Hornblower to Buy Invader Cruises as S.D. Tour Boat Industry Thrives

San Francisco-based Hornblower Dining Yachts, which operates three dinner cruise boats on San Diego Bay, has signed a definitive agreement to acquire San Diego-based Invader Cruises, the companies said Monday. No sales price was released for the deal, which must be approved by the San Diego Unified Port District.

Hornblower’s acquisition of Invader Cruises, which is scheduled to be completed by year’s end, comes at a time when the San Diego Bay cruise and tour boat business is enjoying steady growth. To date, that growth has been fueled largely by the recently completed San Diego Convention Center and other bayfront development.

Boat operators also expect a boom in cruise business from the America’s Cup regatta in 1992.

Hornblower, which operates the Zumbrota, High Spirits and Reknown cruise and dinner boats from dock space in Coronado, began operating on San Diego Bay in 1985. The company owns 19 dinner cruise vessels that operate from San Diego, San Francisco, Berkeley, Los Angeles, Marina del Rey, and Newport Harbor.

Hornblower, a privately owned company, reported $18.3 million in revenue last calendar year, when its vessels carried 325,000 guests from the six ports that it serves.

Invader Cruises operates the 150-foot schooner Invader, the 145-foot Entertainer and the 120-foot, stern-wheeler Showboat from a port-owned tract at the foot of Broadway. Invader Cruises was founded in 1983 by Lawrence Briggs, who is line’s sole owner.

Although individual companies declined to disclose passenger totals, a Hornblower spokesman said harbor cruise boats, water taxis and ferry boats will carry more than 1 million passengers this year on San Diego Bay.

Invader Cruises is believed to have carried about 300,000 passengers last year, and San Diego Harbor Excursions, a competitor that also operates the popular ferry to Coronado, is believed to have carried at least 400,000 passengers.

Boat operators expect a boom in 1992, when nearly a dozen sailing syndicates and thousands of spectators will be in San Diego for the America’s Cup races.

The bay could attract even more cruise boat companies, observers said. “There are discussions going on now with some East Coast operators who want to come here,” according to John Sawicki, owner of Coronado Marine & Livery, which operates several marine facilities on San Diego Bay, including a water taxi service.

The cruise, sightseeing and dining cruise business has grown to the point that there is a shortage of dock space with enough nearby parking for customers.

The Port District expects that a new dock, to open next spring within a stone’s throw of the convention center, will help ease that shortage. The new facility will service charter boats that carry large groups, said Chris Anderson, the port’s director of property.

Many passengers are attracted by the bay’s natural beauty, but boat companies link the recent popularity of cruise, dining and sightseeing boats to bayfront development in San Diego County.

Tourists and convention-goers are increasingly drawn to the waterfront by the area’s hotels, restaurants and the new convention center.

“There’s a synergism that’s starting to develop” between boat operators and San Diego’s land-based attractions, said Sawicki, whose company will operate the new dock near the convention center. Sawicki’s company also operates the “Harbor Hopper” water taxi service, which provides service between points on the bay.

Increased consumer interest in boat travel “shows among other things the resurgence of passenger vessels,” said Terry MacRae, a co-owner of Hornblower. “It’s not that different from what’s gone on in San Francisco, Boston and New York harbors. But some of it in San Diego has to do with the investment that the Port District and citizens have put into the waterfront. It doesn’t happen overnight.”

While tourists and locals who want to see the sights remain an important source of revenue for boat operators, charter groups, including a growing number of convention-goers, are playing an increasingly important role in the local cruise industry.

San Diegans and out-of-town visitors also are following a national trend toward on-board dining. Growth in that segment of the San Diego Bay market has occurred in the past seven years.

“Prior to (Invader Cruises) in 1983, there was no dinner cruise market in San Diego,” said Eric Lund, a former vice president of Invader Cruises who on Monday joined San Diego Harbor Excursions as vice president. “The dinner cruise market here was a real sleeper.”

Hornblower, which entered the San Diego market in 1985, has dedicated its three boats to the charter dining business. However, in other California ports, Hornblower makes space available for individuals, and with the Invader Cruises acquisition, Hornblower will “be able to offer dining cruises to individuals,” MacRae said. “We also expect to do a lot of things in the harbor cruise area.”

To better serve the important charter market, Invader Cruises and San Diego Harbor Excursions each took possession this summer of new dinner cruise boats that cost an estimated $3 million to $4 million to build.

The boats, which can carry as many as 600 passengers, are the first boats to serve on the bay that were designed to serve as floating dining rooms. Existing boats were converted for restaurant use.

The new vessels “have all the amenities of a modern-day restaurant, instead of being a boat that was converted to a restaurant format,” Lund said. “The one drawback to a boat like the Invader is that it has an open-air environment.”

The indoor environment will be important on chilly nights, especially in the winter, Lund said. “While we’re all growing at a healthy pace, you have to work hard in this business because you usually lose money in the winter,” Lund said. “You hopefully make enough money in the summer to offset losses.”

Although Hornblower, San Diego Harbor Excursion and Invader Cruises compete against each other for business, they also compete with hundreds of private boats that are available for charters. And, Lund said, they compete with land-locked restaurants and the county’s wide-ranging tourist attractions.

Under its new owners, Invader Cruises will continue to operate its regularly scheduled whale-watching cruises, dinner cruises, charters and harbor sightseeing cruises for the rest of the year, MacRae said.

Jim Unger, general manager of Hornblower’s San Diego office, has been appointed general manager for the combined companies.

Briggs was charged with three others in May with smuggling a $10-million load of marijuana from Thailand to the United States. A trial date for those charges has not yet been set.