Cruise tourism in New Zealand was worth $1.37 billion for the country during the 2023-24 financial year, according to research commissioned by the industry.
Making waves: Cruise industry says it contributes $1.4b to NZ economy
The $637m figure out today for direct spending aligns with the Government agency’s figures, given last summer was busier than in 2019-20 and there had been a surge in inflation since then.
Timothy Welch is an Auckland University academic who specialises in transportation, infrastructure and urban modelling and is a critic of the cruise industry.
He said $1.37b was “certainly a big number”, but still a very small portion of total direct and indirect tourism expenditure.
Stats NZ said total tourism spending for 2023 was $37.7b.
“So the cruise industry (according to their numbers) contributes to about 3.6% of this total, which is a pretty small fraction compared to their outsized environmental impact,” said Welch.
Climate Liberation Aotearoa spokesperson Perā Crowe also said the economic impact of cruises is debatable and cited NZIER research from 2020 which showed then that, despite its high visibility, cruise tourism accounts for about 9% of international visitor arrivals (about 350,000 cruise passengers and crew) but only 3% of international tourist spending here.
“This is not surprising as cruise lines are overseas owned and their passengers only spend a day at each port of call, often eating the meals provided on board ship rather than onshore,” NZIER said.
Lloyd acknowledged there was scepticism about any tourism and events spending figures.
“That happens with everything, but when we talk to our regions in particular they are very comfortable where this has landed.”
The cruise industry data – using what CLIA said were standard economic multipliers – showed that cruise tourism supported a total employment of 9729 New Zealand jobs last financial year and provided $425.9 million in wages to Kiwi workers.
Lloyd said cruise ships had delivered $439.5m in passenger spending to virtually every region of New Zealand in 2023-24.
A cruise passenger spends an average of $283 every day on shore in New Zealand, but that was only one piece of the picture.
“We also benefit from the spending of crew members and the spending of cruise lines to support their operations and provision their ships.”
Kiwi businesses such as tour operators, travel agents, hotels and restaurants, retailers, transport providers and port operators benefitted.
Cruising is also supported by an extensive supply chain, creating benefits for New Zealand farmers and food producers, winemakers, providores and maritime service providers.
Although the value of cruise tourism is high, the cruise industry has warned that rising costs and regulatory complexities are hampering the industry in New Zealand, leading to a fall in local cruise ship deployment.
“While cruise tourism is thriving in the rest of the world, New Zealand is going backwards and local communities are facing a 20% reduction in visitor numbers over the coming season,” Lloyd said.
“New Zealand has become one of the world’s most expensive destinations for cruise operations, and this is already costing Kiwi businesses millions of dollars as ships head elsewhere,” she said.
Many passengers now faced a $100 international visitor levy – up three times what it was before.
“Doing business in New Zealand is just becoming a little harder.”
Fees that went up suddenly couldn’t be passed on to passengers who sometimes booked years in advance meaning cruise ship companies had to absorb them, she said.
A corresponding survey for Australia Cruise, said tourism in Australia has soared to unprecedented levels, contributing A$8.43b ($9.28b) to the national economy in 2023-24 – a 49.7% increase over the previous year.
CLIA managing director in Australasia Joel Katz said it was disappointing that New Zealand was moving off the radar for cruise lines. Satisfaction levels of passengers who came to this country were high, more of the smaller ships suitable for this market were being launched but this country was less attractive for cruise lines because of higher charges than Australia and complex regulations.
The Value of Cruise Tourism economic impact assessment for New Zealand in 2023-24 found:
• A total of 21 New Zealand ports and destinations were visited, welcoming 1011 ship visits and 1.55 million passenger visit days.
• Total direct passenger expenditure of $439.5 million and direct crew expenditure of $23.5 million.
• An average passenger spend per day on shore of $283 per person. Average crew spend per day on shore $73.9 per person.
• The largest beneficiary of direct passenger expenditure was the retail shopping sector which received $123.5m, or 28.1% of passenger spending. Other beneficiaries included the food and beverage sector ($109.6 million, 24.9%), shore excursion product ($76.7 million, 17.4%), hotels and accommodation ($57.6 million, 13.1%), transport providers ($34.5m, 7.9%), and entertainment ($30.1m, 6.9%).
• Direct cruise line expenditure totalled $317.6m, including $146.2 million paid to ports and Government as fees and charges (46.0% of cruise line spending).
Regional impact
- Auckland (inc Great Barrier Is, Tiritiri Matangi Is, Waiheke), $604.7m, 4184 jobs.
- Otago (Dunedin), $156.0m, 1155 jobs.
- Canterbury (inc Akaroa, Christchurch, Kaikōura, Timaru), $135.2m, 990 jobs.
- Bay of Plenty (inc Tauranga, Whakatāne, Rotorua), $111.8m, 784 jobs.
- Wellington (inc Kāpiti Island), $100.1m, 758 jobs.
- Gisborne, (inc Tolaga Bay), $4.9m, 34 jobs.
- Hawke’s Bay (inc Napier), $89.6m, 657 jobs.
- Northland, (inc Bay of Islands, Whangārei, Whangaroa), $68.7 million, 457 jobs.
- Taranaki (inc New Plymouth), $2.2m, 15 jobs.
- Marlborough, (inc Anikawa, Marlborough Sounds, Motuara Is, Picton, Ship Cove) $60.6m, 452 jobs.
- Nelson, $1.9m, 15 jobs.
- Southland (inc Bluff, Fiordland, Stewart Is), $31.3m, 231 jobs.
Christchurch NZ in early October released its own research commissioned from NZIER on the economic and social impact of cruise tourism in the city for the 2023/2024 season.
It found cruises generated $5.3 million for the local economy, with total cruise tourist expenditure between $23 and $35 million.
The NZIER report revealed a positive view of cruise tourism, with 69% of local businesses seeing it as important for their business, and 68% describing cruise tourism as having a positive or very positive impact on their revenue.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.