Cruising in Australia is now a $5 billion industry

Getty ImagesRoyal Caribbean Cruise line’s ‘Ovation of the Seas’ in Sydney, Australia.
  • Australia’s cruising sector continues to grow as a rapid rate, with the latest assessment of the economic value of the industry estimating its worth at $4.8 billion in FY18.
  • Passengers generated direct spending of around $1.2bn when they came ashore, while the cruise companies spent $1 billionn staying afloat, including $710m spent on port charges, food and drinks, fuel, and travel agent commissions.
  • But the industry is concerned that “capacity constraints” — available port berths, could limit future growth.

Australia’s love of cruise ships continues to grow at a phenomenal pace, with the industry set to pass $5 billion in value over the coming year.

The latest assessment of the sector’s value, commissioned by Cruise Lines International Association (CLIA) Australasia and the Australian Cruise Association (ACA), concluded that cruise tourism was worth $4.8 billion to the Australian economy — 60% of that value is in NSW alone — in direct and indirect economic output during FY2017-18.

Last financial year generated $2.3 billion in direct economic output and $2.5 billion in indirect and induced output, as well as $2.6 billion in value-added dollars from 1,236 ship visits with 3.5 million passenger and crew visit days.

Five years ago, the figure for direct economic expenditure was $1.72 billion. More than 1.34 million Australians — nearly 5% of the population — cruised in 2017.

The new report, by AEC Group, is the first joint-venture by CLIA Australasia and ACA, who previously produced separate economic impact reports with different underlying assumptions and methodologies. While the latest report shows a slowing in growth based on previously findings CLIA managing director Joel Katz said it was an opportunity to reset base assumptions and data collection in a more mature local industry.

“Each year more Australians are choosing a cruise holiday and we’re also seeing more cruise passengers opting to sail in local waters which means they’re spending more time ashore visiting regional ports. This all translates into significant economic benefits for businesses and communities far beyond our ships and ports,” he said.

But Katz argues the ports are “at crisis point” when it comes to available berths.

“We need to find solutions to capacity constraints to ensure strong economic growth into the future. Australia is one of the world’s most appealing cruise destinations and more Australians cruise than anywhere else in the world,” he said.

“For Australia to cash in on this appeal, we need to make room for more ships. If key ports are full, cruise lines will be discouraged from sending their ships to our shores.”

Regional ports such as Broome, Cairns and Eden are now quickly adding to the appeal.

NSW takes the lion’s share of the economic benefit at $2.8 billion, ahead of Queensland with $1 billion, and Victoria and Western Australia at $317 million and $276 million respectively.

Combined, those four states account for 92% of economic output.

The report concluded that more than 17,000 full time jobs were supported by the direct expenditure of cruise passengers, crew and the lines in Australia.

In terms of direct spending ashore, passengers were responsible for $1.2 billion, the cruise lines $1 billion and crews $37 million.

Operating expenses accounted for 82% of cruise line expenditure with port charges, food and beverages, fuel, and travel agent commissions accounting for the vast majority (69%) of these costs at $710 million.

Breaking that expenditure down further, domestic passengers spent $934 million in Australian port destinations, and international passengers $257 million.

Accommodation, transport, dining, and shore excursions, accounted for around 78% of that total spend, with retail shopping adding another 11.3% at $134 million.

An international passenger spends on average $590 daily, before or after a cruise, as well as $215 daily in transit ports, while the figures for a domestic passenger are $447 and $165. When the crew goes ashore, they spend $101 per visit.

With the six-month cruise season kicking off last month, some new ships will be spotted around the Australian coast this summer, including the 3,650-passenger Majestic Princess, the newest and largest Princess Cruises ship to appear in local waters, while Ponant’s brand new small ship Le Laperouse will make its maiden visit to in early 2019, cruising in the Kimberley.

Cunard’s Queen Elizabeth departs from Sydney and Melbourne in February and March 2019 — there’s even a 2-day cruise between the two capitals — while sister ship Queen Victoria will appear on the horizon in February.

Royal Caribbean’s gigantic Ovation of the Seas returns in late November.

Sydney is once again the hub with 45 ships making 285 visits to the Harbour City this summer.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.