PART VI: Economic Impact of Home Port on Puerto Peñasco
by Joe Houchin on June 30, 2014 in Blog.
Part V of our impact study we discussed ways a destination like ours
could duplicate the very effective methods cruise lines have been using
for forty years that have led to their continuous growth. That is to ask
questions and listen to the answers, then give them more than they asked for.
we delve too deeply into the marketing science of garnering the
valuable information that reveals what would make a cruise passenger a
potential vacationer to our little slice of paradise by the sea, let’s
take a macro look at the complex considerations of cruise operators just
to select ports of call and itineraries.
the research methods covered in last month’s Part V, the cruise
industry selects ports of call and itineraries only after careful study
to maximize commercial potential and utilize ship assets.
most significant from a market perspective is that the cruise industry
enjoys several unique characteristics rarely found in other
segments of the tourism industry. For example, because cruise operators
are fundamentally supply driven—demand always exceeds
supply—cruise operators can “create” demand simply by providing new
capacity (ships), then fairly easily find customers to fill them, which
is just a matter of making their loyal customer base aware of what’s
ship capacity doesn’t even matter with the demand situations that
exist. They can fill the smaller ships from ongoing demand for the more
exotic ports of limited capability; larger ships can be filled from the
existing demand for longer itineraries to larger ports.
would seem that all the cruise companies have to be sure of is that
they create itineraries in which the whole is greater than the sum of
its parts—right back to giving the customer more than they asked for.
the decisions involved in choosing the size of a new ship build are as
complex as the financing scenario.
We’re talking a two to four year turn around no matter the vessel size
at an investment that will teeter on either side of a $Billion, whether
it’s a 300 cabin river boat ($700 million plus) or a 3000 cabin mega
ship ($1.2Billion or more). The trend by the larger carriers is definitely
toward larger ships, leaving smaller vessels to the smaller operators
(most of whom are owned by the big cruise companies anyway).
there are the considerations of how best to
maximize revenue streams from a captive market such as on board goods
and services and shore-based excursions. These could impact the number
and order of port calls. Climate can impact whether seasonal
repositioning of ships would be necessary as well.
Puerto Peñasco as a home port would rarely be impacted by any of those
factors other than changes in the overall length of a sailing. An
example of a cruise line deciding to change its port call sequence or
even eliminating one or more of them, might
from another hike in fuel prices which account for 15% of the
operational expenses Those options we’ll address in future impact
studies as they will affect the direction and priorities of
take a walk by the pier with home port project Administrative Director,
Wendy Winzer, to get the latest on the partial resumption of
Down by the Pier
our last walk down by the pier, construction was at a complete stand
still—in fact, it was shut down due to a dispute over the truckers lack
of receipts for work claimed. To finally settle this dispute, state
tourism director, Javier Tapia Camou, the appointed project head, had to
make a trip to the port and personally negotiate with the union.
Camou returned to Hermosillo under the impression that all was settled,
the disputing truckers’ union didn’t see it that way and physically
barricaded the gate to the pier blocking any entry or exit to or from
the sight. Very quickly, however, federal police were called in to
forcibly remove the large trucks from the sight, and tow them some
distance so they would not return.
had also learned last trip that the second blasting of the Black
Mountain quarry, while it did produce useable rocks of the smaller to
medium size needed, geologists determined that this quarry was not
capable of providing enough of the very large rocks needed to complete
the project as originally thought. Thus, research was being conducted to
find alternatives either from other quarries and consideration was even
being given to manufacture the larger rocks from cement and smaller
pieces that are plentiful.
of this situation is still ongoing. Alternate quarries have been found
but the distance is cost prohibitive. A separate team of geologists is
taking another more detailed look at Black Mountain to conduct
laboratory tests to find a way to blast for the larger rocks. Results
are expected sometime in July.
In the meantime, there are eight
double-length trucks that you see unloading along the pier since June 6th.
They’re bringing in the plentiful small to medium sized rocks from the
last blast at the rate of 800 to 1,000 tons per day which are used to
lay the base and first layer of the breakwater. Since the 6th of June they’ve extended the pier by 30 meters.
goal, of course, is to get the project back to the aggressive level of
January when they were moving 5,000 tons per day. She anticipates no
problem rounding up the
trucks once the source of rocks is determined. In fact, the union did
finally produce the receipts that had been missing and they have been
paid accordingly. Wendy says they can return to work once the rock
challenge is met.
As always, we’ll keep you up to date on any new developments on the home port project.