Cruising — tourism’s hot spot
Fast-growing cruise scene is a bright spot amid slowing growth in wider market
This summer’s cruise season promises to be a bright spot for New Zealand tourism, amid sagging overall international tourist growth. Record numbers of Kiwis are also taking cruises in other parts of the world, leading global growth rates.
Latest spending figures for this country are due out today, but last year Stats NZ said cruise ship expenditure by visitors and provisioning for ships reached $434 million in the year ended June 2018, up 18.3 per cent ($67.1 million). That followed a 9.9 per cent increase in the June 2017 year.
This coming season is also shaping up to be a bumper one.
New Zealand Cruise Association figures show 42 ships will make 1173 port calls this summer, up from 41 ships and 943 calls last season.
While still a small part of the total of 3.9 million visitors a year (who spend more than $16b), the doubledigit growth contrasts with the overall trend. The rate of visitor growth is falling and could be flat this year.
Association president Debbie Summers said more than 370,000 cruise visitors would visit this season — up 13 per cent on last year.
“Growth brings increased visibility, which is true often within tourism, however perhaps even more so with vessel sizes and berthing in the heart of communities. Media attention is at an all-time high and communities are demanding balance and sustainability, and rightly so,” she said in an association newsletter.
Ports such as Akaroa are swamped with visitors when cruise ships call, and in Auckland plans to extend a wharf with a “mooring dolphin” to accommodate megaships face strong opposition from those concerned about encroachment into the harbour and the work’s cost.
Summers says the industry is at a “tipping point” when it could lose what it had fought hard to win in the first place.
Megaships such as Ovation of the Seas — back this year for its fourth season — must anchor in the
Waitemata¯ Harbour and have passengers taken by tender to wharves. The cruise industry around the world is acutely aware of swamping ports, as has happened in Venice, where large craft have been banned from the city’s Giudecca Canal.
Smaller ships serving the luxury market don’t face the same issue and are calling at more of the smaller ports. It is one of the fastest growing segments for travellers coming here, and also for New Zealanders in all parts of the world.
Regent Seven Seas Cruises is part of Norwegian Cruise Line and caters to that market. Vice president, sales, Australia and New Zealand, Lisa Pile, says the company is deploying more ships in this region this summer.
“I think 2020 is going to be a huge year here,” she says.
Three out of four Regent ships will be in these waters. About 50 per cent of passengers are from North America, 30 per cent from Britain and Europe and the remainder are those cruising close to home — Australians and New Zealanders.
Pile says the number of Kiwis cruising near to their home is increasing, but the fly-cruise market is also booming for her ships, where passengers pay about $800 to $1000 a day on average for ultra-luxury. Large suites can cost three times that.
“I think Kiwis punch well above their weight — it’s a huge market for cruising.”
The number of New Zealanders taking an ocean cruise (anywhere in the world) broke through the 100,000 barrier for the first time in 2018, reaching 112,000 passengers in a year of world-leading growth, according to the Cruise Lines International Association source market report.
The record result was a 14.6 per cent increase on the previous year, giving New Zealand a growth rate well ahead of the world’s largest and more established cruise markets including the US (9.4 per cent) and Europe (3.3 per cent).
Regent is increasing its presence by expanding its office in Auckland, and Pile says the strong interest from New Zealanders shows no sign of easing off.
Kiwis typically book two years in advance (compared to 18 months for Australians), making them the ideal passengers as this gives cruise companies more time to plan. More Kiwis are forking out for superior suites and for world voyages that last three months or more.
In Australia, there was also strong interest in cruising. While the property market has cooled, she says, most of her line’s customers were not affected.
“You don’t see the dips if there’s a slight downturn [in property] at the luxury end [but] we have a direct correlation to the sharemarket, especially the luxury end.” Most Regent passengers were self-funded retirees and business owners.
“While things are still good in the sharemarket and people feel wealthy, they tend to spend,” says Pile.
Jacqueline Unsworth, a Helloworld cruise specialist, says Kiwis are booking cruises in increasing numbers. “We are seeing this reflected in our own business every week. Local cruising is definitely on the increase with P&O Cruises, Princess Cruises, Royal Caribbean and Celebrity Cruises in particular continually increasing their capacity in this part of the world.”
New Zealand and Australia have proven to be excellent source markets for big-name brands like Princess Cruises, which home-ported its latest flagship Majestic Princess in Australasia last year.
“This is important as usually we would get the older style ships and the newer ships would forever be in the Northern Hemisphere. But that has all changed and we have proved we can fill these ships from the local market.” She says cruise lines have been very savvy in striking up strategic partnerships with celebrity chefs, Broadway show producers, restaurant chains, wine estates and the like to attract new clients to their brands.
“The baby boomer market is continually expanding and they look to cruising to deliver the holiday they want — be it river cruising in Portugal, expedition adventures to Galapagos or Antarctica, small ship cruising with less than 40 people in Croatia to the big ship experience in the Norwegian Fjords.”
Around the world, 28.5 million people cruised last year, up 6.7 per cent on the year before, and the cruise industry is growing faster than overall tourism — which is running at 6 per cent.
Cruise operators say they are benefiting from passengers choosing experiences over buying possessions and this has resulted in the strong financial results for the big three: Carnival, Royal Caribbean Cruises and Norwegian.
Carnival last year enjoyed its fifth straight year of earnings growth — up to $28b. In the past five years Royal Caribbean’s net income has grown by almost five times to $2.7b and Norwegian has just reported its bestever second quarter.
Tourism Industry Aotearoa chief executive Chris Roberts says New Zealand is a fast growing market because ships can call in at so many ports within a relatively small area. It was good for operators. “You know who is coming at least a year ahead and in some cases two years ahead — you know how many are turning up and what day,” says Roberts.
Some travellers on cheap packages would try not to spend a single dollar during port visits and would return to the ship for an allyou-can-eat buffet, while others on luxury cruises would come ashore and take a helicopter ride up to the mountains.
“One of the interesting things about cruise is the variety,” says Roberts.
I think 2020 is going to be a huge year here.
Lisa Pile, Regent Seven Seas Cruises