Just over 20 percent of cruise passengers will go through a Global Ports Holding–operated (GPH) port this year as Chairman Mehmet Kutman continues his strategic expansion of the company.
A deal to take GPH private in 2024 has only helped, giving Kutman the flexibility and speed he needs.
Kutman said he was currently keeping an eye on, and potentially bidding on, around 15 potential port deals globally when interviewed in February.
Caribbean Development
A huge GPH investment has transformed Nassau, sending it from just over 3 million guests to just under a predicted 7 million this year, Kutman said. A similar investment is following in San Juan.
“We have more to do in the Caribbean,” he said, hinting at more concession deals in the works.
“And the mainland U.S. is key for us; we don’t have anything there.
“I’m glad we didn’t get Los Angeles; it was a big project at $1.2 to $1.5 billion. We could have financed that, but it would have been a 20- to 30-year payback period.”
Instead, he has his eye on the west coast of Mexico, where ports like Puerto Vallarta need capital expansion.
Kutman described the entire Mexican Pacific coast as strategically important, with potential homeporting options in addition to port-of-call deals.
In addition, Kutman said two or three East Coast ports are coming up for bid, and the company is very keen on those opportunities.
Global Footprint
Kutman said the development across the Bahamas, including MSC’s move into Freeport, is a net positive. More investment in regional infrastructure benefits the entire ecosystem.
He noted that Caribbean islands are in desperate need of capital for port infrastructure that their own fiscal budgets cannot support.
The pitch to governments is straightforward: a public-private partnership that delivers capital investment, allowing governments to redirect scarce fiscal resources toward roads, water and power infrastructure.
Kutman also pointed to a recent deal in Casablanca as a destination with significant growth potential, particularly once a high-speed rail connection to Marrakech becomes operational. The number of cruise calls could double or triple once passengers can reach Marrakech quickly from the port.
Looking further ahead, Kutman said he is personally scheduled to visit Syria in the spring. It is very early and very preliminary, he said, but consistent with his idea of entering markets before the crowd arrives.
Also on his schedule was a trip to Hong Kong, as GPH intends to bid to run the Kai Tak Cruise Terminal. Kutman said he was looking for a local Chinese company to partner with on the deal.
Business Model
GPH’s ideal concession length is 30 years or more, with an option for a 15-year extension.
Financing terms run 20 to 30 years, and Kutman said the company believes it is one of the two investment-grade companies from the industry.
Kutman said passenger satisfaction is the metric that ultimately drives repeat calls from cruise lines, and the infrastructure investment that GPH makes is key.
Competition for port deals has intensified since the pandemic, Kutman said, noting that the pandemic helped GPH as ports needed capital investment.
But Kutman said GPH’s ownership structure gives it a different time horizon compared to the others that may be funded by private equity.
“We’re not a public company. It’s not other people’s money. It’s my money and the team’s money,” he said. “We’re very long term. We’re not going to flip the asset. We plan for the next 20, 30, 40, 50 years.”
Environmental pressures and anti-cruise movements in some European cities are real but manageable, Kutman said. He said these are midterm issues that will ease as guest traffic flow is better managed by tour operators and as the economic contribution of cruise tourism becomes clearer.
Kutman said that cruise passengers are the ones supporting mom-and-pop shops in port cities, and that the economic impact, particularly in the Caribbean, is too significant to ignore.
