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Carnival-Melbourne stand-off could alter Australian cruise landscape

Ill feelings resurfaced between governments and the cruise sector this week; Myles Stedman gathered comment from a number of players, including Virgin Voyages, on what happens next.

THE Australian Cruise Association (ACA) is urging an immediate whole-of-government approach to developing a forward-looking cruise strategy, as tensions in Victoria bubble over from the recently announced port fee hikes in Melbourne.

ACA Chief Executive Jill Abel called on all sides of government in Victoria to respond to the needs of the fast-growing sector by working closely with cruise lines and industry associations such as her own.

Abel believes the Victorian cruise industry should develop a strategic outlook which supports the growth the sector is currently enjoying.

“The State Government simply cannot afford to turn its back on the cruise sector, but nor can this be turned into a political hot potato,” Abel insisted.

“This is no time for finger-pointing or looking in the rear-view mirror – it is a time for strategic planning to develop a cohesive future cruise strategy in a way that will work for all.

“It is time to look at berthing requirements – if Station Pier is to be the dedicated cruise facility for Melbourne, there needs to be appropriate investment, beyond a maintenance and repair program, on delivering a contemporary, fit-for-purpose facility.“

Abel said the strategy also needs to look at how government works with cruise lines currently visiting Victoria, particularly as the state provides a critical link for southern itineraries visiting Western Australia, South Australia, and Tasmania.

“Victoria has a critical role to play as we continue to develop this country’s cruise sector, and we look forward to the government recognising this and acting accordingly to bring a crucial resolution to these current challenges,” she added.

The calls come as Carnival Corporation announced the cessation of the deployment of two of its cruise lines from Melbourne earlier this week.

The decision to hike taxes 15% for ships arriving into Melbourne undermines the sector’s $380 million value, industry leaders warned.

Abel found a supporter in at least one level of government, with Melbourne Mayor Sally Capp telling local radio station 3AW Carnival’s move will be an “enormous loss” for the city.

Capp showed see clearly understands the value provided by the cruise sector when she opened up on the loss to both tourism and local businesses the move would mean.

Carnival Corp, which itself cried out for greater collaboration with the Victorian State Government, warned Australia is becoming a more difficult market to cruise from.

Chief Strategy Officer Teresa Lloyd stoked fears regarding the lackadaisical decisions recently made by state governments around Australia, when she revealed the company is considering “all deployment everywhere” as margins become thinner around the industry.

“Australia and this region is becoming more difficult since the restart,” she conceded.

“Fuel is very expensive in this part of the world, the distances we have to travel to go to different ports is a long way, we have issues that compound operating in this region.”

Also adding to the calls was Virgin Voyages, with the cruise line dissuading the Victorian Government from introducing “unnecessary” barriers to the growth of the cruise industry.

“Virgin Voyages is committed to bringing global attention, visitors and economic benefits to Australia, and in particular, Victoria,” a spokesperson for the cruise line told travelBulletin.

The revelation is the latest wake-up call to just how precarious deployment prospects are in Australia, after Carnival’s Cunard Line brand announced it will pull out of the country altogether from 2025.

Governmental cruise acceptance has been a dog nipping at the sector’s heel all year long, beginning with New South Wales ruling out the construction of a cruise ship terminal in Yarra Bay back in May, without presenting an alternative option.

Carnival is not turning its back on Victoria, though; Lloyd said the company has asked for a meeting to fully brief ministers on the significance of the rate hikes.

“We’re confident we’ll have a meeting with the minister soon, and we really look forward to having that discussion,” she said.

“It’s too late for 25/26, but for the future, we want to bring the ships back.”

Although Carnival Corp hopes it will reach a decision with Victorian stakeholders soon, Lloyd said other cruise lines within the company are considering their own decisions for the coming seasons, setting an ominous undertone to the narrative.

Lloyd said cruise lines were first informed of the magnitude of the rate increase, which will apply from next year, a number of months ago, but only received formal confirmation last week.

Melbourne’s loss is the gain of other cruise destinations around Australia though, with Carnival set to redeploy some of the lost voyages to Sydney and Brisbane, where it is less expensive to call.

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