Get documents about "716 TQ-CRUISE
Document Sample
Section C Economic Impacts
1 Overview shore staff who fly to each port of call, and particularly base ports, to supervise and maintain the quality of
The cruise industry in Australia is estimated to be worth $200 million each year (Tourism Council Australia product for the whole operation at the destination including passenger exchanges, shore tours and
1999). At the Queensland level, the 1999 Cruise Ship Potential in Queensland Waters study methodology provisioning.)
very conservatively estimated the potential benefit for Queensland at $80.2 million annually. Cruise operators have a range of expenditures. They pay charges associated with the use of the port.
The breakdown of the potential benefit is as follows: These include charges for pilotage, the berth, towage and linesmen. There may also be charges for the
terminal used. In addition, they pay statutory charges to both the Federal and Queensland Governments for
Existing revenue from international cruise ships $7.6 million navigational aids, oil pollution levies, quarantine and customs services and conservancy charges.
Existing revenue from domestic cruise ships $6.6 million
The cruise operator will purchase goods and services to provision vessels. These include supplies of food
Potential new business/untapped potential $66 million
and beverages, fuel and services to enable ship operations such as waste disposal and water. Operators
Total $80.2 million have expenditure on ship maintenance. They may also have business expenditures in designated ports, such
as the cost of operating an office and marketing.
Full details of the calculations are shown in Appendix Four. By comparison, elsewhere in Australasia
economic impact studies suggest that current estimates for Queensland are very conservative. To provide a For cruise ships, the economic impact for the region is considerably greater when a cruise ship is based at
greater perspective of the potential for Queensland, the details of these studies for other cruising regions are ports in the region. In this situation, the cruise ship takes on supplies and the passengers have the
provided in section 4. opportunity to make visits to the region either before or after the cruise. Before developing a base port
operation, the cruise line usually requires a period during which transit calls are undertaken to the port to test
The following lists key areas in which direct and indirect economic benefits from cruise shipping are returned
the port's capabilities and to evaluate its suitability as a base port. Encouraging the establishment of a
to the community:
second base port operation in Queensland is one of the priorities of the QCSP.
> additional foreign exchange earnings;
> economic development and diversification; 3 A Queensland Specific Study
> distribution of income directly into regional and local goods and services; The 1999 Study of Cruise Ship Potential in Queensland Waters, which used conservative figures provided by
the University of Western Sydney [UWS MacArthur] Faculty of Business and Technology, estimated the
> the tendency for greater expenditure by cruise tourists (compared to tourists generally);
economic benefits for two typical cruise ships to be as follows:
> increased regional and city-specific profile globally;
TRANSIT PORT REVENUE BASE PORT REVENUE
> high likelihood of repeat and referral domestic and international tourist visitation;
Based on 800 Passengers (i.e. Norwegian Star) Based on 800 Passengers (i.e. Norwegian Star)
> infrastructure development opportunities; and
> development of additional employment, particularly through base porting. $17,000
The QCSP aims to maximise these benefits. CREW EXPENDITURE
$282,000 CRUISE OPERATOR EXPENDITURE
$15,000*
2 Measuring the Economic Impact of Cruising $397,990 PASSENGER EXPENDITURE
Estimates of the economic impact of cruising depend on: $76,000
> the potential to increase the number and duration of vessels visiting Queensland destinations;
> the potential to establish base port operations from Queensland destinations; and $15,000*
> the potential to increase the number of transit calls to Queensland destinations.
TRANSIT PORT REVENUE BASE PORT REVENUE
The establishment of base port operations for cruise ships is important for the creation of additional Based on 1200 Passengers (i.e. Sky Princess) Based on 1200 Passengers (i.e. Sky Princess)
employment in the region and in Queensland. Base port operations create employment from:
> provision of pilotage, towage and linesman services on a regular basis; $19,000
> provision of crew, administration, sales and marketing staff;
$18,000*
> provision of stores, beverages and other goods for passengers; and $424,000
$541,000
> expenditure on accommodation, tours and shopping from pre- and post-cruise visits.
$114,000
The expenditure on cruise tourism can be divided into the following categories:
Passenger expenditure includes expenditure incurred as part of the cruise (port visit expenditure) and also
$18,000*
that which is associated with making the cruise happen. Expenditure, relevant to estimating the economic
impacts of cruising to the Queensland economy, includes all associated pre- and post-cruise expenditure on Although based upon these figures, the estimates used to calculate the existing and potential revenue from
accommodation, food and beverages, shopping, sightseeing and entertainment. cruise ships in Queensland (Appendix 4) are generally more conservative to take into account the differences
Crew expenditure is incurred on items purchased in port and includes local transport, food and beverages, between cruise ship destinations.
shopping and entertainment. (In the New Zealand study support staff were also included. These comprise
Source: Dwyer L Dr, The Impact of Cruise Tourism on the Economies of Townsville and Queensland, Tourism Queensland,
May 1999. *Not included in Dwyer Study
18 19
4 Other Economic Impact Studies in Australasia
4.1 Victorian Estimates
The Victorian Cruise Strategy of 1999 stated that "on average, each cruise ship visit is estimated to inject $1
million into the local economy" (Cruising Victoria, "The Victorian Cruise Shipping Strategy 1998-2001"). There
is only one Victorian cruise port, Melbourne, and this is a transit port.
4.2 New Zealand Estimates
The New Zealand Tourism Board’s detailed economic studies which commenced in 1997 and were updated
in 1999 estimated that:
> NZ$271 million (AUD$211*) was injected into the New Zealand economy as a result of cruising from
the 1998/99 season. This was from 40 ships making 196 port visits. (This is less than the total port While military vessels are not required to pay government charges and are normally not charged for the use
visits to Queensland for 1999 – 462 visits). of berths by port corporations, they pay for all normal services such as towage, pilotage, special fendering,
> Total industry impacts included: ships agents, water, fuel, stores and maintenance. Expenditure on these services is similar to a cruise ship,
estimated at $17,000 per day in Queensland when using a port as a transit port, although charges vary
1997/1998 1998/1999 1999/2000
between ports due to varying volumes of shipping, charging regimes etc.
(m) (m) (m) (Forecast) There is limited information available on the economic impact of berthing military vessels. Further, the number
Contribution to Gross Domestic Product NZ $53.6 NZ $84.0 NZ $92.0
of visits and the number of personnel aboard military vessels is generally not reported. However, a recent
(AUD $41.9) (AUD $65.6) (AUD $71.9)
Bureau of Transport Economics and AAPMA Report estimates the economic value of military vessel visits to
Fremantle for the 1998/1999 period. This report is a useful analogy and provides indications of the economic
Equivalent Full-Time Jobs Created 855 1340 1430
value and potential of military vessels to Queensland. Estimates for the 1998/1999 period for Fremantle were
reported as:
Source: The Economic Impacts of Cruise Ship Visits prepared for the NZ Tourism Board and
Cruise NZ, 1997 & 1999); *Conversion rate used – AUD$1 = NZ$1.28
Expenditure by US Navy crews $10 million
Economic output $22 million
Number of full-time jobs generated 69.9
In terms of employment, it was stated "employment is estimated in full time equivalents but the part time
Average stay in port 3–5 days
nature of the retail and hospitality employment areas indicates that the actual persons employed is likely to
be higher.”
The New Zealand study showed distinct differences in spending patterns between three, four and five star In May 2001, Townsville Enterprise and Port of Townsville jointly undertook a detailed economic impact
cruises and the 1999 study showed clearly there has been a shift away from the three star market towards analysis of a United States (US) naval ship on the Townsville regional economy. The key findings are as follows:
the more luxurious four and five star markets. > An average expenditure per 24 hours of $376 for US Navy personnel as opposed to $347 for
New Zealand and Australia generally receive the same ships and so, by analogy, the expenditure trend is Australian Navy personnel;
likely to be extremely similar for Queensland. > Whilst the vessel was in port, personnel spent 71% of their time in the city as opposed to just 19%
spent on board the ship.
5 Military Vessels The study showed that the most visible impact flowing from a US Navy ship visit is the direct expenditure of
Although not technically cruise ships, military vessels offer enormous potential for returning even greater
ship crew in North Queensland whilst on leave. Based on a five day stay, the study estimated that US Navy
economic benefits to the community (in comparison to cruise ships) and require much the same
personnel from the USS Essex spent $5.56m in North Queensland. The economic impact of this stimulus
infrastructure as required by cruise ships. Military vessels have the propensity to utilise similar services to
injected $9.1m into economic output, $5.0m in value-added to Gross Regional Product, added $2.6m into
cruise ships, and military vessel personnel will avail themselves of tourism and R&R opportunities. The spend
regional pay packets and created 50 jobs.
rate of personnel is thought to be similar to, if not greater than, cruise ship passengers, and the time in port
Whilst the USS Essex is a relatively large ship (with approximately 5,000 crew), it is expected that
is usually longer, generally between three and five days.
expenditure impacts could be scaled for smaller US Navy ships.
Military vessels on routine visits to Australia are subject to quarantine charges. Vessels involved in joint
Through US naval sources, it was discovered that 88 US naval ships were deployed in the Pacific at some
military operations with Australian Forces are exempt from AQIS charges, but still require AQIS presence at
time during 2001. In comparison, Australian military ships were berthed in North Queensland for a total of
their intended berths.
329 days from Sept 2000 to Sept 2001. Although it is acknowledged that Australian personnel do not have
The number of personnel aboard each military vessel varies, from less than 100 on small vessels to in excess
as high a spend rate as their US counterparts, expenditure from Australian ships is still significant.
of 5,000 on a large aircraft carrier. These larger vessels provide an excellent opportunity to capture an
At least five ports in Queensland receive visits from military vessels. Consequently, the financial benefit to
enormous injection of capital for any community.
Queensland each year could easily be in the range of $10 to $15 million.
20 21
6 Major Beneficiaries of Cruising • Local councils – principally benefit from the supply of water which is the most common
The QCSP recognises that the benefits of cruising are both direct and indirect and that to achieve long term commodity taken on at ports, and the disposal of garbage, waste water and sewage. They also
sustainability for the industry the benefits of cruise shipping must be clearly enunciated so that the indirect benefit from the rates paid by any businesses established to service the cruise ship industry; and
benefits can be easily identified. Some beneficiaries are likely to include: • The government – both State and Federal derive benefits from cruise shipping from revenue
> The Cruise Company: A good itinerary with destinations that provide passenger satisfaction will result related to navigation charges, oil spill levies, GBRMPA permit and environmental management
in high passenger loadings, high yield and repeat visitation. Satisfied passengers generally spend charges, fuel levies, customs and quarantine charges (all the preceding are Commonwealth), and
more money onboard and on shore excursions offered by the cruise company; conservancy charges, QPWS permit and passenger charges, and indirectly through dividends
returned from port corporations.
> The Inbound Tour Operator: Benefits are dependent upon the number of passengers who book
organised shore tours. The greater the number of tours the greater the number of passengers and
hence the inbound tour operator's fee and commission;
7 Direct Versus Indirect Benefits – The Effect on Port Corporations
As port corporations are both major perceived and actual players in the cruising industry it is important to put
> The Destination: In particular: them and their share of benefit in context. Generally, ports are perceived to receive far greater direct benefits
• Local tour operators, coaches, limousines, taxis, and tour guides; from cruising than they actually do. Naturally, a key direct benefit is enhanced profile and public awareness.
• Local shops – those that go out of their way to cater for the nationality of the passengers However, in many cases the outlay on the additional services and requirements for cruise ships outweighs
on each different cruise ship and present high class, well priced merchandise will benefit the direct revenue received. Further, the direct return for ports from berthing a cruise ship is far less than the
more than most, especially if the merchandise has local flavour or significance; direct return from berthing and unloading cargo or other commercial ships.
• Restaurants – there is an increasing trend for passengers to stay away from their prepaid lunch This lack of direct benefit to the ports can act as a disincentive for them to attract cruise ships. Particularly as
aboard the cruise ship and savour the taste of the local food at the destination. This has obvious they are now mostly government owned enterprises and are required to return commercially acceptable
benefits for local restaurants and cafes; and dividends to Treasury and to achieve a specified level of return on assets. Every cruise ship visit seemingly
detracts from their ability to achieve their optimum level of financial performance. Obviously there is an
• The tourist attractions which the passengers visit.
incentive for ports to ensure facilities are adequate for the more directly lucrative cargo ships rather than the
> Hotels – Generally only benefit in base ports where passengers will often stay one or more nights less lucrative passenger ships.
either before joining or after leaving their cruise ship. During this time they will often take a number of
An exception to this situation is the CPA, which has been extremely active over the last decade in attracting
pre or post cruise land tours. Hotels often also benefit from Australian military vessel visits as the
cruise ships to its port. As Cairns is primarily a tourist port, the CPA has sought to diversify its income and
families of military personnel often come to visit and need hotel accommodation while the vessel is in
cruise ship operations help share the fixed costs of maintaining towage and pilotage operations in the port.
port; and
The majority of the significant financial benefits from cruise ships are passed on directly to the local
> Port Service Suppliers – These include services other than from the port corporations, such as:
communities of the destinations visited, in the form of increased revenue for local merchants, and indirectly in
• Shipping agents who derive their commission on a fee for service basis;
the form of repeat cruise ship or individual tourist visitation, together with increased international profile for
• Towage companies for the use of tugs, although today many modern very manoeuvrable the destination.
cruise ships do not require tugs. Towage requirements are set by QT’s regional harbour masters;
For example, both the Gold Coast and Cairns have huge potential to benefit economically from cruise
• Pilotage companies – for port pilotage and pilotage on the Great Barrier Reef, both of shipping with their significant international tourist reputations, well developed land-based tours to World
which are compulsory; Heritage Areas such as the Great Barrier Reef, Australia’s Tropical Rainforest – World Heritage and Gold
• Baggage handlers and stevedores – principally at base ports where they are engaged to Coast Hinterland (Central Eastern Rainforest Reserves of Australia), and supply of four and five star
handle passenger baggage and loading of ship provisions. In many ports stevedores also supply accommodation. Cairns also has the added advantage of having an international airport, which already
the linesmen;
• Provedores – supply of food and hotel supplies required by a ship throughout its voyage. There
are opportunities for marketing Australian goods to international cruise shipping companies, and
base porting vessels in Australia would generate increased opportunities for the provision of
domestic products;
• Fuel suppliers – when the cruise ship takes on bunker fuel;
• The port operator – from port charges which may include berth charges and terminal charges. It is
worth noting, especially in Queensland ports, that very few port operators receive sufficient
revenue from cruise ships to cover the cost of the infrastructure and services provided, particularly
when welcoming and farewell services are supplied for passengers. Some ports charge cruise
ships nothing at all in a bid to attract them to their destination, the thought being that the local
community benefits from the visit;
22 23
benefits through international passengers embarking and disembarking at the port. During the 2000/2001
financial year, 16 682 cruise passengers visited Cairns on international cruise ships with 32.3% of
passengers either embarking or disembarking at the port. In addition, the Reef Endeavour had 8,116
passengers embarking and 7,224 passengers disembarking in Cairns in 2000 (some passengers leave the
ship at Lizard and Dunk Islands). As very few Reef Endeavour passengers live in Cairns, these figures
represent even more people transiting through the airport, staying in paid accommodation, shopping etc. in
Cairns.
The QCSP recognises that whilst the benefits of cruise shipping are less concentrated and direct to the ports
in comparison to cargo ships, there is an overall benefit to the community as a whole (as revenue and profile
are spread across a wide range of industries, businesses and community sectors).
8 Summary
Clearly, cruise ship visits have the potential to bring enormous benefits at the national, state and local level.
By improving services for cruise ships, and by taking advantage of already developed product, Queensland
has the opportunity to increase its market share and in doing so increase economic returns for Queensland
businesses and communities. This is a key aim of the QCSP.
24
