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Cruise Weathering the Storm

Date Published: 24 April 2009

The cruise industry is confident it can weather the storm of the current global economic downturn.

Although cruise bookings for 2009 are down for most countries, executives at the recent international cruise industry event Seatrade were positive about the future globally, and for New Zealand.

The international cruise industry has seen unprecedented growth in recent decades, with New Zealand claiming its share of this growth.

In the 1996/97 cruise season 27 cruises brought 19,000 visitors to New Zealand. In comparison, 2007/08 saw 98 cruises visit New Zealand, carrying over 116,000 people. This represents a 300 per cent increase in passenger numbers in just the last four years.

However 2009 is expected to be a slower year. The Cruise Lines International Association (CLIA), North America's largest cruise industry body, estimates 2009 will see a five per cent rise in passengers to about 13.35 million. With many of these travellers staying close to home, New Zealand is expecting a drop of around 10 per cent.

Although this sounds a lot, Tourism New Zealand Chief Executive George Hickton says the drop will actually take us back to 2007/08 season numbers.

"These were a record for the time," he says, "and we would expect numbers to flatten in the current economic climate. With fewer travellers and some companies deploying ships nearer the US, it is only realistic to expect numbers to be down next season."

Despite these challenges, Captain Craig Harris, Chairperson of Cruise New Zealand, says that attending Seatrade confirmed the cruise industry has a positive future in New Zealand.

"Everyone we met with was really positive about New Zealand. Any decreases in cruise visitors next season will be due to the global situation, as opposed to anything specific about New Zealand," he says.

"The industry will grow again. If anything, it will be our ability to upgrade our cruise infrastructure that may have the biggest future impact on numbers."

Although official numbers have not yet been released, the 2008/09 season in New Zealand looks like it may have been another record, with New Zealand on track for a predicted 120,000 cruise visitors.

And there are positive moves a-foot for next season. Seabourn Cruise Line's luxury six-star $US250 million ($NZ467.02 million) newly-built Seabourn Odyssey, due to be delivered June 2009, will be visiting New Zealand in 2009/10.

Changes in other parts of the world may also benefit New Zealand. Australia is seen as a major emerging source market and New Zealand will benefit from local market sourcing in Australia to fill ships.

Internationally, tactics to reassure and encourage cruise visitors to continue to travel include slashed fares, 'home porting' (changing ports to allow US cruise passengers to drive to their cruise start point) and 'job-loss assurance' - a guarantee that if passengers lose their jobs before they take their cruise holidays, they will receive a full refund.

The industry's optimism is reflected in the fact that eleven new ships that had been commissioned are still on track to be built. One of these, the Oasis of the Seas, will carry 5,400 passengers, which is 40 per cent larger than the current largest ship.

"The industry continues to be upbeat about the future, viewing the recession as another obstacle in a long line of obstacles - September 11, the Gulf War, the oil crisis of the 1980s - through which the cruise industry has maintained steady growth," says George Hickton.

There is definitely potential for growth. A 2008 survey by CLIA found 34 million Americans plan to take a cruise in the next three years.

The CLIA fleet will see 14 new ships (including river cruise ships) at a cost of USD4.8 billion (NZD8.96 billion) set sail in 2009 to meet expected growth in demand. A further 21 vessels, with a total cost of USD14 billion (NZD26.15 billion), are scheduled to enter the North American market between 2010 and 2012. New Zealand will be looking at how to make the most of the potential.

Find out more about developing the cruise industry.