CLIA view: Aus is missing out on cruise growth

JOEL Katz, Managing Director CLIA Australasia

Aus is missing out on cruise growth

With elections behind us and governments returned in both Canberra and New South Wales, it’s now time to put the focus back on the big issues facing Australia’s cruise industry and the work that must be done to return us to strong growth.

As CLIA has been warning for some time, a shortage of berthing space in Sydney is hampering our sector’s development and preventing Australia from reaping the full benefits of a thriving world cruise industry.

Nowhere is this shown more starkly than in the figures CLIA released last month in our Australian Source Market Report for 2018, which revealed Australian passenger growth of just 0.9% last year. After decades of double-digit increases, the long run of expansion we’ve become accustomed to appears to have hit a ceiling.

In all, a total of 1.35 million Australians took a cruise last year, or 5.8% of the population. It’s still the best result we’ve ever achieved and gives us one of the highest market penetration rates in the world, but it’s only a touch above the total shown in 2017. Given the total number of cruise passengers worldwide increased by 6.7% to 28.5 million last year, we’re well behind the growth seen in other countries.

Most tellingly, the number of Australians cruising in local waters (Australia, New Zealand and the South Pacific) grew by just 0.1% over 2017, and this is where the impact of the berthing issue is most obvious. With Sydney’s International Cruise Terminal almost fully booked over the peak summer season and the White Bay Cruise Terminal restricted to ships that can fit beneath the Harbour Bridge, cruise lines have very little ability to deploy more capacity for local cruising.

Fortunately, Australia’s appetite for cruising remains strong. A healthy 3.4% growth in the number of Australians taking fly-cruise options in destinations outside our local region tells us that demand is still there.

That’s one of the reasons we’re confident cruising will continue to grow in the Australian market, even if numbers remain subdued for the year ahead. New developments like the opening of a new International Cruise Terminal in Brisbane next year and significant new vessel deployments in this region from the 2020-21 season will help deliver new capacity and fuel further growth.

But the key issue of berthing infrastructure in Sydney remains a problem.

The cruise industry has welcomed the NSW Government’s Cruise Development Plan and is looking forward to seeing details of its business case for a third Sydney terminal. With elections dealt with, what we need to see now is a commitment from all levels of government to progress this plan as swiftly as possible and develop policy settings that help Australia reap the benefits of cruising, not just in Sydney but all over the country.

 

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