CTroyMathis
25 January 2004, 03:56 PM
Galveston's ship coming in
Growing popularity of cruises puts port on travelers' itineraries
09:24 PM CST on Saturday, January 24, 2004
By SUZANNE MARTA / The Dallas Morning News
http://www.dallasnews.com/s/dws/bus/stories/012504dnbustexascruise.7314d.html
GALVESTON – When Diane Falcioni tried to sell cruise executives on bringing their ships to Galveston Island a decade ago, she didn't get an overwhelming response.
"They just kind of patted you on the head and sent you out the door," said Ms. Falcioni, the Port of Galveston's former cruise promotion manager who now oversees governmental affairs. "They didn't see Texas as a marketplace."
Less than four years after Carnival Cruise Lines and Royal Caribbean International launched service from the Texas resort town, Galveston has become the sixth-busiest port for the Caribbean, the industry's most popular destination, according to Lloyd's Cruise International. Plans to move bigger ships to Galveston this year put it within reach of overtaking the No. 5 port, Tampa, Fla.
Galveston's success has been fueled by a decade of lobbying by local officials and the rapid expansion of the nation's cruise industry. An estimated 9 million people will take a cruise this year, double the number that sailed a decade ago. Increasingly, those passengers are driving to places such as Galveston to board the ship. And even though the industry's torrid growth pace is slowing, industry analysts say, ports such as Galveston are here to stay.
"The industry has stimulated demand by making it more convenient for passengers," said Tom Graves, an equity analyst for Standard & Poor's.
Secondary markets such as Galveston, New Orleans and Charleston, S.C., have led to a transformation of the cruise industry, putting voyages within reach of more potential customers who can now drive to the ship, rather than having to pay extra for plane tickets to get to a Florida port. And they've heightened visibility for the industry as it goes after families and younger passengers who might otherwise go to a resort.
Gloria Rothenberg of Madill, Okla., has been on a half-dozen cruises in the last four years and tried Galveston for the first time this month.
"It was so reasonably priced because we didn't have to pay for airfare," Ms. Rothenberg said. "We just drove in this morning."
Galveston also has proved to be more convenient for some passengers who do fly.
"It was a lot quicker than going all the way to Miami," said Julie Erven, a financial analyst from Seattle.
Tip of the iceberg
Cruising accounts for just 3 percent of the vacation market, and only about 15 percent of Americans have ever taken a cruise. By putting ships closer to customers, cruise officials hope that will change.
"Our strategy has been to fish where the fish are, and Galveston is right in the heartland," said Bob Dickinson, president and chief executive of Carnival Cruise Lines.
A decade ago, cruise lines didn't have to look anywhere but Florida to call home.
"There were so few ships 10 years ago, you could put them all in Miami and still charge high prices," said Jamie Haller, manager of deployment and itinerary planning for Royal Caribbean International and Celebrity Cruises.
But as the cruise lines added capacity, the most popular Florida ports were getting crowded. In the last decade, capacity for North American cruise lines has more than doubled.
"Cruise lines could not have absorbed all this new capacity without expanding into secondary and tertiary markets," said Paul Keung, an equity analyst for CIBC World Markets.
Galveston hosted cruises throughout the early 1990s through the Stella Solaris, which moved to Texas from the Mediterranean during the Persian Gulf War. Then, the cruise terminal was fairly Spartan. A $2 million renovation done in 1989 created a passenger and luggage depot that shared a building with cargo storage. The conveyor belt for luggage was sandwiched among giant bales of cotton.
When passengers returned, port officials trucked bags across the street and laid everything out on the sidewalk to be claimed. Instead of porters, they used local students who worked for tips.
Carnival dabbled with alternate ports in 1994, sending a ship that would pick up passengers in New Orleans and Tampa before heading out to the Western Caribbean. Mr. Dickinson figured the two cities would build enough demand to fill their own ships over about four years.
"It took two," he said.
And when he decided to put a ship in Galveston just over three years ago, Mr. Dickinson started with one that was 40 percent bigger than the one that Tampa and New Orleans shared.
It was good timing. Less than a year after Carnival started cruising out of Galveston, the world was rocked by the Sept. 11 terrorist attacks. Vacationers who still wanted to travel wanted to stick closer to home, making drive-to ports such as Galveston and New Orleans more popular.
This year, the company will add ships in Mobile, Ala., and Jacksonville, Fla., bringing its homeports to 19.
Royal Caribbean took a similar route, selecting ports that wouldn't cannibalize existing business.
"Once 9/11 hit, we flooded capacity in any viable U.S. port that you could do a reasonable itinerary," Mr. Haller said.
In Galveston, ships travel on cruises as short as four days to the Western Caribbean to as long as 12 days, traveling through the Panama Canal.
Although the cruise lines started with ships with around 1,500 berths, passenger demand has caused them to bring in larger ships. Later this year, Princess Cruises – which introduced Americans to cruising in the 1970s and 1980s through the long-running series The Love Boat – plans to launch its 2,600-passenger Grand Princess.
Targeting Texans
Getting cruise lines to consider Galveston as a home port before September 2001 wasn't easy. Ms. Falcioni remembers waiting in the halls near the men's restroom at industry trade conferences in an effort to "bump" into cruise executives on their way out.
"It took me two years just to get them to agree to a 15-minute meeting," she said, sitting in her office overlooking the port. "Once we started talking, I got 45."
Galveston business people, including Andy Monsour and George Mitchell, also pressed cruise officials and spent their own money to send representatives to the industry tradeshows.
Ms. Falcioni tried every angle she could to get the attention of cruise executives. She pitched them on Galveston's proximity to the Gulf of Mexico – a quick 40-minute journey, compared to the hours-long trip it takes from Houston or New Orleans. And she pitched them on the more than 13 million people who live within 300 miles of the port.
"I said, 'Just look at your passengers. How many of them are coming from Texas?'" Ms. Falcioni said.
She even presented potential itineraries that went to places other cruise ships weren't going to set Galveston apart from Florida ports.
"We thought Cuba was just going to be the next big place," she says. (The U.S. government currently restricts tourist travel to Cuba. If those restrictions are lifted, Carnival officials have said the island nation would become the line's No. 1 destination and could easily be reached from Galveston.)
Mostly, cruise executives told Ms. Falcioni there was too much "blue water" time from Galveston to other ports. Today, time at sea is less of an issue because new ships travel faster and they have added more activities such as rock-climbing.
When Carnival finally agreed to visit the Houston and Galveston ports in May 1999, Ms. Falcioni was ready.
"I even played Glen Campbell's Galveston song in the limo when I picked them up at the airport," she said, laughing.
Within weeks, Carnival had decided to bring its 1,486-passenger Celebration with a five-year contract. In exchange, port officials agreed to an $11.3 million renovation of its cruise terminal, $250,000 toward customer marketing and other incentives.
Cruise officials say Galveston is the epitome of a drive market.
"It fills almost 100 percent with new regional demand," Mr. Haller said.
Cruise prices are based on demand, but from Galveston start at $349 per person for a five-day cruise and $499 for a seven-day cruise, assuming two to a room.
Proximity to the port continues to play a role for Farrah Mitchell, 44, who drove with her husband from Colorado City, Colo., to cruise out of Galveston recently.
"We don't have to fly if we don't want to," she said.
Ms. Mitchell, who's been on eight cruises in the last few years and is planning another trip this spring, prefers smaller port cities.
"It's so easy to get around," she said. "You could be on the opposite side of the island and get to the port in like 5 minutes. I'll definitely be here again."
Even as the industry comes to the end of a building spree, Carnival's Mr. Dickinson is bullish cruising will continue to grow.
"Cruising only captures 3 percent of the vacation market," Mr. Dickinson said. "We can continue to build ships, and if we doubled the size of the industry, we'd still only be at 6 percent. For us, that's very attainable."
Growing popularity of cruises puts port on travelers' itineraries
09:24 PM CST on Saturday, January 24, 2004
By SUZANNE MARTA / The Dallas Morning News
http://www.dallasnews.com/s/dws/bus/stories/012504dnbustexascruise.7314d.html
GALVESTON – When Diane Falcioni tried to sell cruise executives on bringing their ships to Galveston Island a decade ago, she didn't get an overwhelming response.
"They just kind of patted you on the head and sent you out the door," said Ms. Falcioni, the Port of Galveston's former cruise promotion manager who now oversees governmental affairs. "They didn't see Texas as a marketplace."
Less than four years after Carnival Cruise Lines and Royal Caribbean International launched service from the Texas resort town, Galveston has become the sixth-busiest port for the Caribbean, the industry's most popular destination, according to Lloyd's Cruise International. Plans to move bigger ships to Galveston this year put it within reach of overtaking the No. 5 port, Tampa, Fla.
Galveston's success has been fueled by a decade of lobbying by local officials and the rapid expansion of the nation's cruise industry. An estimated 9 million people will take a cruise this year, double the number that sailed a decade ago. Increasingly, those passengers are driving to places such as Galveston to board the ship. And even though the industry's torrid growth pace is slowing, industry analysts say, ports such as Galveston are here to stay.
"The industry has stimulated demand by making it more convenient for passengers," said Tom Graves, an equity analyst for Standard & Poor's.
Secondary markets such as Galveston, New Orleans and Charleston, S.C., have led to a transformation of the cruise industry, putting voyages within reach of more potential customers who can now drive to the ship, rather than having to pay extra for plane tickets to get to a Florida port. And they've heightened visibility for the industry as it goes after families and younger passengers who might otherwise go to a resort.
Gloria Rothenberg of Madill, Okla., has been on a half-dozen cruises in the last four years and tried Galveston for the first time this month.
"It was so reasonably priced because we didn't have to pay for airfare," Ms. Rothenberg said. "We just drove in this morning."
Galveston also has proved to be more convenient for some passengers who do fly.
"It was a lot quicker than going all the way to Miami," said Julie Erven, a financial analyst from Seattle.
Tip of the iceberg
Cruising accounts for just 3 percent of the vacation market, and only about 15 percent of Americans have ever taken a cruise. By putting ships closer to customers, cruise officials hope that will change.
"Our strategy has been to fish where the fish are, and Galveston is right in the heartland," said Bob Dickinson, president and chief executive of Carnival Cruise Lines.
A decade ago, cruise lines didn't have to look anywhere but Florida to call home.
"There were so few ships 10 years ago, you could put them all in Miami and still charge high prices," said Jamie Haller, manager of deployment and itinerary planning for Royal Caribbean International and Celebrity Cruises.
But as the cruise lines added capacity, the most popular Florida ports were getting crowded. In the last decade, capacity for North American cruise lines has more than doubled.
"Cruise lines could not have absorbed all this new capacity without expanding into secondary and tertiary markets," said Paul Keung, an equity analyst for CIBC World Markets.
Galveston hosted cruises throughout the early 1990s through the Stella Solaris, which moved to Texas from the Mediterranean during the Persian Gulf War. Then, the cruise terminal was fairly Spartan. A $2 million renovation done in 1989 created a passenger and luggage depot that shared a building with cargo storage. The conveyor belt for luggage was sandwiched among giant bales of cotton.
When passengers returned, port officials trucked bags across the street and laid everything out on the sidewalk to be claimed. Instead of porters, they used local students who worked for tips.
Carnival dabbled with alternate ports in 1994, sending a ship that would pick up passengers in New Orleans and Tampa before heading out to the Western Caribbean. Mr. Dickinson figured the two cities would build enough demand to fill their own ships over about four years.
"It took two," he said.
And when he decided to put a ship in Galveston just over three years ago, Mr. Dickinson started with one that was 40 percent bigger than the one that Tampa and New Orleans shared.
It was good timing. Less than a year after Carnival started cruising out of Galveston, the world was rocked by the Sept. 11 terrorist attacks. Vacationers who still wanted to travel wanted to stick closer to home, making drive-to ports such as Galveston and New Orleans more popular.
This year, the company will add ships in Mobile, Ala., and Jacksonville, Fla., bringing its homeports to 19.
Royal Caribbean took a similar route, selecting ports that wouldn't cannibalize existing business.
"Once 9/11 hit, we flooded capacity in any viable U.S. port that you could do a reasonable itinerary," Mr. Haller said.
In Galveston, ships travel on cruises as short as four days to the Western Caribbean to as long as 12 days, traveling through the Panama Canal.
Although the cruise lines started with ships with around 1,500 berths, passenger demand has caused them to bring in larger ships. Later this year, Princess Cruises – which introduced Americans to cruising in the 1970s and 1980s through the long-running series The Love Boat – plans to launch its 2,600-passenger Grand Princess.
Targeting Texans
Getting cruise lines to consider Galveston as a home port before September 2001 wasn't easy. Ms. Falcioni remembers waiting in the halls near the men's restroom at industry trade conferences in an effort to "bump" into cruise executives on their way out.
"It took me two years just to get them to agree to a 15-minute meeting," she said, sitting in her office overlooking the port. "Once we started talking, I got 45."
Galveston business people, including Andy Monsour and George Mitchell, also pressed cruise officials and spent their own money to send representatives to the industry tradeshows.
Ms. Falcioni tried every angle she could to get the attention of cruise executives. She pitched them on Galveston's proximity to the Gulf of Mexico – a quick 40-minute journey, compared to the hours-long trip it takes from Houston or New Orleans. And she pitched them on the more than 13 million people who live within 300 miles of the port.
"I said, 'Just look at your passengers. How many of them are coming from Texas?'" Ms. Falcioni said.
She even presented potential itineraries that went to places other cruise ships weren't going to set Galveston apart from Florida ports.
"We thought Cuba was just going to be the next big place," she says. (The U.S. government currently restricts tourist travel to Cuba. If those restrictions are lifted, Carnival officials have said the island nation would become the line's No. 1 destination and could easily be reached from Galveston.)
Mostly, cruise executives told Ms. Falcioni there was too much "blue water" time from Galveston to other ports. Today, time at sea is less of an issue because new ships travel faster and they have added more activities such as rock-climbing.
When Carnival finally agreed to visit the Houston and Galveston ports in May 1999, Ms. Falcioni was ready.
"I even played Glen Campbell's Galveston song in the limo when I picked them up at the airport," she said, laughing.
Within weeks, Carnival had decided to bring its 1,486-passenger Celebration with a five-year contract. In exchange, port officials agreed to an $11.3 million renovation of its cruise terminal, $250,000 toward customer marketing and other incentives.
Cruise officials say Galveston is the epitome of a drive market.
"It fills almost 100 percent with new regional demand," Mr. Haller said.
Cruise prices are based on demand, but from Galveston start at $349 per person for a five-day cruise and $499 for a seven-day cruise, assuming two to a room.
Proximity to the port continues to play a role for Farrah Mitchell, 44, who drove with her husband from Colorado City, Colo., to cruise out of Galveston recently.
"We don't have to fly if we don't want to," she said.
Ms. Mitchell, who's been on eight cruises in the last few years and is planning another trip this spring, prefers smaller port cities.
"It's so easy to get around," she said. "You could be on the opposite side of the island and get to the port in like 5 minutes. I'll definitely be here again."
Even as the industry comes to the end of a building spree, Carnival's Mr. Dickinson is bullish cruising will continue to grow.
"Cruising only captures 3 percent of the vacation market," Mr. Dickinson said. "We can continue to build ships, and if we doubled the size of the industry, we'd still only be at 6 percent. For us, that's very attainable."