Introduction
More and more Australians are taking cruise holidays. For instance, it is reported that in the year 2010, the number approached an all time high of about 500,000 basing on the estimates that were given in 2011 (Moffet, 2011).
Beginning from the year 2002, the number of the Australian people that have been cruising has gone up from 116, 308 to 466,692 passengers, which is a 306% increase, realizing a growth rate of nineteen percent per year (Moffet, 2011).
It is also reported that the annual growth in the number of the Australian cruise passengers in the year 2010 was among the highest for the global cruise sector, with just New Zealand recording a higher increase of 35% and other main source markets registered growth with “North America increasing 6 percent in 2010, the U.K 6 percent, France 12 percent and Italy 11 percent” (Moffet, 2011, p.1).
This paper is going to look at the growth of cruising in Australia. The description of how cruising has grown over time is going to be given and the analysis of the cruise sector is going to be carried out in order to justify whether the growth of this sector is sustainable. The conclusion is going to give a summary of the important points in the discussion.
Cruising in Australia
The Australians go cruising for various reasons. Some of them go abroad for the on the ship party environment with an intention for going to dine, drink and nightclub. There are also those who go out to look for quiet hideaways in order for them to engage in reading or to play board games and also to relax from hectic onshore occupations (Australians addicted to Cruising, 2008).
The cruising sector in Australia has gone through a period of growth in the course of the last several years, although from a low base, having a 24 percent in annual passenger days at the port beginning from the year 2005 (Access Economics, 2009).
In the course of that period, there has been an increase in the number of passenger days at the ports in Australia from approximately four hundred thousand per year up to about 1.1 million each year. It is reported that, as on one hand there has been fair growth in the Australian tourism sector in general, on the other hand, there has been a considerable growth in cruise tourism (McLennan, 2011).
It is also reported that “growth in Australian cruise passengers travelling on Australian based ships has been faster than in comparable international markets” (Deloitte Access Economics, 2012, p.9). The estimates that have been presented by the “International Cruise-Council Australia” give an indication that the domestic passengers on the ships that are based in Australia have witnessed a 27 percent growth.
However, there has been slower growth in Australians cruising in the German based ships and both North America and U.K based ships whose growth stands at 19 and 6 percent respectively (Deloitte Access Economics, 2012).
Passenger and crew days at the port
In course of the period 2010 – 2011, there has been strong growth in passenger days in NSW that has stood at 34 percent. However, it is also reported that a decrease in the activity in a larger number of states has brought about an overall decrease of “0.9 percent in passenger days at port Australia-wide” (Deloitte Access Economics, 2012, p.10).
This gives a reflection of an increasing number of passengers that leave Brisbane and Sidney and cruising globally, “to the South Pacific and Asia, rather than to other Australian destinations” (Deloitte Access Economics, 2012, p.10).
An increase in the passenger days in the two main ports has contributed towards having an increased number of ships which are based away from these markets.
At the present for instance, Sidney has “two P&O Australia ships, one Princess and two seasonal Royal Caribbean ships while Carnival Cruise Line’s Carnival Spirit will be the first year round deployment of a ship that is unable to navigate the Sidney Harbor Bridge” (Deloitte Access Economics, 2012, p.10).
On the other hand, at the present, Brisbane has a single Australia ship and also a single Princess ship which are based there with the existing cruise terminal infrastructure as well as location turning out to be an obstacle to more deployments, and particularly the greater capacity of the ship currently having deployment in Australia.
Then again, Melbourne is facing some challenges in regard to driving growth in the period to follow. It only comes after Sidney as a destination that is preferred by the international passengers that come to Australia and thus the transit calls growth is expected to go on.
The challenge comes about in regard to the “home based ships” growth as a consequence of it deprived location in line with the main cruise destinations of the South Pacific as well as New Zealand.
The predicted strong growth in the two major markets implies that there is need to make sure that policy decisions that have an effect on infrastructure are designed in a better way and its implementation is carried out in a manner that will give room for realization of the predicted growth.
Passenger and crew forecasts
Sidney
In this location, the leading source of the growth in the number of passengers is projected to come from Sidney-based cruise ships (Carnival Australia, 2011). It is expected that this will especially be the base in case there will be limiting of the cruise numbers by inadequate berthing opportunities that are in the east of Sidney Harbor to hold ships that have “air draft restrictions” (Deloitte Access Economics, 2012, p.11).
In Sidney, an issue is brought in by the air draft restrictions in that the vessels which are larger in size are not able to “fit under Sydney Harbor Bridge to access the berths on its western side” (Deloitte Access Economics, 2012, p.11).
It is projected that by the year 2015 and the year 2020, 33 and 56 percent respectively of the cruise ships coming to Sidney will not be able to go through the Sidney Harbor Bridge because of how high they are, “necessitating berthing infrastructure on the eastern side of the Bridge” (Deloitte Access Economics, 2012, p.11).
In the near future, in Sidney, the cruise passengers’ composition will be greatly base intensive. Putting into consideration a higher absolute number of passengers as well, and also the large section base passengers, making sure that the requirements of infrastructure are sufficient to facilitate realization of the predicted growth is an issue of great significance in Sidney.
Out of all the Australian ports, Sidney is the one that has the largest proportion of base passengers (Cruising, 2012). By the year 2019 – 2010, it is predicted that nearly all the base passengers will be base passengers, represented by 93 percent (Deloitte Access Economics, 2012).
Brisbane
It is predicted that, by 2019 – 2020, about 20 percent of the forecast passengers in this area are going to come from the transit cruises. This encompasses not just the Australian people coming to Brisbane but the international cruise tourists as well.
It is reported that in the period 2010 – 2011, the number of passengers in this region was about one hundred and sixty five thousand and this number is predicted to increase to about three hundred and thirty two thousand passengers by the 2019 – 2020 (Deloitte Access Economics, 2012).
Considering the recent prediction of strong growth in Brisbane, the infrastructure that is there offers a possible obstacle for the cruise sector in this region. The present position of the Portside facility in this city along the Brisbane River implies that the ships that are larger in size can not access the port.
Hence, it is imperative that the policy decisions that are to be made in regard to the future and there implementation be carried out in a manner that makes sure that there is realization of future growth in Brisbane.
Fremantle
Contrary to the two examples given above, the percentage of the forecast passengers to this region is expected to be approximately the same for base and transit ships. In the period 2010 -2011, the number of passengers received was thirty four thousand and it is projected that in the period 2019-2020, this number will increase to one hundred and nineteen passengers (Deloitte Access Economics, 2012).
Melbourne
Here, the main growth in passenger visits is possibly to originate from the transit international ships instead of the ships based in Melbourne. In 2010 -2011, the number of passengers from transit ships was thirty three thousand and two hundred passengers and this number is expected to increase to one hundred and eighty five passengers in 2019 -2020 (Deloitte Access Economics, 2012).
Melbourne has one of the well-organized cruise passenger facilities (Access Economics, 2009). However, there may still be need to have more investment in order for it to meet the expected demand.
As on one hand challenges of setting up a base ship market exist, but on the other hand, the sustained growth in the short cruise sector and setting up additional capacity in the Australian market indeed offers Melbourne with growth prospect.
Crew
The projected crew arrivals in the main ports are as well significant for the regional economies because they make a contribution towards the flow-on gains to the rest of the tourism industries that is land-based in the course of their time in port including accommodation, food among other servcies.
It is expected that Sidney will be the main crew destination, having expectation of overall crew arrivals numbers to increase to about three hundred and twenty nine thousand by 2019-2020.
On the other hand, there is expectation that by the year 2020, Brisbane will be the second most frequently visited port having over one hundred and thirty one thousand crew visitors coming here.
There is also expectation that the number of crew visitors to Melbourne will increase to eighty eight thousand by 2020 from the lower figure of twenty six thousand that was recorded in 2011. There is expectation of having growth in Fremantle to forty eight thousand by the year 2020 (Deloitte Access Economics, 2012).
Cruise activity by Australians
There has been achieving a double-digit growth in Australia beginning from the year 2005 up to twenty seven percent that was realized in 2010, giving an indication of sustained increases in this sector in spite of a weak global tourism industry. The South Pacific still goes on to be the most common Australian cruise passengers’ destination.
It is reported that, in the year 2010, out of the four hundred and sixty seven thousand passengers who travelled, thirty seven percent of them travelled to the South pacific, nineteen percent travelled to Australian destinations and ten percent of them travelled to New Zealand (Deloitte Access Economics, 2012).
In more than the last seven years, the number of passengers who were travelling to the Australian destinations has almost grown by two times, rising to nineteen percent in 2010 from twelve percent in the year 2006. This rise has facilitated a decline in cruise tourism in Australia to Asia, “which fell from accounting for 15% of passengers in 2006 to 8% in 2010” (Deloitte Access Economics, 2012, p.16).
Penetration in the Australian market is the proportion of the whole of the population of the Australian people participating in cruising. Of great importance, for Australia, in spite of the strong growth rates that were realized in the recent times, it is reported that in the year 2010, the cruise market penetration was low in relative terms standing at 2.1 percent of the total population.
This figure was below what was realized in the U.K as well as North America that stood at 2.6 and 3.1 percent respectfully (International Cruise Council Australia, 2010).
In Australia, there has been a steady growth in the cruise sector market penetration rate beginning from the early 2000s and there is a likelihood that the growth will continue on this course, since other developed nations have realized the penetration rates that are greater (AAP, 2009).
It is reported that the rate of market penetration is projected to increase at the start, and the growth will go on in the course of the forecast period, although at the rate that is lower (Deloitte Access Economics, 2012).
This is possibly due to such factors as the increasing activity that is related to tourism, the increasing popularity for cruising by the people of Australia and the demographic changes that are being realized in the Australian population.
The Future of the Australian Cruising Sector
In Australia, the growth in the domestic sector is expected to stay strong in the course of the medium term. It is reported that, in the period between 2010 and 2013, there is expectation of the average annual passenger growth to stand at thirty percent (Deloitte Access Economics, 2012). The expected strong growth is on the basis of the observation that has been made on the data about Australian port bookings.
In the long run, in the periods 2013 – 2013 and 2019 – 2020 annual passenger increase is forecast to stand at a figure that is much more conservative of seven percent. But on the other hand, the cruising industry has the capacity to realize further growth in case a variety of challenges being encountered by the industry are dealt with in a suitable as well as timely way.
The original projection of a strong growth is made on the basis of remarkable increase in capacity within this industry contributing to strong demand among passengers. This in turn is succeeded by a period in which there is lower growth in the industry, although it is still high growth. There is projection of the portside activity to rise at a rate that is similar to that of the forecast number of passengers.
Moreover, there is projection of the corporate activity to grow at 50 percent of the passenger numbers rate. In the course of the period, the expenditure is expected to rise from below one billion dollars in the 2010 -2011 up to about 2.6 billion dollars in 2019 -2020 (Raggatt, 2012).
It is also projected that the operator share of the whole expenditure to be constant at around 50 percent of the expenditure within the expenditure making a contribution of about 1.3 billion dollars in terms of expenditure by the year 2020 (Tourism Research Australia).
It is also projected that by 2020, the cruise sector will make a contribution of about 2.3 billion dollars to the economy of Australia in terms of value added. An approximation of the total value added to the economy of Australia by the cruise sector by the year 2020 is put at 2.28 billion dollars (Raggatt, 2012).
The GDP is projected to stand at one thousand eight hundred and sixty nine billion dollars. It is also projected that the cruise sector will make a contribution of about 0.12 percent to the whole economy of Australia by the year 2020 (Tourism Research Australia, 2011).
Conclusion
The available figures indicate that more and more Australians are cruising and there has been a steady growth in this sector for the past years. However, this growth may be hindered by some challenges in the near future and there is need to take some measures in order to realize sustainable growth.
The Australian cruise sector has the potential and ability to grow even more if various challenges being encountered by the industry are dealt with in a proper and well-timed manner. There is still need to invest more in this sector so that the increasing demand can be met.
As on one hand challenges of setting up a base ship market exist, but on the other hand, the sustained growth in the short cruise sector and setting up additional capacity in the Australian market definitely offers such a port as Melbourne growth potential. In general, there is need to upgrade ports.
For instance, taking the case of Brisbane, the current infrastructure that is there offers a potential barrier for the future growth in the cruise sector in the port. The present position of the Portside facility in this city along the Brisbane River gives an implication that the ships that are larger in size can not access the port.
Therefore, it is quite important for the policy makers to come up with strategies that will make it possible that such obstacles are overcome so that the forecast strong growth can be realized at this port. The same case applies to the rest of ports in the region.
References
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Carnival Australia 2011, Carnival Australia Submission to the Independent Review of Enhanced Cruise Ship Access to Garden Island. Web.
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Deloitte Access Economics, (2012). The economic contribution of the cruise sector to Australia. Sidney, Australia: Deloitte Access Economics Pty Ltd.
International Cruise Council Australia, (2010). Cruise Industry Report Australia 2010. Web.
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