CLIA view: Nov 2017

Joel Katz, managing director, CLIA Australasia

The Value of Oz’s Cruise Industry

With so many travel agents generating an increased percentage of their revenue from cruise, it’s imperative that the growth of the industry is not inhibited. Many travel agents are small business owners, and the success of the industry has a direct impact on your business.

CLIA recently released our report on the Economic Contribution of Cruise Tourism to the Australian Economy 2016-17, and this report reveals an industry with strong growth potential that generates significant national and regional economic activity, quantifying the industry’s economic output and contribution, and providing vital insight into what’s driving the growth in economic value, from creating thousands of jobs to the economic benefits that flow to businesses and communities far beyond the ships and ports.

The findings provide compelling evidence of the value of the cruise industry and how crucial its continued growth is to the economy. With a record number of cruise ships making a record number of visits to Australian ports, the value of the cruise industry to the Australian economy has surged by 15.4 per cent in 2016-17 to reach $5.3 billion.

Each cruise ship visit delivers a big economic boost from port charges, to fuel and, most importantly, local supplies like Australian meat, dairy, wine and fresh fruit and vegetables. In addition, the visitor economy, including travel agents, hotels, car-hire, and airlines, benefits from the activity of the cruise industry.

Local demand for cruising continues to grow with a record 1.3 million Australians now cruising. Australia is the fifth largest source market for cruise passengers in the world, and with the equivalent of 5.3 per cent of the Australian population taking a cruise, we have the number one market penetration rate in the world.

While this is all good news for your business, and while just about every area of the CLIA report shows positive signs, the cruise industry is warning that infrastructure constraints in Sydney threatens further growth of the industry, resulting in economic benefits not being fully realised for Australia.

Australia is one of the world’s most appealing cruise destinations for global cruise lines and Sydney is a big drawcard but there is no more room for large cruise ships in the harbour during the peak cruising season. Sydney is our cruise gateway and unless we can accommodate more ships here, we will see less international ship visits as well as the prospect of less homeported ships — which as the report demonstrates, would have a massive flow on effect to local economies across a range of sectors.

While New South Wales remains the dominant cruise state, accounting for 58 per cent of the industry’s economic contribution, its 6 per cent growth last financial year means its share has dropped 10 per cent in just two years due to Sydney reaching capacity.

With the nation’s cruise gateway at crisis point, the challenge is to ensure strong economic growth for years to come and the only way to make that happen is to find a solution to Sydney’s capacity constraints.

 

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