Port Privatization Reducing Cruise Benefits for Puerto Rico?

One area of Puerto Rico’s economy has been showing growth this year: tourism. Visitor arrivals hit an all-time high of 210,000 in January of 2019. This was about a 25% increase over the monthly average from the past decade. According to government estimates in September, Puerto Rico predicted four million tourists in 2019, following a 17% rise in hotel accommodations in the first quarter of 2019.

Planned privatization of ports could jeopardize that improvement, according to local journalists. On the other hand, the reports could be false. The local news sources seem to have relied on statements from members of the opposition party which focused on the current government. Denials quickly followed these reports.

Cancellations?

Local news source El Nuevo Dia reported that Fermin Fontanez, Director of the Authority for Public-Private Partnership (AAPP), said as many as 90 Royal Caribbean Cruise stops in Puerto Rico had been cancelled, with an expected loss of revenue for the Island of $44 million.

Telemundo PR also reported the cancellations, saying that a representative for the Popular Democratic Party (PPD), Ángel Matos García, was calling on the government to change their policies.

Royal Caribbean released a statement denying the claim. “The rumors regarding cancellations of sailings departing between April 2020 – March 2021 from San Juan are incorrect. We have not cancelled any of our ships visiting or homeporting in San Juan,” the company said in a statement sent to travel agents.

However, the statement went on to say, “Though we have not yet announced our full 2021-2022 deployments, we do expect fewer calls from San Juan for the 2021-2022 season.”

Carnival Cruise Lines also announced that they would not be canceling cruises.

Port Privatization

The ports in San Juan and Ponce need an investment of some $250 million in order to keep facilities suitable for cruise ships. A private investor is being sought and will be announced by the end of the yer, according to the territory’s government.

Some local news sources reported that cruise lines had directly asked the government not to go ahead with the privatization plans, but the governor’s office denied the reports. “The Government has always had the doors open to listen to suggestions from the entire industry. That continues to be my mandate,” Governor Vazquez said in a statement provided following the initial reports of cancellations. “We are surprised by this notification without any reason, and with a valid contract.”

Port Authority Interim Executive Director Jose Roa said that an investigation into the cancellations would be conducted.

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