Norfolk Versus Baltimore Cruise Sailings

For next year, Norfolk Virginia will be losing cruise sailings while Baltimore will be adding ships and sailings. The business rationale for this action was very obvious to me however, after a recent post and long thread on CruiseCritic, it became apparent that many people in the tidewater area simply don't understand or can't accept this trend.

In advocating for Norfolk over Baltimore, the following facts were thrown out to support the case for Norfolk:

1. Geographically closer to ocean so ships don't have to waste time and fuel traversing the length of the Chesapeake Bay
2. New or renovated cruise terminal and facility
3. Better and lower-cost dock workers
4. Proximity to great beaches and other tourist attractions

Even if one were to acknowledge these as minor tactical advantages, the argument that Norfolk is a better cruise port and market than Baltimore completely misses or ignores Baltimore’s massive demographic, economic and tourism strategic advantages.

First, this is a business decision that is based on demographics, the laws of supply and demand, overall economic conditions, and business profitability. A cruise line bases a cruise ship in most non-Florida cruise ports for one reason--to expand their market beyond its flying customers to attract customers primarily from that local metropolitan area. In other words, they put their ships within a short drive to their customers. Unlike the major cruise ports, these regional or local ports draw the majority of their customers locally, probably within a couple hours drive. The cruise lines have already put many cruise ships close to major U.S. cities such as like Seattle, San Diego, Galveston/Houston, Boston, New York and Washington D.C./Baltimore. Is Norfolk (like Charleston) in this class?

The demographics case for Washington D.C./Baltimore over Norfolk is both compelling and overwhelming. Based on median household income, the Washington DC/Baltimore metropolitan area is the nation's second most affluent with 7,608,070 people with a median household income of $57,291. Per capita income is fourth at $28,856. The Norfolk/Virginia Beach metropolitan area on the other hand is ranked 84th with 1,569,541 people and a median household income of $42,448. Per capita income is ranked 107th with $20,328. So not only does the Washington DC/Baltimore area have almost 5 times the number of people that Norfolk has, but those same people have almost 42% more money to spend. And these statistics are based on a 2000 Census that doesn't even reflect the reality of a likely wider gap today.

Add to this that Philadelphia and many large suburban Pennsylvania, Delaware and Maryland communities that are all within less than a 90 minute drive of Baltimore's cruise terminal. Except for Richmond, Norfolk doesn't have any other major city within a 2 hour drive to draw customers from. That’s a few million more customers to add to the advantage there.

Now let’s look at their respective tourist attractions and tourism businesses. The Washington D.C./ Baltimore area offers a rich assortment of historical, cultural, entertainment, dining and other tourist options. With over 20 million visitors annually, Washington DC is one of the most visited cities in America. Baltimore is in the top 30 with over 12 million visitors each year--comparable to Fort Lauderdale or Nashville and more than the entire tidewater region. The Norfolk area offers tourist attractions with mostly limited, regional appeal such as Busch Gardens, Williamsburg and Virginia Beach.

So in the end, if you want to put a cruise ship near customers who have the discretionary funds to partake in it on a regular basis, where would you put it? RCI Grandeur (and Enchantment next year), Carnival Price and Celebrity Mercury all sail out of Baltimore because they are conveniently accessible to one of the top five most affluent customer bases in America. If anything, more and more ships will call Baltimore home--not fewer. In fact, I'd bet RCI would consider putting a Voyager-class ship in Baltimore if only it could clear the low-spanning Bay Bridge.

The bottom line is that the Washington DC/Baltimore area is far ahead of the Norfolk region from a basic demographics, overall buying power or tourism perspective. Norfolk cheerleaders have been trying to compare their mid-sized city with an average economy and some regional tourist attractions, to a Top-5 major U.S. metropolitan area with some of the nation’s most affluent customers and attractions with substantial international and national drawing power.