This year, Grand Turk will be the fourth-busiest port in the world for Carnival Corporation brands in terms of transit passengers, according to Giora Israel, senior vice president of port and destination development. He said more than 800,000 passengers are scheduled to visit Grand Turk in 2013. He singled it out as an example of a successful company-developed port to meet the needs for an accessible, efficient and attractive destination.
Carnival is currently developing another port, Amber Cove, on the northern coast of the Dominican Republic, which will also offer a short (and fuel-efficient) sailing distance from Southern Florida.
Most of Israel’s efforts are not geared toward building ports, however, but to engineer agreements with ports that will ensure berthing preferences and terminals for Carnival brand ships. The company has some sort of agreement in place with most of its major ports, such as Miami and Port Everglades, where Carnival has 25- and 15-year agreements, respectively.
He explained: “Each agreement is unique. I have never done two identical agreements. In some cases, we lend money, we can even do the construction, or we provide passenger guarantees.”
In Port Everglades, Carnival has guaranteed a minimum passenger throughput for 15 years in exchange for preferential berthing rights at five berths, using four terminal buildings. The agreements include certain “elements of pricing and terminal improvements,” according to Israel.
Port agreements can be between Carnival and the ports, if several brands use the port, or between individual brands and ports.
Israel said: “It is very important to know that we (corporate) will not necessarily do each project. Every line is responsible for its own operations and certain lines have certain needs in certain ports. It comes down to who the predominant user or users are. For example, when Costa needed a port in Savona, since they are using it 90 percent of the time, it is their project, and it is on their balance sheet, not ours.
“The question is when we get involved. If a project benefits more than one brand, we will look at it.”
Corporate agreements tend to be a minimum 15 years, according to Israel, while agreements between brands and ports can be long term or short term – down to three years, for instance, in Port Canaveral.
Israel said deals must be structured so they are strong for both sides. “My responsibility is obviously to Carnival Corporation, but I still want to make sure that a deal is fair to both sides. When you deal with public entities, there are always new governments, new governors, new mayors – they need to know that the agreement is sound.”
Thresholds of where and when Carnival will build are high, according to Israel. “Obviously, the closer they are, the more likely we are to be interested – especially after the hike in fuel prices after 2008 and with the ECA in 2015,” he said.
Excerpt from Cruise Industry News Quarterly Magazine: Spring 2013
