Spending money to increase cruise ship berthing capacity on St. Thomas will help keep the West Indian Company’s facilities from turning down ships and increase revenues over the long haul, WICO Executive Director Joseph Boschulte said during budget hearings Friday.
WICO operates and maintains the territory’s largest cruise ship port, the WICO dock, and also manages the adjacent Havensight Mall, which is owned by the Government Employee Retirement System. WICO is owned by the Public Finance Authority.
As bigger and bigger cruise ships become the norm, other destinations – from the Bahamas to Trinidad and Tobago – that cannot accommodate the biggest ships are "either expanding, building or planning to build docks that can," Boschulte said.
"If you are not already aware, you should know that right next door, the British Virgin Islands not only plans to expand and widen the Road Town cruise ship pier by next season to accommodate the Sunshine class vessels, but they plan to do so quickly," he said
WICO is finishing up one expansion with Orion Marine Construction and expects the work "to be completed by the end of next month," he said. The extra space will allow WICO to host three mega cruise ships at once.
But even when that is done, "WICO will continue to find itself in the challenging position of receiving more requests for berths than we can accommodate," he said, urging the Legislature to support additional expansion of capacity in any way it can.
WICO can currently accommodate a maximum of three ships at the dock, while the Port of Charlotte Amalie can berth one in the inner harbor and another in the outer harbor. Two ships berth at Crown Bay.
"But there are times when the Port of Charlotte Amalie also is unable to find space for the ships so they go elsewhere. In most cases – unless St. Kitts is already on their itinerary – ships we turn away end up going there because of the service and the facilities. If they do not go to St. Kitts, then their choice is to remain at sea," Boschulte said. "Either decision represents a considerable amount of lost revenue" to the territory, he said.
To meet that need and capture that revenue, WICO has a plan for an additional pier in the harbor with two more berths, he said. A feasibility study has been done and WICO is seeking partnerships to complete the project, which is expected to cost $50 to $60 million, he said.
Some St. Croix senators questioned whether building up St. Thomas capacity made more sense than working on bringing more ships to St. Croix and working on its facilities.
Sen. Terrence "Positive" Nelson suggested that Charlotte Amalie is often so crowded with cruise passengers that the crowds alone dampen the tourist experience.
"Having another dock does not guarantee a different cruise ship schedule," Nelson said.
Boschulte disagreed. “Having the resources will mean more ships more often," he said.
Sen. Nereida "Nellie" Rivera-O’Reilly asked if more could be done to promote St. Croix. Among other ideas, O’Reilly mentioned putting banners advertising St. Croix at port and other facilities, as well as working to increase entertainment options for tourists visiting the island.
"We are willing to help," he said, reminding the senator that WICO is not Tourism and does not itself promote the territory. "If someone gives us a banner, we have no problem putting it up," Boschulte said.
Later he said WICO’s plans for St. Thomas were made with an eye to increasing WICO revenues for the whole territory, by turning down fewer cruises that are asking to come there. WICO would support work in Frederiksted but does not control those properties.
"If there is an opportunity to work on the Frederiksted pier or the surrounding area to improve the tourist experience, we would welcome that. But as for those entities and areas not under our purview, I can’t speak to that," he said.
WICO’s revenues are improving somewhat but are far from their pre-recession peak and, as a result, WICO will once again be unable to pay a $700,000 payment in lieu of taxes to the government. It has not made a full payment of this legislative mandate since 2006. Its finances began to worsen when the recession hit and the V.I. Port Authority opened the Crown Bay port, he said.
WICO does not get any money from the local government’s General Fund although the government’s Public Finance Authority owns WICO. It presents a budget to the Legislature but does not receive an appropriation. It projects revenues of $10.6 million in Fiscal Year 2014 – up $1.4 million from FY13 but down from pre-recession levels and below 2011 revenues. About $7.7 million of that is from passenger and docking fees, with the remainder from selling water to ships, mooring fees and leases.
It projects expenses of $6.2 million – down $792,000 from FY13 expenses of $6.99 million.