Cruise ship fees to be studied

Cruise ship fees to be studied

BY PRU SOWER

KONK LIFE STAFF WRITER

The cost of paradise may be going up for cruise ship passengers.

Key West City Commissioners voted Feb. 6 to hire consultant Arcadis U.S. to analyze what the city pays to operate the two piers it owns at Mallory Square and the Outer Mole. Those costs will then be compared to what the city charges cruise ship operators — $10 per passenger plus a 63-cent security charge – to see if the passenger fees are high enough to fully reimburse the city. The $10.63 fee covers disembarkation, security and/or docking fees.

The last time cruise ship passenger fees at those two piers increased was in 2004. Key West Port & Marine Services Director Doug Bradshaw said he is confident the city isn’t losing money servicing the cruise ships in terms of direct costs such as docking personnel and pier maintenance. However, it is unclear how much the city contributes in indirect costs such as the impact of the incoming passengers on the general city substructure.

“The difficult part comes with indirect costs; the impact to our roads, sidewalks, infrastructure. The study will look at what the true cost to the city is,” Bradshaw said.

By law, the city can only set passenger fees to cover its costs; it cannot be a profit center. Currently, fees from cruise ships docking at Mallory Square bring in approximately $700,000 a year. Fees at the Outer Mole total approximately $2.6 million, Bradshaw said. Combined, 191 ships are scheduled to dock at the two piers in fiscal 2018, although that number can change.

Other indirect costs that will be analyzed in the study include police, public works and port personnel charges. It is possible, Bradshaw said, that the costs of operating the two piers are not equal. If that is the case, the city could implement two different fee structures to reflect that.

“It is overdue,” Bradshaw said about a potential passenger fee increase. “We’ll learn a lot from the [Arcadis] study.”

If the study concludes that cruise lines are underpaying and the city is subsidizing the for-profit operators, city officials will still have a tread a difficult line between recouping their costs and alienating the cruise industry by raising its costs. There are, after all, other privately-operated piers in Key West that service cruise ships. However, the docking schedules are often set years in advance and it may be difficult to find another open pier in the short run.

Bradshaw said that the city isn’t looking to augment its revenues more than what is fair. And breaking even is not an unattractive option either.

“Even it the city is breaking even, those are passengers in town, supporting businesses. That is extremely valuable to the city,” Bradshaw said.

The contract with Arcadis for the cost study is $39,9202.

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