A new and improved cruise industry has reemerged after COVID‑19 tried to drown it. Booking activity surged at the start of 2023 – a promising harbinger for Port Everglades, the county‑owned port where Royal Caribbean, Carnival and their sister lines dominate cruise traffic. Carnival and Royal Caribbean both reported a sharp increase in cruise bookings during the so‑called “wave” season from January through March, when cruise lines aggressively market unsold capacity on their ships.
“We are still experiencing a record wave season, which started early, gained strength, and has extended into the year…. It started with record Black Friday booking volumes and continued to build,” Josh Weinstein, president and CEO of Carnival Corp., said March 27 on the company’s quarterly conference call with stock analysts. “Booking volumes for our North American brands have been running in excess of record 2019 levels for the last six months.”
“We expected a strong wave season, but what we are currently experiencing has exceeded all the expectations,” Jason Liberty, president and CEO of Royal Caribbean Cruises Ltd., said February 7 on the company’s quarterly call with analysts.
“We are seeing particularly strong booking trends for North America-based sailings, which account for nearly 70 percent of our capacity this year,” the Royal Caribbean CEO said. “Secular tailwinds continue to benefit us as consumer preferences shift from goods to experiences.”
That all bodes well for Port Everglades, where the cruise industry essentially disappeared during the onset of the doubt-filled COVID-19 pandemic. Yet some reminders of the pandemic era remain. Now that the ships are back, cruise lines at Everglades and other ports continue to use certain protocols they adopted during the contagious pandemic era, including touchless passenger processing and passenger appointment systems that reduce crowding in cruise terminals.
“Old cruising was a group of 500 people coming in, processing through, being in the terminal, starting the party. That group goes onto the ship, the next 500 come in. The cruise really started in the terminal,” said Jonathan Daniels, chief executive officer and port director of Port Everglades.
“Now, it’s less than 15 minutes from curbside to the point where you’re at your cabin,” not only at Everglades but also at such rival ports as Port Canaveral and PortMiami, Daniels said. “The cruise industry maintained that…. It’s an industry that’s changed and in many respects for the better. Unfortunately, it took something like COVID to force us to change.”
Daniels quietly landed a job offer to run Port Everglades in March 2020. A week later, the U.S. outbreak of the COVID-19 pandemic hijacked headlines and the global economy. Several weeks after that, Daniels paid a low-profile visit to Port Everglades. He can recall looking out an office window there and seeing no cruise ships at the port. Not one. He was concerned but hardly surprised. Before taking the top job at Port Everglades on June 29, 2020, Daniels served for seven years as executive director of Port of Gulfport in Mississippi, where COVID also had chased away cruise ships.
“Gulfport certainly was a smaller operation but impacted in much the same way,” he said. With ample service from industry leaders Carnival and Royal Caribbean prior to the pandemic, “Gulfport was the fastest-growing cruise port in the nation at that time,” he said. Then a series of no-sail and conditional-sail orders from the federal Centers for Disease Control put cruise lines on hold and depopulated cruise ports from coast to coast.
Now, Daniels and his team in Broward are trying to move cruise growth at Port Everglades into a faster lane, together with longtime tenants Carnival and Royal Caribbean as well as the cruising arm of entertainment giant Disney – which will make its local debut later this year.
Disney Cruise Line is scheduled on Nov. 20, 2023, to start operating the Disney Dream year-round from Port Everglades. The 1,100-foot-long ship accommodates up to 4,000 passengers. Broward County will serve as a second home for Disney Cruise Line, which established its original homeport at Port Canaveral on the Atlantic coastline of Central Florida.
Under a 15-year berthing agreement, Disney is required to keep one of its ships homeported at Port Everglades on a year-round basis, starting in the fall of 2023, and to add a second seasonal ship in 2025. Disney Cruise Line will operate at Port Everglades in Terminal 4, now undergoing a $35 million upgrade as part of a plan to dedicate the entire terminal to Disney.
Viking and other luxury cruise operators also are adding service at Port Everglades. “Viking moved up from Miami and is in the process of going through its second season here,” Daniels said in an April 11 interview. “Silversea, which is the ultra-high luxury brand of the Royal Caribbean group, has added new vessels coming into this market. Azamara is moving out of Miami and is coming up here. And we’re talking with some other brands that are looking at homeporting in Port Everglades.”
Ranked by the number of multi-day cruise passengers that pass through its terminals, Port Everglades was the third busiest cruise port in the world in 2022, according to SeaTrade Cruise News, an industry news source. Port Canaveral was the world’s top-ranked cruise port in 2022 for the first time, ahead of second-ranked PortMiami, the industry’s longtime leader.
Port Canaveral took the lead last year for reasons that include its proximity to Orlando-area theme parks and its appeal as a drive-in destination from Georgia and other Southern states. But Daniels expressed skepticism about the durability of Port Canaveral’s lead. “I’m not entirely sure how long that’s going to last,” he said without elaboration.
Just two years ago, the Broward cruise industry’s horizon was much cloudier. Pandemic precautions suspended cruise activity at Port Everglade for most of 2021 fiscal year, when just 116,946 passengers passed through the port’s terminals.
Cruise passenger traffic rebounded to 1.7 million in fiscal 2022, which ended last Sept. 30. But that was still less than half of the pre-pandemic passenger count in 2019, the last year before the COVID-19 outbreak. “Tourism and hospitality were impacted significantly and are still impacted, I think, in many ways,” Daniels said.
Port Everglades’ passenger traffic may nearly double this year, compared to 2022, the port’s CEO said, but is likely to remain below the pre-pandemic passenger count in 2019. “We budgeted conservatively. We budgeted about 1.9 million passengers this year,” he said. “The way that the numbers are trending right now, it appears we’re going to be around 3 million passengers.”
Daniels said the cruise passenger count at Port Everglades probably will keep growing to more than 3 million in 2024, boosted by the launch of Disney cruises in November 2023, and may top 4 million by 2025 – which would be more than the pre-pandemic level of 3.8 million in 2019. On the cruise side of the port, “we think 2025 is when we are really going to be back,” he said.
Business diversity is a priority at Everglades, which ranks not only among the world’s busiest cruise ports, but also the nation’s leading cargo container ports. With a cruise recovery and sustained cargo strength, Daniels said Port Everglades may achieve record-high operating revenues in 2023, surpassing the pre-pandemic total of $170.7 million in 2019.
“We moved from pandemic to recovery to growth mode very quickly,” he said. “Even though South Florida was seen as the epicenter of COVID, I felt that South Florida had more of an opportunity to recover quicker than anyplace in the United States and almost the world. I think that has been borne out in many respects. You’ve seen a South Florida economy that just continues to grow.”
Revenues from cruise, cargo and petroleum shipping operations increased last year to $151.7 million, just 11 percent below the 2019 level prior to the COVID era. Cargo tonnage at Everglades has bounced higher since bottoming out in 2020. The port handled 7.3 million tons of cargo last year, well above the pre-pandemic total of 6.7 million tons in 2019.
“The port is a primary gateway for the economically vibrant and populous region in South Florida, and above-average population growth in South Florida and Central Florida will support long-term cargo demand for the port,” bond rating agency Moody’s Investors Service said in a June 2022 report on Port Everglades.
The port also handled about 126.5 million barrels of jet fuel, gasoline and other petroleum-based products last year. It was the second-most barrels in a single year in the port’s history, fortifying its position as South Florida’s leading port for fuel shipments.
Among more than 20 ocean cargo carriers that maintain regular service at Port Everglades are carriers from India, Greece and Turkey that started operating there last year. But the port’s cargo business is still based mainly on U.S. trade with countries in the Caribbean, Central America and South America. “We’re seeing more trade lanes open up within our traditional north-south routes. We want to see more cargo business within those traditional lines,” Daniels said. “If we can bring something new from another part of the world, that’s wonderful. But we want to stay within our lane, stay within the strength that’s there.”
Port Everglades and other ports around the state benefited from a marketing campaign to encourage ocean freight carriers to use Florida ports instead of crowded ports on the West Coast of the United States. Daniels helped to lead the campaign in his position as chairman of the Florida Ports Council, a statewide maritime trade group. “That sort of put Florida on the map, globally, as an alternative to traditional supply chain routes,” said Ellen Kennedy, a port official who oversees marketing, public relations and business development.
A nonstop construction site, Port Everglades is building on its trio of strengths in the cruise, cargo and petroleum businesses – symbolized by a mighty trident in the port’s new logo, unveiled in January.
For example, a brand-new jet fuel storage facility was set to come online in spring. A ribbon-cutting ceremony was scheduled for April 26 for the four-tank facility with 480,000 barrels of storage capacity, or 120,000 barrels per tank.
By 2026, the port expects to start widening Slip 1, which will increase the maximum width of fuel tankers and other cargo ships operating there. “That’s primarily for the jet fuel industry, which allows us to handle tankers that may be coming from foreign shores,” Daniels said. Petroleum shipments to Port Everglades come primarily from Texas, Louisiana and Mississippi. “It allows us the opportunity to handle much larger vessels, Aframax vessels, which are somewhere between 80,000 and 120,000 deadweight tons,” he said.
Another project, called the Southport Turning Notch Expansion, will lengthen the existing deepwater turnaround area for cargo ships at Port Everglades from about 900 feet to 2,400 feet, allowing for construction of as many as five new berths for cargo ships. In a related project, the port also has installed three Super Post-Panamax gantry cranes to move cargo containers and plans to install three more by the end of 2023. Valued at $15.1 million each, the 175-foot-tall cranes are designed with booms that extend out and back, rather than raise up, to keep them out of flight paths around Fort Lauderdale-Hollywood International Airport, less than two miles away.
Plans for new infrastructure at the port include its shore power project, which will allow operators of cruise ships to turn off engines and plug into land-based electrical power at all eight passenger terminals. Shore power will not only benefit the cruise lines but also the local community, by reducing emissions of carbon dioxide, nitrogen oxide, sulfur oxide and particulate matter.
The cost of improving Port Everglades is adding up. The port’s construction commitments rose during the 12 months that ended last Sept. 30 from $92.5 million to $115.8 million, a 25 percent increase. But ample cash and credit have insulated the port from financial complications.
Moody’s Investors Service last year put its A1 rating on about $127 million of port facilities revenue bonds that Port Everglades issued. Moody’s also affirmed A1 and A2 ratings on another half-billion dollars of port bonds and said the port’s rating outlook was stable. “Strong support from parent government Broward County – which allocated portions of its own COVID relief grant funding to the port and took extraordinary measures to pay operating expenses – support the ratings,” Moody’s reported. “The stable outlook reflects Moody’s expectation that revenue will continue to recover and that the port will match capital plan outlays with available resources.”
No capital improvement at Port Everglades looms larger than its joint plan with the U.S. Army Corps of Engineers to deepen and widen the port’s various channels. Three years ago, the Broward County Commission approved a plan to study the deepening and widening project together with the Corps of Engineers. But the project has been decades in the making.
“We’re in year 27 in the planning and development of that, and it continues to be pushed off,” Daniels said. “We need to go deeper. We need to go wider in some areas, particularly in the Southport access channel. Right now, if you have a couple of cruise ships on the Intracoastal Waterway, it’s tough to get some of the larger vessels by. They are just too close… The only way that we’re really going to see the full potential of the port is if we do the deepening and widening project.”