Sunday 21st Oct, 2018

CRUISE SHIPPING SPECIAL REPORT: The future of cruise

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CRUISE is one of the fastest growing tourism sectors in Australia and New South Wales is looking at ways to keep up with the growth in passenger numbers and ship visitations.

The NSW government and port operators are currently working on strategies to maximise capacity at Sydney’s two existing cruise terminals in Port Jackson, while also working with partners to support growth in key regions such as Newcastle, Port Kembla and Eden.

The state government’s Cruise Development Plan, unveiled in July, reported that Sydney’s current berths are nearing capacity during peak season as more large cruise ships, with more than 51 metres above the waterline, call at Sydney.

This means the number of ships able to pass under the Sydney Harbour Bridge to berth at White Bay Cruise Terminal is expected to decrease while demand for berthing at the Overseas Passenger Terminal is expected to increase. Additionally, some mega cruise ships are unable to dock at the OPT due to their width exceeding safe harbour traffic management requirements.

The 2016-17 cruise season saw a record 344 ships visit Sydney, including 10 maiden visits.

With the federal government ruling out the use of the naval base at Garden Island as a cruise ship terminal, the new strategy is to scope out alternative locations. This will include a strategic business case to assess the viability of two potential sites at Molineaux Point or Yarra Bay, both in Botany Bay.

The state government is to also investigate the use of Hayes Dock – where Hutchison’s Sydney International Container Terminal at Port Botany is located – as an interim cruise terminal.

A spokesperson for NSW Ports told Daily Cargo News they would “work with the NSW government in their strategic review, which will include consideration of interim solutions, but currently all Port Botany berths are allocated to container and bulk liquid trades”.

Recent figures from the Cruise Lines International Association (CLIA) show that Australian cruise passenger numbers hit a record high in 2017 (1.34m) and 34%, or 451,000, travelled to Australian destinations. A further 200,000 international cruise passengers hit Australian shores last year, which was the seventh largest source of inbound international tourists.

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Regional ports to benefit
Beneficiaries of these domestic cruise travellers included an increasing number of regional ports and destinations.

“We are aware of the recently released NSW government cruise plan,” the NSW Ports spokesperson said.

“We welcome the inclusion of Port Kembla in this plan and the government’s action to investigate funding options for suitable infrastructure to support cruise visit calls to welcome and process passengers at Port Kembla.”

NSW Ports said Port Kembla enjoys many strategic advantages for cruise ships, such as “24/7 port operations, deep-water shipping channel, suitable berthing facilities which allow for shore side embarkation and disembarkation, [with] no tendering required”.

The port also offers tugs, lines, stevedoring, providoring and bunkering and is close to Sydney.
“Port Kembla can continue to facilitate growth now and into the future for cruise … it is well catered to accept large cruise ships,” the spokesperson said.

In total, the port has welcomed six cruise ships in the past two years. Radiance of the Seas (294 metres) has made several visits to Port Kembla and in March of this year Explorer of the Seas (311 metres) called.

In 2016/17 there were 14 visits to the Port of Eden, up from eight in 2015/16. In Eden, the Australian and NSW governments and Bega Valley Shire Council have confirmed $44m in funding for a 110m extension to the Snug Cove breakwater wharf to allow the berthing of cruise ships over 325m.

The industry forecasts that demand for ocean cruising in Australia will continue to grow, and notwithstanding infrastructure constraints would reach 2m ocean cruise passengers by 2020.

In 2016/17 the Australian cruise industry’s contribution to the national economy once again grew at a significant rate, rising by 15.4% to reach $5.3bn. New South Wales received the lion’s share of this contribution at 58%.

However, CLIA notes in a recent report on cruise shipping that the total economic impact in NSW rose by only 6% which was the lowest out of all the states and a substantial decrease on the almost 20% growth in 2015/16.

“This drop can be directly attributed to Sydney reaching its cruise capacity with the Overseas Passenger Terminal unable to accommodate any more cruise ships during the peak cruising season,” said the CLIA report.

While Australia’s high market penetration rate signals the continued demand for cruising, the local industry faces growth constraints in the form of a lack of cruise infrastructure development in ports across Australia.

A customs conundrum
CLIA said in its report that Australia is also constrained by a “customs policy that hinders the development of increased domestic cruising”.

“Resolving these infrastructure constraints and ensuring the right regulatory settings can be achieved is an absolute priority to future-proof cruise tourism in Australia,” a CLIA spokesperson said.

Globally, there are 109 new cruise ships set to be delivered between 2018 and 2027. Australasia is well-positioned to reap the rewards of increased deployment so long as it can meet capacity requirements.

“With cruise tourism in neighbouring Asia still growing at an impressive rate due especially to a sharp increase in passenger volume from China… it is critical that Australia future proofs cruise tourism to avoid losing potential capacity to Asia,” the CLIA spokesperson concluded.

This article appeared in the September edition of DCN Magazine





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