The Galveston Wharves Board of Directors has adopted a conservative 2021 budget based on past performance and realistic forecasts for the coming months. It’s important to remember that we’re a self-supporting, city-owned business that does not rely on tax dollars for any part of our operations.
ON THE REVENUE SIDE
We’re forecasting operating revenues of $37.5 million compared to $27 million in 2020. This projection is based on a phased resumption of our cruise business, with full operations in 2022.
Our cruise revenue forecast of $15.3 million is based on what we know today about cruises scheduled in 2021 by our three cruise lines – Carnival, Royal Caribbean, and Disney. Currently, we’re projecting cruise revenues based on no cruise business in the first quarter, 25 percent of scheduled ship capacity in the second quarter, 50 percent in the third quarter, and 75 percent in the fourth quarter.
We think that this is realistic considering the great progress the U.S. cruise industry is making with plans to safely and sustainably resume cruises and with recent news about a vaccine.
In the 2019 budget, cruise revenues made up about 65 percent of our income. As the fourth most popular cruise port in North America, we expect our cruise revenues to continue to grow in 2022.
Cargo, including wind energy components and grain, is forecast to be about the same as this year. Our lay ship business also is forecast to be a steady revenue stream next year.
The Wharves Board recently adopted revised tariff policies, including a 3-percent across-the-board increase for wharfage and dockage to keep pace with the market.
IN THE EXPENSE COLUMN
Like many businesses, employee salaries and related personnel costs are our largest expense. Our 90 dedicated port employees have done a tremendous job to keep the port running smoothly during this challenging year.
The board approved a 2-percent cost-of-living increase totaling $123,858 for port employees, as well as an additional 2-percent incentive bonus, paid only if the port is profitable in 2021. (This applies to all employees except the port director.)
We’ve budgeted 13 new positions for police, security, engineering, and, construction and maintenance for 2021. These will be filled only when the cruise revenues return and/or when construction commences on the Royal Caribbean terminal.
In these dynamic times, we will amend the budget as needed, as we expect some changes to the assumptions used in preparing the 2021 budget. Find more details about the 2021 budget in the Document Center on our website www.portofgalveston.com.