When the Wei Wai Kum cruise ship terminal opened in 2007, the Campbell River Indian Band had high hopes of attracting up to a dozen giant luxury liners every summer, generating much-needed revenue for the band and more than $11-million in annual economic spinoffs for the surrounding community.
Three years later, a struggling economy, increased competition and difficulty marketing the Vancouver Island town of Campbell River as a destination have turned the $18-million, taxpayer-funded terminal into a money-losing white elephant that shows few signs of realizing its potential.
The 300-metre-long floating dock and accompanying facilities attracted 10 ships in the first two seasons, but that dropped to one 170-passenger ship last year and none at all this summer.
The band's business representative, Darryl Anderson, blamed the lack of traffic on a sharp decline in the number of cruise ships plying B.C. waters since the global recession hit 18 months ago.
"Ourselves and every other port on the coast with the exception of Victoria are in a really difficult market this year," he said. "Campbell River as the newest entry certainly feels the pain the most."
The band's business plan for the terminal, created in 2004 and 2005 when cruise-ship traffic in North America was growing by about 7 per cent a year, failed to anticipate how the industry would react to a sudden downturn, Mr. Anderson said.
Instead of exploring alternative ports on B.C.'s West Coast, such as Campbell River, Nanaimo and Prince Rupert, cruise-ship companies have responded by sticking with the tried-and-true option of Victoria in a bid to keep costs down, he said.
"In this economic climate, you're not going to displace business from an established port of call," Mr. Anderson said.
Under U.S. maritime law, foreign-flagged vessels are prohibited from calling on two U.S. ports in sequence, forcing most Alaska-bound cruise ships to stop at a Canadian port of call on their way north, and before they return home.
Vancouver's cruise-ship business dropped an estimated 30 per cent this year. But in Victoria, which is a more convenient stop for northbound cruise ships, Ogden Point terminal will host 228 ships in 2010, matching the record high set last year.
Nearly $16-million in public funds went into the construction of Wei Wai Kum cruise-ship terminal, $9.45-million from the federal government, $4-million from the province and $2.3-million from the City of Campbell River.
Mr. Anderson said the band has also invested some of its own money, including $750,000 this winter. The band spends about $75,000 annually to maintain the terminal and has a limited marketing budget because of the minimal revenue it has generated to date, he said.
The terminal needs to attract "10 to 14" ships a year to break even and, unlike established ports such as Victoria, Campbell River has to hire Canadian Border Service Agency staff for each visit at a cost of "between $5,000 and $7,000 per vessel," he said.
There's also the prospect of increased competition from Nanaimo, where construction is due to start on a $22-million cruise-ship terminal, a budget that includes $17-million in federal and provincial infrastructure grants.
Carnival Cruise Lines spokesman Vance Gulliksen said in an e-mail response Wednesday that the company has not considered Nanaimo or Campbell River as alternative ports to Victoria.
"We believe that Victoria is much better known which is often helpful in marketing the itinerary. In addition, it offers a good guest experience, including interesting shore excursions for our guests," he said.
Princess Cruises media-relations manager Karen Candy said the company is "familiar with the facility" in Campbell River but has no plans to send ships there.
"We're always looking at new and unique places to take our passengers," Ms. Candy said. "At this time, we're pleased with our current itineraries in this region."
Mr. Anderson said the band has been forced to shift its business focus toward mid-size vessels and specialty excursions, but still hopes to one day attract major luxury liners.
"I don't think anyone's lost sight of that long-term goal, but the economy has fundamentally changed because of the recession," he said. "You've got to be competitive with how the markets evolve."
Campbell River Tourism referred all cruise-ship enquiries to the city. Officials with the City of Campbell River did not respond to a request for comment.
Special to The Globe and Mail