Why develop a cruise port? Portimão – May 20th, 2009
By José Campos MedCruise Secretary General
The Boom in Cruising Europe and the Mediterranean are at the focal point of the current boom in the cruising industry. Cruise is the fastest growing sector of the tourism industry. Some statistics: –
Only 2.6 million Europeans took a cruise holiday in 2001. By 2008 the annual number had leapt to 4.4 million, a 10.5% increase over 2007.
–
60% of Europeans cruising chose the Mediterranean and Altantic Islands.
–
21.7 million passenger visits in European ports in 2008, a 15% increase over 2007.
Source: GP Wild, Intl; BREA
Top 20 Cruise Ports Worldwide 08 Port
Ranking
2008 Projection (pax) Homeport
Transit
Total
Miami
1
3,880,000
8,690
3,888,690
Port Canaveral
2
2,600,000
65,0000
2,725,000
Port Everglades
3
2,539,461
12,423
2,551,884
Cozumel
4
1,200
2,520,800
2,522,000
Barcelona
5
1,200,000
800,000
2,000,000
San Juan
6
964,450
987,382
1,951,832
Civitavecchia
7
800,000
990,000
1,790,000
Nassau
8
400
1,787,280
1,787,680
St Thomas
9
8,250
1,715,000
1,723,250
Grand Cayman
10
0
1,598,000
1,598,000
St Maarten
11
860
1,400,360
1,401,220
Piraeus
12
695,882
594,000
1,289,882
Venice
13
1,160,000
105,000
1,265,000
Los Angeles
14
1,124,340
6,000
1,130,340
Naples
15
1,600
1,096,000
1,097,600
Palma de Mallorca
16
560,000
500,000
1,060,000
New York
17
992,800
16,600
1,009,400
Juneau
18
38,000
945,500
983,500
Vancouver
19
884,000
49,000
933,000
Ketchikan
20
0
900,000
900,000
Source – Lloyd’s Cruise International; GP Wild, Intl.
Highlights of the industry in Europe In 2008, cruise industry direct expenditures increased by 10% over 2007. These economic impacts included the following: •
€14.2 billion in direct spending by cruise lines and their passengers,
•
€32.2 billion in total output (direct and indirect), including: – 311,512 jobs, and – €10.0 billion in employee compensation. Source: GP Wild, Intl; BREA
Highlights of the industry in Europe In 2008, €2.7 billion in direct cruise passenger spending at ports-of-embarkation and ports-of-call. This is an 8% increase over 2007. • Excluding airfares, embarking passengers spent on average €90 at embarkation port cities. • On average, cruise passengers then spent another €60 at each port visit on their cruise itinerary. 60€(50,000) = 3,000,000€ in direct passenger expenditures.
Source: GP Wild, Intl; BREA; Passenger Shipping Association
Growth of European source market
This growth has been driven by the investment in new ships and new Europe-focused itineraries not just by home-based cruise lines but also by those previously concentrated on the North American market. In 2008, Europeans represented more than 25% of all cruise passengers worldwide, compared with 19% in 1996.
Source: GP Wild, Intl; BREA; Passenger Shipping Association
Growth of European source markets Share per country:
Source: Passenger Shipping Association
Growth of European source markets Europeans mostly visit the nearby Med and Atlantic:
Source: Passenger Shipping Association
Traffic Growth – MedCruise Ports
GENERAL GROWTH Year 1998 2007
HOME 2.097.278 4.803.263
TRANSIT 2.680.929 9.300.543
TOTAL 4.778.207 14.103.806
Cumulative Annual Growth Rate Total Pax : 12,8% (Analysis includes MedCruise ports that submitted statistics from 1998 through 2007)
Traffic Growth – MedCruise Ports STATISTICS IN WESTERN MED/ATLANTIC (1998-2007) Western Med/Atlantic Annual ∆ (%) 16,00% 14,00% 12,00% 10,00% 8,00% 6,00% 4,00% 2,00% 0,00% Tot al (Pax)
Home (Pax)
Transit (Pax)
Cruise Calls
How seasons affect growth in Med 1. December, January, February Our busiest ports are experiencing very successful Novembers, and March can vary. 2. October through March Some medium-sized ports would claim November and March as low season – while others – even October. 3. October through April The season doesn’t currently take off in the Black Sea until April or later.
How seasons affect growth in Med Barcelona 2007 – Home port with Transit traffic 300.000 250.000 200.000 PAX by Month in 2007
150.000 100.000
DEC
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
50.000
How seasons affect growth in Med Lisbon 2007 – Atlantic repositioning 60000 50000 40000 PAX by Month in 2007
30000 20000
DEC
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
10000
Mediterranean Off-Season Trends Total Pax for: Barcelona, Cartagena, Cannes, Genoa, Gibraltar, Ibiza, Lisbon, Livorno, Mahon, Nice, Koper, Palma, Savona, Trieste, Venice.
600000 500000 400000 November December January February March
300000 200000
2007
2006
2005
2004
2003
0
2002
100000
Cruise: a good investment choice Average annual traffic growth of more than 10% in Europe and the Mediterranean Many Mediterranean ports saw growth rates greater than 20% between 2006 and 2007. The trend continues through 2008. High levels of optimism in the industry High levels of passenger satisfaction – Product considered superior & better value than other tourism products – Repeat customers
Immense potential for growth (latent demand)
Industry trends – growth! Construction of megaships – and the need to expand port infrastructure More ships, bigger ships – multiple ships at one port Opportunities to expand marketing to new niches New itineraries needed – growth in new regions New ports needed – marketing opportunities Increased fuel costs – itinerary modifications, new opportunities
The current economic crisis
MedCruise survey of 2009 cruise traffic projections show continued potential growth for 2009, albeit, at a smaller rate – 4%-6% at large ports Huge variations in growth rates (or rates of decline) at smaller ports. – Some smaller ports show large jumps in growth, and others large declines.
So far the ships are calling with high capacity rates. Cruise lines are implementing aggressive tactics to fill ships. 2010 projections need to be watched.
Cruise Industry Model : the Players TOURS & VENUES RECEPTIVE AGENTS
HOTELS/RETAIL DESTINATION
AIRPORTS
TRAVEL AGENTS
PASSENGERS
PORTS
PORT AGENTS
SHIPS CRUISE LINES SHIPYARDS
Why would a port want cruises? Requires a separation of uses at the port Requires expensive new port infrastructure Requires qualified personnel Requires state-of-the-art security systems Requires building new relationships with local tourism, city officials and the cruise industry community
The benefits Prestige
The benefits The development of a passenger port
… the main benefit Tourism – local industry with local profit Cruise tourism doesn’t compete with other landbased tourist products Cruise ship passengers aren’t always the same tourists that would visit your destination on their own Cruise passengers can experience your destination and decide to return to spend more time, and money
Cruise industry model: port finance Indirect/Induced Impacts Private and/or Public Investors
PORT PRODUCTS
€
€ Financing
Port Infrastructure
COMPETITION
MARKET
Infrastructure needs for megaships
• November 2008 MSC Fantasia 333,3 mts LOA
• June 2009 MSC Splendida 333,3 mts LOA
• December 2009 MSC Magnifica 293,8 mts LOA
Developing your port’s strategy What cruise lines look for in a port: – – – – – – – –
Shared vision at the destination Understand the market and the client Experiences that are seamless Regional interdependence A long-term action plan Take advantage of own resources Product differentiation Respect, appreciation and preservation of historic heritage » Courtesy Princess Cruises
Evaluating your port/destination
What type of port are you? What type of destination are you?
Evaluating your port/destination Are you a home port or a transit port?
Evaluating your port/destination Requirements for a home port – Security equipment, warehouse and baggage handling equipment – Passenger terminal Or alternative infrastructure
– Parking area for coaches, taxis and private autos – International flights, sufficient air lift to source markets – International airport within 45 minutes of port
Evaluating your port/destination Are you a “marquee” or a “discovery” destination? – A “marquee port” … is world-famous Absolutely necessary for every itinerary
– A “discovery port” benefits from being included in the itinerary Where do you fit in the itineraries?
Evaluating your port/destination Survey courtesy of Princess Cruises “Marquee” port: How did passengers rate their visit to Venice? – Reason for purchasing cruise: 91% – Port score after visit: 93%
Non-”marquee” port. How did passengers rate their visit to La Rochelle? – Reason for purchasing cruise: 66% – Port score after visit: 85%
Evaluating your port/destination Many home ports are also marquee destinations – They have well-developed tourism infrastructure and – An airport with direct international flights Barcelona Civitavecchia (Rome) Venice
Some transit ports are also marquee destinations Naples (Pompeii) Livorno (Florence, Pisa) Nice
(Dilemma of popularity – Congestion!)
A port’s development strategy
1. 2. 3. 4.
Know how to promote your destination Invest in basic services and in human resources Develop relationships Capital improvements
Development strategy First, know how to promote your destination
Authenticity The Product Discovery Know your Source Market
Development strategy Second, preliminary investment in the destination Organisation on all levels (services, promotion, coordination) Action plans – short- and long-term Human resources Basic infrastructure
Development strategy Third, expand relationships 1. 2. 3. 4.
Cruise Lines Industry Press/Shows Industry Associations Cruise Clubs – local collaboration
Port Agents Tourist Board Town Hall Chamber of Commerce Merchant Organisations
Development strategy Fourth, capital improvements 1. 2. 3. 4.
Passenger terminal (necessary?) Berths, piers, dredging‌ infrastructure for megaships? Logistics zones for ground transportation Port-City relationship = Ship-Destination relationship
MedCruise – a regional stakeholder The Association of Mediterranean Cruise Ports: founded 12 years ago in Rome, and now represents 75 ports in 20 countries. However difficult, MedCruise helps propagating new approaches to maritime tourism, and puts value on making the passenger-shore contact a unique, rich, peaceful experience, for the benefit of both sides.
MedCruise Brings Ports Together General Assemblies and other events.
TRIESTE SOCHI
CEUTA
AZORES ALEXANDRIA
MedCruise - the Seas Unite Main objectives: – Promote the cruise destinations and the ports in the Mediterranean and adjoining seas. – Develop quality passenger shipping experiences: Preserve diversity and authenticity. Manage congestion. Shared return: local communities, ships, passengers.
– Collaborate on solutions: Security. Environment. Training.
MedCruise Tools Networking forum (assemblies, associate member scheme, trade fairs). Promotion/information sharing (newsletters, directories, press relations, economic studies). Maritime policy : security/environmental/transportation (European Commission stakeholder role) et l’Union pour la Méditerranée. Professional development role (collaboration with Escola Europea de Short Shipping).
The MedCruise family
The Leisure Yachting Industry: Defining New Directions for Tourism Portimão – May 20th, 2009
Thank you.
José Campos MedCruise Secretary General