Today Mayor Sandy Stimpson revealed the destination and purpose of a two-day economic development trip he took earlier this week. He was in Miami with Chamber of Commerce representative Mike Lee, who served as the enabler, to speak to three cruise ship operators about utilizing the Alabama Cruise Terminal.
“This was an unusual trip in the aspect that it really wasn’t an economic development trip on something brand new… I went to Miami and had five visits with people involved in the cruise business in an effort to see where we stood as far as getting a cruise ship back in Mobile,” Stimpson said during a meeting with the press today.
“Before I answer the question of whether it was promising, I think it’s important to understand where the cruise industry is. The last few years because of the onboard illnesses and mechanical breakdowns the public perception is a little negative right now. Because of that and a little bit of an economic downturn in that industry, they are all very, very aware of the need to increase profitability. The way they choose to increase their profitability is they look at all their markets, and if a ship is not being profitable, they determine if there is another market they can move it into where it is profitable.”
Stimpson said Carnival officials re-affirmed the previous administration’s claim that it left the city for profitability reasons in 2011. So what is the promise for the future, he asked?
“There is no short-term good news to say there will be a ship coming back in the next year or 18 months,” he said. “But Mobile is very much in their minds as an opportunity to relocate another ship at some point but the economics need to be in place for them to do that.”
Stimpson said he and Lee, the president of Page and Jones, met with officials from Carnival, Royal Caribbean and Norwegian Cruise Lines while they were in Miami. The trip was originally planned in January but delayed by the ice storm.
He said two of the companies were more receptive than the other and suggested one may schedule a handful of “test cruises” in Mobile before entering into any long-term agreement. He said the city would work with a company to maximize the profitability of a cruise ship’s return, but it wasn’t in the position to offer traditional “economic incentives” usually associated with such negotiations. He also said the conversations would not keep his administration from exploring alternate uses for the cruise terminal, where the city is still obligated to pay a $27 million debt service.
“Out of the three (companies) there are two where we have a real opportunity with, probably more so than the third,” he said. “But it will take some re-analyzing of the situation in Mobile before they are willing to make that move. Carnival had an excellent experience in Mobile and the personnel that dealt with Mobile had the highest remarks, so at the end of the day it’s really economics.”
Mobile is slightly handicapped, Stimpson admitted, because it is further from ports-of-call than some other cities on the Gulf Coast and requires passengers to spend more time on the boat. He said the cruise companies’ profitability depends upon ticket prices, on-board spending and fuel costs, and Carnival officials suggested on-board spending began to wane in Mobile.
Stimpson implied a company could be profitable in Mobile with higher ticket prices and advertising partnerships and profit sharing from parking or other minor sources of related city revenue. He also played up other advances in the regional economy.
“Things are a little bit different in Alabama now,” he said, mentioning several statewide economic developments that are generating new jobs. “We made the case the demographics and possibly their market is a little different than we they left.”
Meanwhile, Stimpson will be leaving next week to attend the Mayor’s Institute of City Design in San Antonio, Texas where among other things, he will be sharing ideas about how to redevelop Mobile’s waterfront. He emphasized that despite the recent conversations with the cruise industry, his administration was continuing to look at re-purposing the cruise terminal for other uses.
“We cannot afford to sit here for years hoping that some market change or some company is going to decide to put a cruise ship in there,” he said. “We need to start tomorrow, thinking about what the cruise terminal can be used for to start generating revenue immediately and obviously there is no immediate answer, but we are going to be very proactive in looking at trying to repurpose the cruise terminal.”