On Saturday, the first cruise ship will depart from Carnival Cruise Lines’ Long Beach terminal, marking the return of voyages to the city’s harbor after 17 months. Cruise passengers returning to the city bring with them millions of dollars in economic and fiscal impacts from spending on hotel nights, meals and visits to local attractions before and after they embark on Carnivals’ ships.
The first ship to sail from Long Beach will be the Panorama, a 4,008-passenger vessel set to depart on a seven-day cruise down the Mexican Riviera, with weekly sailings starting this Saturday.
For its first voyage, the ship will be sailing at 75% capacity, according to Carnival Cruise Lines’ Chief Communications Officer Chris Chiames, who said the company expects that number to increase in the coming months.
“There’s a very strong demand for the return of cruising,” Chiames said.
Following over $10 billion in losses as a result of a no-sail order issued by the Centers for Disease Control in 2020 to prevent the spread of the coronavirus, Carnival has steadily clawed back bookings and revenues since the beginning of the year. In the first quarter, bookings were up 90% compared to the last quarter of 2020, before increasing another 45% over the last three months.
The Panorama will be Carnival Cruise Lines’ eighth ship in a fleet of 24 vessels to return to service, following sailings from Miami, Orlando and Galveston, Texas. Carnival is expecting half of its fleet to return to service by the end of September, according to Chiames, but has not yet announced a return date for its two remaining ships to be homeported in Long Beach.
The Carnival Miracle and Radiance ships will be departing from Long Beach for the first time once sailings commence, replacing the significantly smaller Inspiration and Imagination. The new ships have the capacity to bring 1,000 more passengers to Long Beach.
That means more patrons for local businesses, who serve cruise passengers before they board cruise ships and upon their return.
Allison Lesser, director of sales and marketing at Hotel Maya, which is located just a half mile away from the cruise terminal on Pier H, said that while the hotel doesn’t specifically track bookings by cruise passengers on a regular basis, “cruise business has traditionally been a nice base of business for Hotel Maya.”
“Now that the cruises are ramping up again starting with Panorama this weekend, we are looking forward to building back that same base of business,” Lesser said in an email. For this upcoming weekend, the hotel has received “a couple dozen” bookings associated with Carnival’s associated voyage, according to Lesser.
Tranh Ninh, owner of the 123 Pho restaurant on Third Street and The Promenade in Downtown Long Beach, said he’d been monitoring the return of cruises to Florida to gauge when cruises might come back to Long Beach as well. Both on-ship staff and cruise passengers created significant revenue for his business before the pandemic shut down cruises in March of last year.
“They’d come in with their suitcases,” Ninh said. “They’d be shopping for their next trip and they’d come in and eat.”
While he said the amount of revenue associated specifically with cruises was hard to quantify, Ninh estimates that crew members and passengers brought in an additional $1,000 per week for his restaurant.
A recent economic impact study by the Port of Long Beach estimated that the 670,000 passengers that came to the city to board Carnival’s ships in 2017 spent $124 million on local goods and services, including meals and lodging.
With cruises returning after a 17-month hiatus, the cruise terminal will also begin creating passenger fee revenues again.
Those fees, $4.30 per passenger, go into a historic preservation fund that was supposed to be used by former operator Urban Commons to pay for repairs to the adjacent Queen Mary. Urban Commons filed for bankruptcy protection this spring, and the city has since taken over the lease to the ship, which needs millions in repairs before it can reopen.
The city also took out $23 million in bonds to pay for immediate repairs to the ship in 2016, which was an advance of sorts on passenger fee revenue. In a written statement, Long Beach Economic Development Director John Keisler said this is a critical source of revenue for the city, and it will be used to pay the bonds.
“Restarting cruises at the Long Beach cruise terminal is good for both the City and for the future of the Queen Mary,” he said.
It’s not immediately clear how the city plans to pay for repairs to the ship, which operates as a hotel and attraction. An inspection report in April determined the ship would need at least $23 million in repairs to remain viable in the next two years.
But, for the first time since the pandemic began, the city will be getting some revenue from the cruise terminal operations, which are a critical tourist draw.
Interest in cruises is picking up, with bookings for 2021 and 2022 on track to surpass pre-pandemic volumes, according to Chiames. But emergent variants of the coronavirus, most recently the delta variant, have raised concerns among potential passengers and investors alike.
After plummeting to $13.17 per share in March of last year, Carnival Corporation’s stock had recently made gains again as cruise operations resumed across the country. In early June, share prices had returned to the $30 range, which—while still significantly lower than pre-pandemic share prices—signaled that investors were once again feeling confident in the company’s future. Since then, share prices have resumed a downward trend.
Two of the company’s three ships to sail from Long Beach, the Miracle and the Panorama, are currently in the CDC’s orange and yellow tiers, respectively, meaning that the agency is monitoring the status of infections and potential infections on board.
Chiames said the company’s safety protocols are its best weapon against concerns from passengers and regulators, which in turn impact investor confidence. “We’ve built a platform of protocols that are designed to flex up,” he said of the cruise line’s ability to respond to new health and safety-related challenges.
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