In hit to The City, port’s biggest client cuts service

Princess Cruises, the Port of San Francisco’s biggest client, is cutting back its port-of-calls to The City, in a downturn for the local cruise industry that could cost city businesses up to $22 million next year.

The huge cruise line accounts for more than half of the ships that dock in The City each year, port officials said. Two of its ships, the Regal Princess and the Dawn Princess, will halt service to The City this year and next, respectively. Another company, Celebrity Cruises, is also cutting cruise lines that travel to Mexico from The City four times a year, according to port officials.

Each time a cruise ship docks in The City, it generates between $750,000 and $1 million for taxi drivers, restaurants, stores and other businesses, said Michael Terney, the port’s maritime marketing representative. This year, the port expects about 250,000 cruise ship passengers, while next year, that number will plummet to around 200,000 to 210,000. This year, 81 cruise ships are expected in The City. Next year, only 59 are scheduled, with most of the reduction coming about due to the Princess Cruises decision.

The port has seen a steady increase in the number of cruise ships since 2000, when only 40 docked in The City. In May of this year, the port set a new record of 23 cruise ships.

The Dawn Princess will begin operating its Mexico service out of San Diego starting in April. And the Regal Princess is heading for Australia later this year, Princess spokeswoman Julie Benson said.

“We’re always looking to offer new itineraries and, from time to time, do make changes,” Benson said. “I will say that we have had a very long, successful relationship with San Francisco. We’re at a point where it’s time to look at San Diego.”

Cruise terminal consultant Philip Crannell, who has been hired by the Port of San Francisco to help develop a new terminal at piers 30-32, said big cruise ship companies want modern facilities in which to bring their ships, which are increasingly growing larger.

The cruise ship business is generating about $1.6 million for the port this year, according to the port’s financial data. The port is a redevelopment area that does not receive money from city coffers. The agency faces more than $1 billion in costs to fix its crumbling piers.

The decision by Princess to change its base to San Diego for its Mexico trips is likely due to the strong success of its Southern California cruises, Crannell said.

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