Calling on Charleston

Arnold Donald (center), president and chief executive officer of Carnival Corp., talks with the Rev. Randolph Miller and Elizabeth Colbert-Busch after giving the keynote address at the Martin Luther King Jr. breakfast Tuesday morning.

The seas have been anything but calm for the cruise ship industry in Charleston since the Carnival Fantasy ship arrived in the Holy City five years ago. Historic preservationists have brought lawsuits claiming the industry will damage the city’s character, while environmentalists argue the ships produce harmful emissions and pollute the water.

All of this has halted development of the State Ports Authority’s proposed $35 million passenger terminal at Union Pier, which would have the capacity to handle more frequent cruise ship visits. But for all the controversies, Carnival Corp. has remained mostly silent — until recently.

Arnold Donald, who became chief executive officer in July 2013, visited Charleston last week to give the keynote speech of the YWCA’s annual Martin Luther King Jr. memorial breakfast. It was the first time a CEO of Carnival had ever been to the city in any official capacity.

Although Donald didn’t talk much about Carnival’s presence in Charleston during the speech — he mostly focused on his experience growing up in segregated New Orleans — the CEO said after the event that his visit signals how much Carnival values its operations in Charleston.

“This is an important port for us, and an important city, and it’s a city our guests really like. So for me to come support a city that is supporting us, just made a lot of sense,” he said.

Donald didn’t avoid the controversies that have swarmed the cruise ship debate in Charleston. He went on to discuss the company’s position on Union Pier, how Carnival is handling environmental concerns and some points he thinks the arguments against Carnival have missed.

One thing was made clear: Donald wants Carnival to be known as a responsible corporate citizen that cares about all 700 of its port cities around the world.

Charleston and State Ports Authority officials have pushed for the Union Pier cruise terminal for more than five years, often citing the need for a more attractive entry point into the city for cruise passengers. And while Donald did note the existing terminal’s disadvantages, he didn’t exactly make a compelling argument for a new one.

“The existing terminal is small. It’s small even for the size ship we have here, the Fantasy. And it is aging. But we go to 700 ports in the world, and they’re not all new and beautiful,” he said, adding that he’s confident a new terminal will be built here eventually, even if it is stalled for a while.

On the subject of the environment, Donald maintained that Carnival goes beyond what the law mandates to keep the air and water as clean as possible.

“We share not the concerns of us being here, but we share the concerns about the environment, and we take extraordinary measures to address those,” he said. “We have exhaust gas cleaning systems that we’re working on putting on our ships to make sure the emissions are nonexistent basically.”

Carnival announced in May that it would invest $400 million to install those systems on 70 percent of its ships. Also, Donald and a team of spokesmen emphasized, not for the first time in recent years, that all of Carnival’s ships wait until they are at least 12 miles offshore before they discharge any treated wastewater, which is nine miles beyond what the law requires.

Cruise industry skeptics, such as Katie Zimmerman and Dana Beach of the Coastal Conservation League, said Carnival has never agreed to provide proof of their water discharge practices, and that using shoreside power rather than running ship engines is the most effective way to reduce greenhouse gas emissions.

Donald said it just wouldn’t make sense for Carnival to mistreat the environment of their port cities.

“Nobody wants to go to a place that’s polluted, and a marine environment that’s soiled. We have a natural vested interest as a business. But beyond that, we’re all citizens of the world, too, we have people who work with us that live here,” he said. “So, we’re just like everybody. We want a clean environment.”

Many who argue against the new cruise terminal have said that if the SPA invests $35 million on a new cruise terminal, there’s no guarantee that Carnival would keep operating in Charleston. While nothing is set in stone, Donald said it’s likely Carnival will have “a long-term play here.”

The reason the cruise line decided to launch operations in Charleston has more to do with the city’s strategic location than its thriving tourism industry. Donald said the Lowcountry is in close driving distance to dozens of major metropolitan areas in the Southeast, which allows Carnival to reach a broad client base.

“We are a great value, but people have to get to us. So in that 300-350 mile radius outside of Charleston, it opens up a market to a number of people who might not otherwise cruise, and driving is a cost-effective way to get to us,” he said. “I think the other thing is, Charleston is such an interesting destination. It’s a beautiful city with a lot to offer and people really like coming here.”

Donald, who has been at the helm of Carnival for about a year and a half, has a lot of ideas about how to steer the company in the right direction. One of his top priorities is to bring all of the company’s nine independent cruise brands closer together and to start marketing them from a unified front. For instance, Carnival is running its first-ever commercial in the Super Bowl this year.

He added that Carnival needs to rev up demand, because the only way to grow substantially is to increase ticket prices.

“The reality is, our ships sail full. All of our competitors’ ships sail full. The industry is constrained,” he said, explaining that adding another ship would only grow the company by about 1 percent. “We’re not going to make shareholders happy growing 1 or 2 percent. The only way we can grow is through increased ticket prices and giving people more of what they want when they’re on the ship.”

Another frontier he’d like to explore is the idea of creating cruises for a cause. He hasn’t mapped out what that program would look like yet, but he said he wants to provide experiences for passengers “who choose to say, ‘as part of my vacation, I want to make a difference.’”

He had hinted at that initiative during his speech earlier that morning, when he discussed the importance of “making a meaningful difference” in Carnival’s port cities, to push forward the values set forth by Martin Luther King Jr. more than 50 years ago.

“What I’m talking about is transforming communities,” he said, describing long-term projects in port cities where passengers would have the option of volunteering to work with local organizations during their trips. “It’s true impact travel. It’s very authentic, it’s very real, but it does not exist today and we have to create it.”

He said he hopes these initiatives will extend to areas like Charleston. But, until then, he welcomes any other opportunities to get to know this community better.

“We appreciate the support we have and we want to be transparent with any of those people who have concerns so we can address those concerns. We think this is a great port city,” Donald said. “In the end, we want to do good things.”

Reach Abigail Darlington at 937-5906 and follow her on Twitter @A_Big_Gail