Association chairwoman Tansy Tompkins says the document Cruise Aotearoa New Zealand 2040 comes at a critical time, with the industry facing ever-changing geopolitical and economic factors.
The industry has shown remarkable resilience in the post-Covid tourism recovery and although it continues to face bans in some European ports and backlash to its environmental impact, it’s now one of the fastest-growing travel sectors globally. Numbers exceed pre-pandemic levels of close to 30 million a year.
Tompkins said that despite a robust 2023/24 season, New Zealand was anticipating a 15-20% reduction for this summer and beyond because of increased costs to operate, global competition and geopolitical risks.
During the 2023-24 season 54 ships carrying 360,000 passengers and 49,000 crew made 1056 port visits.
Stats NZ figures cited in the report show a ship visit was on average worth $614,000 a day and $380 per passenger.
Geopolitical tensions which meant ships couldn’t travel south through the Middle East, negative impacts of foreign exchange, rising fuel costs and the slow return of China to travel, combined with increasing costs and regulatory requirements in New Zealand are significantly impacting the outlook, the report says.
“Notwithstanding our destination appeal and high passenger ratings, our distance from Northern Hemisphere home ports, relatively expensive cost structures and increasingly demanding regulatory environment can combine to negatively impact profitability and viability for cruise lines, with forecasts demonstrating that cruise won’t just always come.”
In June Australian cruise brand P&O Cruises announced it was closing, and Pacific Explorer which regularly sails in and out of Auckland will be removed from the fleet.
NZCA chief executive Jacqui Lloyd said the headwinds underscored the need for a long-term vision and better co-ordination within the tourism sector.
“The cruise lines have always said that we have been an expensive destination, but the visitor experience and the passenger ratings have always outweighed that.”
Changes to the border clearance levy coming in at the end of the year add an estimated $2.1m to cruise lines’ costs as they can’t now recover them from passengers.
Figures in the report show that for an eight-day visit, depending on the size of the ship, cruise companies pay between $143,000 and $614,000 in levies, fees, and insurance for an eight-port visit.
She said the aim wasn’t necessarily getting high numbers of ships and passengers but attracting high-spending visitors.
“I’m in Picton - for the year of the pandemic we were going to have 85 ship visits, that would have broken our town and people would have been unhappy. So it’s got to be managed in the right way.”
The report outlines several challenges, including the perception of cruise.
“Negativity dominates the narrative based partly on historical events, real community impacts, anecdotal or misinformed narrative and isolated incidents. Nonetheless, it is a fossil-fuel based industry that does create challenges of waste, biosecurity, and emissions. Improvements and progress have been made, yet we acknowledge there is still work to do,” it says.
Cruise volume, size and frequency that can cause traffic congestion, overuse of services, high visual impact and a perception of light economic benefit and environmental degradation had impacts on how ships were perceived.
“There is an ever-present threat of loss of social licence in certain regions either now, or in the future. Communities are not necessarily informed well about ship arrivals, and often not included in communications or planning so can feel marginalised. There is a view that cruise lines don’t always appreciate the importance of community opinion,” the report says.
Cruise Lines International Association (CLIA) managing director in Australasia, Joel Katz, said adopting a comprehensive national strategy was vital.
“By taking a whole-of-government approach and adopting a national strategy to foster cruise tourism, New Zealand has an opportunity to strengthen its tourism economy and create lasting benefits for local businesses and communities. Overcoming regulatory complexities and high operating costs are essential if New Zealand is to fully benefit from the potential of cruising.”
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
