Carnival opting out of Puerto Rico for 2014
Carnival Cruise Lines, the largest cruiseship operator in Puerto Rico, will phase out its presence on the island, at least for the 2014 season, tourism industry representatives told CARIBBEAN BUSINESS. At this time, no agreement has been reached between the cruiseline and the Puerto Rico government since the company is moving its homeport to Barbados, sources indicated.
Such a development could deliver a potentially mortal blow to the island's cruiseship industry, especially since Carnival, together with Royal Caribbean, comprise about 90% of cruise visits to Puerto Rico. Carnival has a sizable 60% of those visits, said American Association of Travel Agents Puerto Rico President Daphne Barbeito.
At stake is an industry that during the 2011-2012 cruise season employed 5,000 people and generated $186.6 million in expenditures favoring the local economy, according to the latest study from Business Research & Economic Advisors.
Carnival's looming exit may seem surprising to some, especially since Law 113 of 2011, which provides incentives to increase cruiseship visits, was extended in early March until fiscal year 2018. The law originally had such incentives available until June 2013, but because cruiselines usually plan their routes up to two years in advance, the extension of the incentives may have proved to be a case of "too little, too late."
A visit by government officials to Sea Trade, a cruiseship-industry convention held in Miami in mid-March, has so far prompted no announcements from government officials, leading many within the industry to believe efforts to secure Carnival's participation in the 2014 season have so far been unsuccessful.
Carnival also recently released its slate of routes for the spring 2015 season, in which Puerto Rico is conspicuous by its absence, Barbeito noted. "We are already late for 2014, and the situation will only get worse if we don't do something about it," she added.
CARIBBEAN BUSINESS' attempts for a response from Puerto Rico Tourism Co. Executive Director-designate Ingrid Rivera Rocafort weren't successful as of press time.
In light of the central government's apparent inaction on the issue, several industry organizations have banded together to sound the alarm about this threat to the local cruiseship industry. Among the loudest voices in the consortium is Cobartur, which groups businesses in Old San Juan that generate most of their revenue from visiting cruiseship tourists.
Cobartur spokesman Juan Fernández attributed the island's lagging cruiseship business to a lack of coherent strategies to attract more cruise activity. He made note of the steadily decreasing number of cruiseship visits to Puerto Rico since 2009, when 305 ships arrived, which dropped to only 242 ships by 2012.
Barbeito, meanwhile, contrasted the situation in Puerto Rico to the state of the cruiseship industry worldwide, which is going through a boom, and the Caribbean region remains the most sought-after destination. "From 2012 to 2015, a total of 25 new ships are set to take passengers for the first time," she said.
Apart from Carnival's current issues, Barbeito and Fernández highlighted several problems in Law 113 of 2011, the cruiseship incentives law, which have prevented further growth in the sector, among them the alleged preferential treatment of the "big two" cruiselines, Royal Caribbean and Carnival, when it comes to incentives. That practice has strangled the sector out of a more diverse offering of cruiselines that could make PuertoRico their homeport, they said.