Aviation, tourism and energy writer for the Business Herald

Cruise ship boom comes with a warning

Ovation of the Seas is too big to berth in Auckland
Ovation of the Seas is too big to berth in Auckland

A leader in the booming cruise industry is warning growth in New Zealand is threatened by infrastructure constraints and complacency.

Figures released by Cruise New Zealand show total direct spending by the booming sector is heading for $723m within the next two years.

Cruise reached a record high last summer with more than 254,400 passengers and almost 92,000 crew visiting New Zealand.

"This represents a phenomenal growth of 26 per cent in terms of passenger arrivals which translates to an injection of $484 million into New Zealand's economy," said Kevin O'Sullivan, Cruise NZ's outgoing chair.

But his organisation has identified problems.

"New Zealand is facing infrastructural constraints and rising costs of operation which have the potential to cap the growth the country has been experiencing over the last 10 years," said O'Sullivan.

"Cruise's growth should not be taken for granted as cruise lines will not visit New Zealand simply because of passenger demand.

New Zealand's costs of operation need to make financial sense. Increasing levies and charges do not do New Zealand any favours.''

This country was at a "critical" point where infrastructure was not meeting demand, particularly berths for ships that are getting bigger.

This summer the biggest ship to visit New Zealand, The Ovation of the Seas, will be forced to anchor off Prince's Wharf and thousands of passengers ferried in by tender to shore.

Tourism Industry Aotearoa chief executive Chris Roberts said this was not satisfactory.

"This isn't a sustainable approach. Whatever happens at Auckland Port it has to establish a good standard of cruise facilities."

Lyttelton had similar problems.

Without the right facilities there was a danger cruise ship operators would take their vessels elsewhere, said Roberts.

The standard of cruise infrastructure would be reviewed in a wider study of tourist facilities commissioned by the TIA and due for release in November.

The cruise season has started and O'Sullivan said forecasts for the next two years were exciting.

"Although we are expecting to experience a slight dip in passenger numbers despite this new capacity in 2016-17, it will rise by 11% to a new record in the 2017-2018 season."

That dip in passenger numbers would be offset by an increase in passenger exchange activity (where the cruise begins or ends in New Zealand) which has a 40 per cent higher value, O'Sullivan said.

"This is significant at a time when the wider tourism industry is placing its emphasis on value through regional dispersal, as outlined in Tourism 2025, New Zealand tourism's growth framework."

O'Sullivan said the cruise sector would not only inject a projected $490m to New Zealand's GDP and support 8878 jobs in the coming season, but it would also spread the tourism dollar to regions less frequented by international travellers.

Roberts said cruise was an important part of New Zealand's tourism strategy. While there were concerns several years ago that hotel and coach tour operators were missing out as tourists were aboard ships, these had eased as tourist operators adapted to the new market and some passengers returned for longer land-based holidays.

Read the full report here:

- NZ Herald

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