San Diego: Port Commissioners Hear Cruise Business Update

The San Diego Board of Port Commissioners on Tuesday, September 13, 2011, heard a report on the potential for recovery and growth of San Diego’s cruise ship business.

Trend lines indicate that the beginning of the turnaround will be 2015.

“Cruise ships are an important business for San Diego,” said Scott Peters, chairman of the Board of Port Commissioners. “It’s good to see there is light at the end of the tunnel—even though it’s a longer tunnel than we’d like.”

An update on San Diego’s cruise market was prepared by the planning firm Bermello Ajamil & Partners, Inc. Consultant Luis Ajamil told the Board of Port Commissioners that San Diego’s cruise business is in “the bottom of the trough.” Business has slumped over the last few years due to the struggling U.S. economy and strife in Mexico—a common destination for cruises beginning in San Diego.

The report will assist the port in creating an “action plan” to guide its cruise marketing and development efforts.

The cruise industry remains one of the port’s core business activities. Efforts are under way by the port’s Business Development and Marketing Department to retain and boost this lucrative industry that serves as an economic engine for the region.

Cruise ships—and the thousands of passengers aboard—have a strong economic impact for the region. It is estimated that every cruise ship call injects $2 million into the local economy.

Cruise ship traffic in and out of San Diego peaked in 2008 with more than 916,000 passengers on 254 sailings.

The report noted that this level of activity may not return until the late 2020s.

This year, the volume is projected at 307,000 passengers on 104 sailings. That volume of cruise activity is expected to bring more than $200 million into the local economy.

The report said the port should increase its marketing efforts to the cruise lines and their customers to capture a larger share of the robust global cruise industry.

It also noted that the B Street Pier cruise ship terminal—which the port plans to upgrade—is the only facility capable of accommodating the increasingly larger cruise ships that are being built.

The neighboring Port Pavilion on Broadway Pier, a new auxiliary cruise terminal and event center, can handle small to medium-size cruise ships.

“The cruise industry will be coming back,” said Port Commissioner Robert “Dukie” Valderrama. “We want to be prepared when it does.”

The Port of San Diego was created in 1962 and has been responsible for $1.7 billion in pubic improvements in its five member cities: Imperial Beach, San Diego, Coronado, Chula Vista and National City.

The Port oversees two maritime cargo terminals, a cruise ship terminal, 17 public parks, various wildlife reserves and environmental initiatives, the Harbor Police Department and the leases of more than 600 tenant and sub-tenant businesses around San Diego Bay.

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