Bayport Cruise Terminal To Be Vacant Again . . . But Why?

Word is out that both Norwegian Cruise Line and Princes Cruises are leaving the Houston Bayport Cruise Terminal. Naturally there as a lot of speculation as to why.  After all, this is a fine state of the art terminal located in one of the largest concentrations of people in the country. 

Princess says they are repositioning because of the growth of their Chinese market. They simply need more capacity in the Far East. Norwegian has not particularly announced an official reason for leaving. However, that has not stopped politicians from speculating as to the reasons for the port to be once again vacant. 

Some have suggested that the distance from the airports to the terminal are just too long and winding. First, it should be noted that Galveston is twice as far from both major airports as is Bayport. The Route from either is not winding as the Sam Houston Toll Way passes by both airports and connects with the highways leading to the Bayport complex. I hardly think this is a real problem. 

Others suggest because the cruise terminal is located in an industrial area where there are no shops, hotels, casinos or restaurants nearby. Simply put, there is nothing for cruisers to do. This is true, but it is also true of many other cruise terminals around the country. 

It has been suggested that the winding ship channel, heavy cargo port traffic and inland fog is a constant problem. This too is true but several ports, Tampa for one, have this same issue. Granted, Houston is among the busiest cargo ports in the country but the Bayport Terminal is not far from the opening to the Gulf of Mexico of the Houston Ship Cannel on which the port is located. 

Still others suggest that the proximity of the Port of  Galveston has hindered the growth of the Bayport Complex.  This hardly deserves mentioning. The two Ports are not any closer together than Miami and Fort Lauderdale and both ports thrive on Cruise traffic. 

Personally I think the pull-out by the Norwegian and Princess Cruise lines has little to do with the items most often mentioned.  If I were going to site some reasons for these two cruise lines pulling out I would suggest the following: 

1. The incentives given to the cruise lines to Home Port at the Bayport Terminal were set to expire. These included no port fees and  rent free terminal. This was virtually a "freebie" for the cruise lines. That was going to be renegotiated and the Port was not willing to continue to absorb these millions of dollar cost. The free ride was ending. 

2. Concerning Princess I think they are doing what they have always done, that is, change home ports frequently. When they say the demand in China and Australia is increasing their need for capacity in that part of the world they are telling the truth. These are growing markets that are under served.  

3. An element that plagues all the cruise lines at Bayport is a failure to understand the ports cruise market. They are still doing what Carnival and Royal Caribbean did for years. They have an east coast understanding of the cruisers in mid-America and the Gulf Coast in particular.  

One of the first things any business has to do to succeed in a market is to understand how to place their product in that market. Norwegian and Princess have not been able to do that.  Carnival did early on and Royal Caribbean soon after relocating to Galveston re-thought their marketing strategy.  

Two things stand out about the Gulf Coast market, especially Texas and Louisiana: First, from the wealthiest to the poorest the people in this area are monetary conservatives. They want value but they also tend to equate value with low price. If you are going to charge $200 a person more for your cruise you are going to have to do a whale of a job convincing them that they are getting $400 worth of value for that extra cost. (Celebrity Cruises Line's new tiered pricing would probably do just that.)  People want to that for $315 more for their cabin they are going to get up to $1,500 in value added 

Second, If you are going to visit the same ports as the two behemoths, Carnival and Royal Caribbean, then you are going to have to be willing to accept a lower ROI (return on investment) and price match.  Gulf coast people are not going to pay more to see the same places they can see for 100's less.   

Galveston is now one of Carnival's busiest ports with three ships and Royal now has two. Houston/Galveston is a commuter cruise market. Thousands of people drive into the area in private cars to meet their cruise ship.  

I'd love to see Celebrity offer a 7-10 day Panama Canal cruise from the Bayport. I believe I could sell it as a new and different experience at a great value with their Big, Better, and Best pricing tiers.  

But for now, Houston will no longer serve as a cruise port in 2016 . . .  and that my friends is too bad.