2021 budget growth forecast means more local jobs
With cruise sailings resuming and cargo tonnage up, the Galveston Wharves is forecasting increased revenues and jobs growth for 2021 compared to 2020.
This means more household income for thousands of families in our region who rely on port-related jobs. It also means that the port, a self-sustaining city entity, will have more money to invest in critical infrastructure and capital improvement projects, which also generate more local jobs.
Mid-Year Budget Revision
After cruises were suspended in March 2020, the Galveston Wharves Board of Trustees and the staff worked diligently to reduce expenses, look for new revenue sources, and revise budget forecasts. Despite the loss of an estimated $44 million in cruise revenues over 15 months, we have maintained a positive cash flow.
With cruises and cargo ramping up, the staff presented a new budget forecast at the July 27 Wharves Board meeting that shows increased revenues for the second half of the year.
Income from operations in 2021 are forecast to be $30.8 million, compared to $27.4 million actual income in 2020. Cruise-related gross revenue accounts for the largest portion at $3 million, which includes passenger service fees and port-operated cruise parking.
Net operating income before depreciation is expected to be $9.1 million. With annual depreciation and amortization of physical assets, such as port-owned buildings, docks and vehicles, net income is $1.9 million. In your personal finances this would be like calculating household income and expenses then including the depreciation on your vehicles and appreciation of your home.
Cruise News
This new budget forecast is based on 128 cruise ship sailings in the second half of 2021, with passenger capacities gradually increasing.
As the fourth most popular cruise port in North America, the Port of Galveston is looking forward to full-scale operations in 2022, hosting more than 1 million passengers a year.
The port will also get a big budget and jobs boost in 2022 when it opens its third cruise terminal. Royal Caribbean International is building the $110 million cruise terminal at Pier 10. It is forecast to generate more than $7.6 million in income for the port in 2023, the first full year it is open.
Cargo Growth
Galveston Wharves cargo tonnage is up 37 percent year-to-date for the first half of 2021 over 2020, with grains totaling 734,000 tons, up 89 percent; bulk liquid exports doubling to 1 million tons; and new car imports up 66 percent.
With a total of 2.6 tons for the first half of 2021, the port is on track to exceed its 4.3-million-ton total in 2020 and reach the highest annual total since 2016.
What This Means for Jobs
Galveston's cruise and cargo growth fuels the economy and adds thousands of good-paying jobs in our region and state. The new cruise terminal is creating an estimated 400 construction jobs and 400 operations jobs.
Total union labor hours in 2021 could be up 25 percent over last year due to increased cargo activity and the resumption of cruise sailings in July. 2022 is forecast to be the best in years with 690,000 hours, with 460,000 cargo work hours and 230,000 cruise hours.
