The Tribune

• ‘Remarkable’ 32 vessels to call this week

• February 2022 berths exceed 2019 levels

• Extra 2023 calls could give 400k tourist boost

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Downtown Nassau must “polish its product” to maximise the benefits from the “busiest cruise port in the world”, which is this week enjoying a record-breaking 32 vessel berths.

Michael Maura, Nassau Cruise Port’s chief executive, told Tribune Business yesterday that Bay Street and cruise dependent businesses have to now fully exploit the thousands of visitors being “dropped on our doorstep” by offering unique, authentically Bahamian experiences that will both increase per passenger spending and entice them to disembark the cruise ships.

Speaking after it was revealed that February’s cruise ship calls on Nassau exceeded pre-pandemic levels, he added that berth bookings for the 2023 full-year have already surpassed those for 2019 by around 100 calls.

Based on the average 3,600 passengers per ship achieved in 2019, the last year before COVID-19 struck, Mr Maura told this newspaper the extra 100 berths scheduled for 2023 could bring an additional 360,000 visitors to the Bahamian capital if - as projected - the cruise industry returns to sailing at 100 percent occupancy by the end of 2022.

Passenger occupancy for cruise ships calling on Nassau stands at 65 percent for March to-date, the highest level it has been at since transient voyages resumed towards the end of 2021. Vessel occupancy levels, which stood at 52 percent in October, increased to 64 percent for December 2021 before falling to a low of 45 percent in January due to the Omicron-related COVID surge.

However, Nassau Cruise Port data shows passenger volumes have rebounded strongly since that variant tapered off, with cruise ship occupancies increasing to 54 percent in February 2022 and subsequently to almost two-thirds full for the first two weeks of March.

“Nassau has been a critical and essential part of the cruise industry recovery, which started for us on June 12, 2021, with the home porting of Adventure of the Seas,” Mr Maura told Tribune Business.

“We’re at a point today where this week we have 32 cruise ships in one week. Nassau is the busiest transit cruise port in the world today. Previously, in the low 20s was a substantial show, so having 32 is a remarkable week for us.” This number comprises vessels from Carnival, Royal Caribbean, Norwegian, Disney and Celebrity cruise lines.

“Our ship arrivals are very strong as evidenced by this week,” Mr Maura added, “and our bookings are much stronger than 2019 for 2022 and 2023.” Some 1,207 vessels called on Nassau in 2019, compared to the 1,252 scheduled for this year and the 1,300-plus that are anticipated for 2023.

“Our average was around 3,600 passengers per ship in 2019, and if you use those numbers and look forward to 2023 with the same average occupancy per vessel, you’ll have close to 400,000 additional passengers assuming those ships are at full occupancy.”

Global Ports Holding, Nassau Cruise Port’s 49 percent controlling shareholder, predicted in a statement issued this week to investors that the cruise industry will have returned to 100 percent passenger capacity by 2022.

For downtown Nassau, Bay Street and all cruise dependent businesses, the key will be to convert the promise of increased visitor footfall into more passengers that actually leave their vessels and to get them spending more per capita in the destination.

Mr Maura, acknowledging this, told Tribune Business: “We’re leading the region. We’re the busiest transit cruise port in the world, and we have a tremendous opportunity. The cruise industry is delivering these passengers and dropping them on our doorstep. It’s up to us to keep polishing our product and keep them coming back.

“The only way we’re going to increase that spend is by polishing that product and offering something that is unique, of value and differentiated so that it is not experienced in St Thomas, St Maarten, Saint Juan, Grand Cayman and St Kitts and Nevis.”

Global Ports Holding, in its trading update to the capital markets, this week revealed that February 2022 vessel calls to Nassau Cruise Port exceeded those during the same month in 2019 - a record-breaking year for tourism arrivals, which saw 5.4m cruise passengers visit The Bahamas, and the last full year pre-pandemic.

“Continued positive momentum can be seen in our cruise calls for January and February 2022. On a like-for-like basis, they were only 9 percent below the same period in 2019, with Nassau Cruise Port actually welcoming more ships in February 2022 than in February 2019,” Global Ports Holding said.

Mr Maura confirmed this, revealing that Nassau Cruise Port received 102 vessel calls this February as opposed to 95 during the same month in 2019 - a rise of 7.4 percent. He added that Carnival and Royal Caribbean both expect to be at 100 percent passenger occupancy by June, with the other lines also eyeing similar timelines or nor far behind.

“Every week it’s improving,” Mr Maura said. “If you look at March 9, when we had five ships in port, including the Wonder of the Seas, we had over 14,000 passengers.”

Global Ports Holding’s trading update revealed that Nassau Cruise Port’s near-$300m transformation accounted for $79.5m, or almost all its total $83.6m in capital expenditure, during the nine months to end-December 2021. Additional debt taken on to finance the construction work at Prince George Wharf result in Global Port Holdings’ net debt jumping $132.7m during the period.

“Net cash from operating activities was a negative $11.8m in the period, mainly driven by advance contractor payments for capital expenditure in Nassau,” Global Ports Holding said. “Net cash from financing activities was a negative $98.5m, reflecting the net impact of our early Eurobond repayment, drawdown on our new loan facility and an additional $55m of debt issuance by Nassau Cruise Port, as well as $43.1m of interest paid in the period.

“Interest cash payments during the period were notably higher because the first interest payment date on the May 2020 bond issued by Nassau Cruise Port (current outstanding amount of $134.4m) was June 2021. All future interest at Nassau Cruise Port is to be paid semi-annually.”

Global Ports Holding, echoing Mr Maura, was upbeat on the prospects for both the cruise industry and its network of ports across both Europe and the Caribbean. Its statement said it continued to see “a strong month-on-month acceleration in cruise calls and passenger volumes” due to customer demand and the continued relaxation of COVID-related travel restrictions and protocols.

“The cruise industry currently expects activity levels to continue to rise, with the industry expecting to reach close to 100 percent fleet deployment during the summer of 2022,” Nassau Cruise Port’s controlling shareholder said, outlining trends that will also benefit The Bahamas. “As activity levels continue to increase, cruise ship occupancy levels will be crucial to our financial performance.

“Occupancy levels remain significantly below long-established historical norms of over 100 percent, and have not materially risen in recent months. In the last few months, concerns around the Omicron variant had a negative impact on cruise ship occupancy levels, with passenger volumes for January and February 59 percent below the same period in 2019.

“However, occupancy levels are expected to steadily increase over the next 12 months, trending back towards a run rate of around 100 percent by the end of calendar year 2022.” Much is likely to depend on whether another worldwide COVID outbreak occurs, impacting key passenger source markets, rising fuel prices and geopolitical tensions surrounding Russia’s invasion of Ukraine.

However, Global Ports Holding was equally optimistic on the cruise industry’s longer-term outlook. “Longer-term, the outlook for the cruise industry continues to be positive,” it said.

“The passenger capacity of the industry is forecast to grow by 45 percent by 2027 from 2019 levels, driven by the 75 cruise ships currently in the cruise ship order book and due for delivery by 2027.

“This growth in the number of ships, and the size of ships, means that many cruise ports will need to invest in their infrastructure in order to be able to accommodate the new ships. There is no better example of this type of investment than Global Ports Holding’s significant investments into Antigua Cruise Port and Nassau Cruise Port,” the port operator.

“Despite the impact of the COVID-19 pandemic on Global Ports Holding and the cruise industry, our investment to increase the capacity of these ports and transform the passenger experience has largely continued as planned over the last two years. This demonstrates the commitment of Global Ports Holding and our partners to our ports and destinations.”