A Surprise Ending: Why Did Carnival Ditch Mobile with No Warning?

[cdamion]

Originally Posted by LHP

Now that this is all said and done, I do believe there is a very valuable lesson that other cities can learn from this experience.

It has made me wonder how Jacksonville is doing. They have been sailed from there about the same length of time as Mobile. And Jacksonville would not be any more of a "destination" city than Mobile.

However, Jacksonsville was smart and only built what is considered a "temporary" cruise terminal. Several years ago, Jacksonville looked at building a new 60 million complex....but because of a slow economy, that was put on the back burner.

Any city in Texas like Corpus Christi should definately not invest a lot into such a project. Houston always has a huge terminal just sitting there.

Cities like Norfolk have speciality cruises that sail out of there. But to my knowledge, it is not used 12 months a year by anyone.

Charleston already had a cruise facility before Carnival moved there that handled speciality cruises. Now (as I understand it) Charleston was also looking an building a better facility. But if any lessons are learned from Mobile...it should be that who ever is in charge of that decision had better know what they are doing.

This is not a business for beginners....

Add San Diego to your list. They just spent a ton of money on a new terminal that will go unused.

This does not seem too different from cities that spend tons of money for pro sports teams that end up leaving when the ticket sales aren't there.

[Vanessa L]

Originally Posted by PaulMedik

CorvetteLady,

No, I didn't miss the point; I just disagree that it's a point. Eight months is about the same amount of time human families have to prepare for a new child's arrival. Is an equivilent to a human gestational period not long enough notice for a business decision?

If Carnival Elation sailed on Monday and notified the port officials when they left port that they would be returning the passengers to a different port, then that would be 'no warning' perhaps, but even then it would not be appropriate to publicly cry foul over a financially motivated business decision.

Public officials who wish to entice businesses to remain loyal or relocate assetts, would be more likely to succeed by holding their tongues. I know I would avoid interactions with any entity that so readily attempts to harm my reputation when I take steps to save funds or bring in more. Who among us wouldn't?

If I am reading Corvette Lady correctly, I do think you missed the point. The point is not that it is a day, a week or a year, but that once told, it was a done deal. I don't care if you are given 5 years notice, if at the end of the time, the result is the same, then it can be said there was no notice. Notice would have been for Carnival to say to Mobile, "We are giving you 8 months to turn this around (with a clear definition of what "turned around" looks like) and THEN, if you have not met our goals, we are pulling out permanently." Telling someone the end result without first giving them the chance to change things, is NOT giving notice. It's simply stating the end result ahead of time. Now, if Carnival HAS already set those guidelines for Mobile, and they failed to meet them (I am not 100% versed on this story), then what I have written is irrelevant, as they were given a very clear directive and failed to meet it. That is not on Carnival, that one's on Mobile. But the way I am reading this story (I believe) is that Mobile was never given a either/or directive from Carnival. Please correct me if I am wrong.

[mcwebber]

Originally Posted by Vanessa L

If I am reading Corvette Lady correctly, I do think you missed the point. The point is not that it is a day, a week or a year, but that once told, it was a done deal. I don't care if you are given 5 years notice, if at the end of the time, the result is the same, then it can be said there was no notice. Notice would have been for Carnival to say to Mobile, "We are giving you 8 months to turn this around (with a clear definition of what "turned around" looks like) and THEN, if you have not met our goals, we are pulling out permanently." Telling someone the end result without first giving them the chance to change things, is NOT giving notice. It's simply stating the end result ahead of time. Now, if Carnival HAS already set those guidelines for Mobile, and they failed to meet them (I am not 100% versed on this story), then what I have written is irrelevant, as they were given a very clear directive and failed to meet it. That is not on Carnival, that one's on Mobile. But the way I am reading this story (I believe) is that Mobile was never given a either/or directive from Carnival. Please correct me if I am wrong.

So I guess if I told my boss I was quitting in 4 weeks he could say I didn't give him notice? I just don't understand what the folks in Mobile think they could have done differently to get Carnival to stay, unless they were willing to subsidize each passenger.

[PaulMedik]

Originally Posted by Vanessa L

.......... Please correct me if I am wrong.

Vanessa,

You may be correct in that I am not sure what issue was most relevant to CorvetteLady, but the fact is that on board spending is where Carnival makes it's profits and there's nothing the port authority can do to influence how much passengers spend. Given that the port authority had no options, why would they be given an opportunity to attempt something they have no control over?

Can you imagine an advertising campaign sponsored by Mobile that would be designed to entice gamblers and drinkers to visit their city just to board a ship when those same groups can board elsewhere and enjoy their habits on land before and after their cruise?

Carnival stated; We are leaving in eight months. Issue that you cannot control influenced our decision. Simple, straight forward and doesn't call for mindless spending to try and keep them there. Very professional in my opinion.

[mcwebber]

Originally Posted by PaulMedik

Vanessa,

You may be correct in that I am not sure what issue was most relevant to CorvetteLady, but the fact is that on board spending is where Carnival makes it's profits and there's nothing the port authority can do to influence how much passengers spend.

I wonder what the excursions before and after in Mobile are. I can't find them on Carnival's site. In Port Canaveral Carnival is able to sell Disney, Universal, NASA, etc. Plenty of tours in New Orleans as well.

[Tapi]

Originally Posted by LHP

Could you post me a link on that documentation? I have searched and searched for some specifics with no avail.....

all I can find that is that the Elation was not generating the targeted revenues.

It was part of an internal Q&A document issued to the Consumer Research department at Carnival. I'm sure it was the same Q&A document issued to all departments so any Carnival employee should be able to corroborate that info.

Not generating the targeted revenues is not necessarily the same as loosing money.

[salty dingo]

Originally Posted by bonniemari

They are, but only once a month May-Oct. At least they better be, because I am booked for May 19th Charleston-Bermuda.

Well, not exactly. NCL was 7 days Sat to Sat, and docked in St George's.

Carnival is looking like mid-week to mid-week and docking at King's Wharf, which is quite a different thing.

Anyway Bermuda is lovely, and I would enjoy going there in any event!

[salty dingo]

Let's take a hard look at Carnival's business model (which mirrors NCL, RCI, etc.)

You offer a low-ball fare to attract people, and once you have them onboard as a captive audience, you sell, sell, sell to make the profit margins you seek.

That model breaks down when you get people (like me) who do not like to part with much money after they board the ship.

Simple answer: raise fares and make more stuff all-inclusive (restaurants.) Make alcohol reflect the duty free prices. Make excursions cost similar to what the independent vendors charges.

Wishful thinking, because unless ALL the cruise lines changed their business model, people would just go to the line where the fares are cheaper.

Heck, many peopl choose Carnival because fares are cheaper in the first place. How many of them are high rollers?

So, Mobile just opened the doors for a lot of people to cruise, but it did not open their wallets!

[Tapi]

Originally Posted by LHP

Now that this is all said and done, I do believe there is a very valuable lesson that other cities can learn from this experience.

It has made me wonder how Jacksonville is doing....

Any city in Texas like Corpus Christi should definately not invest a lot into such a project....

Houston always has a huge terminal just sitting there....

Norfolk has speciality cruises that sail out of there....

Charleston already had a cruise facility before Carnival moved there that handled speciality cruises....

This is not a business for beginners....

Add Savannah to the list of cities "playing with fire":

Click here: Cruise Ships to Savannah?


Cruise ships to Savannah?
Atlanta Business Chronicle - by Dave Williams, Staff Writer
Date: Friday, March 4, 2011, 11:46am EST

The Georgia House of Representatives Friday got behind efforts to build a cruise ship terminal in Savannah.

Lawmakers voted 156-1 for a resolution supporting public- and private-sector efforts to make Savannah Georgia’s first cruise ship port.

Already a tourist hot spot, Savannah drew more than 6 million visitors last year, Rep. Bob Bryant, D-Garden City, one of the resolution’s sponsors, told his fellow House members during a brief presentation before Friday’s vote.

Those tourists spent $1.9 billion, enough to support about 23,000 jobs, Bryant said.

“This industry could grow exponentially if the city could capture a portion of the cruise ship industry,” he said.

Bryant said the city of Savannah has hired consultants to study the idea, including exploring potential sites for the terminal.

Other Savannah-area House members sponsoring the resolution are Reps. Ron Stephens, R-Savannah, the delegation’s chairman; Ann Purcell, R-Rincon; Mickey Stephens, D-Savannah; and Craig Gordon, D-Savannah.

[futaba951]

Originally Posted by Tapi

Add Savannah to the list of cities "playing with fire":

Click here: Cruise Ships to Savannah?


Cruise ships to Savannah?
Atlanta Business Chronicle - by Dave Williams, Staff Writer
Date: Friday, March 4, 2011, 11:46am EST

The Georgia House of Representatives Friday got behind efforts to build a cruise ship terminal in Savannah.

Lawmakers voted 156-1 for a resolution supporting public- and private-sector efforts to make Savannah Georgia’s first cruise ship port.

Already a tourist hot spot, Savannah drew more than 6 million visitors last year, Rep. Bob Bryant, D-Garden City, one of the resolution’s sponsors, told his fellow House members during a brief presentation before Friday’s vote.

Those tourists spent $1.9 billion, enough to support about 23,000 jobs, Bryant said.

“This industry could grow exponentially if the city could capture a portion of the cruise ship industry,” he said.

Bryant said the city of Savannah has hired consultants to study the idea, including exploring potential sites for the terminal.

Other Savannah-area House members sponsoring the resolution are Reps. Ron Stephens, R-Savannah, the delegation’s chairman; Ann Purcell, R-Rincon; Mickey Stephens, D-Savannah; and Craig Gordon, D-Savannah.

This whole Mobile thing will probably make cities a lot more cautious and reluctant to cater to the cruise lines every whim. They will want to see the money before they are willing to put out. May not make much of a difference in the short term as the cruise lines already have locked into their favored ports, but if the economic climate changes in the coming years and the cruise lines look to expand into new ports, they may find a lot of prospective ports less than willing to be dictated to.

[richstowe]

Originally Posted by mcwebber

So I guess if I told my boss I was quitting in 4 weeks he could say I didn't give him notice? I just don't understand what the folks in Mobile think they could have done differently to get Carnival to stay, unless they were willing to subsidize each passenger.

Well put. Carnival gave ample notice.

CC's article title seems like Carnival bashing.

Reading another related thread, I was amused to hear that financial basket case Baltimore
is "exploring" a second passenger port.Talk about gambling with public funds! It will not end well.

If they want more traffic, Baltimore should cut all fees (perhaps to zero) to convince cruise lines to
sail from Baltimore on Saturday's rather then build more port facility's.

[mcwebber]

Originally Posted by Tapi

Add Savannah to the list of cities "playing with fire":

Lawmakers voted 156-1 for a resolution supporting public- and private-sector efforts to make Savannah Georgia’s first cruise ship port.

How is passing a resolution "playing with fire?"

[Vanessa L]

Originally Posted by mcwebber

So I guess if I told my boss I was quitting in 4 weeks he could say I didn't give him notice? I just don't understand what the folks in Mobile think they could have done differently to get Carnival to stay, unless they were willing to subsidize each passenger.

Apples to oranges. Corvette Lady's point (I believe this is the gist of it) is that they were not given an opportunity to correct what was wrong before Carnival pulled out.

Two examples come to mind: If I am divorcing my spouse, saying, "In 3 months I am outta here. Nothing you can do to change it," is NO notice. Just an end result statement. Versus saying, "If we do counseling and we just cannot seem to get it together in 3 months, I am going to have to move out and divorce you." The first example is what Carnival did to Mobile (as I understand it). In the second example, had Carnival actually given Mobile some notice as to what they needed changed exactly (whether Mobile could control it or not it not relevant to this topic) then I don't think it would have ruffled as many feathers had Carnival said, "We notified Mobile 8 months ago of exactly what we needed to stay and unfortunately, they have not been able to deliver so we are faced with pulling out of the city." I think the point is the sh*tty way they went about delivering the news without at least giving Mobile the opportunity to change things.

As a stock holder myself, and with a tiny bit of understanding that Carnival's ultimate responsibility is to it's stockholders and really, they could care less "who's feelings they hurt", I get why they did what they did. It doesn't make it any less sh*tty for the city of Mobile, however.

[mcwebber]

Originally Posted by Vanessa L

Apples to oranges. Corvette Lady's point (I believe this is the gist of it) is that they were not given an opportunity to correct what was wrong before Carnival pulled out.

Two examples come to mind: If I am divorcing my spouse, saying, "In 3 months I am outta here. Nothing you can do to change it," is NO notice. Just an end result statement. Versus saying, "If we do counseling and we just cannot seem to get it together in 3 months, I am going to have to move out and divorce you." The first example is what Carnival did to Mobile (as I understand it). In the second example, had Carnival actually given Mobile some notice as to what they needed changed exactly (whether Mobile could control it or not it not relevant to this topic) then I don't think it would have ruffled as many feathers had Carnival said, "We notified Mobile 8 months ago of exactly what we needed to stay and unfortunately, they have not been able to deliver so we are faced with pulling out of the city." I think the point is the sh*tty way they went about delivering the news without at least giving Mobile the opportunity to change things.

Actually, it's quite relevant since you're saying they should have asked them to fix something that Mobile apparently had no control over and then move the ship anyway. Like that would have been better? "Passengers in Mobile are not generating enough revenue. Unless Mobile subsidizes Carnival passengers by $X per cruise, Carnival will be moving out." How would that have gone over? I suspect, like a lead balloon.

[Tapi]

Originally Posted by mcwebber

How is passing a resolution "playing with fire?"

Not the resolution. The prospect of spending MILLIONS of dollars on a venture that, at best, is a gamble, specially when they have Jacksonville and Charleston so close to them. And now that Jacksonville's temporary dump, I mean, warehouse style cruise terminal has extended its useful life until at least 2016, it doesn't seem like Carnival will be looking for an immediate new home for the Fascination...

[Vanessa L]

Originally Posted by mcwebber

Actually, it's quite relevant since you're saying they should have asked them to fix something that Mobile apparently had no control over and then move the ship anyway. Like that would have been better? "Passengers in Mobile are not generating enough revenue. Unless Mobile subsidizes Carnival passengers by $X per cruise, Carnival will be moving out." How would that have gone over? I suspect, like a lead balloon.

Since I'm not talking about the big picture, rather, whether or not it was crappy for Carnival to pull out of Mobile without at least giving them the opportunity to change things. Right or wrong, human nature tends to side with the underdog. It has ruffled feathers in this case because the perception is that Carnival simply thumbed their nose at Mobile rather than being able to, in October saying, "We gave Mobile notice in March that they needed to change 'x' and they have not been able to fulfill that request so we are pulling out, effective immediately." At that point, it wouldn't seem like (again perception is important here) the "big, bad, company is pooping all over the little city". At that point, perception is, "Well, they gave Mobile notice that they had to make theses changes in 8 months and they couldn't, too bad for Mobile."

[futaba951]

Originally Posted by Vanessa L

Since I'm not talking about the big picture, rather, whether or not it was crappy for Carnival to pull out of Mobile without at least giving them the opportunity to change things. Right or wrong, human nature tends to side with the underdog. It has ruffled feathers in this case because the perception is that Carnival simply thumbed their nose at Mobile rather than being able to, in October saying, "We gave Mobile notice in March that they needed to change 'x' and they have not been able to fulfill that request so we are pulling out, effective immediately." At that point, it wouldn't seem like (again perception is important here) the "big, bad, company is pooping all over the little city". At that point, perception is, "Well, they gave Mobile notice that they had to make theses changes in 8 months and they couldn't, too bad for Mobile."

Carnival didn't want to fix Mobile, they wanted to move the ship to PC where they can operate at a much lower fixed cost. Can't say that I blame them for that. IMO it's NOLA that really got the thumb because they lose a ship with all the upgrades for a ship with less than half the upgrades, for no apparent reason. Mobile's situation is entirely understandable in a business sense, while NOLA's just seems spiteful IMO. Why couldn't they just move Elation to PC and leave NOLA out of the mix entirely? I have to think that if they'd left Fantasy in Mobile with all of it's upgrades, that it would have stood a far better chance of pulling in better money than Elation. I believe that this plan has been in the works for a lot longer than it appears. Again, I can't say that I blame Carnival for the move. It makes perfect business sense. It's a shame that Mobile didn't have the sense to have a contract in place where they could hold Carnival's feet to the fire in just this type of situation, but I'd bet that in any case the contract would have been stacked against the city and in their zeal to hold onto a ship would have felt compelled to sign on to whatever Carnival dictated.

[Vanessa L]

Originally Posted by futaba951

Carnival didn't want to fix Mobile, they wanted to move the ship to PC where they can operate at a much lower fixed cost. Can't say that I blame them for that. IMO it's NOLA that really got the thumb because they lose a ship with all the upgrades for a ship with less than half the upgrades, for no apparent reason. Mobile's situation is entirely understandable in a business sense, while NOLA's just seems spiteful IMO. Why couldn't they just move Elation to PC and leave NOLA out of the mix entirely? I have to think that if they'd left Fantasy in Mobile with all of it's upgrades, that it would have stood a far better chance of pulling in better money than Elation. I believe that this plan has been in the works for a lot longer than it appears. Again, I can't say that I blame Carnival for the move. It makes perfect business sense. It's a shame that Mobile didn't have the sense to have a contract in place where they could hold Carnival's feet to the fire in just this type of situation, but I'd bet that in any case the contract would have been stacked against the city and in their zeal to hold onto a ship would have felt compelled to sign on to whatever Carnival dictated.

Absolutely right. As a stock holder I get it. But there are still going to be a ton of posts about how Mobile got the shaft and "if onlys" going on for months. And it is still going to be "big, bad Carnival's fault". "Poor little Mobile."

[richstowe]

Originally Posted by Vanessa L

Absolutely right. As a stock holder I get it. But there are still going to be a ton of posts about how Mobile got the shaft and "if onlys" going on for months. And it is still going to be "big, bad Carnival's fault". "Poor little Mobile."

So far I haven't seen a ton of posts pro Mobile. Frankly most CCers care about their own dealings with Carnival and could care less about Carnival's
business dealings with Mobile ,or for that matter any port city.

Also there are lots of " hurray another boat in Florida "postings.

[PaulMedik]

Originally Posted by Vanessa L

..............

If I am divorcing my spouse, saying, ........

Vanessa,

How about a third option; You do not feel your husband has the ability to change so you spare him the humiliation of trying by packing your bags and leaving? In Carnival's case they need eight months to pack, but they at least aren't dragging their 'partner' along thru a bitter separation and counseling when they can't change.