Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
6c
ACTION ITEM
Date of Meeting
March 10, 2020
DATE: February 28, 2020
TO: Stephen P. Metruck, Executive Director
FROM: Marie Ellingson, Cruise Operations and Business Development Manager
Jeff Hoevet, Sr. Manager Airport Operations
Stephanie Jones Stebbins, Managing Director Maritime Division
SUBJECT: Cruise Luggage Valet Program – 2020 through 2022 Cruise Seasons
Total estimated cost:
$4,100,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a contract with Baggage
Airline Guest Services, Inc. to provide cruise passengers Onboard Airline Check-in (“OAC”) and
Airline Baggage handling, screening, and storage services for participating carriers at Seattle-
Tacoma International Airport at an estimated cost of $4,100,000 for the 2020, 2021, and 2022
cruise seasons.
EXECUTIVE SUMMARY
Port Valet allows cruise passengers to place their luggage outside their cabin door the night
before disembarking their cruise ship in Seattle. Their luggage is then off loaded from the ship
and delivered directly to Sea-Tac via truck for security screening and inducted into the baggage
system. The guest retrieves their luggage at their destination airport. Guests participating in the
service also receive their boarding pass onboard the cruise ship. The program has resulted in
important operational efficiencies at both the cruise terminal and the airport. As ships get larger
and Seattle’s market share continues to grow, this program is key to our success. Furthermore,
without their luggage, these guests can easily enjoy area attractions, restaurants, and retail
opportunities prior to making their way to the Airport growing the economic impact of the cruise
business to the region.
Per SLOA IV, airlines have agreed to pay for 50% of costs incurred by the Port to handle baggage
transferred from cruise ships to the Airport. Maritime costs are covered by revenues generated
from cruise passenger and dockage fees. This service is available as part of the premier services
available to guests. We consider this part of the premier service that allows us to charge a
premier rate.
COMMISSION AGENDA – Action Item No. _6c___ Page 2 of 5
Meeting Date: March 10, 2020
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
The success of the Port Valet program over the past two years has significantly improved the
operational efficiencies of processing cruise passengers at both the seaport and at the airport.
The reductions in congestion and passenger wait times throughout the ship to plane process have
given the cruise lines the confidence in Seattle’s ability to process larger ships. In 2019 the Port
of Seattle welcomed the Norwegian Joy and Royal Caribbean Ovation of the Seas, both with
upwards of 5,000 guests during peak season. We learned from Royal Caribbean that Seattle’s
passenger ratings were among their highest. In 2020 we’ll have an additional homeport at Pier
66, the Norwegian Sun. In 2021 we will welcome the Norwegian Encore (replacing the Joy), and
we anticipate an additional Quantum Class vessel from Royal Caribbean. We are seeing continued
growth in cruise passenger participation in the program year over year, resulting in economic
benefits to our community and continued operational efficiencies in passenger processing/
baggage handling at cruise terminals and airport.
The potential for the most beneficial impact to the airport is a reduction to the number of cruise
guests that arrive at the airport during the peak morning hours. For passengers with flight times
that require them to travel directly to the airport, this program will free them of their luggage
while making their way from the Airport's North East Ground Transportation Lot to security.
Without their check luggage and with a boarding pass in hand, wait times for elevators is reduced
and congestion at the check-in counters is reduced for all Sea-Tac passengers. The program also
reduces congestion on the baggage system during peak times.
In addition to the operational benefits, the program also allows passengers to be unencumbered
from their luggage to sightsee and spend time in Seattle which results in increased economic
benefits to downtown Seattle business and tourist attractions. The service provides a competitive
advantage for Seattle as a cruise homeport by offering a one-of-a-kind customer service that
transforms cruise passengers into tourists who can readily contribute to the local economy. By
allowing guests to disembark without their luggage and with their boarding pass in hand, they
are easily able to enjoy the city before heading to the Airport. While offering exceptional
customer services to the guests, the program also makes it possible for the seaport and airport
to handle the operations of larger cruise ships as the industry grows. In fact, the Port of Seattle
won, for the second time, the Cruise Critic Award for Best North American Homeport in 2019
specifically siting the Port Valet Program. Cruise Critic also named Seattle “Cruisers Choice” in
their top 5 destinations of 2019.
DETAILS
The Port Valet service, in partnership with Bags Inc., will offer luggage service, including airline
boarding passes, to passengers flying all major airlines.
Bags Inc. has proprietary software and special permissions from Customs and Border Protection
and the Transportation Security Administration to offer this service. There is a CPO-(5) Policy
Waiver currently in place which covers this service contract.
COMMISSION AGENDA – Action Item No. _6c___ Page 3 of 5
Meeting Date: March 10, 2020
Template revised June 27, 2019 (Diversity in Contracting).
Per commission’s request during the approval process for the program in 2019, this year we are
requesting a term of up to three years, which would include the 2020, 2021 and 2022 cruise
seasons.
Bags Inc. has an offsite location near the airport where luggage is retagged and sorted
according to flight times, then brought to the Airport in a metered fashion. This streamlined
process removes congestion of operations at both the cruise terminal and the airport.
The estimated cost of this program for 2020 is estimated to be $1,200,000. The charges will be
based on actual services rendered. The port will pay a per-passenger-fee for only those
passengers that sign up for the service.
2017 – Pilot Program
1,071,594 Total Revenue Passengers
63,000 Passengers Participated
71,000 Bags Processed
$545,669 Total Cost
2018 – Actuals
1,114,888 Total Revenue Passengers
121,172 Passengers Participated
136,000 Bags Processed
$832,844 Total Cost
2019 – Actuals
1,210,722 Total Revenue Passengers
150,963 Passengers Participated
162,943 Bags Processed
$972,930 Total Cost (50% Cruise / 50% Aviation)
Participating Airlines
• Alaska
• American
• Delta
• Horizon
• JetBlue
• Southwest
• United
Participating Cruise Lines
• Carnival Cruise Line
• Celebrity Cruises
• Holland America Line
COMMISSION AGENDA – Action Item No. _6c___ Page 4 of 5
Meeting Date: March 10, 2020
Template revised June 27, 2019 (Diversity in Contracting).
• Norwegian Cruise Line
• Princess Cruises
• Royal Caribbean
Scope of Work
Following approval, staff would complete all necessary steps to have the program in place by
the start of the 2020 cruise season. The first ship call with disembarking passengers eligible to
receive this service is May 02, 2020.
(1) Complete negotiations and execute service contract with Bags Incorporated.
(2) Complete development of and kick-off 2020 promotional program for the courtesy luggage
valet service.
(3) Collaborate with all stakeholders for a successful launch of the program at start of 2020
cruise season.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Discontinue the passenger check-in and luggage valet service
Cost Implications: $0 (however congestion will likely result in increased operational costs *)
Pros:
(1) No cost to the Port at this time.
Cons:
(1) Tourism opportunity and growth in economic impact (spending and job creation) is lost.
(2) Congestion in the airport and cruise terminal resulting in reduced customer service.*
(3) Late vessel sailings and delayed passengers on larger ships calling Seattle for the first
time in 2020.
This is not the recommended alternative.
Alternative 2 – Provide the Bags Inc. valet service to cruise passengers
Cost Implications: $1,200,000
Pros:
(1) Increases positive customer experience for cruise passengers
(2) Make it possible for the seaport and airport to handle the operations of larger cruise
ships and the growth in our cruise business.
(3) Increase the economic impact to Seattle.
(4) Increase airport jobs.
(5) Reduce congestion at airport and cruise terminals.
Cons:
(1) Increase in cost of investment by the Port.
(2) Not available to passengers with early flights or flights the next day.
COMMISSION AGENDA – Action Item No. _6c___ Page 5 of 5
Meeting Date: March 10, 2020
Template revised June 27, 2019 (Diversity in Contracting).
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Estimated Service Contract Bags Inc. cost
full 2020 season
$0
$1,200,000
$0
AUTHORIZATION
Request for authorization for a term of up
to three years anticipating year over year
growth of approx. 20% passenger
participation (2020, 2021, 2022)
0
4,100,000
0
Annual Budget Status and Source of Funds
Funds are approved in the 2020 budget and come from two sources since the program benefits
both the Airport and the Cruise operations. Per SLOA IV, airlines have agreed to pay for 50% of
costs incurred by the Port to handle baggage transferred from cruise ships to the Airport.
Maritime costs are covered by revenues generated from cruise passenger and dockage fees. This
service is available as part of the premier services available to guests. We consider this part of
the premier service that allows us to charge a premier rate. The benefits achieved in Cruise and
Airport Operations in processing baggage as a result of this program being in place for the prior
cruise seasons (2018, 2019), turned out to be crucial in meeting vessel sailing schedules—
enabling quick movement of large volumes of people and baggage through the facilities. Funds
are approved in the 2020 budget and come from two sources since the program benefits both
the Airport and the Cruise operations. Per SLOA IV, airlines have agreed to pay for 50% of costs
incurred by the Port to handle baggage transferred from cruise ships to the Airport. Maritime
costs are covered by revenues generated from our cruise business.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
March 26, 2019 - The Commission authorized the Cruise Luggage Valet Program- 2019 Season
April 10, 2018 - The Commission authorized the Cruise Luggage Valet Program- 2018 Season
February 27, 2018 – The Commission was briefed with a Cruise Overview
April 11, 2017 - The Commission authorized the Cruise Luggage Valet Pilot Program- 2017
Season
