New Zealand Regional Cruise Industry Study

On 30 September 2010, a national cruise ship Economic Impact Report was released by the Ministry of Economic Development, Tourism NZ & Cruise NZ.

The attached, new, regional cruise report provides a more in depth summary of the economic impacts and activity levels on a port/regional basis

The report has been prepared by Market Economics on behalf of Cruise New Zealand.

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Full report: CNZ_Regional_EIA_2009101112.pdf

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Executive Summary

This assessment has drawn from the national study of the cruise industry (New Zealand Cruise Industry Study, 2010) to establish the regional distribution of the activity and the resulting economic impact for the 2009/10 season and forecasts for the coming two 2010/11 and 2011/12 seasons.

The national study (New Zealand Cruise Industry Study, 2010) found that the New Zealand cruise industry has grown strongly in recent years, from 27 cruises catering for 19,400 passengers in the 1996/97 season, to 81 cruises catering for 109,951 passengers in 2009/10 and potentially over 199,943 passengers in 2011/12. This activity by the cruise industry creates significant volumes of spend in the national economy. The national study estimates that the direct expenditure from the industry will grow from $176.7m in 2009/10 to $318.6m in 2011/12. The resulting value added (GDP) generated by the industry is expected to grow from $200.0m in 2009/10 to $362.7m in 2011/12. This level of activity is expected to generate employment for about 5,800 by 2011/12 which is 81% greater than 2009/10.

The regional results in this study show that the industry activity levels and the economic impacts are likely to grow for most regions and ports. In general, the growth over the coming two seasons is expected to be focused on the ports/regions that already see high levels of activity.

The forecast growth in ship port days and person port days is expected to be focused on the larger regions, Auckland, Bay of Plenty, Hawkes Bay, Wellington, Canterbury, Otago and Southland. These regions see a significant increase in ship days, with each region seeing an average of 40 additional ship port days by 2011/12 which creates an additional 100,000 port passenger days for these regions. Some of the smaller regions will see a small reduction in ship port or stop days. The Gisborne, Waikato, Nelson and Tasman Regions will loss around 2 to 4 ship visits between 2009/10 and 2011/12. This reduction in ship visits causes a drop in person port days for these regions of around 1,200 on average.

The value added (GDP) impact associated with the industry is focused on the four larger regions. These regions are expected to attract 64% of the growth in value added impact over the coming two seasons (Auckland 35%, Wellington 12%, Canterbury 9% and Otago 9%).

The cruise industry regional economic impacts for the larger ports are as follows,

• Auckland grows from $66.6m in 2009/10 to $113.3m in 2011/12, which creates an additional 680 jobs.

• Wellington grows from $14.8m in 2009/10 to $31.0m in 2011/12, which creates an additional 280 jobs.

• Canterbury grows from $19.7m in 2009/10 to $31.8m in 2011/12, which creates an additional 200 jobs.

• Otago grows from $16.5m in 2009/10 to $28.0m in 2011/12, which creates an additional 190 jobs.

It is also expected that the smaller ports and regions will capture a very small proportion of the growth in economic impact, with some regions recording a small decline (Tasman and Gisborne).

The study shows that Auckland region receives the largest proportion of the industry spend and economic impact in the 2009/10 season, which is consistent with previous studies of the industry. While Auckland is expected to remain the largest hub of activity and spend in the coming seasons, the other regions are expected to grow faster (all other regions grow by 37% p.a. while Auckland grows by 2

30% p.a.). This trend is caused by the expected increase in Australia swing voyages. These voyages tend to impact more evenly across the regions and have very little exchange activity.

The regional cruise industry employment impact shows that by 2011/12 seven of the regions are expected to have over 350 jobs supported by the industry (Auckland, Bay of Plenty, Hawkes Bay, Wellington, Canterbury, Otago and Southland). The results also show that the majority of the jobs created (around 70%) will be related to passenger demand (i.e. retail, exchange activity, excursions activities and transport).

Finally, in this study we have developed a new measure of activity for the industry. This measure estimates the number of people movements onto and off a cruise vessel in each port. The measure will be useful for local planners as it provides an indication of the potential traffic volumes created by the industry.

At the national level it is estimated that passengers and crew will move through a seaport or stop 1.3 to 2.6 million times in 2009/10 (or 1.6 to 3.1 movements per person per port day). The movements through ports will increase by around 40% p.a., with total movements expected to range between 2.6 to 5.2 million by 2011/12. The regional results show that there is likely to be significant growth in person movements in Northland, Auckland, Bay of Plenty, Hawkes Bay, Marlborough and Wellington (over 100% in the coming seasons).

Local planners and business operators need to plan for the future growth in movements to provide sufficient services, this would include additional coaches, guides, excursion capacity and port handling facilities. Each port needs to be careful to provide sufficient services as capacity issues may cause cruise ships to switch to other ports and stops.

ENDS

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