Tuesday, May 24, 2011

LA Port Facing Steep Decline in Cruise Traffic

The number of cruise ship passengers moving through the Port of Los Angeles this year is expected to be just under half of the 1.2 million passengers handled at the port's World Cruise Terminal in its peak year of 2005.

Despite overall US cruise numbers on the upswing – up by about 1 million passengers last year to a total of 16 million nationwide – Los Angeles numbers are predicted to decline by an additional 25 percent next year to 450,000 passengers.

According to the port, cruises out of Los Angeles – which focus mainly on trips to Mexican resort towns along the West Coast – have suffered from a growing wariness among travelers as reports of drug-related violence throughout Mexico have increased over the past several years.

"We're really at the mercy of how people perceive Mexico as a whole, even if the port cities aren't reporting any problems," Port of Los Angeles manager of business development Chris Chase told the Torrance Daily Breeze. "We're hoping the market will quickly turn around and show a new interest in Mexico."

The situation has grown so bad that no regular Mexico cruise service is planned out of Los Angeles through September, according to the Daily Breeze.

Royal Caribbean Cruises' high-end liner Mariner of the Seas had its last Mexico cruise from the Port of Los Angeles in January. The cruise line moved the vessel to a new home in Galveston, Texas, where it now offers western Caribbean excursions.
Earlier this month, Norwegian Cruise Lines discontinued Mexico service with its Los Angeles-based vessel Norwegian Star and moved the ship to its new home in Tampa, Florida.

The vessels account for a large percentage of the Los Angeles cruise passenger traffic, with the Mariner of the Seas alone accounting for just over 40 percent of the Los Angeles port's total 755,000 annual cruise passengers handled last year.

Estimates suggest that a cruise ship call at a Southern California port pumps between $1 million and $2 million into the local economy.

While the industry and industry watchers have pointed to the escalating violence in Mexico and the torpid world economy as logical reasons for the moves, other experts citing the growing nationwide increase in cruise traffic have also pointed to a general decline in passenger interest for the Mexican excursions.

Norwegian Cruise Lines said, while it plans to consider a return to Los Angeles at some point in the future, the departure of the Norwegian Star was directed by an "overcapacity in the market" and "decreased demand."

At the neighboring Port of Long Beach, home to two Carnival Cruise Lines vessels, port officials are predicting no 2011 or 2012 downturn in passenger traffic to Mexico through the Long Beach cruise facility, which handles about 400,000 passengers annually.