Royal Caribbean International will base both of its Genesis-class ships in Port Everglades for year-round Caribbean cruises.
Carrying 5,400 passengers each on a double occupancy basis and 6,400 maximum, plus approximately 2,000 crew members, the two ships will add more than half a million more passengers to the Port's traffic when they are both in full-year service.
Port Everglades posted 3.4 million passengers in 2007, compared to 3.9 million for the Port Of Miami. But Port Everglades traffic includes one-day cruises of which Miami has none.
Miami continues to hold the title to being the biggest cruise port in terms of passenger volume and is expected to homeport the new and larger ships from Carnival Cruise Lines and Norwegian Cruise Line.
Port Everglades will renovate Terminal 18 at a cost of $37.4 million to accommodate the Genesis ships.
According to its agreement with Port Everglades, Royal Caribbean will fund the $37.4 million in capital expenditures plus interest at 8.5 percent for expansion of Terminal 18 and related infrastructure needs.
Royal Caribbean will pay for the work through a $5.70 fee per passenger when they embark and disembark. In addition, each passenger will pay a $9.95 port user charge. These charges will be effective starting January 1, 2008.
The new port user charge will be instead of previously charged fees for line handling, water, electricity, terminal overtime, dockage and wharfage, and will increase annually by the lower of 3.5 percent or the annual tariff increase for wharfage.
Shortfalls for annual revenue guarantees are due annually within 60 days of notification.
Royal Caribbean commits to homeport each of the Genesis ships at Port Everglades for at least one year following their inaugural sailing.
Capital Cost Recovery
According to Port Everglades, its agreement with Royal Caribbean is a departure from past practice which provided terminal improvements as part of the base wharfage rate. The port now plans to use this so-called capital cost recovery for similar agreements in the future.
"We will make any upgrades or improvements the lines want," Port Director Phil Allen told Cruise Industry News. "But on their nickel through a cost recovery program."
Counting embarkations and disembarkations, it is projected by the port that each Genesis ship will handle 564,064 passengers annually.
Royal Caribbean is guaranteeing 17 million passenger movements ( embarkations and disembarkations) over an initial 10-year term. The cruise line has two five-year renewal options.
The agreement also states that Royal Caribbean shall provide the port with written notice of its cruise itineraries 12 months in advance.
The port will provide two preferential berths seven days a week with Berth 18 serving as primary and Berth 25 as secondary.
It is estimated that the agreement will result in $204.1 million in revenues for the port, with approximately $105.9 million for activities related to the terminal upgrades.
This year, Port Everglades will welcome several new ships, including the Queen Victoria, the Independence of the Seas and the Solstice.
And making their maiden arrivals this past fall were the Costa Fortuna, which hosted an early birthday party for Costa, turning 60 in March; the Emerald Pr incess and the Navigator of the Seas.