Cruise sector outperforms Australian economy
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7 December, 2009: Cruise sector’s economic contribution soars 54% to A$1.2 billion in 2007- 08 Access Economics predicts 7% growth each year for next decade Contribution could exceed A$3 billion by 2020 Carnival Australia CEO Ann Sherry urges governments to reaffirm commitment to improving port facilities, removing capacity constraints
An Access Economics report issued today shows that the Australian cruise industry remains the standout performer in the tourism sector, with its contribution to the national economy rising 54% to A$1.2 billion in 2007-08.
The report found that the cruise industry is expected to achieve annual growth of 7% over the next 10 years, significantly outperforming the Australian economy, and recommended a number of infrastructure policy options to help avoid “current and future bottlenecks”.
Carnival Australia, the country’s largest cruise shipping company, believes the industry’s economic contribution could exceed A$3 billion by about 2020 but said this will only be achieved if State and Federal governments commit themselves to significant infrastructure planning and implementation.
In its second annual report on the cruise industry, Access Economics found that the economic contribution in both gross output terms and value added terms grew 54% in 2007-08. This growth was in “stark contrast” to the general holiday sector where international tourism rose by a modest 3.9% based on visitor nights and domestic tourism activity dropped 2.4%, the report said.
Specifically, the contribution in gross output terms rose to A$1.2 billion from A$781 million while in value added terms the contribution from the cruise industry increased to A$549 million from A$357 million a year earlier.
Carnival Australia Chief Executive Ann Sherry said the latest results exceeded the company’s own forecasts and highlighted the resilience of the cruise industry during the global financial crisis as well as its significant economic contribution.
Carnival Australia is part of Carnival Corporation, the world’s largest cruise shipping company. In this region, Carnival Australia represents iconic brands including P&O Cruises, Princess Cruises, Cunard, Seabourn and Costa.
“The latest report from Access Economics is a compelling addition to the intensifying debate around all the critical issues facing the cruise industry now and into the future,” Ms Sherry said.
“We will continue to work with governments to ensure the development of long term solutions to overcome capacity constraints that could impede the sector’s continued expansion.
“Carnival Australia welcomes the progress made to improve port facilities but much remains to be done to ensure that this key part of the tourism sector continues to provide thousands of jobs in major ports around Australia.”
Access Economics said the cruise industry’s market penetration is expected to rise from 1%-2% of the Australian population in 2009 to 3%-5% in 2020, similar to more developed markets such as the US, UK, and Germany.
“Carnival Australia expects the local cruise industry will carry one million passengers by 2020 but this target will prove elusive if holidaymakers who want to travel around a first class country are discouraged by second rate port facilities,” Ms Sherry said.
In its report, Access Economics estimated that total cruise sector activity will increase 7% each year over the next decade as more Australian families cruise onboard ships which regularly visit major ports such as Sydney, Melbourne, Brisbane, Fremantle, Cairns, Adelaide, and Hobart.
“The importance of Sydney as a destination is critical to the growth of the cruise sector in terms of attracting international (cruise) tourists to Australia,” the report said.
“Issues around the provision of suitable infrastructure, in Sydney and elsewhere, will need to be addressed for the sector to reach its growth potential,” it added.
While there have been encouraging attempts to deal with the variable quality of port infrastructure in Sydney, Ms Sherry said further solutions are needed east of the Sydney Harbour Bridge to accommodate the bigger ships being built around the world and a tripling of passenger numbers by 2020.
“As our cruise ships increase in size, only 15% of liners visiting Sydney in 2020 will be able to dock west of the Harbour Bridge. The industry and government must work together to resolve outstanding issues such as capacity constraints,” she said.
Carnival Australia will this week welcome its fifth ship to sail from Australia full-time. P&O Cruises’ superliner, Pacific Jewel, will be based in Sydney.
The executive summary of the Access Economics report can be found on the Carnival Australia website: www.carnivalaustralia.com
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