Capacity constraints on ships in Sydney continue to be the bane of the Australian cruise sector, with a lack of infrastructure requiring CLIA Australasia to revise down its once achievable 2020 target of two million local cruise passengers.
Following the release of the latest ocean passenger Cruise Industry Source Market Report, LATTE chatted with the organisation’s Managing Director for Australasia, Joel Katz, to learn more about the cruise infrastructure dilemma, and to quiz him on his preference for an alternative site.
Joel, what are we waiting on for a decision on a third cruise port in Sydney?
It’s not so much about waiting. We’ve really worked hard the last few years. I’ve only been with the organisation for 18 months, but this is not something new by any means. This has been on the agenda for 10 years, that we need to sort this out. And you know that the two million by 2020 number was presumed, but in 2015 looking forward, if the issue had been resolved then, the figure would have been achievable. It’s all about putting it into perspective.
It’s been really encouraging the last couple of years. Certainly, since I’ve been on board. We were invited by the NSW Government to work with them on the Cruise Reference Group which is a very important step.
What is happening with the Cruise Reference Group?
That work is progressing. We made some recommendations. We represented the industry, some of the big cruise lines were part of it as well, plus various government organisations. But we worked through that process in order to make some recommendations as to what would work for the industry. And that was important to us. That they listen to what the industry needs before they now start the work on really refining and coming up with that key recommendation to be taken forward. Because a lot of work needs to be done. It’s not as simple as saying we’re going to put a cruise terminal ‘there’. There are technical, environmental, tidal and transportation elements to consider. All the work that needs to be done and to establish if a cruise terminal will work there.
It’s really encouraging that work is starting to happen behind the scenes so that hopefully, in a very short time, they’ll be able to come out and say that we’ve done the work, based on the input that we’ve received from the cruise industry, and this is what the solution could look like.
And to then see the Federal Government has jumped on the bandwagon as well and is also recognising the value that cruise brings to the Australian economy is really encouraging, because it means that at both levels (Federal and State) they see how important getting a resolution to this issue is.
What is your preference for a solution in Sydney? Garden Island, Botany Bay or another alternative?
You know, I actually don’t have a preference. I don’t have a commercial agenda. From my perspective, it doesn’t matter, as long as we have a solution.
We can see the number of new ships that are being built and the percentage that won’t fit under the bridge, combined with the age of the existing fleet. It’s inevitable that bigger and bigger ships are going to be coming down to this part of the world. That’s not to say that there isn’t space for the small ships. As we said, expedition is growing exponentially as well, and there is definitely room for the smaller ships. But we need to be able to accommodate the bigger ships, because that’s where the volume is.
Is extending the Australasian ‘wave season’ a temporary fix?
Well ,the challenge is looking at global deployments. Ships that are homeported here year-round have seasons in other parts of the world. So a vessel may do Sydney and Alaska. Or there are ships that move between the northern and southern hemisphere and follow the summer.
At the end of the day it comes down to the extent of would people want to cruise in winter?
Beyond Sydney, are there other cities feeling the pinch caused by constraint issues?
It’s a regional issue.
But is Sydney the only culprit?
No, Brisbane has just announced a new cruise terminal, but that’s going to take a number of years to develop. Western Australia has done a lot of work, Cairns is doing some planning, Newcastle is developing infrastructure, Port Kembla is talking about it, Victoria is talking about it. The momentum is starting to develop, but because of the long lead times, it’s a pity we didn’t have that conversation five years ago.
So if cruise lines are turning their back on Australia, where are they basing their ships? Auckland?
I would say the region is losing out. In order to deploy a ship to this region, a cruise line needs to be able to offer a series of itineraries. Obviously bringing big ships down here is a major investment in repositioning a ship, so the cruise lines would want to ensure that they were able to offer a comprehensive seasonal deployment. And that was one of the points we made, regulatory settings.
In the same way cruise lines would like to offer more domestic cruising around the Australian coastline, but again because of the way various customs and cabotage rules work, they can only spend a certain amount of time along the coast.
Some of our cruise lines have demand from overseas markets to offer more Victorian, South Australian, Tasmanian, Western Australian cruises, but because there is no where for ships to go overseas from those hubs, they can’t operate as many voyages as they would like.
That’s another opportunity to grow the regional cruising market, and we’re engaging with the Federal Government to see whether there are opportunities to create some more flexibility.