State of the industry

There can be few better ways of taking the pulse of the Australian cruise industry than to attend a Cruiseco conference where the cream of the country’s cruise agents mingle with key cruise principals. The recent Cruiseco conference showed that the industry currently has a very healthy pulse indeed. Of course, local infrastructure needs still need treatment. And for agents, there are a couple of minor blips on the pulse rate chart but the conference heard re-assuring words about these. The blips for agents are the seemingly inexorable growth of NCFS (noncommissionable fees), and the “ridiculous prices” which cruise lines, from time to time, feel compelled to offer to achieve desired occupancy levels. In the case of NCFS, perception, it seems, is everything. Many agents see NCFS increasing and are convinced they form a growing proportion of total fares. Not so, according to Dominic Paul who addressed the conference – and took questions from agents – via video link from his UK office. Paul, senior vice president international for Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises, did not deny what is readily apparent – that governments and port authorities are hiking charges. (The extent to which this is a legitimate means of funding infrastructure for a growing industry as opposed to exploiting that growth in a grab for revenue is a topic for another day.) But Paul also maintained that the amount of commission his company is paying to agents is increasing and, crucially, this growth is outstripping NCF growth. Meanwhile a number of principals, and Cruiseco itself, reported booking lead times for 2016 are longer than they have been for a number of years. That is a promising portent that the cruise lines will be under less pressure to release last-minute “fire sale” prices to clear unsold berths. Lengthening cruise booking leadtimes were just part of the optimistic picture that emerged during the Cruiseco conference. Delegates heard 2016 is poised to be the single biggest year of growth for the Australian industry. A country which was once the dumping ground for “remnant tonnage” is now attracting new-builds. And the industry can even take in its stride negatives beyond our shores, such as war and terrorism which are seeing cruise lines shift capacity from Turkey and elsewhere in the Eastern Mediterranean, at the same time creating new opportunities for agents in the Western Mediterranean and Northern Europe.