It was only about four years ago when the city of Long Beach, California, was considering sinking the rundown yet historic Queen Mary. Now the ship and floating hotel is profitable and a potential centerpiece to lure visitors from the nearby 2028 Los Angeles Olympics.
That voyage to financial stability, just the latest in its colorful century-long history, provides a glimpse at one city's effort to add visitors and capture gains in domestic tourism over the past few years.
California’s seventh-largest city, about 25 miles south of Los Angeles, seeks to leverage that added travel with new ship-adjacent commercial and civic development. It's tapping a tourist attraction that, until early in the pandemic, hadn't had a major upgrade since the retired cruise liner arrived in Long Beach Harbor in 1967 and was converted into a hotel in 1971.
Long Beach officials are planning a revitalization of the city's waterfront and nearby downtown area that can be showcased to the world. Of 22 planned sports venues announced in July by the LA28 Olympic organizing committee, five are in Long Beach — more than any city outside of Los Angeles itself. As Long Beach hosts events including swimming, rowing, sailing and water polo, city officials are looking to further raise the city’s profile as a business and tourism hub.
"As we work with LA28, we’re always open to considering ways the ship and hotel might support those efforts," said Chelsey Magallon, spokesperson for the Long Beach Economic Development Department. Officials point to the recent tourism draw of the Queen Mary as one example of what the larger downtown could become.
Visitors to the ship now "exceed pre-pandemic levels," Dylan Matteson, director of experiences for the Queen Mary, told CoStar News. "For tours specifically, we have had 20% more tour guests this past year. The operation is profitable, and we will continue building that profitability."
The city is moving ahead with plans to redevelop the 43-acre site surrounding the Queen Mary, including building a waterfront amphitheater next to the ship on land that now houses parking. It's all part of an effort to raise the city's profile and make it appealing as a place where businesses can expand their operations, building on the presence of companies involved in defense and aerospace.
Luring more businesses “will also help us to support these things that we have been looking to improve for local residents, such as affordable housing,” said Alison Spindler-Ruiz, planning bureau manager for the city’s Community Development Department.
But there's no guarantee even the higher visibility of the Olympics will lead to increased development, or that added tourism can translate to overall increases in city revenues to support major initiatives. And the area isn't relying solely on the Queen Mary: There are other nearby attractions including the Long Beach Aquarium and a hub of new restaurant and retail venues as well as a fuller slate of events at the city's convention center.
Management overhaul
After surviving decades of location changes and management struggles, the iconic retired vessel nearly met its end in the depths of the COVID-19 pandemic. Operations shut down completely from March 2020 through its December 2022 reopening on a limited basis.
Early in the downtime, some city officials mentioned scrapping the ship as an alternative to investing between $100 million and $500 million that was estimated to be needed long-term to address all overdue repairs to the historic attraction that for many years was a money-loser for the city and its operators.
After the ship closed to visitors, the city took complete control of its management, veering from decades of oversight through contracted private leaseholders, the latest of which was unable to keep up with needed repairs before filing for bankruptcy.
City officials, in deciding to save rather than sink the ship, began tackling the most necessary improvements first, and plan to invest in additional upgrades over the coming years using proceeds from the ship's tourism operations.
The city has invested about $45 million thus far in the most urgently needed repairs and maintenance of the ship's aging infrastructure, including flood control pumps, utilities, ventilation and fire prevention systems. Those repairs included upgrades to portions of the ship's hotel lobby, floors, stairways, and food and beverage areas.
Long Beach has plans for more onboard renovations, including improvements to guest entry areas, using new revenue from expanded foot traffic and other sources to support expanded operations. City officials have yet to determine a timeline for upgrades, or if all the upgrades will end up costing the city up to $500 million, as was initially projected. Future renovations are expected to take place in phased installments.
Since taking over management of the ship's hotel and food services in 2022 under a five-year contract with the city, Evolution Hospitality has overseen the full reopening of the vintage attraction. Hotel operations were back in full service in June 2023, and available room capacity has grown from 100 to 200 rooms.
The ship is hosting events that include "ghost tours" of rooms reportedly haunted since the ship's early cruising days, and they have grown from three in June 2023 to its current 22, including new holiday-themed activities that are drawing visitors.
More visits
On a recent Friday afternoon, visitors were lined up outside the ship for tour tickets, and those inside walked along newly restored floors and stairways leading from the ship's hotel lobby. Visitors browsed the new Picadilly Candy Shoppe opened in the past year in a space that once housed a gift shop in the ship's early days. One floor above the lobby, visitors talked over drinks and caught sports on TVs at the ship's newly restored Observation Bar, with panoramic views of Long Beach Harbor.
Visitors cruising the ship's halls might not see all the extensive repairs that took place to enable such rebounded activity, because they are in the guts of the boat out of sight of tourists. But those improvements to internal systems are credited by city officials with enabling the boost in hotel service capacity, which in turn has increased business for on-site bars and restaurants and heightened traffic for the ship's popular tours including a ghost tour of purportedly haunted rooms.
The efforts come as cities across the nation have been looking to revive downtown areas and historic districts to lure tourists, often through sports venues and added events. The Queen Mary's upgrade lets the city benefit from a docked tourism draw as have cities such as San Diego, Boston, Baltimore and Philadelphia with retired military ships that were converted into maritime museums — but that were kept in good condition.
In Long Beach, the Queen Mary — among the world’s few retired ocean liners and the only one in the United States to be converted into a hotel that's still operating — generated more than $115 million in direct annual visitor spending prior to the pandemic and $200 million in overall regional economic activity for Los Angeles County, according to consulting firm Beacon Economics.
City officials said the Queen Mary’s financial performance is fueling optimism. According to city staff reports, the Queen Mary since the end of fiscal 2023 has garnered average positive earnings of about $300,000 per month. City officials project the ship’s on-board hotel, attractions and special events, along with the next-door Carnival Cruise dome and on-site parking facilities, to generate more than $7 million in profit in the 2024 fiscal year.
That’s a sharp contrast from losses that totaled more than $31 million between 2007 and 2019. Officials said the Queen Mary as of late July had garnered 487,000 visitors since its reopening in April 2023, including 228,000 in the first seven months of 2024.
“The Queen Mary can now support operating expenses with regular operating revenue; all generated revenue is being invested back into the ship and vicinity,” a city statement said.
Added changes ahead
Long Beach leaders are looking to do what several prior subcontractors and leaseholders were unable to accomplish in activating property next to the Queen Mary. That includes entertainment giant Disney, the holder of the leasehold for a few years starting in the late 1980s but was unable to carry through with plans to add new retail, entertainment and dining to the property.
Urban Commons, the latest prior leaseholder, filed for bankruptcy in 2021. It at one time had plans for a 65-acre district called Queen Mary Island, calling for an additional new hotel, shops and restaurants, along with features like an ice-climbing wall, zipline and skydiving simulator.
The city's plans now call first for a temporary amphitheater with up to 10,000 seats that could host concerts and other community events, and which could be operating by mid- to late 2025 to potentially play host to Olympic-themed events. Depending on financial results and community feedback, that could eventually be replaced by a permanent and larger amphitheater, with several major operators already expressing interest, according to Long Beach Economic Development Director Bo Martinez.
By year’s end, Martinez said the city is looking to have plans in place to demolish a vacated and dilapidated former retail center near the ship called English Village, built in the 1970s but vacant for the past several years, to be replaced by a multi-floor parking garage and potentially other commercial structures. The garage is needed in part to ease traffic overflows resulting from crowds arriving at the ship year-round for on-board events since the Queen Mary fully reopened in 2023.
“You know you’ve arrived when you’re having issues with parking demand,” Martinez said.
Some local retail analysts said the Queen Mary has the potential to generate ripple commercial business along the lines of other Southern California venues like L.A. Live in downtown Los Angeles, anchored by the arena that houses the NBA’s Lakers, and other mixed-use projects aiming for year-round traffic geared around sports and tourism venues.
“It’s really about increasing that foot traffic, giving people more reasons to come to that area and spend time there,” said Mitchell Hernandez, partner and co-founder of retail brokerage Beta Agency of El Segundo, California, that handles leasing and consulting at more than 100 Southern California retail centers. Getting visitors to linger "is really important.”