An opportunity for the cruise sector to reconnect with communities

AS THE CRUISE SHIPS RETURN to New Zealand in their droves, life after COVID-19 has been anything but plain sailing for tourism operators throughout the country.

With the global pandemic finally starting to show signs of slowing, tourists from all pockets of the country have boarded cruise ships and begun to flex their spending dollar, descending on all areas of New Zealand –including the smallest of townships.

However, despite port numbers bouncing back to pre-Covid levels, the lack of infrastructure and widespread staff shortages throughout the surrounding sectors has caused, and continues to cause, undue stress on an already vulnerable sector.

“These issues are known to sector leaders, and collective efforts are in place to help resolve, or at least, mitigate the situation,” NZ Cruise Association Chief Executive Kevin O’Sullivan says.

“We’re more or less back to where we were prior to COVID-19, but we are finding a significant increase in on-shore issues, particularly in hospitality and the fact there simply aren't enough coach drivers or transport alternatives.

“It’s great to see the industry bouncing back, but we’re all conscious that it needs to be managed with less infrastructure and resources available ... and that in itself, requires extra consideration when drumming up business.”

Though on a more positive note, Mr O’Sullivan points out several lessons that have been learnt through Covid, and reflects with the benefit of hindsight – prompting a new focus within the industry.

“Covid certainly gave us time to take a pause, look at how the industry was shaping up and put plans in place to avoid future issues. [I think] in the past, as a sector, we have aimed to get more of everything into New Zealand, and while we all achieved that, the pandemic has given us the opportunity to realign back with communities and consult with them as to what they would like to see . . . both now and in the future,” he said.

“That’s been a really positive milestone, and we continue to work closely with the Government to look at the issues that have arisen and establish a longer-term strategic approach for the cruise industry here in New Zealand.”

Mr O’Sullivan and his team are also setting their sights on mitigating issues in the industry but continually find themselves being dragged back by mother nature and her might.

“Every month tends to bring its latest calamity and you begin to wonder, what’s next ... what’s around the corner. Whether it’s the pandemic or the recent deluge we’ve just had in Auckland, these things are extremely hard to plan for and no amount of contingency planning is enough to replicate the real-time effects.”

So while tourism operators are doing their best to accommodate the return of the cruise ships, it’s clear there is widespread frustration at the lack of resources available onshore – be that in cafes, on coaches or public facilities.

“While we are all happy to see the cruise ships back and docking in ports around the country, everyone is doing the best they can with what they have.

“When all is said and done, this won’t be indefinite ... things will change and more resources will become available again. For now, it’s about weathering a storm, no pun intended, and realising the pandemic particularly, has thrown up a number of challenges that didn’t really exist prior to COVID-19.”

While in recent times the cruise ship industry has had its critics, the industry has stood firm and argues that New Zealand needs the business that cruises bring. In 2018, 131 cruise ships docked in Auckland, and it’s estimated their presence boosted the economy by $200 million a year.

New Zealand tourism operators run shore excursions, and passengers visit local cafes, bars and shops – all contributing to the overall economy. With the two-year hiatus, the industry has reset and had a chance to pause and look at what they can improve. That includes investigating alternative fuels and cutting the use of plastics on board –both topics hot on the Government’s agenda.

The 2022/23 cruise season is expected to accommodate more than 900 port calls, between October and April – generating almost $570 million in the year to June 2023. This is up slightly from the passenger estimates produced in the paper Growth & Growing Pains in the NZ Cruise Market, published in 2019 by Neil Douglas and Harriet Henry for the Australasian Transport Research Forum.

This paper states that direct onshore spending estimates produced by M.E Consulting for the NZ Cruise Association forecast for 2018/19 at $911 million. The total included $524 million of passenger spending, $46 million crew and $341 million of ship resupply spending.

“On average, passengers spent $370 at ports where spending opportunities existed. This average spend was calculated by dividing $524 million by the 1.44 million cruise passengers disembarking at ports/ anchorages where spending opportunities exist (i.e. excluding visits to Fiordland, Sub-Antarctic Islands). This is clearly a high average spend figure.

“In explaining their figures, M.E. Consulting commented that the ‘expenditure includes international airfares, fuel, and other imports, which have very little impact on the New Zealand economy’. Airports of course would see ‘airfares’ as part of their economic impact and for NZ, airfares seem mostly relevant for passengers starting or finishing their cruise at Auckland, NZ’s cruise ‘exchange’ port (and many would fly on non-NZ carrier aircraft).”

In an economy starved of the overseas dollar for several years, few could dispute the need to continue attracting cruise ships to our ports, and the positive economic domino effect this has on all parts of New Zealand, and essential sectors.

Kevin O'Sullivan

Chief Executive Officer,

Nzca

Kevin has worked closely with the New Zealand cruise industry for over 10 years, developing strong relationships with cruise lines and government agencies. He held the role of Southland Regional Harbourmaster and has a wealth of marine science and maritime experience. Kevin served as Chair of NZCA for several years until the Board appointed him Chief Executive Officer.