US port negotiating terms of the potential 60-year operating contract with Royal Caribbean Cruises Ltd.
By
Rebecca Gibson |
The board of trustees at Galveston Wharves and Royal Caribbean Cruises Ltd. (Royal Caribbean) have signed a Memorandum of Understanding (MOU) to build a new cruise terminal at the Port of Galveston in Texas, US.
According to the MOU, the 200,000-square-foot terminal is expected to open in autumn 2021 and will be built on 10 acres of land in the south-east section of the port known as Pier 10. The facility will also include a staging and loading area, space for buses and taxis and a ‘substantial’ number of parking spaces for cruise guests’ vehicles. Work will also be carried out on the pier bulkhead and apron to ensure it can safely accommodate Royal Caribbean’s largest vessels.
The MOU outlines the general terms for developing and operating the terminal, which would be the third at the port. The long-term lease negotiations could lead to a 60-year transaction with Royal Caribbean: a 20-year initial term and four 10-year options.
“This new cruise terminal to be built by Royal Caribbean allows the port to continue investing in our infrastructure while growing our cruise business exponentially,” said Roger Rees, director and CEO of Port of Galveston. “This partnership will bring both larger class ships, as well as more visitors to the city of Galveston and the region. This long-term lease agreement represents Royal Caribbean’s confidence in the Port of Galveston’s efficient cruise operations and the ability to attract passengers on its current and future sailings. Galveston is on course for being a global destination for cruising and we are thankful for partners like Royal Caribbean.”
Royal Caribbean’s brand Royal Caribbean International currently homeports two ships in Galveston – Liberty of the Seas and Vision of the Seas. The port expects that the new terminal will help the cruise line bring an additional one million passengers to Galveston halfway through the term of the contract.
“Over the last 15 years, Royal Caribbean has brought over 2.4 million guests to Galveston driving an economic impact of US$65 million each year,” said Michael Bayley, president and CEO of Royal Caribbean International. “The development of a new terminal is crucial to our continued growth and expansion of the brand in the region. We look forward to continuing our outstanding relationship with the Port of Galveston and are excited about our plans for a state-of-the-art facility with a bold new design and technological advancements that will considerably enhance our guest experience.”