Neighborly cruises

Anticipation: More cruise passengers visiting Baltimore will mean more dollars for the city's economy.

March 11, 2001|By Paul Adams | Paul Adams,SUN STAFF

Americans do love to cruise.

Last year, U.S. cruise lines reported that about 7 million of us packed up our cabana-wear and sailed off to exotic ports stretching from the Bahamas to Hawaii.

But when Americans cruise, they rarely do it aboard an American-built ship with a predominantly American crew. And, thanks to a federal law forbidding foreign-flag ships from transporting passengers between American ports, they generally don't spend much time in their own coastal waters.

Delta Queen Coastal Voyages, a subsidiary of Chicago-based American Classic Voyages, is working to reverse that trend in a way that could benefit both Baltimore's tourism industry and port. Beginning in May, the growing passenger carrier will offer a series of five eight-day excursions featuring stops in Philadelphia and port cities throughout the Chesapeake Bay, including Baltimore. Also planned are coastal cruises that will take passengers farther up the East Coast and to various Southern states.

To comply with U.S. maritime laws, the voyages will be aboard relatively small American-built ships manned mostly by Americans.

Baltimore port and tourism officials applaud the news, saying hundreds of additional cruise passengers will fill restaurants and shops in the Inner Harbor and help boost the city's image nationwide. Last year, 21 cruise ships called at the port, up from fewer than 10 just a few years ago. The International Council of Cruise Lines estimates that passengers visiting the city pumped $105 million into Maryland's economy in 1999.

"The fact that Baltimore is becoming a destination for cruise lines starts to raise not only the awareness level of Baltimore as a destination, but it also starts to change the perceptions that this is the Rust Belt, or an industrial city," said Dan M. Lincoln, vice president of tourism and communications for the Baltimore Area Convention and Visitors Association.

However, some skeptical industry observers say American Classic is taking a big gamble in a business dominated by increasingly massive luxury liners built in subsidized foreign shipyards and staffed with low-cost labor from around the world. There also is some doubt as to whether the cruising public is willing to pay premium prices to sail domestic waters when it has the option of traveling to popular international destinations for the same price or less.

But it's an experiment that U.S. shipyards, marine subcontractors and labor leaders are watching closely in hopes that success will result in the construction of more cruise ships in America, helping to preserve an industry many see as essential to national security. And it comes at a time when the Bush administration is considering eliminating funding for a crucial loan guarantee program that helps shipowners obtain affordable financing for the construction of new vessels, including those being built to sail the Chesapeake Bay.

"Those of us involved in this have a bit of a mission mentality," said Roderick K. McLeod, president and chief operating officer of American Classic Voyages, who noted that it costs about 25 percent more to build a cruise ship in America than in European or Asian countries. Most foreign shipyards have more experience building cruise ships and benefit from government subsidies, making it difficult for their U.S. counterparts to compete.

"I would like to have as part of my career legacy the playing of a role in the return of the U.S. flag to the U.S. cruise industry," McLeod said.

American Classic is already the largest owner of U.S.-flag passenger vessels. It is well known for its paddlewheel tours on the Mississippi River, but also offers cruises in the Pacific Northwest and the Hawaiian Islands, among other destinations. The company owns six vessels with a capacity for 3,256 passengers.

The company is experiencing growing pains, however, and suffered an expected $10.1 million loss in 2000, compared with a loss of $1.8 million in 1999. Its stock trades at just above $12, down from a 52-week high of $27.

While the numbers suggest a difficult future, the company created a buzz when it signed a $1.4 billion deal with Litton Ingalls Shipbuilding to build two 1,900-passenger cruise ships, making them the first full-size cruise ships built in the United States since 1958. The keel for the first ship was laid in October at Litton's 620-acre Pascagoula, Miss., shipyard and is slated for delivery in 2003.

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