Cruise ship stops soaring, boosting local economy

Jason · August 7, 2005

By PETER ROBISON AND CHRISTOPHER DONVILLE, BLOOMBERG NEWS

With Puget Sound and the Olympic Mountains as a backdrop, the 965-foot-long Norwegian Star disgorged 2,000 passengers from its 15 decks onto Pier 66. The vessel's stop Sunday was among a record 170 cruise-ship calls the Port of Seattle expects this year, adding more than $200 million to the local economy through spending by passengers such as Jeff Blakeman, 29, a mechanic from Gillette, Wyo., who took a seven-day cruise to Alaska.

Seattle is drawing business from Vancouver, B.C., which had been the hub for Alaskan cruises. Part of the reason: Since the Sept. 11, 2001, terrorist attacks discouraged some Americans from traveling abroad, cruise lines have pulled ships out of Europe, boosted sailings to destinations such as Alaska and Hawaii, and based more ships in the United States.

"It helped being in Seattle," said Blakeman, who traveled with his wife and child by Amtrak to join the cruise. Seattle is among more than a dozen U.S. cities benefiting from the post-Sept. 11 shift among such ship owners as Miami-based Carnival Corp., which owns the Carnival, Princess and Bellevue-based Holland America brands, and Norwegian Cruise Line, a unit of Star Cruises Ltd. of Hong Kong.

They aren't selling the exotic so much as the familiar.

Carnival Cruise Lines advertises "Close-to-Home Sailings!" on its Web site. Norwegian Cruise Line takes passengers around the Hawaiian Islands on a red, white and blue-painted ship called Pride of America, with amenities such as the Lazy J Texas Steakhouse and the John Adams Coffee Bar.

"You feel like you've gone to a new and different destination," said Andy Stuart, senior vice president of marketing at Norwegian. "But everyone speaks the same language and it's very much in the U.S."

Until 2001, there were only four major North American cruise ports: Vancouver, B.C., Los Angeles, Fort Lauderdale, Fla., and Miami, said John Hansen, president of the Northwest Cruise Ship Association, a trade group based in Vancouver. Now there are more than 20, including Boston; New York; Baton Rouge, La.; Baltimore; Norfolk, Va.; Mobile, Ala.; San Francisco; San Diego; and Honolulu, he said.

"After 9/11, people like to drive to their cruises or take easy flights," Hansen said.

The Port of Seattle expects 343,000 passengers on its 170 cruise ship calls this year compared with just 6,615 on six ships in 1999. In Vancouver, B.C., the port authority forecasts its own ship calls to slip 4.5 percent this year to 273, a third consecutive decline. After passengers peaked at 563,000 in 2002, Vancouver forecasts 465,000 this year.

Entering Canada is more difficult since 2001. U.S. airlines such as Northwest now require people flying there to show either a passport or a birth certificate, not just a driver's license.

To stem the loss of passengers to Seattle, the Vancouver Port Authority started a program in April called U.S. Direct. It allows cruise passengers traveling through Vancouver International Airport to clear customs in advance, avoiding airport lines.

"No doubt there's competition between the two ports," said Anne McMullin, a spokeswoman for the Vancouver port, which estimates that cruise ships add $468 million and 13,000 jobs to the local economy. "You do the best you can to have the cruise lines stay."

Seattle is growing partly because of new facilities. In 2000, it opened the $17 million Bell Street Pier Cruise Terminal at Pier 66 on Alaskan Way and followed that with a $17 million berth at Terminal 30, just south of downtown. Last Sunday, three ships crowded the waterfront: the Norwegian Star, the Sapphire Princess and Holland America's Amsterdam.

"Alaska is seen as a safe cruise," said Tino Salud, general manager of cruise and dock operations at the Port of Seattle. "And you've got some issues with the border, having to bring a passport and go through additional screening."

A study commissioned by the port estimated that cruise ship calls added $208 million in local sales, $59 million in local wages and 1,732 jobs last year.

Norwegian was looking to expand across Asia and other "more adventurous" destinations in 2001, marketing chief Stuart said. The company now promotes what it calls "homeland cruising," with departures from 11 U.S. ports compared with five before Sept. 11. Norwegian bases 80 percent of its ships in the United States, up from 65 percent in 2001, Stuart said. Norwegian reflects an industrywide phenomenon: Between 2002 and 2005, cruise-ship capacity in Europe slumped 20 percent while it rose 27 percent in Alaska and 53 percent in Hawaii, according to Cruise Lines International Association, a trade group based in New York.

Capacity for the South Pacific and Southeast Asia has dropped 65 percent over the same period. Until 2001, Royal Caribbean International had a ship called the Legend of the Seas sailing Middle East and Australia routes; it has since been redeployed, spokesman Michael Sheehan says.

On July 4, Norwegian introduced the Pride of America, based in Hawaii and staffed by a "warm and friendly 100 percent American crew," according to its Web site. After a steak at the Lazy J, passengers might grab a drink at the Napa Wine Bar or catch a film at the Hollywood Theater. Another Hawaii-based ship, Pride of Aloha, began sailing last year.

"People are looking for an exotic but safe vacation, and Hawaii is the perfect mix," Stuart said.