pandemic. The terms of the agreement allowed Royal Caribbean to pull out of the deal by April 2020.

Just weeks before that deadline, the world changed. The spread of the virus in the United States sent the economy screeching to a halt, including the cruise industry. A mix of voluntary cancellations and state mandated no-sail orders have kept passenger vessels from sailing from Galveston and other U.S. ports since the middle of March last year.

As the pandemic worsened, port officials agreed to give the company another year to make a final decision on whether to go forward with the terminal. The port continued to conduct pre-construction work for the terminal, including moving customers to other port properties to make way for the development.

Still, the worldwide shutdown sowed seeds of doubt about whether Royal Caribbean would build the terminal.

Shannon credited Port Director Rodger Rees’ efforts in maintaining relationships with the company in the past 12 months.

“Patience, baby, patience,” Shannon said. “Keep the faith.”

As of Wednesday, there was no definite timeline for when cruises would again sail from U.S. ports. Carnival Cruise Lines has canceled all of its cruises through the end of May, while the earliest Royal Caribbean cruise remaining on the Port of Galveston’s schedule is set to sail May 21.

But returning to sailing requires the U.S. Centers for Disease Control and Prevention issuing more guidance to cruise companies, officials said.

John Wayne Ferguson: 409-683-5226; john.ferguson@galvnews.com or on Twitter @johnwferguson.

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(8) comments

Bailey Jones

[thumbup] Good news!

Charlotte O'rourke

It is very good news. According to the agenda item at yesterday’s meeting Ceres will be a partner.

Now, hopefully we will get even better news about declining covid numbers and the guidelines from the CDC for sailing as the port has project financial obligations as well. A lot of businesses and workers in Galveston depend on the port - cruising and cargo.

Phill Sean

Good news for the port and city hotels. Cruising is a great benefit to businesses.

Wayne D Holt

Well, I am surprised and I will have to say dead wrong on this call. I really didn't believe an investment of this magnitude, for this discretionary activity with the huge hit cruise lines took, would see the light of day anytime soon.

This is more than good news, it is probably just short of amazing and certainly much needed for Galveston's economy at this time.

Bailey, you get three free throws of the apple in a Virtual Dunk the Clown mea culpa. Make it count. Charlotte, you get just one because I think you probably can do some serious damage to a gent of my fragile sensibilities [rolleyes]

Charlotte O'rourke

Wayne, RCL went in 50-50 partners with Ceres. It is in other articles if you search online or read the transfer request letter online on port agenda.

What surprised me is that the companies signed before the CDC guidelines were revealed and before the April 9th due diligence deadline.

So good news and expectations of cruising returns, but it’s important to remember the port has financial obligations to the project as well and NO cruise revenues since mid March 2020 and likely to continue until late 2021 or into 2022.

I’m fiscally conservative which anyone that knows me understands, and I have been critical that the port 2020 budget was passed with no discussion of expenses on the boards part. The 2020 budget projected a net income loss of ($3.9 million) and a negative operating cash flow of about ($777,000). I was seriously floored that no sacrifices were called for, and only revenues discussed. Performance was better, but still no policy discussion debate and vote on areas to cut so the public could hear the discussion. This year the budget also has a [($1 million) negative net income projection, but the port projected cruise revenues in 2nd quarter which doesn’t look like it will happen.

If the port would be more open, everyone would know what a hidden gem it is and the importance to the community. It puts heads in beds and tourism in Galveston. But I don’t think the port should lobby for a hotel occupancy tax increase without the major players also committing to lobby. In other words, public money is not spent on competing goals by the city, PB, and GWB.

No dunk from me. I like different people expressing opinions. I just prefer it’s on the issue and not personal attacks.

Let’s all hope cruising revenues and it’s jobs returns and more emphasis is placed on cargo and jobs in future discussions.

Wayne D Holt

Thanks for those details, Charlotte. While we disagree on some topics, on port cargo and maritime servicing business, I am definitely on the same page with you. I hope this past year has had a chastening effect on those who want to go all-in on just one slice of the pie...only to find we're not allowed to bake it.

Charlotte O'rourke

👍. The port almost went into the financial abyss due to a dependence on one commodity. At that time it was grain and railroad revenues. The port diversified and focused on obtaining cruises in the late 90s. It was a great plan to diversify to cruise but over the last 20 years the profits never seemed to make it to the cargo side. It’s past time.to achieve that goal.

Friends and neighbors can disagree on issues, and still be friends and civil regardless of single issues or political party or religion.

Wayne D Holt

"Friends and neighbors can disagree on issues, and still be friends and civil regardless of single issues or political party or religion."

I would go so far as to say it is imperative to remember how to do this. We used to be a society where you could figure out a way through the differences, but we've gotten into a polarization that is making that harder and harder.Thanks for the reminder we can chose a different way.

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