B.C. cruise industry headed for milestone

But infrastructure, operational constraints threaten to limit its growth

Greg Wirtz, president, Cruise Lines Industry Association, North West and Canada | Chung Chow

This season, the Port of Vancouver will set a new record.

Canada Place will welcome ashore its 25-millionth cruise passenger, a milestone that is being met with a celebration in May.

In September, the port will also host the largest cruise ship ever to dock in Vancouver. The more than 333-metre-long Norwegian Bliss is manned by more than 1,700 crew members and can accommodate over 4,000 passengers.

Bigger ships mean bigger economic potential for the port, Vancouver and B.C. At present, each cruise vessel that berths at Canada Place brings with it $3 million in direct economic impact.

Larger ships like the Norwegian Bliss can increase that figure, but they also stretch the limits of Vancouver’s sea and ground capacity.

“Ports up and down the West Coast, save for Vancouver, have been doing a lot to prepare for that growth,” said Greg Wirtz, president of the Cruise Lines International Association (CLIA) North West and Canada.

Since Wirtz spoke to Business in Vancouver last summer, he says not much has been done to address capacity constraints.

“The industry is really struggling with putting its new ships into Vancouver because of the limitations of Canada Place and the Lions Gate Bridge.”

In a handful of instances over the last year, Wirtz said cruise lines have had to bypass Vancouver because of restrictive tides and the operational limits at Canada Place.

“We know that cruise ships are getting bigger, which is becoming an issue for ports worldwide,” said Katherine Bamford, director of trade development at the Vancouver Fraser Port Authority, in a written response to BIV.

“We are working closely with industry partners to develop short-, medium- and long-term solutions to address these challenges.”

When a cruise cannot dock in Vancouver, it has the option of anchoring in Seattle, which competes with Vancouver as a home port for cruises to Alaska. Seattle also reopened its Bell Street Pier Cruise Terminal last year after a US$30 million renovation, in part to accommodate the Bliss.

Trips to Alaska make up approximately 80% of the cruise itineraries for Canada Place, according to the port’s 2016 Economic Impact Study. And demand for the popular route is growing, with Alaska expected to see another record year for passenger volume, after a 17% bump in passenger traffic from 2016 to 2017, according to industry statistics.

There may be more than enough business to go around. However, every vessel that instead chooses to set sail to Alaska from Seattle is $3 million in forgone revenue for the port, the hospitality industry and the Vancouver businesses that benefit from cruise traffic.

“I get a little concerned when I read that there are going to be some challenges down the road with the cruise ship terminal as ships get larger and larger,” said Charles Gauthier, president of the Downtown Vancouver Business Improvement Association (DVBIA).

Retail locations and restaurants in the DVBIA, which surrounds and extends south from Canada Place, benefit most from a captive cruise audience with a limited amount of time in Vancouver. 

Anecdotally, Gauthier relays that retailers have seen cruise passengers generate 20% to 30% of their total sales from May to October. On average, each passenger spends $359 in B.C., according to the CLIA.

He’s also concerned about ground transportation options to and from Vancouver’s cruise ship terminal. Gauthier said allowing ride-hailing services like Uber and Lyft to operate in Vancouver – something the DVBIA supports – would likely create more congestion around Canada Place, which this year expects to see the highest cruise passenger volume since 2010.

“This new government doesn’t seem to be moving ahead with [ride hailing], which is unfortunate,” added Wirtz, who argues that the cruise industry is in “desperate need” of for-hire, on-shore transportation capacity.

According to Bamford, the port authority is exploring the potential for a new cruise terminal in the Lower Mainland, though she says the work is very preliminary.

Wirtz argues that Ballantyne Pier east of Canada Place, which ceased cruise operations at the end of 2014, would be a good short-term solution to help alleviate pressure on what is now Vancouver’s single point of cruise entry.

“It’s just sitting there mothballing, ready to go,” he said. “It’s hard to understand, honestly, why that wouldn’t be activated given the current situation, in order to spread the business between two separate terminals.”

From the port authority’s perspective, Ballantyne – which Bamford said saw 1% to 4% of cruise calls each season – required a “sizable investment” to continue its cruise operations, and passenger volume didn’t justify it. Systems were therefore centralized at Canada Place.

In the recently published Greater Vancouver Economic Scorecard 2018 commissioned by the Greater Vancouver Board of Trade and researched by the Conference Board of Canada, Greater Vancouver ranked ninth out of 18 regions around the world for its number of cruise vessel calls – one spot ahead of Seattle, one behind Los Angeles and several behind cruise-call heavyweights including Miami and Barcelona.

The report acknowledges Canada Place compares favourably against a number of international competitors, though Wirtz said he is concerned about Vancouver’s reputation, should it not expand to meet the growing demands from cruise line companies.

In the interim, however, the port isn’t hurting for business.

Not only is it the busiest cruise destination in B.C. – which is itself responsible for the majority of Canada’s cruise business – it expects 32 vessels from 14 different cruise lines to make a total of 241 visits to Vancouver.

On them, more than 895,000 passengers are anticipated between a slowly extending cruise season – up 7% year-over-year. Next year, Bamford said, close to one million passengers on more than 280 vessel calls are expected at Canada Place.