The first question that everyone asks about Carnival's decision to remove the Elation from Mobile is: Why? ["CCL pullout has Mobile recruiting cruise vendor," July 11]
Carnival's move to reduce capacity on the northern Gulf Coast is a good, basic business decision, though maybe not for the reasons you might think. Don't believe all the assumptions about low onboard spending. Don't believe the ticket prices on the Mobile sailings are lower than from other homeports. Do you really think Atlanta-based passengers, who make up the highest geographic portion of passengers out of the northern Gulf Coast, are spending less money on their vacations because they are sailing from Mobile rather than New Orleans?
On the contrary, the argument made in 2004 for putting the Holiday in Mobile rather than Gulfport or New Orleans was that Carnival did not want to give passengers the opportunity to gamble in their embarkation port cities for fear that it would reduce onboard spending. Further, there are more instances of lower rates on the newer, larger ships homeported in South Florida than vice versa.
The reason for Carnival's pulling out of Mobile is basic Economics 101: supply and demand, coupled with a lack of competition. With New Orleans growing from one ship a year ago to four ships in the fall of 2011, the northern Gulf Coast is going to be hard-pressed to handle all the increased capacity. The cruise market in New Orleans will grow from approximately 125,000 seven-day equivalent berths annually in 2009 to about 460,000 in 2012, a 360% increase in berths sailing on the Western Caribbean itinerary from the northern Gulf Coast.
Quite obviously, this is going to be a tremendous challenge for the cruise industry, especially with Galveston's increase in capacity. In this poor economic climate in which cruise lines are not getting the prices they want for their products, the best way for them to make money is to reduce capacity from a homeport that offers no competition to displace their existing market share. By pulling out of Mobile, Carnival has less berths to fill on the northern Gulf Coast. Plus, the Mobile cruise market gets absorbed into the remaining homeport markets. So, as long as competing cruise executives believe that Carnival pulled out of Mobile because it could not make money sailing out of there, Carnival's plan works like a charm.
The only problem is that Mobile is left high and dry.
From a Mobilian's perspective, I can tell you a few things are certain should another cruise line bring a ship to Mobile.
First, no one from the Atlanta area is going to drive past a competitor's ship to get to a Carnival ship two-and-a-half hours farther away. It's just not going to happen.
Second, a tremendously grateful city of Mobile and state of Alabama are going to support a new cruise product 110%. I think you'll see the city and state governments' meetings and incentives business thrive for many years if a cruise line takes advantage of Mobile as a homeport.
Finally, vacationers in this market desperately want what they perceive to be a better cruise product than what they perceive Carnival to be. If and when another cruise line gives Mobile another chance to prove itself as a viable cruise homeport, you can expect Mobile to rise to the occasion.
Steve Cape
Cape Travel
Mobile, Ala.
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