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

[pittpanther]

Additionally, he said that, though the ships sailed full, it was because fares were so deeply discounted. People simply weren't willing to pay higher fares out of Mobile, though they would in New Orleans or Miami, for example. Both of those cities are seen as "destinations"; Mobile is usually not.

How do you get one of these "discounted fares? I cruised out of the Gulf last fall. NOLA and Mobile cruises were roughly the same rate, according to the info I received from my TA.

 

Are you sure this is fact, or was this his opinion?

[*Mach*]

I have to wonder when the Breeze comes over in Fall 2012 if Carnival might send a ship back to Mobile??

 

 

I'm sure that Carnival will continue to look at Mobile as an option but I don't think that they'll be back within the next few years unless something happens to improve the revenue flow...

:)

[golfadj]

Carnival is a business that needs to be profitable to stay in business.

 

If any business looks and sees it can generate more profit moving to another area they have a responsibility to their shareholders to do it.

 

It is Mobile's responsibility to convince another cruise line to move in.

[nytraveller53]

Carnival is a business that needs to be profitable to stay in business.

 

If any business looks and sees it can generate more profit moving to another area they have a responsibility to their shareholders to do it.

 

It is Mobile's responsibility to convince another cruise line to move in.

I agree 100%. MOBILE needs to be proactive, it's not Carnival's responsiblity to support the Mobile economy.

[bguppies]

Laura:

 

I think Pollyanna and Jabee's comments (echoing the travel agents and port authority) about the great capacity numbers only shows how little folks know about what it takes to make money on a cruise ship.

 

During these discussions, folks have voiced that they will miss Mobile because it was less expensive than their nearest competitor. That should have been clue number one.

 

Filling a ship ( at any capacity ) does not work if the price is discounted to much. Also, this does not address how the real money is made on the ship. I call these the "back end" revenues (Spa, Shore Excursion, Bar sales, Casino etc)

 

I think it is simple common sense that no cruise line is going to leave a profitable market. And I think it clearly demonstrates, yet again, a lack of understanding how the cruise market works, for a Mobile official to say there is anything that they could have done if they had been given a heads up.

 

No amount of "advertising" is going to make people spend more money once they get on a cruise ship. Again, capacity wasn't the issue. Total Cabin Revenue was.

 

And as someone named in the article, I have to say that I was not so much defending Carnival as I was trying to find and present the facts. I prefer to know as much as possible before forming an opinion.

 

If Mobile had been "wronged" in some way, then the facts would have proven it. But all the facts proved was that 23 million dollars was invested in this project and Carnival passengers generated 24.5 million in revenue by the end of the year. (according to Al.com ~ Mobile's Web Newsite)

 

Mobile elected to participate in a fickle business where something as minor as rising fuel costs and a slowing economy to something has major as 9/11 could bring it to a screeching halt.

 

Mobile is not alone. San Diego is sitting with a brand new terminal that has never been used. Houston has been sitting on a brand new terminal for over a year with the only use being during a brief hurricane event.

 

The City of Mobile's leadership is supposedly known for its mismanagement and fiscal irresponsible behavior according to a CC member that lives there.

 

They certainly demonstrated many incompetent business moves, such as purchasing the facility from the Retirement Systems of Alabama 3 years ago without any permanent or long term commitment from Carnival.

 

As for Mobile not being aware that their particular market was not producing, any reasonable person, with an ounce of common sense, would have known that if a cruise line had a producing hot market; they would have been protecting their territory by locking in the port space.

 

Just like Carnival "ditched" Mobile, at any time Mobile could have "ditched" Carnival for NCL or RCCL, because there was no contract. I do not recall any articles about how NCL or RCCL were knocking down Mobile's door to get a piece of the action.

 

No cruise line is going to discuss their confidencial proprietary information such as productivity of one ship with the outside world. You can't even tell how many cabins a cruise line has available on any given cruise. They hold this kind of information close to the vest as they should.

 

Carnival honored all contracts and gave Mobile 7 years by the time the Elation leaves.

 

As for the title that Carnival "ditched" Mobile with no warning, I believe the "warning signs" were like huge red flags all over the place.

 

As an outsider who cruised out of Mobile 4 times in the past 9 months, I saw them and I wasn't even looking. Mobile not educating itself about the product they were dealing with and ignoring all those warning signs is not Carnival's fault.

 

As for the quickness of the decision and the manner in which it was delivered, I have my opinions about that as well...but that is a post for another day.

 

Extremely well stated.

 

Thank you for some factual information over emotional nonsense that these threads usually devolve into.

 

Bill

[LHP]

I think you missed the point, there was no warning before they decided to move the ship. There is nothing that can be done now to keep the ship in Mobile. I don't like how Carnival handled it but I am sure Carnival really doesn't care how I feel.

 

According to the VP at Carnival, Mobile officials chose to ignore the fact that Carnival was not happy with the revenues but instead chose to simply look at the capacity numbers.

 

For someone to "ignore" that Carnival was not happy with the revenue tells me that Mobile had to know.

 

8 months notice is not "no warning" by the way....especially when there is nothing Mobile could do about it. Mobile can't order passengers to spend more money onboard. The capacity was there...they just were not spending money.

[LHP]

Ok...I consider myself someone who tries to keep up with the news...

 

but did anyone else know about this???

 

 

"As of 2012, all ships within 200 nautical miles (370 kilometres) of North American shores will be required to use fuel with no more than 1% sulphur content. In 2015, that maximum will fall to 0.1%.

 

The average sulphur content in fuel used by cruise ships is about 2.5%, with the global limit at 4.5%.

 

Stricter regulations already exist elsewhere. In Europe, for example, ships must use fuel with a sulphur content of 0.1% while in port."

 

 

Nothing like adding another 70 million to the ole "expense" column.....

Carnival's estimated additional expense according to the Maritime article....

[LHP]

Extremely well stated.

 

Thank you for some factual information over emotional nonsense that these threads usually devolve into.

 

Bill

 

Thanks Bill. As an Accountant, (an auditor) we are trained to just look at the facts without emotional attachment.

 

Of course the human side of me hates to see any community suffer from the mismanagement of their revenues by their officials.

 

While Carnival leaving would still result in the loss of some jobs (I still do not believe the 125 number though), had Mobile handled the revenues properly; they would not have been saddled with the 26 million dollar debt they now have. (although I have seen 4 different debt figures in the local media from 4 million to 27 million)

 

Sometimes I wonder if the right hand knows what the left hand is doing??

[mcwebber]

Check out the latest Carnival Cruise Line news from Cruise Critic:

 

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

 

No warning? They warned them in March they would be pulling out in October. Sounds like plenty of warning to me.

[mcwebber]

Carnival's departure from Mobile is a hard pill to swallow blaming revenue, specially when Carnival just posted over $2 BILLION DOLLARS and 552% NET PROFITS! It doesn't seem like Carnival was in a precarious situation...!

Hmm, more than 100%? What is that percentage of?

[mcwebber]

Perhaps Carnival or another line will come to Mobile in the near future and fill the void the Elation will leave...

 

I wish they never moved Elation out of Port Canaveral.

[salty dingo]

I wish Carnival would do Charleston to Bermuda, like NCL used to do!

[bonniemari]

I wish Carnival would do Charleston to Bermuda, like NCL used to do!

 

 

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

[PaulMedik]

I think you missed the point, there was no warning before they decided to move the ship. There is nothing that can be done now to keep the ship in Mobile. I don't like how Carnival handled it but I am sure Carnival really doesn't care how I feel.

 

 

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?

[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....

[cdamion]

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]

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]

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]

.......... 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]

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]

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]

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]

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]

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.