How Jacksonville is looking to build upon the cruise industry’s rebound (Courtesy of the Jacksonville Business Journal) — Nearly four years after the Covid-19 pandemic shut down the cruise industry, business has bounced back, with passenger levels and industry revenue hitting new heights.
Amid the cruise industry’s upswing, Jacksonville is cashing in on the success, as Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) entered an agreement to homeport a ship in Jacksonville starting in 2025.
The port officially signed the agreement with Norwegian last week, setting the stage for the 2,394-guest capacity Norwegian Gem to have its homeport in Jacksonville from November to April every year through 2028, offering seasonal cruises to The Bahamas and Eastern Caribbean.
It’s a big step by the port: Norwegian will be the second cruise line to provide service out of Jacksonville in addition to Carnival Cruise Line, with the passenger capacity out of Jacksonville more than doubling when both boats are operating.
Drive-in customers
The move by Norwegian allows the company to tap into the drive-to-cruise market of the Southeastern United States.
But the reach could extend far beyond the South, said Stephen Pratt, the department chair of tourism, events and attractions at Rosen College of Hospitality Management at the University of Central Florida.
Passengers traveling from the Northeast and Midwest may also travel to Jacksonville as it’s a closer destination than Miami, Port Canaveral and Tampa.
“I mean, the trade-off, of course, is it’s just going to take a little bit longer to get from Jacksonville down into the Caribbean,” Pratt said. “So is that better or worse? It takes a little bit longer. But then the attraction is for cruise passengers. They’ve already started their cruise instead of another couple of hours in the car driving down to Port Canaveral or Tampa or Miami, Fort Lauderdale.”
The additional cruise line coming to town also opens a door for the city to invest more in tourism.
Companies such as hotels can benefit from this by bundling deals with cruises for passengers staying overnight, Pratt said.
“Ports can also start to be an attraction in and of itself, so they can generate extra revenue by having concessions, food outlets, things for the kids to do … maybe facilities for our older cruise passengers,” Pratt said. “…Think about airports now becoming almost like a destination if you think about Changi Airport in Singapore.”
Becoming a tourist hub
Jaxport CEO Eric Green said the additional cruise service marks a step forward for Jacksonville to become a more vibrant tourist hub.
“Growing our cruise business with a company like Norwegian is another way we build on the diversification of business, which ultimately creates jobs,” Green said during the special board meeting where teh agreement was made official. “Expanding our popular cruise program also provides passengers throughout the southeast U.S. and beyond with even more reasons to choose Jacksonville for their next vacation.”
The big question was whether Jaxport could take two cruise lines at the same time in its cruise terminal, Green said, but leaders found the port is able to homeport both Carnival and Norwegian.
Jaxport saw 190,872 cruise passengers during the 2023 fiscal year, which runs October to September, compared to 194,655 during the 2019 fiscal year, according to Jaxport data.
Month-to-month, the number of passengers during 2023 mostly surpassed or stayed close to pre-Covid cruise ridership in 2019, Jaxport data shows.
That trend fits in with the industry overall, which has seen passengers flock back to the boats: PortMiami, the world’s largest cruise port, said had 7.3 million passengers in fiscal year 2023, almost double the 4 million in had the year before.
“I think there’s really been almost a surprise that the cruise industry has bounced back so quickly after the pandemic, given as opposed to flying and driving that the cruise passengers are all on one vessel and more susceptible to pathogens and diseases and things like that,” Pratt said. “But the industry has bounced back over and beyond pre-Covid levels.”
Getting to the deal
Green said the planned Norwegian service out of Jacksonville evolved from a positive history the company has had with Jaxport.
“We have served as a port of call for the region Seven Seas navigator, a division of Norwegian. Also during the pandemic JaxPort hosted three of their cruise ships during an industry pause,” Green said during the meeting. “One of those ships was the Norwegian Gem … All of those sailing were smooth and allowed us to establish a good working relationship with Norwegian today’s agreement is a natural evolution of that partnership.”
The work started in December 2023, Green said.
The Jaxport CEO contacted Juan Koryla, the senior vice president of port development and construction at Norwegian. Green said he knew Koryla — who had been offered the Jaxport CEO job more than a decade ago, before he became CEO of PortMiami — prior to the deal.
“Last year, he and I spoke about the possibility. We gathered our teams in quick fashion and we began to have those discussions and deliberations about what it may look like,” Green said at the meeting where the vote was taken. “So here we are today.”
Jaxport CFO Joey Greive told the Board of Directors that the 26 sailings of service to the Bahamas on five-five-four rotation from November through April. The first trips start Nov. 2025.
Grieve said the terms say Norwegian must meet a minimum annual guarantee of $1.6 million for the first three cruise seasons.
The Jaxport cruise terminal itself will remain the same, but Jaxport leaders could assess how and when to build up other businesses at the cruise terminal for passengers waiting to board in the future.
“It’s really all about space, right? So we’re very methodical about the things that we do. So we will look at those things as time goes on,” Green said. “But it’s really about how long the commitment and the contracts are, and what we need to put there to facilitate the movement of the passengers and things like that to make their experience a great experience.”