$4.6 BILLION BOATS: Nearly 1 in 20 Aussies went cruising last year

The 5 ships in the P&O fleet off Sydney last November. Photo: P&O

Australia’s cruising industry posted a massive 27% jump in economic value last financial year, hitting $4.58 billion in FY15, according to a new industry report.

The Cruise Lines International Association (CLIA) Australasia’s annual report, “Contribution of Cruise Tourism to the Australian Economy in 2015-16”, shows the industry continues to boom, with several key parameters showing major increases, from passenger numbers to daily spend.

The overall cruise ship visit days to domestic ports jumped 39%, thanks largely to P&O Cruises adding the Pacific Eden and Pacific Aria to its roster last season. Those two ships also accounted for 55% of the increase in passenger visit days.

The data comes just a few weeks before Royal Caribbean’s new $1.3 billion Ovation of the Seas makes its debut in the Australian market as the largest cruise ship ever seen in these waters.

More than 1 million people went cruising in Australia last year, including 150,000 inbound international tourists.

CLIA says that since 2004, the number of Australian cruise passengers has grown more than sixfold, making Australia the fourth largest source market in the world and the biggest by market penetration. In 2015, 4.5% of all Australians took a cruise, leading the US with 3.5%.

Since it began compiling the economic activity report in 2013, the value has risen 43% to $4.58 billion. There were 1,079 cruise ship calls at Australian ports during 2015/16, a 39% increase (259 calls) on the previous year, while home port visit days – the port where the ship is based – grew by 45%.

The report doesn’t take into account how much passengers spent on the actual ship’s cabin and onboard, only the amounts expended by the industry, crew and passengers when ashore. It says the sector spent around $1.3 billion locally last financial year, up 23%, on everything from food and beverage ($174m) to travel agent commissions ($152m), shore excursions paid by the company ($129m) and in a major windfall for state governments, $189 million in port fees and charges.

The industry also spent around $1.3 on wages and salaries. Direct expenditures generated by cruise lines and their passengers and crew totaled $2.3 billion, an increase of 20% from 2014/15.

The main focus was on economic activity generated when passengers go ashore, with the cruises generating 1,177 cruise ship visit days, 2.5 million passenger onshore visit days and around 336,000 crew onshore visit days. The addition of smaller expedition vessels in the data for the first time added a 2% boost to the numbers. The ports of Sydney, Brisbane and Melbourne accounted for 1.75 million passenger visit days.

The report concluded international passengers spent an average of $708 per day in a home port, and $186 per day in transit ports. For domestic passengers, the figures are $485 and $151 respectively.

Accommodation, transportation, food and beverages and shore excursions accounted for 79% ($753 million) of total passenger onshore expenditure

New South Wales is the local market leader, with the CLIA report concluding 63% of the industry’s economic contribution went to the state, although that share dropped from 68% in FY15. The eastern seaboard dominates the sector, with New South Wales, Queensland and Victoria accounting for 92% ($2.1 billion) of direct spending in FY16.

The overall economic output rose by 20% in real terms in NSW to $2.89 billion, while Queensland’s contribution leapt 53% to $976 million, and Victoria’s rose 43% to $346 million. All the other regions posted large growth: the Northern Territory’s economic output doubled to $62 million, Tasmania’s was up 32% to $60 million and South Australia’s up 72% to $51 million. Western Australia posted a modest rise of 9% to $190 million.

The report says the value-added impact of cruising is close to $2.4 billion. The industry now employs 18,700 Australians directly and indirectly.

And the move towards an Australian-based industry was reflected in the fact passenger visit days for international ships fell by 9.4% to 480,000, reflecting an 18% drop in port days for international ships, the second straight decline.

CLIA Australasia chairman Steve Odell warned that the industry’s rapid growth and success should not be “taken for granted by government”.

He said capacity constraints, particularly in Sydney, were placing more pressure on Brisbane and Melbourne ports.

“To make the most of our potential and maintain our edge in an increasingly competitive environment, we must recognise the importance of long term infrastructure planning and a positive regulatory environment, and do all that is possible to encourage more cruise ships to our shores,” he said.

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