Tapping into cruise ship profits a conundrum for city’s businesses
A few weeks ago, 1740 tourists disembarked from a cruise ship on a Sunday afternoon in Geraldton.
The ship had docked on the foreshore for several hours and passengers were no doubt looking to stretch their legs and see the sights.
As they slowly filtered ashore with wallets at the ready, they were greeted by scores of closed doors — shops and food outlets along Foreshore Drive and Marine Terrace were shut for the day.
It was one of the rare times when cruise ships visit Geraldton on a Sunday or public holiday.
Scenarios like this that have played out since cruise ships started visiting Geraldton several years ago, say tourism advocates, are not a good look.
They say it’s bad for business — and everyone in the community, long-term.
But retailers say it’s more complicated than that.
They say until some major hurdles are overcome, it would be foolish to open their doors on Sundays or public holidays to cater for cruise ship arrivals.
What exactly are the hurdles? And is the cruise ship industry the lucrative tourism driver many say it is?
In this special report, the Guardian takes a closer look at the issue.
According to Tourism WA and the Cruise Line International Association, cruise ships brought in $275 million to WA’s economy in 2015-16.
They estimated each domestic passenger spent an average $150 per day in transit ports, which Geraldton classifies as.
They say international passengers spend an estimated $180 a day in transit ports.
According to the City of Greater Geraldton, 17,872 passengers disembarked in Geraldton in 2015-16, when 13 cruise ships visited the city.
Two of those shore visits happened on a Sunday and both times more than 1700 people came ashore.
Penalty rates and profitability have historically been the major barriers for retailers opening their doors outside regular trading hours for cruise ships, according to former Mid West Chamber of Commerce and Industry chief executive Rob Jefferies.
“While calculations can be made on estimated expenditure from cruise ships, these are average figures,” he said.
“A number of businesses found when they opened the expenditure wasn’t anywhere near those levels.
“Some sectors have done well — notably hospitality and cafes — while some have done average.
“It’s important to realise tourists are looking to experience the local product, something that is relevant to the town they are visiting.
“They are not looking to go to a supermarket to buy a jar of Vegemite.”
He said a significant issue not widely understood was that cruise ship arrivals could not be guaranteed, yet if retailers chose to open their doors they had to pay staff regardless.
Mr Jefferies said the argument of lifestyle and wanting time off to spend with family or to play sport did not come up in discussions he had with retailers on the issue.
“There are a lot of assumptions made about why retailers don’t open their doors but the fundamental reason is profitability,” he said.
Mr Jefferies said the Geraldton Visitor Centre and the chamber were working closely to try to improve communication between retailers and cruise ship passengers.
“A lot could be done, but the best results are achieved in retail when visits are co-ordinated, and the chamber and visitor centre are doing a great job, so I’m sure it will continue to improve,” he said.
City of Greater Geraldton chief executive Ken Diehm said an issue recently identified by cruise ship operators was the need to anchor offshore and bring their passengers into the marina by boat. “On some days when our ocean is not calm, that exercise is uncomfortable for their passengers, and it limits the number that choose to come ashore,” he said.
“The preference of the cruise ships would be to enter our port and berth, to enable passengers to disembark onto the port docks.
“That would certainly see greater numbers of passengers disembarking safely, in the calmer comfort of the port, and that might logically make it more worthwhile from a commercial standpoint for
more foreshore and CBD businesses to open on Sundays and public holidays when ships visit.”
Representatives from the City and the Port recently discussed the possibility of having cruise ships berth in the port.
“We appreciate the primary business of the port is export of regional mineral and agricultural produce, so there is competition for berths,” Mr Diehm said.
“An advantage of cruise ship operations is that they publish their planned visits program up to two years in advance, and that allows ports along their cruise route to schedule use of berths.
“The Port is keen to pursue this, to find a workable arrangement. One hitch is the swell problem that the port experiences, resulting in broken lines, but the potential for investment in shoreline tensions systems is being actively explored, to mitigate that problem.
“The Port has been seeking solutions to this problem, recently trialling several shoreline tension units, and finding them effective.
“Obviously, investment in these units for the Port will cost money.
“The City will support efforts by the Port to fund and acquire the shoreline tension units.”
Mr Diehm said the City would consider special trading arrangements for businesses to better cater for cruise ship arrivals outside regular business hours.
“The City has been keen to liberalise retail trading hours for some years, but our retail community has been reluctant to embrace that change, for a range of reasons,” he said.
“We understand the Mid West Chamber of Commerce and Industry considers this issue on an ongoing basis.”
Albany Chamber of Commerce and Industry chief executive Russ Clark said it was important for the business community to focus on the positives offered by cruise ships on Sundays and public holidays, rather than negatives.
“In Albany, we promote heavily to the local businesses when the ships are arriving,” he said.
“Some regions have also looked at getting people to go onboard the ships and inform the passengers ahead of time of what services are open.”
Mr Clark said passenger demographics and trip duration also played a significant role in their movements on arrival.
“Early on in the trip, passengers typically like to save their money, but towards the end they like to spend up big as they may wish to purchase gifts or trinkets,” he said.
“Rather than focus on the businesses that are shut, we like to promote businesses that are open.”
Mr Clark acknowledged the pressures Sunday penalty rates had on small businesses and understood why some businesses opted to stay shut on Sunday.
Local businessman and lead for new proposed business-led entity Progress Mid West Todd West, said the cruise ship industry was an important part of Geraldton’s tourism.
“Progress Midwest sees the cruise ship industry as a vital component to the long-term success of tourism in the Mid West,” he said.
“We need to be maximising the opportunities the cruise industry brings to the region.
“We know the cruise ship itineraries and need to seek to understand how we can add value to the experience that passengers have when they land in Geraldton.
“This is about building longterm relationships and enticing people back, and their friends, to the region long after the initial visit.
“This is all about taking the individual good and turning it into the collaborative great.”
City of Greater Geraldton Mayor Shane Van Styn, an advocate of deregulated trading, wants businesses to consider opening on Sundays when a cruise ship plans to visit.
“It’s unfortunate shops remain closed during those peak cruise ship times,” he said.
“I would encourage all business owners to consider, for the 18-odd times a year, being open to serve those cruise ship passengers, as we look to grow tourism in the Mid West.”
Mid West Chamber of Commerce and Industry (small and medium enterprise) representative Dave Clare would like to see retailers working more closely with cruise liners to maximise tourism and business opportunities.
He said local businesses had plenty of opportunity to plan for when cruise ships arrive and to cater to passenger needs.
“It would be great for retailers to communicate closely with the cruise liners and find out which direction they are heading or returning from,” he said.
“That way, they can determine the demographics of passengers onboard, money to be spent and cater to passenger needs.”
Mr Clare said he would like to see the foreshore busy when cruise ships arrived. “Even if shops didn’t trade fully, it would be great if special trading provisions could be introduced and businesses could set up market stalls,” he said.
“We want tourists to have an exciting experience in Geraldton.”
Newly-appointed Mid West Chamber of Commerce and Industry chief executive Glen Whistler Carr said he could not comment at length on the issue because he was still determining how retailers would like to be represented.
But he said the chamber’s retail committee was involved in ongoing discussions, “trying to find an equitable solution beneficial and sustainable for businesses”.
Big visitor: cruise liner Sun Princess anchored beyond Seal Rocks.