The Puerto Rico Ports Authority concluded its competitive procurement process by selecting cruise port operator Global Ports Holdings for a 30-year concession to operate the San Juan Cruise Port. As part of the deal, the company, which has made its strategy to focus on cruise terminal operations, will undertake a significant upgrade of its facilities in San Juan.
The San Juan cruise port is a strategically important port in the Caribbean cruise market, both because of its location and because unlike many ports in the region, it is also a home port. San Juan has good commercial airline connections with the United States, which helped it emerge as early as the 1970s as a Caribbean home port for the emerging cruise industry. It continues to play that role by allowing cruise lines to develop week-long itineraries reaching the southern Caribbean.
Before the pause in cruise operations during the pandemic, approximately 20 percent of passengers passing through San Juan were boarding or disembarking cruises with others who were day visitors. In 2019, Puerto Rico reported 1.8 million unique passenger visits or 2.2 million total, counting all boarding and disembarking passengers. Approximately 400,000 passengers were San Juan home port passengers.
San Juan becomes the third largest port operation in Global Port Holding’s portfolio. The company also operates cruise ports in Antiqua and Nassau in the Bahamas.
GPH expects to begin operating the facility early next year, subject to meeting closing conditions, including financing conditions. The company was selected as the winner of a competitive procurement process managed by the Public-Private Partnership Authority of Puerto Rico for the concession of the cruise port.
Under the concession agreement, GPH will pay an upfront fee of $75 million to the Puerto Rico Ports Authority and invest $100 million in improving port facilities and infrastructure. The initial phase of investment will focus primarily on critical infrastructure repairs at Piers 1 and 4 and the Pan American Pier, as well as improvements to the terminal and walkway buildings.
The company has also committed to invest an additional $250 million in a second phase that will include expanding the cruise port’s capacity by building a new cruise pier and state-of-the-art home port terminal capable of handling larger vessels. largest cruise lines in the world at piers 11 and 12. The company plans to finance the investment through private equity.
In addition to investing in infrastructure for the San Juan cruise port, GPH says it will also invest in modernizing the cruise port experience for cruise passengers, cruise lines and local retailers. In announcing their victory, they said they will use their global expertise and the company’s operating model to improve the management of cruise port operations. The company will also invest in systems, equipment and technology to improve the port’s operational performance and ensure environmental protection, safety and security.
“The addition of this fantastic location to our cruise port network marks another important step in our growth strategy and will increase cruise passenger volumes across our network to over 16 million passengers per year,” said Mehmet Kutman. , CEO of GPH.
San Juan marks the company’s third port win in 2022, earlier in the year, they announced a deal with Tarragona in Spain and later deals in the Canary Islands. The company’s growth and position as a leading cruise terminal operator also attracted the interest of MSC Group, which was considered by the decision not to proceed with a takeover bid for Global Ports.
Main photo of San Juan cruise port in 2018 by Moebiusuibeom (license CC BY-SA 4.0)