Growth of Cruising in Australia - Case Study Example

Growth of Cruising in Australia Introduction The cruise section in Australia is the fastest growing form of tourism, which has been continually experiencing double-digit growth for the last five years. The Australian region is inarguable among the leading global cruise markets (Dwyer & Forsyth, n.d). Taken as a whole, the sum of passengers surpassed 800,000 in the year 2013. The numbers are expected to rise to a million by the year 2016. At around 2012-2013, the cruise industry made a contribution of around $2.9b, and caused a stimulation of economic activity, both regionally and nationally (Dwyer & Forsyth, n.d). The crew boosted the economic activity and passenger expenditure during ship calls. Provision of food, ship supplies, maintenance requirements, fuel and beverages also helped stimulate economic activity. As an island nation, there are numerous potential access points for cruise ships. Australia is known to bring to the table new, innovative and exciting experiences (Campbell &Woods, 2013). Tourism in Australia mainly targets the North American market, because of the activities in undertakes in North America (Dwyer & Forsyth, n.d). The market in North America makes up the highest percentage of cruise passengers not only in Australia but also in the world. The Economic Impact of Cruising in Australia Other than Australia, cruising marks an important business in all other parts of the world. On a global perspective, there is stiff competition in the tourism industry. The whole region of the South Pacific, including Australia accounts only for 1.6% of the total cruising in the world (Mylne, 2007). The Caribbean enjoys about half the total cruising business in the world, in terms of largeness and foreign exchange (Dwyer & Forsyth, n.d). Around the years 1993-1994, the Australian government noted the significance of cruising in Australia and set aside funding in its annual budget, to develop the continent as a more aggressive and striking cruising target. Cruising expenditure influences both directly and indirectly on Australia’s economy. On the suppliers, it influences directly since they sell services and goods to tourists and operators. Beverage and food suppliers, fuel s suppliers, restaurants, hotels, shops, entertainment, transport and tours companies among others, take in the expenditure of tourists as revenue (Dwyer & Forsyth, n.d). While satisfying the demand of tourists, the benefit accrues to workers as wages, to the employers as profit and to the government as revenue, acting as a source of development financing. The indirect impact of cruising to the Australian economy is as a result of flow-ons. An occurrence of this comes about when direct suppliers buy inputs from firms that in turn buy inputs from other firms and so on. The induced effects of cruising come about when those who receive the indirect and direct expenditure spend their added income, which then set off a cycle of rounds of purchase by supplying industries and further imposed consumption. The cruise industry has made about 2.9 billion dollars between the years 2012-2013. This presents an increase of about 18% from the year 2011-2012’s figure of around 2.4 billion dollars. Other industries such as agricultural industries, restaurants and close to 3,000 agents greatly benefit from the cruising industry (Dwyer & Forsyth, n.d). The increased deployment of cruise ships in Australia, from research, will influence the cruise industry in 2014 with an excess of four billion dollars by the year 2016. Notably, based on important trends coming up in the industry, other regional economies in Australia will probably achieve future economic growth (Mylne, 2007). Marketing Australia as a Cruise Tourism Destination Marketing cruising in Australia has caused the making f several policies to maximise the importance of cruising to Australia (Gibbs 2010). A number of recommendations on marketing involve enhancing the environment of operation, regulatory policies, non-port facilities and paying attention of the issues that may come up on cruising in Australia as a whole (Campbell &Woods, 2013). According to the National Cruise Shipping Industry, there is commendable potential that will help develop Australia to a favourite cruising destination. While market Australia, however, some issues are bound to come up. The cruising board however has come up with a few strategies that will market cruising in Australia. Cost Price Reductions The cruising board recommends that reducing the reduction of prices for services. This is in relation to application of rules, innovative approaches to efficient pricing of services at the port, enhanced terminal infrastructure and better border clearance on passengers (Mylne, 2007). Improved efficiency in cruise tourism activities results to saving on cost, which makes it possible to impose lower fares on passengers. Introduction of the ‘fly-cruise’ has enabled the cruise lines to purchase scheduled seats in bulk, to enable price promotion and to book arrangements, as well as, lower fares to consumers (Dwyer & Forsyth, n.d). Lowering the fares may in turn create more demand for cruise tourism in Australia, not only from the locals but also from foreigners. On the part of foreigners, reduced fares may mean substituting a cruise vacation for a land-based vacation, and if so, Australia will get less expenditure (Richards, 2008). The reduced expenditure will make Australia gain additional demand for cruise tourism. While reduced cruising ticket prices may attract foreigners, it will also attract the local residents to domestic cruises. Increased local cruising will make an impact on domestic expenditure and foreign exchange. More foreign exchange normally has positive impacts on the economy (Gibbs 2010). This will mean saving in vacation costs which will reduce the expenses incurred, though the foreign component of the cruising industry might be lower. Introduction of New Products: Another way to market cruising in Australia involves introducing new products or services (Campbell &Woods, 2013). The development of new products will involve the broadening of development of diverse and innovative itineraries that will constitute a larger array of ports, packaging flight, land options, development of better shore attractions, and anchorages (Dwyer & Forsyth, n.d). The modern trends in cruising, globally, involve sectioning of the shipping markets. Fresh cruising products can be created within the notion of marketing other forms high interest tourism that present high growth rates. Examples of such would involve eco-tourism, where the tourists seek to encounter nature-based educative experiences. Introduction of adventure tourism in Australia’s cruising industry where sailing ships with development of expedition styles, or cruise- trek safaris might also boost the market of cruising in Australia (Mylne, 2007). Promotions The final way to market cruise tourism in Australia would involve promoting cruise tourism. Considering that cruising generates higher commissions for travel agents compared to other packages, promotions of the product are on the increase. In Australia, however, contact between travel agencies and cruise operators are not properly established. The body supporting cruising in Australia, (National Cruise Shipping Strategy) has come up with a possible solution that involves promotion of cruise tourism overseas by the federal government (Gibbs 2010). Promotion of cruising outside Australia might increase the number of foreign visitors to the cruises (Mylne, 2007). This will make the effect on expenditure and merits lessen, in comparison to the indication of receipts of cruise visitors. An Overview of the Success of the Australian Cruise Industry Over the past decade, the Australian Cruising Industry has presented significant growth. Currently, cruising is the leading industry in growth, in the tourism sector. The cruising industry has presented a continual average yearly growth of more than 20% between the years 2002-2012. More Australians, in hundreds of thousands are expected to cruise in the subsequent years (Campbell &Woods, 2013). The Australian cruising industry is also the quickest growing market in the world with a market penetration of about 3%, second alone to the more developed US cruise market. The region around Australia is responsible for the global cruise ship’s tonnage deployment, which indicates the competitiveness of the region as a target for cruise ship deployments. An estimated percentage of about 6% of the world market tonnage is expected to be deployed in the region in the year 2014 (Richards, 2008). Operating Environments for the Cruising Industry in Australia Having in mind that the Australian cruising industry is a worldwide industry, it faces high competition from the international market. Commercial operational and regulatory environments of markets from the globe encourage the deployment strategies for the industry. These two factors are important while determining the decisions to make on the major cruise lines regarding deployment of fleets (Campbell &Woods, 2013). The surety of the environment of operation and the sustained competitiveness of the same are important if maintaining and enhancing Australia in its top position are to be achieved (Richards, 2008). Growth of Australia’s cruising industry is promoted by the ability for internationally recognised and registered ships to operate independently of the domestic regulations (Mancini, 2008). Major Tourists in Australia’s Cruising Industry While cruising in Australia is a major event, it attracts numbers of foreign guests to experience the splendour of the continent. There are many tourists’ attractions in Australia, other than cruising. The cruise industry has set the highest record in accumulating tourists (Gibbs 2010). On a general outlook, New Zealand tourists make it highest on the scale of tourists who go for cruising (Dwyer & Forsyth, n.d). Backpapers are another main source of tourists in Australia in the cruise industry. Backpapers are normally a group of youngsters from the Western Europe regions. Many backpapers normally go for long work holidays in Australia. The cruise industry in Australia also presents a strong domestic tourist market which sources close to 63 billion dollars. This shows that Australians themselves are huge domestic travellers, not only in the cruising industry but also to other attractions such as camping and fishing (Cornel, 2010). On a research conducted in Australia concerning cruising, passengers were given face-to-face interviews. The findings showed that most of the domestic tourists normally came from outside West Australia, travelled as twos and were normally around the ages of sixty and above (Mancini, 2008). About 92% of the passengers were experienced at cruising, had at least one cruising expedition before, and were mostly international tourists. Most of the international tourists, it was found, came mostly from the United States of America (33%) and others from the United Kingdom, (30%). Cruising in Western Australia (WA) Once the specific Western Australia destination was introduced, it effected on decisions made by passengers to book the cruises, especially those to Broome. Most of the tourists were driven by the general appeal to visit the destinations. Passengers would normally seek information about port destinations during the cruise (Richards, 2008). The general performance of ports based on services to passengers was uniform and rated high across all ports in WA (Cornel, 2010). Personal security and safety were important, though other factors that would facilitate the experience for the passengers would be availability of information and other port facilities. Other areas that required improving while cruising in WA included providing wider food varieties, shopping options and enhancing toilet facilities (Campbell &Woods, 2013). Other key areas of improvement also included extension or more hours that are flexible that will allow ship docking or enhance the overall cruise tourism package (Mancini, 2008). The study also showed that around 60% of the passengers developed interest in indigenous experiences while at the ports. Such passengers showed more activity while on board, with a number having already participated in organised expeditions. In conclusion, the study placed recommendations that involved boosting the passenger experience (Cornel, 2010). Investment in port facilities and services would have been of importance in managing the expectations and experiences of the passengers. Fremantle, as a destination in WA, proved best in terms of passenger experience because of the strong infrastructure and many passenger activities. It only failed to help the passengers acquire right over choosing the cruise ship to travel in. Recommendations to improve Cruising in Australia The various destinations in Australia need to put in mind how most cruise tourists acquire information to increase the visibility of tourism packages, as well as, to manage and raise expectations (Campbell &Woods, 2013). The Australian federal government would for instance enhance the cruising destination websites, before a cruise is commenced, adding in-cruise information, once cruising has already started and an onshore guide for visitors who are cruising (Richards, 2008). The government should also consider working with operators in the cruising industry to increase the amount of information disseminated during the cruise. Working together will help improve the destination profiles, especially considering the high utilisation of cruise operators as information sources (Luck, 2008). The low expenditure by cruise tourists per stop also suggests there being room to maximise passenger expenditure. Materials that promote cruising that are more specific are useful before and while cruising to enhance awareness and book tours (Cornel, 2010). The cruising bodies should also consider improving facilities and port experiences; they should also improve service and product delivery through improved means of disseminating information (Mancini, 2008). To enhance market opportunities, destinations can make better offers on coordinating the retail industry, such as setting up pop-up shops. Operators in businesses should also make sure to deliver high quality products, as well as, services (Richards, 2008). The improvements should especially target organised tours and improved purchase of foods and beverage. Critical areas of seating or shade should also be improved in the port infrastructure segment. Any improvements should include the majority preferences, as well as, the minority. Conclusion The cruise industry in Australia is continually experiencing growth as gathered from the above report (Mancini, 2008). The fact that Australia is an island continent makes its access points even more. Cruising in Australia, is continually gaining market, gathered from the consistent growth in passengers year after year. In the year 2011 alone, passenger numbers grew by about 34% (Richards, 2008). In the subsequent year, 2012, they grew by an added 11%. The growth trend has been experienced for the past ten years with about 700,000 in the year 2012. The cruise tourism industry has grown to almost six times its size in the year 2002. The Australian cruise industry has had eight years of continuous double-digit growth, which is expected to keep rising (Mylne, 2007). An example of a cruise company in Australia, Carnival Australia, has stated its aim to ensuring close to a million passengers take on a cruise vacation. The worldwide industry on cruising has also seen a growth of almost double in the total number of passengers between 2002-2012 (Luck, 2008). The international cruising agents are active in Australia, since it is the leading cruising market in the world. Such growth of the cruise industry is bound to attract more attention from global investors and tourists (Mylne, 2007). This will in turn augment the number of international cruise operators in Australia. While the expansion of the cruise industry has been so much on the spotlight, little information on crimes that take place in the sea is provided. The cruise industry boasts of its image as a secure way to vacations claiming it is safer to cruise in bug ships. Claims to support this have not been confirmed yet (Mancini, 2008). The biggest cruising companies, Carnival group and Holland America have been hosting almost half the worldwide cruising tourists and still do, up to date (Richards, 2008). The cruising industry is also sensitive to claims on safety and health. The Australian Cruise industry demonstrates the best health habits in the world. Australia has a percentage of about 3.4% globally, in the cruising business (Luck, 2008). Carnival Australia has the largest share of cruising activities in the Australian cruise market. The continual growth of the economy in Australia is boosted by its market penetration which is at 3% (Campbell &Woods, 2013). It also recorded the highest growth rate of 11%, and was only equalled by Germany. Australia has also grown by eight percent each year since 2002. The annual average growth of the cruising market in Australia over the past ten years has hit 20%. A research that was sponsored by Carnival Australia estimated the contribution of the cruise industry in 2010 to 2011 to almost be 830 million dollars. The findings from the report also predicted that by the year 2020, the cruise industry will have contributed around 2.28 billion dollars to the economy of Australia (Dwyer & Forsyth, N.D). Passengers departing on cruises from ports in Australia were found to be Australians; and made up around 86% (Luck, 2008). The other 14% was made up of foreign tourists who would make flights to Australia then later get on cruises. While a majority of Australian passengers travel in cruises from their home countries, they also increasingly fly to other countries then go on cruises (Campbell &Woods, 2013). Most of the Australian passengers came from Queensland and New South Wales, though the capital of Australia normally has the highest number of tourists who are cruising. In the year 2012, the number of passengers aged below forty made up 25% of the total passengers (Mylne, 2007). Passengers who were sixty years and above made 33% of the total numbers. In conclusion, the Australian cruise market has grown beyond its borders. While a company like Carnival Australia is based in Australia, its mother country is found in the United Kingdom (Luck, 2008). Australia however does not have any major vessels flagged in it. This gives the necessity of a vessel being flagged in Australia. Considering the continual growth of the Australian, cruise industry, the future looks promising (Dwyer & Forsyth, N.D). The continuous enhancements of the services offered and the infrastructure, almost assure a continual growth of the cruise industry in Australia. 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