Royal Caribbean in Royal Roatan

May 1st, 2006
by Thomas Tomczyk

[private] John Tercek is Royal Caribbean’s Vice president of Commercial development. He is responsible for improving the infrastructure of Royal Caribbean’s ports of call that would support the companies’ strategic growth and itinerary objectives. John graduated from Wharton School of Finance at University of Pennsylvania and Fordham University Law School. He lives with his wife, Linda, and child in Coconut Grove, Florida.

Tercek is the president of the newly created “Puerto de Cruceros de Marina de Las Islas de La Bahia,” the entity taking over the legal operation and the concession of existing Coxen Hole’s dock’s capital assets. Municipal and IHT has under one percent ownership of this corporation.

In venture with Puerto Rico’s government, Royal Caribbean (RC) and Celebrity Cruises have developed four docks in San Juan. RC also developed docks in Bayonne, New Jersey and Port of Miami. Roatan is the first time RC ventures to do a project outside the US Caribbean.

Roatan’s cruise ship dock is a long term strategic investment for the American cruise company. Royal Caribbean was the only bidder in a year long bidding process that secured the company a 30 year lease of Coxen Hole dock.

v4-5-Interview-John Tercek

Bay Islands Voice: Outside Puerto Rico this is your only other Caribbean destination you choose to develop. Why did you choose to come to Roatan?
John Tercek: If you look at the map and the traffic of the cruise ships today, especially in the high seasons, Grand Cayman, Cozumel, Costa Maya, and Belize City are virtually full on key mid week days. Cruise ships typically leave the US on the weekends and get there mid week. This was one of the few places that offered the potential for expansion. It’s an interesting way of visiting another country like Honduras. You can build five docks in Mexico, but passengers are only willing to make one or two stops in Mexico. They want to visit other countries. We thought in the long term, 30 year concession, that Roatan would continue to become an important destination, if nothing else just because of the sheer growth of the cruise business. Roatan is also a pretty nice place to visit. It offers a combination of location, exotic image, and delivers pretty well once you get beyond the dock.
Bay Islands Voice: If Roatan is such a great place for any major cruise ship company to consider, why were you the only bidder for the dock here?
John Tercek: I cannot comment on that.
Bay Islands Voice: What do you think about the whole, year-long bidding process? How transparent was it? Honduras never dealt with this sort of thing.
John Tercek: This was part of it. They went overboard in trying to make it above board and transparent and they made it extremely complex for the bidder. When we saw the documents, we suggested to the government, “You are not going to get very many bidders.” What they were requiring was quite extraordinary. They made it a very formalistic bid process and the cruise ship business is a very hard to understand. Unless you are in the cruise business, you don’t really know what the factors that make ships come are. It is difficult for a private party completely unrelated to the cruise business bid on a port, because they really don’t know how to predict the future. They had a very long list of qualifications [for a bidder] and the emphasis was on the qualifications. For these reasons, it didn’t surprise me that there weren’t too many bids. We were the only bidder and we had a negotiations period on the financial side of it.
Bay Islands Voice: What is your goal for Roatan’s cruise ship dock?
John Tercek: Our goal is to make the port of Roatan become a better functioning facility to accommodate more and larger vessels and to improve an esthetic experience the guest encounters. The appeal of the port will go up for vacationers and they will want to take the cruise to Roatan. Up to now we made sporadic calls here. It has been a more exotic destination on a longer itinerary or when we wanted to get a ship into another port and we couldn’t get it onto a dock. It’s actually been a very insignificant port for us historically. This port has been used by Norwegian and Carnival Cruise lines and we expect that they will continue to come. Once we start implementing the improvements, we expect to send ships to Roatan on a more regular basis. (…) We do the cruise planning a couple years in advance so the real growth of Royal Caribbean will not be next year, but several years in the future.
Bay Islands Voice: What will be the first things that you plan to do?
John Tercek: We’re hoping during the next year to come up with a master plan for the development of the port. (…) Our first component of the project will be to expand the staging area so that there is a better, cleaner, safer logistical operation of moving the passengers into the port. As you can observe on a cruise ship day, they can’t even get all the busses into that little piece of dirt there today. The second phase will be adding a thematic village of some sort, a high quality waterfront project, with a mix of retail, restaurant, food, beverage and entertainment appealing to cruise ship passengers and growing landside visitors as well as to people who live here.
Bay Islands Voice: Will the dock resemble the drawings you submitted with the bid.
John Tercek: That’s the idea, but the drawings that you’ve seen are the artist’s renderings. It had nothing to do with true engineering components. We don’t yet know the permitting process or how long it will take to do the engineering studies. We know that the water depths are very challenging. Itis extremely shallow and it’s extremely deep. Some of the depths, just 30 feet from the current dock are extraordinary… too deep to build. The government did not make it clear enough, or they didn’t even know, of the engineering challenges. They had only very sketchy drawings. This is a particularly tricky geographical location for a dock. The current dock was not master planned at all. It was just thrown in there. It’s a very simple dock and it works. The compatibility of that dock and the new dock appears to be an engineering challenge. [/private]

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