How New Orleans might be hurt if Carnival Cruise Line’s legal troubles continue

Carnival Cruise Line’s legal troubles could damage the Port of New Orleans and city’s cruise business if a federal judge follows through on her threat to ban Carnival’s ships from U.S. ports starting in June.

The Miami-based cruise ship operator on Wednesday was reprimanded by U.S. District Judge Patricia A. Seitz in Miami for violations of a $40 million settlement she imposed two years ago for a series of alleged environmental abuses and a cover-up by the company.

She threatened to ban Carnival ships from U.S. ports starting in June if company executives cannot adequately respond to recent allegations of further abuses and evasions since the settlement. 

The impact of such a ban to New Orleans was made clear by a study released Thursday from economists at LSU and consultants Jones Lang LaSalle, which noted the importance of the growing cruise market to the port and the city’s economy.

Total cruise ship traffic hit a record 1,182,111 in passenger traffic in 2018, up 2.3% from the year before and notching a fifth straight year above one million. Passenger traffic includes passengers that embark or disembark from New Orleans, so it can sometimes double-count the number of people. 

Passengers, crew members and others associated with the landings spent an estimated $129.1 million in the regional economy, while the cruise lines themselves spend another $125.2 million, according to the report.

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While Carnival is just one of three ocean-going cruise lines operating out of New Orleans, it dominates the market, according to Port Nola and Carnival data.

Carnival passengers traveling through New Orleans last year topped 950,000, or about 81% of the total, and Carnival is the only ocean-going operator running year-round service. Cruise ships operated by Phoenix Reisen and Norwegian Cruise Lines only run seasonally.

It’s not clear how serious the threat is from Judge Seitz, and whether a ban would really come to pass. Carnival’s share price showed little reaction on Thursday, losing 20 cents to $52.27, and the company itself played it down.

“It appears there were some mischaracterizations made by others to the court,” said Roger Frizell, Carnival’s spokesman. “We intend to fully address the issues,” noting the proceedings were at an early stage.

“Just the thought of (the ban) is pretty scary,” said Terry Tarleton, a Metairie-based cruise planner and travel agent. “Probably about 75% of the cruises I book are with Carnival and people come from all over the country. And it would have a ripple effect on hotels — because most people don’t only stay one night — and airlines, if people had to cancel.” 

Indeed, the LSU/JLL report said 90% of cruise passengers are from out of state and 73% spend multiple days in Louisiana either before or after their cruise.

“These passengers generate more than 306,000 room nights in area hotels annually,” said Brandy Christian, CEO of Port Nola in response to the report. She wasn’t available to comment directly on the potential impact of a Carnival port ban.

New Orleans’ cruise ship economy is growing increasingly reliant on Carnival. It’s passenger traffic has grown five-fold since it first launched year-round service in 1994 and it is set to grow further this year, according to Vance Gulliksen, a Carnival spokesperson.

The Carnival Glory, which arrived in March, will be joined by the Carnival Valor next month, the two ships having a total capacity of nearly 6,000, representing an increase of 10% over the ships they’re replacing.