Cruise business: Should it stay or should it grow?

For retail merchant Randall Cullen, regional manager of the Rangoni of Florence shoe store in downtown Charleston, the city's cruise-ship business means one sure thing: more foot traffic.

The King Street store records some of the best sales in the chain, he said, often outperforming other tony retail areas such as Palm Beach, Fla., and San Diego.

While the store doesn't rely on cruise customers to stay afloat, it's certainly welcome business, he said. And the more well-heeled the cruise passengers are, the more money they're likely to spend.

"The high-end cruises bring the best business," Cullen said.

The notion of more passengers stepping ashore here wouldn't hurt, he said. Naturally, officials at the Charleston Area Convention & Visitors Bureau also see the value of grabbing more cruise business.

Some downtown residents, however, aren't on board with that idea.

The debate over the future of the cruise business in Charleston took a slight turn last week, when the State Ports Authority said it plans to hire a consultant to assess its small, aging passenger terminal.

The SPA staff stressed the scope of the work will be narrow: to study how the terminal complies with U.S. Customs and Border Protection regulations. The consultant also will recommend how the building can be upgraded in terms of processing baggage and ship passengers.

It's not meant to be an exhaustive analysis of how the port can improve on its existing cruise business, said Byron Miller, SPA spokesman.

But the discussion in the SPA boardroom Monday quickly turned to the feasibility of expanding Charleston's cruise business and the terminal building. Board members, including Chairman Bill Stern, inquired about the state of the industry.

"It's safe to say there's a lot of interest out there in the cruise business looking for new destinations," said Bernard S.

Groseclose Jr., the SPA's president and chief executive.

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The Port of Charleston has seen its cruise business grow steadily over the years. At the same time, cruise lines have built larger ships that carry more passengers. As a result, the port finds its cruise facilities increasingly strained.

"We've kept this running with what we've had," Groseclose said.

The 18,000-square-foot passenger terminal off Concord Street opened in 1973 and was designed to accommodate 800 passengers at a time. By 1984, as the worldwide popularity of cruises grew, about a dozen ships a year called at Charleston. That number had risen to 33 in 2001 and to 50 by 2006.

During this year's cruise season, which generally runs from fall to spring, Norwegian Cruise Line, the only line with which the SPA has a contract, tied up at the foot of Market Street 27 times. SPA officials and the company are negotiating to add another seven calls for next year's season.

The last NCL ship arrived in late April. Carnival Cruise Lines has a departure that leaves on Memorial Day, and the season picks up again in September.

The thought of more cruises calling downtown doesn't sit well with Anson Street resident Pat Jones, president of the Historic Ansonborough Neighborhood Association.

More ships mean more passengers, and the dominoes topple from there, she said. The traffic from passenger cars will increase, more tour coaches will try to edge around tight street corners and carriages will further slow movement across the Historic District, Jones said.

"It's just one more additional headache," she said.

Groseclose acknowledged that infrastructure needs, such as more parking spaces, would be just the beginning if Charleston is going to grow its cruise business.

Passenger terminals in markets with the level of business Charleston might want to attain usually are at least 30,000 square feet, or two-thirds larger than the existing building.

Taste of Charleston

In Norfolk, Va., one of Charleston's chief rivals for containerized cargo business, officials last month welcomed the first cruise ship to the city's new $36 million passenger terminal. Called the Half Moone Cruise and Celebration Center, the 80,000-square-foot waterfront building is expected to generate extra revenue by serving as a special-events venue.

"Building something from the ground up meant we could get it right the first time," said Stephen E. Kirkland, Norfolk's cruise operations manager.

A comparable undertaking in Charleston would require considerable investment by the SPA for a sector of its business that accounts for less than 3 percent of its annual revenue, albeit a fairly profitable sliver. The SPA does not break out its cruise earnings.

One option is to add a second floor to the existing terminal building.

Board member Carroll A. Campbell III wondered out loud if the city of Charleston would be interested in partnering financially with the SPA on any improvements, given the tax revenue that cruise ships generate for shops, restaurants and tour businesses on the peninsula.

Groseclose quickly quashed that discussion, saying it would be more appropriate for the board to take it up behind closed doors.

While the cruise business is a slim piece of the revenue pie for the SPA, the industry helps feed the region's tourism machine.

Perrin Lawson, deputy director of the visitors bureau, estimated that cruisers account for only about 1 percent of the local visitor base. But their brief stays ashore in the city can pay off in the long run.

"It whets their appetite, and they want to come back," he said.

Reach Peter Hull at 937-5594 or phull@postandcourier.com.