The cruise industry’s rapid growth may be concentrated in far-flung markets like China, Brazil and Europe, but ports served by vessels headed to more traditional markets can still capture more business by accommodating larger and larger cruise ships.
And the Port of New Orleans, where work on a third cruise ship terminal is underway at the Poland Avenue Wharf, has been successful at doing just that, an executive with Royal Caribbean Cruises said Friday.
“New Orleans has done a good job of keeping up with the requirements,” said John Tercek, vice president in charge of new business development for the world’s second-largest cruise line. “Larger ships require larger infrastructure.”
Speaking at the annual Tulane Business Forum at the Hilton New Orleans Riverside, Tercek said the port “has been great to work with” as the industry builds ships that can hold 4,000, 5,000 and now 6,000 passengers.
Even with only modest business growth in the Caribbean — the destination for cruise ships leaving the Port of New Orleans — a cruise line’s replacement of a 2,000-passenger ship with a 3,000-passenger ship represents a 50 percent jump in visitors to the city.
The key reason the market is so tied to the size of the ship is that customer demand for cruises is highly elastic. Tercek said that when demand slackens, cruise lines cut prices and the ships still fill up reliably. And whatever passengers pay to get on the boat, they still spend money in New Orleans at either end of the trip.
Robert Jumonville, the port’s director of cruise and tourism, said cruise passengers now spend about $58 million a year in New Orleans.
Gary LaGrange, president and chief executive officer of the Port of New Orleans, told attendees that 10 years ago, New Orleans wasn’t even on the industry’s map but is now the sixth-ranked cruise port in the country. The port saw 977,703 cruise passengers in 2012 and will soon break the 1 million mark, he said.
The port finished a $23 million renovation of the Julia Street Wharf terminal in 2011 and has begun construction of the $30 million, 130,000-square-foot Poland Avenue terminal.
Jumonville said the new terminal, which will be completed in October 2015, will be built to handle ships in the 4,000-passenger range but will be able to accommodate vessels as large as 6,000 passengers.
According to LaGrange, cruise industry-related spending in Louisiana is responsible for creating 7,548 jobs.