PORT CANAVERAL, Fla. – Port Canaveral officials are revising their financial projections for the current budget year to reflect the possibility that multiday cruises will not resume until July because of the coronavirus pandemic.
The cruise industry has been shut down in the United States since March 2020 because of the pandemic that triggered a U.S. Centers for Disease Control and Prevention no-sail order. Cruise lines are working on restart plans that will meet the CDC’s “framework for conditional sailing” announced in October that replaced the no-sail order, News 6 partner Florida Today reported.
As a result of the port’s revised outlook for the return of cruise operations, Port Canaveral Chief Financial Officer Michael Poole is projecting $32.59 million in operating revenue and a $43.12 million loss for the port in the current budget year that ends Sept. 30.
Before the latest revision, the port was projecting $56.90 million in operating revenue and a $37.03 million loss for the current budget year.
Canaveral Port Authority commissioners will discuss the revised budget projections during their meeting Wednesday morning.
In projecting that the major cruise lines would not resume sailing from Port Canaveral until July, “we decided to rip the bandage off” in projecting a worst-case budget scenario, Port Canaveral Chief Executive Officer John Murray said.
When Port Canaveral’s 2020-21 budget was being prepared last summer for approval by port commissioners in September, port officials were projecting that the port’s four major cruise lines would resume sailing in January, with one ship each.
But, based on their most recent announcements, Carnival, Norwegian and Royal Caribbean will not be sailing until at least May, and Disney will not be sailing until at least April.
The port, though, now is taking an even more conservative view, projecting that those four cruise lines will resume sailing from Port Canaveral with one ship each in July.
Murray emphasized that the port’s projections are based only on its own estimates, taking into account the work needed by the cruises lines and the CDC to get the cruise industry restarted. The projections are not based on any statements from cruise line officials.
Canaveral Port Authority Chairman Wayne Justice said he supports the port’s decision to do a midyear budget revision now, rather than wait several months.
“The facts are the facts,” Justice said. “The situation is what it is.”
The port now is projecting revenue from cruise operations at $9.83 million for the budget year, down $24.21 million from the previous estimate. This includes revenue from wharfage, dockage, line-handling and other fees, as well as cruise-related parking fees.
The port is continuing to receive some cruise sector revenue from Victory Casino Cruises’ Victory 1 gambling ship, which sails twice a day from Port Canaveral, Wednesdays through Sundays.
The port also receives some revenue from Disney and Royal Caribbean cruise ships that stop briefly at Port Canaveral without passengers to take on fuel and supplies, or for maintenance work.
Among other revenue changes in its revised budget, the port:
- $400,000 in reduced revenue from commercial vehicles, reflecting reduced activity at the port by shuttle buses, taxis and ride-hailing services because of the cruise shutdown.
- $120,000 in reduced revenue from Exploration Tower, reflecting lower-than-anticipated visitors and special-event rentals.
- $414,520 in increased revenue from Jetty Park, reflecting higher-than-anticipated camping activity.
In its revised budget, the port reduced its operating expenses for salaries and benefits by an additional $531,890 and operating expenses for utilities by $550,000, both related to extended shutdown of cruises.
Murray said previous cuts in spending that the port accounted for in its initial budget plan approved in September will allow the port to avoid additional borrowing, even with the current cut in revenue projections.
“We have the wherewithal to go forward,” Murray said, adding that the port took a “sledgehammer” approach early on to cut spending, as it anticipated an extended shutdown of the cruise industry.
Port Canaveral, for example, reduced its staff from 268 positions to 153, largely because of lost revenue related to the cruise industry shutdown. That was done through a combination of 68 permanent layoffs, 17 unpaid furloughs, and not filling 30 positions that were left vacant because of retirement or employees taking jobs elsewhere.
The port also reduced service contracts, utility use and various other expenses.
Justice said the port is fortunate to be in a position, through its financial reserves, to get through the current downturn.
“There’s light at the end of the tunnel,” Justice said. “We have to ride it out and get on with it.”