Port of MiamiCould Miami, the indisputable "cruise capital of the world" since Ted Arison launched Carnival Cruise Lines from the port in 1972, soon find itself losing that title to a city better known for yachting and spring breakers?

Slowly but surely, Fort Lauderdale has been luring the cruise industry's newest and largest ships to its Port Everglades, 23 miles up the coast from Miami.

Royal Caribbean International picked Port Everglades to homeport its 5,400-passenger Oasis of the Seas, the world's largest cruise ship, as well as its sister ship, the Allure of the Seas, which is scheduled to arrive in November.

Combined, the two ships will bring about 1.2 million cruise passengers to Fort Lauderdale annually.

Next year, Miami will lose its current largest cruise ship to Port Everglades when Royal Caribbean's 3,600-passenger Liberty of the Seas heads north.

Royal Caribbean's parent company, Royal Caribbean Cruises Ltd., also chose Fort Lauderdale's port for Celebrity Cruises' first two 2,850-passenger Solstice-class ships, the Solstice and the Equinox.

In the meantime, the brands of Carnival Corp. recently guaranteed Port Everglades that they would bring 25.5 million cruise passengers to and from Fort Lauderdale over the next 15 years if the port made significant improvements to its four existing cruise terminals.

Port Everglades was happy to oblige, just as it eagerly invested $75 million in building what is now the world's largest cruise terminal, Terminal 18, to accommodate the Oasis, in exchange for guarantees that Royal Caribbean, Celebrity and Azamara Club Cruises would be tenants for at least 10 years.

All this from a port that didn't begin hosting major cruise ships until the 1990s.

Click on the chart for a larger view.According to the Florida Ports Council, by 2013 Port Everglades and the Port of Miami will be tied at 4.3 million cruise passengers each. (Click on the chart for a view of cruise passengers at each port.)

Port Everglades, however, believes that its long-term contracts with RCCL and Carnival Corp. will enable it to surpass Miami sometime in 2012, once the Allure has been sailing at capacity for a full year.

"It's the case of the tortoise about to beat the hare," said Stewart Chiron, CEO of Miami-based CruiseGuy.com.

Allen, who took his position in 2005, noted that the trend is clearly in his port's direction. Between 2006 and 2010, he noted, Port Everglades captured 70% of the growth in the Caribbean cruise market out of South Florida.

Last year, Port Everglades saw its number of multiday cruise passengers increase by 200,000, and that was before the Oasis launched service. "The new ships are coming here," Allen said.

To his point, besides the Oasis-class, the two Solstice-class ships, the new Seabourn Cruises and Silversea Cruises ships and the Ruby Princess all launched service from Port Everglades.

When it arrives this month to launch Caribbean service, the 4,000-passenger Norwegian Epic will be the first new class of cruise ship since Royal Caribbean's Freedom of the Seas to be introduced in Miami. It will be joined by the third Solstice-class ship, the Eclipse, next winter. But neither is staying year-round.

And when the Liberty of the Seas leaves Miami, Royal Caribbean might not be launching a seven-day cruise to the Caribbean from Miami for the first time in 40 years.

Miami's port director, Bill Johnson, dismissed such concerns, saying, "Cruise capital of the world" is a "tired title," even though the slogan appears on his port's website.

"The Port of Miami is doing quite well," he said. "We have the three major cruise lines and are doing 1 million passengers with each of them. Those are significant numbers that no other port can boast. We are the world leader and always have been."

Johnson acknowledged that Port Everglades' getting the Oasis ships was a "game-changer" but said that Miami was still No. 1, pointing to the record-breaking 4.1 million passengers who passed through the port last year. In contrast, Port Everglades said that in 2009 it got 3.4 million cruise passengers, pre-Oasis.

"Competition is good," Johnson said. "If Port Everglades is successful, South Florida is successful. If they are able to grow, I'm able to grow."

Port EvergladesMaybe so, but Port Everglades is clearly growing at a faster rate than Miami is.

Johnson said that cruise traffic at his port has been "steady." But it has remained steady as the industry has grown rapidly.

The cruise industry introduced 14 new ships in 2009, none of which debuted in the "cruise capital of the world."

Chiron, of CruiseGuy.com, said that Miami's inability to capture that market share has hurt the local economy.

"Miami has continued to lose ground to Everglades over the years, with no response," he said.

It was the Oasis that seriously tipped momentum to Port Everglades. An economic impact study found that within five years, an estimated 8,012 jobs would be produced by the project, generating $356.5 million in personal income and $32.8 million in state and local taxes.

"When you have two ships with $3 billion of corporate investment, adding 6,000 passengers twice a week to the Caribbean market, you are significantly impacting the marketplace," Port Everglades' Allen said. "When you have that kind of investment, you want to put it in a location capable of handling the vessels."

The Oasis was the first ship Royal Caribbean introduced at a port outside Miami, even though RCCL Chairman Richard Fain has famously said that he likes to look out his Miami window and see his ships docked at the port.

One reason Miami didn't get the Oasis was space. Port Everglades offered to build a new terminal, while Miami was only able to refurbish existing terminals.

"A challenge for the Port of Miami is that it's a landlocked port," said Mark Ittel, vice president of ports and maritime for Bermello Ajamil and Partners, a cruise terminal design firm based in Miami. The company works with both ports. "It has very little room for expansion. Port Everglades has the room now."

Royal Caribbean's vice president of port operations, Juan Trescastro, concurred.

"At end of the day, the best financial deal for us was the Port Everglades deal," he said. "Miami would have done a fine job, but the thought of having a brand-new terminal with all the new bells and whistles was the icing on the cake."

Trescastro added that the new terminal enabled Port Everglades to introduce passenger-flow concepts that proved to be an essential part of the Oasis experience.

"Our mantra became, how could we be as innovative on the landside as we were on the shipside?" he said. "We are driving innovation and changes in the way we process our guests prior to getting on the ship."

For cruise lines, the overall balance of port capacity is a good thing.

"They need both of these ports to be successful in order for the cruise industry to thrive," Ittel said. "They want to see them both competing."

That competition means better port facilities. The financial benefit that cruise ships can bring to a port means improved facilities around the world.

"The ports have started to realize that if they have better infrastructure and do certain things, the ships will come," Trescastro said. "In the past ... we were more of a nuisance than a benefit. Now, they realize the true economic benefit of the cruise industry to the destination."

Miami has learned that lesson. Only three years ago, former Carnival Cruise Lines CEO Bob Dickinson publicly called Miami a "third-world" port.

Johnson had only recently taken his post at the time, and since then the port has invested $100 million in its Carnival facilities and has spent $17 million to refurbish the terminal for the Norwegian Epic.

"All ports want bragging rights: the name of the newest ship or the size of a ship," Johnson said.

"But if you want to retain market share, you have to focus on the basics. At the Port of Miami we have a sound business model, and we are focused on service to the lines and the passengers."

This report appeared in the June 14 issue of Travel Weekly.

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