No Appetite for L.A. : Dinner Cruise Ships, Unsuccessful at Commercial Port, Seek Richer Waters

Barely a year after their christening in Los Angeles Harbor, the port’s two largest dinner cruise vessels are steaming to new destinations, abruptly canceling long-term leases worth at least $300,000 a year to the Harbor Department.

The departure early next year of both the 600-passenger Pride of Los Angeles and 1,000-passenger California Hornblower ends an ambitious and unsuccessful bid by their owners and the port to establish a dinner cruise business in the nation’s busiest commercial harbor.

“It’s disappointing. But we knew going in it was somewhat risky, somewhat speculative,” said Mark Richter, the port’s assistant property manager.

The owners of the Pride of Los Angeles, whose lease contained a cancellation provision, will pay the port to end the lease. The Hornblower’s owner has proposed a similar end to its lease, but that is up to the port since its contract lacks a buyout provision.

The owners of both vessels, which are among the largest dinner cruise ships on the West Coast, said late last week that a combination of factors led them to end their stays in Los Angeles Harbor, where their ships arrived with fanfare in early 1989.

The reasons the owners said they are moving include greater demand in other ports and Los Angeles Harbor’s proximity to industry. “Our business is like the restaurant business. It’s location, location, location. And there aren’t too many successful restaurants in the shadow of coal facilities,” said Michael Watson, president of Hornblower Dining Yachts, the San Francisco-based operator of 22 cruise vessels on the West Coast.

During its first year of operation, Watson said, the California Hornblower met the company’s goal of $2 million in business. Although bookings from conventions, weddings and other group charters were solid, the ship failed to lure the individual weekday customers it needed, Watson said.

“What we found with San Pedro is that the local population is fairly small and that in order to be successful with individual ticket events, we need a sailing location more accessible to large populations,” he said. “At this point, we don’t believe we can develop the healthy dinner cruise business we need. And that is really the reason we are leaving.”

Although the company has decided to end its 10-year lease at Berth 93D, Watson said, it is building a permanent berth at the Catalina Island terminal in Long Beach. There, Watson said, the company expects to continue a local dinner cruise business at a location more convenient to that city’s large population and Orange County’s bustling convention trade.

The Long Beach berth, he added, will probably be used by one of the company’s smaller dinner cruise ships while the California Hornblower sails to San Diego, one of the West Coast’s most lucrative harbor cruise markets.

The Pride of Los Angeles, meanwhile, will be leaving Berth 94 for New York City, where that ship’s owner found a stronger market.

“We have an immediate need for an additional ship on the East Coast,” Paul Roth, general manager of the Pride of Los Angeles, said Friday. “The exceptionally strong East Coast demand dictates” the relocation.

The Pride of Los Angeles, he said, will begin sailing from New York City next March. The ship, built last year for operations in Los Angeles, will be renamed the Spirit of New York, according to an official with Spirit Cruises Inc., the Norfolk, Va.-based owner of that vessel and nine others in the United States.

Although the 15-year lease with Pride of Los Angeles calls for its owners to pay $180,000 for early cancellation, no similar provision was included in the 10-year agreement with the California Hornblower, according to the port’s Richter.

The Hornblower’s owners have offered to pay the port a $120,000 buyout of their lease, a proposal that must be decided by the Harbor Commission, Richter said. Richter said the long-term leases with the vessels translated to at least $300,000 in annual revenues to the port--an amount unlikely to come from any increase in business that may flow to smaller dinner cruise ships operating from San Pedro’s Ports o’ Call.

But Richter said the Harbor Department has already held talks with operators of several smaller dinner cruise ships, which are better suited for the San Pedro market. “We would consider other tenants and, frankly, we are far more interested in successful, smaller cruise operations than large operations that are unsuccessful,” Richter said.

In the meantime, Richter said, the imminent departure of the two large ships proves what port officials previously guessed: Los Angeles Harbor is not likely to see a major dinner cruise business soon.

“From the start, we knew both companies were taking a risk in coming to the port with vessels of this size,” Richter said.

“Los Angeles is not like other coastal cities. We don’t have the backdrop of a skyline of New York City or Golden Gate Bridge. Los Angeles is an industrial port somewhat removed from population centers,” he said.

“They were aware of that and felt they could overcome the drawbacks with advertising and promotion,” he said. “We would have been absolutely delighted if they had been successful.”

And for the foreseeable future, that means the port will be crowded with tankers and freighters, not steamships or dining yachts.

“We’re not willing to say the Port of Los Angeles can’t sustain any dinner cruise operations,” Richter said. “But it may be we can’t sustain the kind of business needed for vessels as large as those that are leaving.”