Growth of Cruising in Australia - Case Study Example

Growth of Cruising in Australia Student’s Name Institutional Affiliation Executive Summary This report is about the growth of cruising in Australia. The report discusses the growth in terms of the number of Australians that are taking cruise annually as well as the general growth rate recorded in the world wide industry. In this report, some of the reasons why people cruise are explored which are then correlated with the rise in cruising in Australia. The report also contains figures that are meant to further elucidate on the facts that are discussed in-depth in the report. The report also looks at various destinations and the cruise lines that have dominated the Australian cruise industry for the past decade. In this report, the demographics of the passengers are also discussed. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 5 The Growth of the Australian Cruising Industry 6 Demographics of the Cruising Passengers in Australia 11 Destination of Australian Passengers 14 Reasons why People Cruise 14 Conclusion 17 References 18 Introduction In the annals of history, the success of the curding industry has been something that stirred great discussion and research among the professional and scholarly domains. The modern cruising industry received a boost from globalization that made it possible for people to interact through travelling to various destination all over the world (Brida and Zapata, 2010). As a matter of fact, the ascendancy took root from around the 1960s and has since then grown into a mass market that involves usage of large vessels that for quite a while have generated revenues (Berger, 2004). The Australian cruise ship industry has emerged as one of the most lucrative in terms of investments making the country to become the most preferred destination by most people (Berger, 2004). This ha correspondingly increased the number of tourists that visit the country annually. In the last decade, there has been a considerable positive change in the Australian cruise industry albeit the low base (Berger, 2004). There has been a steady growth of passengers in the industry with projections being that the industry will do fairly better than it does now (Brida and Zapata, 2010). Compared to the global cruise industry, the Australian cruise industry has emerged to be the one whose growth has been faster with most ships having the country as their favourite destination (Brida and Zapata, 2010). Noteworthy is the fact that both the Australians as well as international tourists prefer the country as their destination. This paper explores the growth of the cruising industry in Australia paying attention to the characteristics of the passengers, their motivation, their destination and the annual statistics of Australians who cruise. The Growth of the Australian Cruising Industry The cruising industry has grown to become one of the most important industry in Australia especially to the tourism sector (CLIA, 2012). The growth of cruising in Australia and the industry in general is reflected in the strong and steady rates of growth that have even made it easier to predict the future of the industry. The country being an island nation, there exists various access points for the cruise ship. Additionally, the number of Australians that explore their sea is increasing at a steady rate as well. The average annual growth that is projected for the industry in the coming years is 43% (CLIA, 2012). In a nutshell more than 50 cruise ships visit Australia annually. Between 2013 and 2014 the Australian cruise shipping industry recorded an increase of about 13.4 percent in the number of cruise ships. The Australian cruise shipping industry had an estimated total output of $2.06 billion inclusive of $1.23 billion that was covered in direct expenditure. Compared to the year 2011/12 the cruising industry recorded 20.6% increase in output from the $1.71 billion (CLIA, 2012). In 2012/2013 the estimated total output accumulated to $2.88 inclusive of the domestic passengers (AEC Group, 2014). The passenger capacity also rose from 54,063 to 62051. In 2011/12 43 ships visited Australia reflecting an increase in the number of ships that are visiting Australia (AEC Group, 2014). As indicated in the figure below, there has been a considerable increase in the number of passenger days since 2007. Figure 1. The statistics of the increased passenger days and expebditure across the years from 2007 to2013 (Cruise Downunder, 2013). The cruise ships between these two years arose to 45 compared to the years 2011-12 (CLIA, 2012). The passenger capacity and thus number grew from 62,051 to 63263. The capacity of the crew increases similarly to 28061 from 27032 (Dowling, 2011). The number of port visits between the same period rose from 692 to 773. Out of the port visits 339 were base visits, which also demonstrated a rise from the previous 317 (CLIA, 2012). The passenger days also increased to 1.9 million an increase from 1.8 million in the period between 2012 and 2013 (CLIA, 2013). Similarly, the crew days also increased to 434,058days in port from the previous 373,104 port days (CLIA, 2012). In terms of expenditure passengers in Australia spent over $676 million, the corporate expenditure was also at $167 million and the general expenditure in the cruise industry was at $1.854 billion (Dowling, 2011). This is a clear record that the Australian cruise industry is expanding at a very great rate. The Australian cruise ship market accounts for 3.4% of the global cruise market. The most known cruising corporation in Australia is Carnival Australia. Despite Royal Caribbean being popular globally, it has a small representation in the Australian market. The cruising market in Australia is mature measured through a variety of parameters. First off, in terms of market penetration 3 percent of Australians have at least cruised. Secondly, the Australian market has been growing steadily and at a higher rate with 2012 recording 11% growth only equalized with Germany that also have a better cruising industry (CLIA, 2013). Still on the same, the Australian market has recorded a steady growth of at least 10% for a number of years. Lastly, in terms of annual average growth the annual growth of the Australian market have been stable at 20% for the past decade (CLIA, 2014). Recent research indicated that 86% of the passengers who depart Australia are domestic passengers the other 14% accounts for those who fly into Australia just to enjoy the cruising experience (CLIA, 2014). Through the years there has been an increase in the number of Australians who are cruising. A major milestone occurred in the year 2014 with a record of a remarkable number of passengers. In this same year (2014), a total of 1,003,256 Australians were recorded to have cruised (CLIA, 2014). This compared to the year 2013, represented a 20.4% increase from 833348 passengers (CLIA, 2014). This represented 170000 passengers increase which was the highest ever increase. The projections and analysis of Australian cruise passengers indicate clearly that there has been a boon in the cruising industry for the last decade with the base that was recorded in 2004 being 158000 passengers (CLIA, 2014). As a matter of fact, the Australian cruise industry has steadily been growing with a constant annual rate of 20 percent. In 2014, the market penetration rate grew to 4.2% remaining the best and highest ever rate in the global cruising industry (CLIA, 2014). This means that at least 4.2 percent of the Australians have taken cruise. In terms of worldwide contribution Australia contributed 4.5% of the total 22.1 million passengers who took cruise worldwide (Cruise Downunder, 2013). As aforementioned the market growth of Australia remained stagnant at 20% with a slight skew to 20.4% in the year 2014 a clear indication that the industry is growing at a steady rate. Figure 2. Australian Passengers from 2002-2014 (CLIA, 2014) The other testament that cruising industry in Australia is the number of days that are spent at sea. The analysis and estimation of the number of days the passengers spend in the sea gives an insight of how booming the industry is. In 2014, 10 million days were spent by the Australian passengers at the sea (CLIA, 2014). This alone is an increment by 14.4% compared to the previous years. However, the growth rate was a bit slower than that recorded in 2013 when the increase was by 22% (CLIA, 2014). This basically means that the number of short cruises is slowly taking over the long cruises. Figure 3. Estimated Annual sea days by Australian Passengers with reference to the cruising industry (Cruise Downunder, 2013). The major cruise lines in Australia include the P&O, Princes Cruises, Carnival Cruises, Royal Caribbean, Celebrity Cruises, Cunard Cruises, Azamara Cruises and Holland America Cruises that serve both the domestic as well as international passengers (CLIA, 2014). The growth of the Australian cruising industry is beneficial to other sectors of the economy and takes lead to other forms of tourism in the country. Associated with the growth is the rise in the number of ships that visit the Australian ports. It can ideally be said that since some areas such as NSW and Queensland have an all year cruising, most of the people who cruise come from the region. It is also valid to say that the number of ships that visit Australia reflect the number of increase in Australian passengers who take cruising for a variety of reasons as shall be discussed later. The projections being higher and there being some consistency in growth is a clear testament that the industry will perform even more better as globalization takes hold of any industry. Demographics of the Cruising Passengers in Australia Most of Australian passengers come from New South Wales and Queensland (Destination NSW, 2014). However, the number of passengers in terms of percentage from Australian Capital Territory is high accounting for 5.5% (Destination NSW, 2014). In the year 2014, NSW accounted for 40.9% of the total number of cruise passengers while Queensland accounted for 23.6% (CLIA, 2014). The other area that also recorded an appreciable number of passengers in terms of origin was Victoria that accounted for 17% (Destination NSW, 2014). The Australian Capital Territory had 390000 of its residents taking cruise in the year 2014. Generally the number of passengers by origin grew to greater percentages as can be seen in the figure 3 below. Figure 4. The number of Australians taking cruise by state (CLIA, 2014). The Australian passengers are fond of making cruise bookings six and twelve months to the actual departure of the cruise ships (CLIA, 2014). Generally in 2014, 36.5% of bookings were done between 6 and 12 months prior to departure (CLIA, 2014). Those booking for a period of less than 90 days also indicated an increase from the previous years. This is a clear indication that most of the Australian passengers plan for their cruising and definitely have reasons why they go cruising (CLIA, 2014). Research into the demographic of the Australian passengers reveal that most of them depart from the ports from all the mainland capitals where departures are organized (CLIA, 2014). The popularity of cruising differs in terms of age group. However, there is not as single age group that has dominated the Australian cruising market as all are spread evenly across the industry. The market segments that are targeted by the cruising industry in Australia are the singles, couples, families, corporates and the retirees (CLIA, 2014). In the year 2012 for instance, a third of the passengers were aged 61years and above. However, the other age groups were also represented. Under 40 years comprised 25% of the total passengers, 41-45 accounted for 14%; 46-50 years accounted for 8%; 51-55 years accounted for 9%; 56-60 years accounted for 11%; 61-70 years accounted for 21% and over 70 years of age passengers accounted for 12% (CLIA, 2014). Generally this would better reflect the fact that most of the youth are involved in cruising and so are the adults. Cruising is also popular among families. For the domestic passengers, the highest motivator was the cruise ship itself (CLIA, 2014). The second motivator was the cruise itinerary, followed by interesting destinations then the cruise lines. Most of the domestic tourist cruise so as to shop, visit attractions and for friends and family vacation (CLIA, 2014). Figure 5: Market segmentation by age of Australian Passengers (CLIA, 2014). Destination of Australian Passengers Majority of the Australian passengers preferred voyages to areas that are close to home. The most preferred destination for most Australian passengers is the South Pacific attracting more close to 400000 passengers. This is a representation of 39 percent of the Australian cruise market share. The statistics indicate that the number of Australians who cruise to South Pacific has been doubling. There is also an indication that about 189796 passengers preferred the Australian waters when cruising. The other preferred destination despite the decline in the number of passengers is New Zealand attracting about 88685 Australians in the year 2014 compared to 100000 in 2013. The other destination taken by the Australians was Asia in different destinations attracting 55399 passengers. The other destination is Alaska where 27901 Australians were recorded to have cruised to as a preferred destination. The other destination is the Caribbean region inclusive of the Bahamas and Panama Canal that attracted 31482 passengers in the year 2014. The other cruising experience recorded in the industry is river cruising that attracted an impressive number of about 79530 Australians. This niche in the cruising industry has accounted for 8% of the total Australian cruise passengers in the industry. Reasons why People Cruise There are myriad of reasons as to why people go cruising. The largest of all reasons why mot Australians like cruising is for leisure (Szarycz, 2008). When people want to get off the daily hustles and bustles they often take to the sea and enjoy nature (Kennedy, 2015). A cruise ship offers a variety of services (Streetdirectory.com, 2015). There are accommodation services therein, making it a perfect place for vacation. Therefore, some of the passengers often board the cruise ship on their holidays and weekends to enjoy the ride far off the island nation (Streetdirectory.com, 2015). The second most major reason is that, the passengers also get the chance to appreciate nature (Kennedy, 2015). Cruise ships have tour guides who have experience on the seas (Szarycz, 2008). These guides take the passengers through story sessions and also show them some of the wonderful features that are found in the sea (Kennedy, 2015). Additionally, when the cruise docks, the guides also direct the tourists on the best attractions to visit near the port. The other batch of passengers also like cruising so as to get time with their families and enjoy the vacation (Kennedy, 2015). At this times when the families are cruising, they get to enjoy some of the indigenous foods and have a chance to interact with other passengers who are also families as such the experience at sea is usually great (Kennedy, 2015). The cruise ships also have childcare services and facilities where the children can separately get their experience (Streetdirectory.com, 2015). The cruises also offer family friendly experiences and entertainment for the families to get together and bond (Kennedy, 2015). The treatment one gets while cruising is also reason enough why most people would prefer cruising. For example, most people like the pampering options onboard such as sunbathing, massage, spas and hot tubs. Tourist attractions forms the largest reasons why most people go cruising. There are many tourist attractions at the sea that people would like to see. Most passengers need to get the chance of getting the enriching and pleasant experience at the see (Kennedy, 2015). When doing this the passengers get the chance of appreciating different cultures across the world through interacting and different sessions aboard (Papathanassis, Lukovic & Vogel, 2012). Additionally, some see this as a chance for fishing expedition that is done just for fun and bonding. There are a number of features as well as historical sites and wildlife that are accessible by the sea. For that matter, most passengers prefer cruising when visiting such locations (Papathanassis, Lukovic & Vogel, 2012). Cruising also gives one a chance to socialize with people from different areas and get to learn a lot about other people. Some passengers prefer cruising because they have a modest income that can make them enjoy some pampering that happens aboard ad aforementioned. Apart from the pampering, the cruise ships also give one a dining experience (Lück, Maher &Stewart, 2010). Aboard the ships are chefs with the experience of making any type of food that suits individuals as well as families. For that matter, some events are organized in cruise ships so as to give people a chance to enjoy foods from different parts of the world (Meacham, 2015). Some cruise ships also offer wine tasting sessions for couples (Meacham, 2015). The other reason as to why people cruise is for educational reasons (Lohmann, 2014). When sampling geographical regions, cruise gives a wider view of the sea features that otherwise could have been seen in the classrooms in the form of pictures (Lohmann, 2014). Still on education, the cruise guides also take the passengers who are education oriented through sessions where they are narrated for the history of different features that are marked as historic sites (Lohmann, 2014). Most corporates also use cruising as a chance of team building and as a reward vacation for those people who have one well as well as the whole organization after various success stories (Thomas, 2015). Cruise ships often have shopping malls (NomadicMatt, 2012). This is a chance for the consummate shoppers to get their experience. The shopping is usually memorable and most people take the chance to have the memories in photographs (Papathanassis, 2009). Cruising also attracts the photography enthusiasts in that they get to take photographs of the great features that are found in the river banks as well as the sea (NomadicMatt, 2012). Couples seeking to have a romantic experience will also opt for cruising. Other people also use the cruises as places for events such as birthday and wedding events (Papathanassis, 2009). The core reason as to why most people would prefer cruising is its safety and affordability compared to flying and travelling through car that is exhaustive (Papathanassis, 2009). Lastly, most people also chose cruising for exploring the world and have an experience of nature. Conclusion The cruising industry is one of the fastest growing industries in Australia. The industry has recorded a steady growth, outdoing even the mature markets such as Germany and North America where cruising is the order of the day. Worth noting is that the market penetration of the industry has grown and is still taking a similar fashion as the industry in general with a current rate being at 4.2% annually. The number of passengers of Australian origin also have grown steadily at 20% annually. In the year 2014 more than one million Australians went on cruising compared to earlier statistics that even though were higher were outdone by the year 2014. There are a number of reasons why people cruise. Similar reasons best explain the growth of the Australian cruise industry. Some of the reasons are tourist attractions, luxury, leisure, romantic experiences and learning experience as well as exploring. In Australia most of the passengers hail from the NSW and Queensland that surprisingly have cruising all year round while the rest of the areas are seasonal in nature. References AEC Group. (2014). Economic Impact of the Cruise Shipping Industry in Australia, 2013-14 (1st ed., pp. 1-9). Sydney: AEC Group. Berger, A. (2004). Ocean travel and cruising. New York: Haworth Hospitality Press. Brida, J., & Zapata, S. (2010). Cruise tourism: economic, socio-cultural and environmental impacts. IJLTM, 1(3), 205. http://dx.doi.org/10.1504/ijltm.2010.029585 CLIA. (2012). CRUISE INDUSTRY SOURCE M ARKET REPORT Australia 2011 (1st ed., pp. 1-12). North Sydney: Australia: Cruise Line International Association. CLIA. (2013). CRUISE I NDUSTRY SOURCE M ARKET REPORT Australia 2012 (1st ed., pp. 1-12). 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