Royal Caribbean Will Invest $250 Million to Expand Presence in Miami

Royal Caribbean Cruises has plans to open a new cruise terminal in Miami by 2018, increasing its presence in the U.S. market and giving its giant new-build vessels a potential homeport in South Florida.

Earlier this week, the Miami-Dade county Board of Commissioners signed a legislative resolution which will likely lead to a new home for Royal Caribbean’s ships in the region.

The resolution, obtained by Skift from the Miami-Dade county Board of Commissioners, shows that a long-term lease to accommodate Royal Caribbean’s large new vessels will likely be signed in the next four months.

According to deal, Royal Caribbean will invest more than $100 million to build a new cruise terminal in a ten-acre plot on the north side of PortMiami. Its expected investment over the course of the contract is $250 million.

Royal Caribbean Cruises will introduce eight new ships across its six brands by the end of 2020, including four more gigantic Oasis- and Quantum-class ships.

PortMiami says the deal is a good one for them because Royal Caribbean will bear the brunt of all upfront costs for building the new terminal. The port just completed a costly dredging project to let large cargo and cruise ships access its facilities.

“Although much work remains to determine the cost ranges for various elements of this program, RCL will bear the full cost for constructing the cruise terminal, parking garage, ancillary facilities, and any bulkhead work,” according to the report.

PortMiami expects to earn $9.5 million annual from leasing the land to Royal Caribbean, an increase from the about $1.2 million it currently earns from cargo companies using the land. The initial lease will run for 20 years and will be renewable in ten year increments once the original terms expire.

Royal Caribbean’s biggest vessels now homeport at Port Everglades due to its infrastructure’s support for larger ships, and PortMiami wants the cruise line’s continued business.

“At the time that PortMiami failed to secure the Oasis of the Seas and the Allure of the Seas, the Port did not have facilities capable of hosting these vessels nor did it have suitable expansion plans,” reads the document.

Royal Caribbean can bring in other investors to help finance the new terminal, but will be on the hook for at least 20 percent of the venture when the project is completed.