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World Cruise World Cruise Tourism Market Tourism Market and the Baltic and the Baltic
VisionVisionByBy
Peter Wild and John DearingPeter Wild and John Dearing
G. P. Wild (International) LimitedG. P. Wild (International) Limited
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BackgroundBackground
Cruise tourism is the fastest growing part Cruise tourism is the fastest growing part on tourism in the worldon tourism in the world
Cruise tourism has grown consistently Cruise tourism has grown consistently since at least 1980since at least 1980
The industry has shown great resilience in The industry has shown great resilience in the face of difficultiesthe face of difficulties
It made a rapid recovery from 9/11 and It made a rapid recovery from 9/11 and has enjoyed a boom since early 2004has enjoyed a boom since early 2004
The fundamentals of the industry are The fundamentals of the industry are strongstrong
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IntroductionIntroduction The growth of the cruise industry has meant The growth of the cruise industry has meant
many changes in cruise port operations and many changes in cruise port operations and the infrastructure needs of destinationsthe infrastructure needs of destinations
Key drivers of this change include:Key drivers of this change include: Increasing introduction of larger cruise shipsIncreasing introduction of larger cruise ships The requirement to handle higher The requirement to handle higher
concentrations of cruise tourists over a short concentrations of cruise tourists over a short time scale – a challenge for local resources, time scale – a challenge for local resources, traffic management and supporting traffic management and supporting infrastructureinfrastructure
Need to develop new itineraries and destinations Need to develop new itineraries and destinations to handle market changesto handle market changes
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The Next The Next generation and generation and Larger Cruise Larger Cruise ShipsShips
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Current Ordering PositionCurrent Ordering Position
ItemItem QQ LBsLBs GT (m)GT (m) Cost Cost US$ US$ (m)(m)
BuildinBuildingg
4242 106,63106,6333
4.2344.234 22,98322,983
PendinPendingg
88 12,04412,044 0.4960.496 2,1472,147
TotalTotal 5050 118,67118,6777
4.7304.730 25,13025,130
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Annualised Ordering PositionAnnualised Ordering Position
15
10
4
6
910
1
3
11
1413
9
-
5,000
10,000
15,000
20,000
25,000
30,000
2001 2003 2005 2007 2009 2011
-
4
8
12
16
Pax (LB) No. of Newbuildings
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Trends in Newbuildings to Trends in Newbuildings to 20122012
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
-
1,000
2,000
3,000
4,000
Av. GT Av. Cap. (LBs)
Av. GT 68,28 74,89 81,78 90,50 92,00 108,7 94,42 87,14 92,20 104,3 116,7 93,50
Av. Cap. (LBs) 1,568 1,792 1,868 2,310 2,361 2,750 2,440 2,236 2,318 2,647 2,903 1,880
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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An Analysis of Current Order An Analysis of Current Order BookBook
6
2
17
13
2 2
0
4
8
12
16
20
<1,000 1,001-2,000
2001-3,000
3,001-4,000
4,001-5,000
5001-6,000
Lower Berths
Ship
s
No. of Ships
14 Panamax 22 Post-Panamax
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Structure of current order Structure of current order bookbook
TypeType QQ LBsLBs GT (m)GT (m) Cost Cost US$ US$ (m)(m)
Post-Post-PanamaPanamaxx
2222 75,29675,296 2.9782.978 15,41515,415
PanamaPanamaxx
1414 29,24429,244 1.1281.128 6,5846,584
OthersOthers 66 2,0832,083 0.1280.128 984984
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Annualised Levels of Annualised Levels of InvestmentInvestment
-
2,000
4,000
6,000
8,000
Pending - - - - - 450.00 942.00 500
Firm 4,331 4,497 4,420 3,757 1,598 3,053 4,284 5,464 5,708 5,659 1,805 -
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Impact of Vessel Size Impact of Vessel Size on Itineraries and Portson Itineraries and Ports
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The Rise of the Mega ShipThe Rise of the Mega Ship
0
10
20
30
40
50
60
1996 1998 2000 2001 2004 2006 2008 2010 2012
No.
in S
ervi
ce
0
40,000
80,000
120,000
160,000
Tot
al L
Bs
No. in Service Cumulative Capacity (LBs)
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Deployment of Mega Cruise Deployment of Mega Cruise FleetFleet
0
5
10
15
20
25
30
35
40
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nu
mb
er
of M
eg
a S
hip
s
Caribbean Mediterranean ECNA WCNA Asia/ Pacific N Europe Transatlantic
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CommentComment Some smaller cruise ships will continue to Some smaller cruise ships will continue to
be builtbe built The size of the average cruise ship will The size of the average cruise ship will
continue to increase in next decadecontinue to increase in next decade Mega cruise ships will gradually replace Mega cruise ships will gradually replace
lower capacity tonnage built prior to 1990lower capacity tonnage built prior to 1990 Debatable whether cruise ships will get Debatable whether cruise ships will get
larger still and go beyond the Genesis larger still and go beyond the Genesis ClassClass
Changing fleet structure has many Changing fleet structure has many implications for ports and itinerariesimplications for ports and itineraries
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Comment cont…Comment cont…
A survey by G. P. Wild (International) A survey by G. P. Wild (International) Ltd has established that an ever Ltd has established that an ever increasing number of pax will cruise increasing number of pax will cruise on large ships by 2014on large ships by 2014
Over 50% will sail on ships >290m Over 50% will sail on ships >290m loaloa
Almost 30% will use ships >300m loaAlmost 30% will use ships >300m loa 20 of the 42 cruise ships on order 20 of the 42 cruise ships on order
exceed 300m in lengthexceed 300m in length
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Further commentsFurther comments
Ports that are unable to accommodate Ports that are unable to accommodate the largest ships face the prospect of the largest ships face the prospect of an ever decreasing market sharean ever decreasing market share
For example a port which just 17 years For example a port which just 17 years ago was able to handle the largest ago was able to handle the largest ships under construction at that time ships under construction at that time (around 250m) faces a reduction of (around 250m) faces a reduction of 54% in market share by 201454% in market share by 2014
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Fleet structure in 2011 by lengthFleet structure in 2011 by length
0
50000
100000
150000
200000
250000
>50m >100m >150m >200m >250m >300m >350m
Length
Low
er B
erth
s
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More commentsMore comments
Almost 78% of cruise tourists will Almost 78% of cruise tourists will sail in vessels exceeding 250m in sail in vessels exceeding 250m in length by 2011length by 2011
Over 57% of the fleets capacity will Over 57% of the fleets capacity will be accounted for by ships in excess be accounted for by ships in excess of 275mof 275m
21% of the fleets capacity will be 21% of the fleets capacity will be offered on vessels over 300m in offered on vessels over 300m in lengthlength
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Critical ScantlingsCritical Scantlings
Length – up to 360mLength – up to 360m Beam – in excess of 55mBeam – in excess of 55m Draft – maximum 10.3mDraft – maximum 10.3m Air draft – in excess of 65mAir draft – in excess of 65m
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Implications for PortsImplications for Ports
To maintain or increase market share To maintain or increase market share ports not able to meet future market ports not able to meet future market requirements will have to invest in requirements will have to invest in new facilities and infrastructurenew facilities and infrastructure
Two berths of 350m plus are almost Two berths of 350m plus are almost certainly going to be required if a port certainly going to be required if a port wishes to remain competitive and wishes to remain competitive and attractive to the cruise lines by 2014attractive to the cruise lines by 2014
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Implications cont…Implications cont… Berths to accommodate 360m cruise ship Berths to accommodate 360m cruise ship
may only be required to provide around may only be required to provide around 250m for flat of sides with dolphins or other 250m for flat of sides with dolphins or other similar arrangements being used to provide similar arrangements being used to provide safe berthing overallsafe berthing overall
Suitable infrastructure needs to be provided Suitable infrastructure needs to be provided to accommodate traffic flows to and from to accommodate traffic flows to and from the ship including coach marshallingthe ship including coach marshalling
Car parking will be needed for turnaroundsCar parking will be needed for turnarounds Customs, immigration and security issues all Customs, immigration and security issues all
need to be addressedneed to be addressed
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Possible Traffic Flow Possible Traffic Flow NeedsNeeds
PaxPax Coaches – Coaches – 100%100%
Coaches – Coaches – 70%70%
Coaches – Coaches – 50%50%
5,4005,400 108108 7676 5454
3,1003,100 6262 4444 3131
2,5002,500 5050 3535 2525
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Funding InvestmentFunding Investment
This can be complex and take various This can be complex and take various forms depending upon the particular forms depending upon the particular position of a port and destinationposition of a port and destination
Port authorities, towns and cities, Port authorities, towns and cities, governments at various levels and governments at various levels and banks and financiers can all play a rolebanks and financiers can all play a role
Also increasingly the cruise lines Also increasingly the cruise lines themselves are participating in port themselves are participating in port related investments – perhaps also related investments – perhaps also agreeing to make a certain number of agreeing to make a certain number of calls over a period of timecalls over a period of time
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Examples – Cruise Line/ Examples – Cruise Line/ PortPort
RegionRegion PortPort Operator(s)Operator(s)
CaribbeanCaribbean Costa MayaCosta Maya CarnivalCarnival
ECNAECNA New YorkNew York Carnival, NCLCarnival, NCL
WCNAWCNA Long BeachLong Beach CarnivalCarnival
E MedE Med KusadasiKusadasi RCIRCI
W MedW Med NaplesNaples Costa, RCI, MSCCosta, RCI, MSC
W MedW Med MarseilleMarseille MSCMSC
W MedW Med CivitavecchiaCivitavecchia Costa, RCI, MSCCosta, RCI, MSC
SE AsiaSE Asia Laem ChabangLaem Chabang Star CruisesStar Cruises
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Thank YouThank You
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