Carnival Cruise Lines Operations - California State University, Long

The Economic Impact of
Carnival Cruise Lines Operations
in the Long Beach Economy and
the State of California, 2006
Carnival Corporation: A Global Company
Carnival, one of the most popular and profitable cruise lines in the world, began in 1972 as the vision of the late
Ted Arison. Today, Carnival Corporation operates a fleet of 87 ships, with another 20 ships scheduled for delivery
between now and 2012. At any given point in time, there are more than 215,000 people sailing aboard the Carnival
fleet, with over 160,000 guests and 80,000 shipboard employees worldwide.
The North American cruise industry accounts for over 80 percent of worldwide passenger embarkations. Carnival
Corporations is the unquestioned market leader with 50 percent of all embarkations. Carnival Cruise Line is the
largest single cruise line in the industry with over 3 million annual passengers and a market share of 33 percent.
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Economic Impact of Carnival Cruise Lines Operations
in the Long Beach Economy and the State of California, 2006
The Long Beach Cruise Terminal
Economic Impacts
In 2003, the Long Beach Cruise Terminal opened, representing
an investment of $50 million. The construction of the passenger
terminal was unique in that it marked the first time a cruise
company, Carnival Corporation, built a port in the United States
from scratch, including the terminal and pier.
Economic impacts from Carnival Cruise Lines’ Long Beach Cruise
Terminal arise from:
Carnival Cruise Lines has two ships positioned out of Long Beach.
Carnival Pride is a ship with 2,124 lower berths that provides a
seven-day cruise usually to the Mexican Rivera, with ports of call in
Puerto Vallarta, Mazatlan, and Cabo San Lucas. Carnival Paradise
is a ship with 2,052 lower berths that provides three and four day
cruises to Baja Mexico (Ensenada Mexico and Catalina Island).
The Long Beach Cruise Terminal served approximately 400,000
individual passengers annually or 800,000 embarkations and
disembarkations. Almost 20 percent of cruise passengers are
out-of-the-area and generate approximately 53,000 room nights in
either pre or post cruise stays in the local economy.
Passengers & Crew Spending,
$24.9 million
millions
$30.0
$24.9 million
$22.5
• Spending by Carnival Cruise Lines’ operations staff at the
terminal and their expenditures for goods and services, including
food and beverages, fuel, hotel supplies, equipment and so forth. In
2006, Carnival Cruise Lines spent $57.5 million on its operations
and purchasing within the local economy.
• The $82.4 million in direct expenditures generated an
employment impact of 536 jobs and an annual payroll of $18.2
million.
The direct expenditures of $82.4 million, in turn, yield indirect and
induced impacts in the regional and state economies.
• In the regional economy, defined as the counties of Los Angeles,
Orange, San Diego, Riverside, San Bernardino, and Ventura, the
total economic impact of Carnival Cruise Lines was $126.6 million,
an annual payroll of $28.9 million and 792 jobs.
$20.5 million
$15.0
$7.5
$4.4 million
$0
Crew
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• Spending by cruise passengers and crew members for goods and
services associated with the cruise. In 2006, cruise passengers and
crews spent $24.9 million in the local economy.
Passengers
Total
• At the state level, Carnival Cruise Lines’ Long Beach operations
generated a total economic valued at $132.4 million, an annual
payroll of $31.2 million supporting 847 jobs. The total economic
impact for the State of California is only slightly higher than that of
the region, indicating that much of the economic impact of Carnival
is in the local and regional economy.
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Carnival Cruise Lines Direct Expenditures,
$57.5 million
millions
$60
$57.5 million
$50
$40
$36.6 million
$30
$20.9 million
$20
Ship Provisions
Port & Operating
Costs
Total
Expenditures
Total Direct Expenditures,
$82.4 million
millions
90
57.5 million
50
24.9 million
10
Passengers & Crew
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On March 29, 2009 one of Carnival Cruise Lines newest ships,
Carnival Splendor, is scheduled to replace Carnival Pride for the
seven day voyages to the Mexican Rivera. Carnival Splendor is a
113,300-ton vessel with a maximum passenger capacity of 3,700. The
deployment of Carnival Splendor requires a $10 million construction
expenditure for an additional berth and related expenditures to the
pier and the Long Beach Cruise Terminal.
Carnival Splendor will have additional economic impacts with its
increased capacity of 1,000 additional passengers and an additional
300 crew members per cruise. Had Carnival Splendor been deployed
in Long Beach during 2006, the total annual passengers would have
increased by 50,000. In 2006 dollars, these additional passengers
would have spent $5.4 million; added crew members would have
spent $600,000; the economic impact of Carnival Splendor would
have increased direct expenditures in the local economy by $6 million.
82.4 million
70
30
Future Prospects
Carnival
Cruise Lines
Total Direct
Expenditures
The added capacity of Carnival Splendor would cause Carnival
Cruise Lines purchases of goods and services to increase$3 million.
Staffing levels for embarkation, disembarkation, security and added
personnel would have involved additional $5 million expenditure.
Overall, the additional economic impact of Carnival Splendor would
have been $14 million in direct annual expenditures. These added
expenditures would have increased the direct expenditures from
$82.4 million to $96.4 million.
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Total Economic Impact of Carnival Cruise Lines Operations
in the Long Beach Economy and the State
Activity
Direct
Indirect
Induced
Total
Operations and Purchasing
$57.5 million
$17.1 million
$16.5 million
$91.1 million
Passenger and Crew Spending
$24.9 million
$8.2 million
$8.2 million
$41.3 million
Total
$82.4 million
$25.3 million
$24.7 million
$132.4 million
Operations and Purchasing
297
78
123
498
Passenger and Crew Spending
239
49
61
349
Total
536
127
184
847
Operations and Purchasing
$11.9 million
$3.9 million
$4.6 million
$20.4 million
Passenger and Crew Spending
$6.4 million
$2.1 million
$2.3 million
$10.8 million
$18.2 million
$6.0 million
$6.9 million
$31.2 million
Jobs
Payroll
Total
Economic Impact Study of Carnival Cruise Lines Operations
This study was prepared by Drs. Lisa M. Grobar and Joseph P. Magaddino of the Office of
Economic Research at California State University, Long Beach. The authors may be contacted
at 562.985.5061 or [email protected]. 2008
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