More ports enter water for Disney's business

[daveypoo]

From the Orlando Sentinel

Fort Lauderdale, Miami, Tampa and Seattle vie with Port Canaveral.

Jason Garcia | Sentinel Staff Writer
October 2, 2007


Disney Cruise Line, which is nearing the end of its initial 10-year contract with Port Canaveral, is pressing the port to cut costs amid suggestions that it might move its cruise ships.

E-mails between Disney and port executives reviewed by the Orlando Sentinel show that, on at least two occasions, Disney Cruise Line President Tom McAlpin hinted that his company could send ships to Miami or Fort Lauderdale.

The negotiations come as speculation builds about the future of Disney Cruise Line, which is increasingly experimenting with destinations beyond the Caribbean and which plans to double the size of its fleet to four ships by 2012. Ports from Tampa to Seattle say they have talked to Disney in recent months about the possibility of hosting ships.

"I think it's clear they want to diversify their itineraries," said Port of Tampa Chief Executive Officer Richard Wainio.

Disney's presence in Canaveral has already dipped. This summer, the company for the first time had to make a "shortage payment" to the port because its ships did not make enough stops at Canaveral.

Disney's contract requires that its ships, the Disney Magic and Disney Wonder, make at least 150 calls combined each year in order to maintain exclusive use of the nearly $30 million cruise terminal Canaveral built for the company. But port figures show that Disney made just 139 in its most recent contract year, which ended in July, because it had the Magic cruise ship in Europe for the summer.

As a result Disney had to pay roughly $107,000 to cover the port's losses in dockage and wharfage fees and to maintain its exclusive terminal use.

That payment surfaced as an issue in one of the e-mails between McAlpin and Robert Giangrisostomi, Canaveral's senior deputy executive director for business development.

On Aug. 29, Giangrisostomi forwarded McAlpin a newspaper story that included a ranking of the top 10 U.S. ports by passenger boardings. Canaveral ranked second, behind Miami but ahead of Fort Lauderdale's Port Everglades.

"Tom, Thanks for making us number 2," Giangrisostomi wrote to McAlpin.

"I hope the $100k that we were forced to pay put you in the number 2 spot. If we were in Ft. Lauderdale, I wonder if that would propel them to number 1?" McAlpin responded. He included a smiling face icon in his note, presumably to indicate he was joking.

It wasn't the first time McAlpin implied that Disney was considering South Florida. On Feb. 7, Giangrisostomi sent him another newspaper story detailing problems facing Miami's port. "Some interesting stories," Giangrisostomi wrote.

"Yes but they have the geographical benefit," McAlpin replied, alluding to the fact that Miami is much closer to "Castaway Cay," Disney's private island in the Bahamas. He again included a smiling face in his e-mail, but then he added, "PS. Have you found a way to reduce our costs yet?"

Disney would not elaborate on McAlpin's comments.

"Right now, we're in negotiations, and we don't discuss negotiations with the media traditionally," spokeswoman Rena Langley said.

Stan Payne, Port Canaveral's CEO, called the exchanges "good-natured ribbing." But he also acknowledged that Canaveral is in the midst of in-depth negotiations with Disney on a new deal.

Payne said talks have focused primarily on renovations and improvements Disney wants made at its terminal.

"There are some changes that are going to have to be made at the terminal to maintain the level of experience that Disney expects," Payne said.

Disney, though, is also studying other options.

In February, Disney Cruise Line representatives toured the Port of Tampa, in part to learn whether it could handle its ships in the event of an emergency such as a hurricane, Wainio, the port CEO, said. But Wainio said follow-up conversations broadened to the possibility of basing a ship in Tampa, which like Canaveral is a short drive from Walt Disney World but which offers access to different ports of call.

"We certainly hope that one day in the future they make the decision to move one of those ships over here," Wainio said.

A spokesman for the Port of Seattle, a popular homeport for cruises to Alaska, said it, too, had talked to Disney.

Cruise-industry analysts say Disney is likely trying to leverage the best deal possible out of Port Canaveral by suggesting it might move its ships. But they also say Disney might decide to maintain a lesser presence there in the future.

The company has already announced it will send the Magic back to Los Angeles from May through August of 2008. And analysts say Europe and the U.S. West Coast -- where sailings could be split between Alaska and the Mexican Riviera -- are likely candidates for permanent Disney service once its new ships arrive in 2011 and 2012.

Langley said Disney is still weighing those decisions.

"We're exploring all of our options for the future, which is what any prudent company would do," Langley said.

Jason Garcia can be reached at jrgarcia@orlandosentinel.com or 407-420-5414.
_________________
When you're curious, you find lots of interesting things to do.
--Walt Disney

[WDWFan]

Good article. Can't fault Disney for looking for the best deal. That is simply good business.

[daveypoo]

But Port Canaveral is a good location for the Land and Sea packages Disney offers. If they move farther away, people may not be as receptive to these cruises. I know I wouldn't.
_________________
When you're curious, you find lots of interesting things to do.
--Walt Disney

[daguru]

While the out of state ports are a possibility, this is mostly just Disney trying to get leverage on Port Canaveral.... There was a report on the local news this morning that Port Canaveral only did half the business this year that it did in 2006... So the port is going to do almost anything to keep Disney...

However, I do think Tampa would be a serious competitor... The travel distance from the parks is approx the same as the distance to Port Canaveral... Most of the local ports are being considered for emergency docking locations, in case of hurricanes, natural disasters, etc.... But, while those ports are talking to Disney about these services, of course they are going to pitch themselves as a new full time home (heck, what company wouldn't )...

Again, I think this is mostly just Disney trying to leverage PC into getting what they want...

Regarding the out of state ports, a few are possibilities, especially Portland... There have been some discussions about Disney "testing" an Alaska cruise, which have become very popular the last few years... Some rumors I've seen say that Disney may test these cruises after their Pacific/California cruise line is up and running smoothly...

[WDWFan]

I think one Disney gets its two new ships we will most likely see a ship in the western Coast and possibly out of another port in the East as well. While sticking with PC diversity of ports offers diversity of cruise options as well.