Cruise bosses 'optimistic' despite spate of cancellations (2024)

Australia's cruise executive has admitted recent ship withdrawals are "concerning" but says he's optimistic about the future.

Plans to close P&O cruise line, the withdrawal from Australia of Virgin Voyages plus cancellations of cruise visits to Melbourne by some brands due to price hikes are among the issues which have caused turmoil in the $5.6 billion industry over the past few months.

That's despite cruising being more popular than ever, with a record 1.25 million Aussies sailing last year, the vast majority close to home.

The cost of cruising in Australia - including port fees which can be as much as triple that of other world ports - has been blamed for some of the developments.

Adding to the uncertainty, paperwork which allows cruise ships to easily operate in Australia is set to expire at the end of the year and has not yet been extended.

"It's certainly concerning that the current situation in Australia where we have these high costs, where we have these complex regulatory requirements, is going to lead to a hopefully short-term contraction of the sector here, but at the same time we are optimistic," Joel Katz, the managing director of the Cruise Lines International Association Australia (CLIA), told 9news.com.au.

Other issues having an impact on cruises in the region include the weak Aussie dollar and the distance ships have to sail to do seasons in Australia, Katz said.

He confirmed exemptions to the Coastal Trading Act 2012 need to be reviewed to easily allow cruises to go on past the end of the year.

"We expect that will come out in the next few months and then we'll develop our position accordingly,"Katz said.

He called on state and federal governments and ports and destinations to work together to ensure Australia builds its slice of the lucrative market, which will see 63 new cruise ships built worldwide in the next decade.

Risk of pricing out cruise lines

Business bosses called for action amid the development, pointing out ships are "mobile assets" which can be taken elsewhere if needed.

"Authorities need to be aware that there is a real risk they can price cruise lines out of the local market if fees and charges are unreasonably high," Paul Nicolaou, executive director of Business Sydney, told 9news.com.au.

Amid the latest developments, independent cruise reviewer Adrian Tassone declared on his pages that cruising in Australia is "broken".

He launched a petition calling on federal Transport Minister Catherine King to urgently address the Coastal Trading Act 2012 issue.

He said his viewers are "disappointed" at the situation.

"Some of them are saying they will travel overseas because cruising in the country is not really a viable thing anymore," the Sydney-based Tassone said, adding he expected prices to increase.

How the situation has unfolded

In November 2023, Princess Cruises and Cunard, both owned by Carnival, said they would no longer sail from Melbourne from the 2025-26 season, due to what they called an "unreasonable" port fee hike.

No plans have been announced for future seasons using alternative routes.

It will be folded into its parent company Carnival and one ship will go.

The company blamed "significantly higher operating and regulatory costs" in Australia.

Industry publication Cruise Passenger has reported Sydney and Melbourne port bills are as much as triple that of other parts of the world.

'No decisions have been made'

A Department of Infrastructure, Transport, Regional Development, Communications and the Arts spokesperson said it will "shortly" begin a review into the Coastal Trading Act 2012 but that "no decisions have been made".

"The exemption has reduced red tape and costs for cruise operations in Australia," they said.

A Port Authority of NSW spokeswoman said: "Like all Australian states and territories, NSW charges visiting cruise lines a fee to cover the costs associated with the infrastructure and services.

"Port Authority will continue to support the cruise industry with the facilities they need to ensure NSW retains market share of the Australian cruise market."

Do you have a story? Contact journalist Sarah Swain at sswain@nine.com.au

A spokeswoman for Ports Victoria said the price increase for docking at Melbourne's Station Pier was the first for two and a half years.

"The increase of 15 per cent was less than the increase in the Australian Consumer Price Index for the same period (18 per cent) and the increase in the Victorian Construction Price Index (21 per cent) for the same period," she said.