Mobile adviser questions rise in cruise terminal spending ‘without ship promise’
Mardi Gras will be over in a week, but a Carnival-like celebration is still set to take place in Mobile on March 5 to commemorate the return to cruising for the first time since the start of the COVID-19[female[feminine pandemic.
But Carnival Cruise Line’s welcome party comes with uncertainty about what will happen to cruising in Mobile after Carnival Ecstasy sails for the last time in October.
It also comes with new scrutiny from a Mobile City Council member who on Tuesday questioned government spending on the cruise.
“I see us putting a lot of money into the terminal without the promise of a ship,” said Councilor Scott Jones, who was elected to the council last year. “I think we should have the promise of a ship before we continue to invest more money in a shipless terminal.”
The board is set to vote on two expenses at its meeting on Wednesday. The first is $55,000 to replace flooring in elevator cabins and lobbies at the cruise terminal. The second is $15,842 to Theodore-based Cart Dr. LLC to purchase golf carts that can be used at the facility.
Jones said the spending should come into question at a time when Carnival Cruise Line, the Miami-based cruise giant, returns to Mobile with a short-stay-only cruise ship and with a contract expiring in November.
“I know we have to put money into this thing to keep it operational, but part of my angst… I spent the weekend in New Orleans and my hotel was overlooking the river,” Jones said. at the pre-conference board meeting. “When I got to the room, there’s a Carnival cruise ship coming into the terminal. When I went to bed, the ship was leaving. The next morning, another ship is coming.
He added: “I see these other cities with other Carnival cruise ships in operation and our contract is in limbo. I know they come here in March and (their team) has meetings with the mayor. I hope they understand that we are doing our part to be a good partner in this relationship and that will help them provide services to our city as they do in these other cities.
Carnival Cruise Line President Christine Duffy informed Mobile Mayor Sandy Stimpson earlier this month that the cruise will be discontinued from the cruise terminal beginning October 15 and that the cruise will not operate for 11 month. Carnival Ecstasy, a sister ship to Carnival Sensation, will be the ship arriving in Alabama for the restart of the cruise and it will sail for seven months before leaving the company’s fleet this fall.
Duffy, who is expected to be in Mobile on March 5, informed the mayor that Carnival plans to return to the city “after adjusting its operations” in 2023.
Carnival hinted that it planned to announce a “new operating plan for Mobile”, although no details were provided.
Council Speaker CJ Small, also on Tuesday, asked if the city administration plans to hold events and generate revenue inside the downtown site while the cruise isn’t taking place. .
“We learned on our leadership trip last year that cruises are a gamble,” Small said, adding that the city should “look at a way to find revenue while (the terminal) sits idle.”
Joe Snowden, executive director of the city’s administrative services, said the city has run the site in the past.
But those rentals don’t compare to the economic benefit the cruise brings to the city and the revenue it generates to pay off the cruise terminal’s debt.
Stimpson said last year that cruising, before the pandemic brought the industry to a halt, brought in about $6 million in annual gross revenue from dock and parking alone. But the numbers plummeted in fiscal 2020, the year the cruise was discontinued – only about $3 million in gross revenue was generated from the terminal.
In fiscal year 2020, which runs from Oct. 1 to Sept. 30, terminal operating expenses were $2.1 million, leaving the city with $1.07 million in net revenue. That revenue, however, was not enough to cover the city’s typical debt service payment on the cruise terminal, which amounts to about $1.8 million a year.
The bond at the cruise terminal is not expected to expire until 2030.
“We are in constant communication with Carnival,” Snowden said. “They understand and know how much we are investing in this facility. We fight hard to let them know. Our facility and crew are highly rated for hospitality, and we beat other ports for the hospitality and services we provide there.
Snowden said the spending shows the city is “trying to maintain this high level of service.”
Mobile has never had a cruise ship before. From 2011 to 2016, the terminal was without a cruise ship after Carnival decided to leave Mobile over fears it would raise prices for its out-of-town cruises, hampering cash flow. Without a cruise ship, the terminal has been relegated to hosting wedding receptions and other events. These events, however, did not produce the revenue that could have been used to pay the annual bond debt.
The city lobbied to bring a cruise ship back to Mobile, and its efforts were noticed in the industry. The return of the cruise in 2016 was accompanied by an initial agreement of 13 months; in 2019, Carnival and Mobile signed a three-year agreement to continue sailing from downtown Mobile.