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Reports & Reviews: Hawaii, Saint John

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Fitch Ratings has affirmed the Hawaii Harbor System’s revenue bond rating at an "A " grade, citing a stable future outlook. A study commissioned by Port Saint John and New Brunswick’s Tourism, Heritage and Culture Department to examine Saint John’s potential as a cruise homeport concludes that the port is best suited to welcome expedition-class ships.

Fitch Affirms Hawaii Harbor System’s Revenue ‘A ’ Bond Rating

Fitch Ratings has affirmed the Hawaii Harbor System’s revenue bond rating at an "A " grade, citing a stable future outlook. The system consists of 10 commercial harbors on six islands operated by the Harbors Division of the Hawaii Department of Transportation.

The ratings affirmation was based on Fitch’s positive analysis of the harbor system’s scheduled tariff increases for cruise, cargo and pipelines; the progress of its capital improvements plan; and the strength of its overall financial profile.

In issuing the upgrade, Fitch identified the following as positives of the harbors system:
  • Strong Financial Profile: Stable operating margins with a sizable liquidity cushion with unrestricted liquidity. 
  • Natural Monopoly: The port system provides essential maritime services and serves a state without an efficient alternative means of transporting goods to and throughout it. 
  • Approved Tariff Increases: The harbor system has adopted scheduled tariff increases for cruise, cargo and pipelines, with escalations underway since 2010 and scheduled to continue through 2015. 
  • Considerable Capital Plan: Sizable and evolving capital improvements, currently at $618 million, are progressing on schedule. 
  • Conservative Debt Structure: Relatively low leverage consisting of all fixed rate bonds with rapid amortization schedule on existing debt. 
"This rating is a vote of confidence in our harbor system and our state’s economic stability," said Gov. Neil Abercrombie. "Hawaii heavily relies on its harbors, importing approximately 80 percent of consumable goods – and 98 percent of that through the harbors system. Our modernization plans will continue to increase efficiency into the future."

Saint John Seen as Potential Homeport for Niche Market Cruises 

A study commissioned by Port Saint John and New Brunswick’s Tourism, Heritage and Culture Department to examine Saint John’s potential as a cruise homeport concludes that the port is best suited to welcome expedition-class ships. 

The study analyzed Saint John’s strategic position on the Canada-New England itinerary, and evaluated its tourism offerings and the additional requirements necessary to offer a cruise line the option of homeporting ships. 

Based on the requirements, the study concluded that Port Saint John is well-positioned to welcome expedition-class ships. These are niche market vessels, they are often a higher-end product offering and carry between 50 to 200 passengers, plus crew members. In addition, expedition cruises are often geared toward adventurers with specific interests, such as exploring nature.

"Port Saint John already has an excellent reputation in the cruise industry. We also have excellent partnerships in our tourism sector, including our long-standing partnership with the New Brunswick Department of Tourism," said Port Authority Chairman Peter Gaulton. "When these strong attributes are added to 25 years of testimonies from passengers praising the destination, our potential to together contribute to tourism in this region keeps growing. Attracting expedition-class ships to homeport here gives us one more avenue to explore in the future."  

According to the port authority, the average passenger visiting Saint John spends between $60 and $80 during a port of call visit. With a homeport, passengers spend up to twice this amount. The majority of passengers visiting homeports stay at least one night in a local hotel, while also spending money on meals and other incidentals. 

However, a special gangway and/or floating platform is required to accommodate expedition-class ships because of the daily tide range in Saint John. 

"I believe that we have a number of opportunities to take the next step with the cruising sector at Port Saint John," said Trevor Holder, Minister of Tourism, Heritage and Culture for the Province of New Brunswick. "This study has highlighted some very real and achievable ways to get into new cruising business opportunities but also some challenges. To help overcome these initial challenges, over the next three years, our government will provide $100,000 in funding to the port, each year, to help address the immediate infrastructure needs of the port." 

Port Saint John’s 2014 cruise season begins on July 5. Highlights this season include a record number of double-ship days, seven inaugural calls and the 1000th ship call. During the 2013 cruise season, the port received 64 ship calls and 166,616 revenue passengers.
 

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