Study shows significant growth in cruising's economic contribution

New economic analysis by Deloitte Access Economics shows the Australian cruise industry contributed $828.1 million to the national economy in 2010/11 – an increase of more than 44% on its contribution of $576.6 million in 2007/08.

According to the study commissioned by Carnival Australia the total economic contribution of cruising is highest in NSW ($370.9 million in 2010/11, forecast to be $1.128 billion by 2019/20) and Queensland ($166.4 million in 2010/11, forecast to be $340.8 million in 2019/20).

Commenting on the analysis Carnival Australia Chief Executive Ann Sherry stated "the cruise industry has for years been the standout success of the Australian tourism sector and the new study enables us to now quantify its positive economic impact.

"In 2011, around half a million Australians took a cruise holiday and we are on course to achieve the goal of a million passengers enjoying a cruise holiday by 2020."

Some of the major findings of the analysis include:

• Total cruise expenditure in 2010/11 was $943.7 million and this is forecast to grow to $2.595 billion by 2019/20;
• Between 2010/11 and 2012/13, average annual passenger growth in the cruise sector is expected to be 32% (based on observed Australian port bookings data);
• Providing impediments are addressed, annual passenger growth is expected to be seven% from 2013/14 to 2019/20;
• The Australian cruise sector now represents over 4% of the global cruise market in terms of passenger numbers compared to less than two% five years ago;
• The cruise sector's contribution to employment in 2010/11 was 7,220 (FTE) and this is forecast to grow to 19,841 by 2019/20.

Deloitte Access Economics Director Ric Simes said the Australian cruise sector had experienced strong growth over the last five years and its contribution to national and state economies had also grown signficantly.

Sime explained "this growth has exceeded previous estimates and, based on the available data, will certainly continue in the medium term.

"In terms of economic activity, cruise tourism's contribution to national GDP is forecast to double to 0.12% through to 2019/20."

The latest analysis further underlines the strength of the Australian cruise industry, which is enjoying an average annual growth rate of more than three times that of the global cruise industry.

Sherry added "research shows the local cruise industry has grown by an average 18% in each of the past five years compared with just 5% for the global industry which means we are the envy of the rest of the world."

Sherry said the Deloitte Access Economics analysis underlined the need for appropriate investment in port facilities to encourage further growth of the cruise industry and its increasing economic contribution.

This was particularly relevant in Sydney where a 'three berth solution' is needed with one berth west of the Sydney Harbour Bridge and two in the eastern harbour.

On thus, Sherry concluded "the Overseas Passenger Terminal in Sydney is already at capacity and the need for a permanent shared solution at Garden Island is now critical.

"International cruise ships are less likely to come to Sydney if suitable berthing arrangements are unavailable. If this happens, Australia could miss out on the economic benefits the sector provides."

STATE BY STATE BREAKDOWN

New South Wales: Sydney has experienced significant growth in value added and employment since the previous report was undertaken in 2007-08. Value added has increased from $232 million to $371 million in 2010/11. This is equivalent to growth of 60% over the three years.

Queensland: There has been a significant amount of activity in the cruise tourism industry in Queensland since the previous report was undertaken. Total value added has increased from $105 million in 2007/08 to more than $166 million in 2010/11. Over the three years this is equivalent to growth of around 60%.

Victoria: Growth in value added in Victoria has averaged around 13% in the three years since the previous report was undertaken, this is equivalent to total growth of 45%, resulting in expenditure increasing from just less than $42 million in 2006/07 to $60 million in 2010/11. Therefore while growth has not been as strong as Queensland and NSW, growth in Victoria has been notable.

South Australia: The total economic contribution of the tourism-related port activity in South Australia is just over $3.1 million. Included in the value added is wages paid to employees of $1.7 million, the cruise-related activity generates about 30 FTE workers in the South Australian economy.

Western Australia: Western Australia has experienced significant growth since the previous time this report was undertaken in 2006/07, total value added has increased from $22 million to almost $38 million in 2010/11, total growth over the period is 68%, or almost 19% annually.

Tasmania: Unlike many of the other regions in Australia, Tasmania has experienced a period of significant slowdown in value added since the previous report was undertaken. Total value added over the period has fallen from $16.1 million in 2007/08 to just under $7 million. This is negative growth of almost 25% over the three years.

Northern Territory: The Northern Territory has experienced considerable growth over the period since 2006/07 total value added has increased by 213%, at an annualised rate of 47%. Total value added has increased from $14.8 million in 2007/08 to more than $46 million in 2010/11.