Cruising goes year-round ahead of expansion of berth space

Brisbane’s new cruise terminal is scheduled to begin operations with a flourish in 2020, changing the shape of Australian cruising and setting the scene for further expansion in the lucrative market. The cruise industry contributes an estimated $5 billion to the Australian economy annually. And, according to advocates, cruising has brought an economic lifeline to a number of regional and remote coastal communities that have been crying out for a financial lift.

Yet the increasing popularity of cruising as a holiday option has strained the current capacity of some Australian ports — the premier port of Sydney Harbour especially — so the Port of Brisbane’s new $158 million terminal will provide a welcome increase.

Numbers tell the story of an industry straining at the leash. Up to two years ago the cruise industry had been growing at double digits every year, with a 10-year average of 18 per cent growth, says Joel Katz, Australasia managing director of the Cruise Lines International Association.

The growth slowed to a crawl over the past couple of years, simply because constrained Australian ports have not been able to keep up with the demand for facilities.

“Brisbane is proceeding full speed ahead with their new international cruise terminal, which will come on line around about October next year,” Katz says, adding that the new facilities are certain to add a growth spurt to the industry.

Meanwhile, as a result of Australia’s overall constrained capacity, “after double-digit increases over much of the past two decades, growth dropped to 4.4 per cent in 2017, and then to 0.9 per cent in 2018”, he says.

“We’re forecasting 2019 to be either in the same region or flat because there’s no room to bring more ships,” Katz says. “We’ve been campaigning for 10 to 15 years now that we need to grow the capacity, particularly here in Sydney, which is considered the gateway port for the whole region.”

NSW Tourism Minister Stuart Ayres said in a statement that work was now under way to bring Sydney’s cruising facilities up to speed. The city’s Overseas Passenger Terminal recently had a $78 million upgrade and was fully booked for the peak summer season, he said.

In order to address the shortfall in capacity, the Port Authority of NSW, working with the NSW Treasury, was preparing a detailed business case for a cruise terminal at Port Botany, he said.

“Other suitable locations are being explored to accommodate the anticipated doubling in ship numbers by 2040,” Ayres said. “Regional NSW offers up unique experiences for the global cruise market with the regional ports of Newcastle, Eden and Port Kembla increasingly being added to cruise itineraries.”

Katz says cruise operators and advocates have been warning the NSW government for some time that capacity shortfalls are looming in Sydney Harbour. The Overseas Passenger Terminal, he says, has been operating at 100 per cent capacity during the peak season for the past two years.

“There’s one cruise terminal on the eastern side of the bridge, and one in White Bay on the western side,” he says. “Only those ships that can fit under the bridge can use White Bay,” he says, noting that most ships now being built would not squeeze under the bridge.

Katz says a major infrastructure project such as a new cruise terminal would likely take a minimum of five to seven years to complete — leaving cruising growth on hold in the city often seen as Australia’s premier cruise destination.

Australia has one of the highest cruise-market penetrations in the world, leading the established cruise markets.

A higher percentage of the Australian population chooses a cruise holiday than their equivalents in the US, Britain or Europe.

Jill Abel, chief executive of the Australian Cruise Association, believes the new Brisbane cruise terminal will push the industry back into solid growth, perhaps not double digits again but a “very sustainable” 5 to 7 per cent nationally.

“As these infrastructure projects come on line, our season in Australia becomes longer as well,” she says. “It used to be November-December through to March-April, but we’re now seeing all year round cruising in Australia.”

Australia’s smaller coastal communities have seen the financial potential in the cruise market.

The likes of Eden, Port Lincoln, the Philip Islands, Albany, and Bunbury are definitely gaining an advantage in the international passenger field from cruises, Abel says, adding that international travellers may only stop in a port for one day, but if they like what they see they often return for a more extended visit.