Transcript Full Study - Cruise Liners

FULL STUDY
INVESTIGATION OF THE CRUISE LINER INDUSTRY
DRAFT STUDY RESULTS | 7.16.08
MITCHELL DUPLESSIS PROJECTS (PTY) LTD | LANDDESIGN
CRITICAL TOPICS COVERED
 The modern cruise industry and the overall prospects for
continued growth at a global and regional level
 Infrastructure and services required by homeports and ports-of-call
 Insights on other cruise regions business success—notably,
Australia / New Zealand and South America
 Recommendations as to how Cape Town should consider moving
forward and to become a greater participant within the industry
SEC1
GLOBAL CRUISE CHARTERISTICS
GLOBAL CRUISE INDUSTRY: MODERN ROOTS
 1970s transatlantic voyages for travel and
leisure, not transportation
 North America’s love affair with the
“Love Boat”
 Caribbean entrepreneurs and
development of the Fun Ships
 The cruise ship as the destination
CRUISE INDUSTRY: GROWTH IN PASSENGERS
GLOBAL PASSENGER LEVELS HAVE DOUBLED EVERY DECADE
16,000
14,000
Passengers ('000)
12,000
10,000
8,000
6,000
4,000
2,000
0
1980
1990
North America
SOURCES: CLIA, 2006 AND CIN, 2008
2000
Europe
Australasia
2008
CRUISE INDUSTRY: FEATURES OF GROWTH
 Phenomenal success in developing new products and sustained
interest in cruising
 Adept at converting land-based resort guests into cruise
passengers
 Deliver a high level of passenger satisfaction, leading to repeat
clientele
 Model adaptable to changing market conditions
 Lines have limited competition, reduced operational costs, and
diversified revenues
LEADING CRUISE CONGLOMERATES
21%
6%
5%
22%
46%
Carnival Corporation
NCL
Others
SOURCE: CIN, 2008
Royal Caribbean Cruises
MSC Cruises
LEADING CRUISE CONGLOMERATES
NCL / STAR CRUISES
ROYAL CARIBBEAN
3 brands, 16 Vessels, 36,484 total berths
5 brands, 38 Vessels, 79,446 total berths
Celebrity
Royal Caribbean International
Pullmantur
CDF
Azamara
21%
NCL
NCL America
Star Cruises
6%
5%
22%
46%
CARNIVAL CORPORATION
11 brands, 89 Vessels, 169,584 total berths
Carnival Cruise Lines
Princess Cruises
Cunard
Seabourn Cruise Lines
Holland America
Costa Cruise
SOURCE: CIN, 2008
Iberocruceros
AIDA
P&O Cruises - UK
P&O Cruises - Australia
Ocean Village
MSC Cruises
1 brand, 10 Vessels, 19,530 total berths
MSC
PRIMARY CRUSING REGIONS



SOURCE: CIN, 2008


PRIMARY CRUSING REGIONS
22%
7%
7%
6%
6%
2%
40%
10%
Caribbean / Bahamas
Mediterranean
West Coast
Asia / Pacific
Alaska
South America
Northern/Western Europe
Others Below 2% (see note)
SOURCE: CIN, 2008; Others below 2% include: Transatlantic, Canary Islands, Bermuda, New England / Canada, Hawaii, Panama Canal, Indian
Ocean / Red Sea, Domestic Waterways, Antarctica, World, Africa.
PRIMARY CRUSING REGIONS
S
E
A
S
Y E A R
S
SOURCE: CIN, 2008
E
A
O
N
A
L
R O U N D
S
O
N
A
L
CURRENT GLOBAL INDUSTRY CHALLENGES
 Dollar weakness
 Fuel costs
– Cruise lines operations
– Impact to key destination delivery components – airlines,
shore excursions, ground transportation
 Security and terrorism
 Inability to raise ticket prices
 Weakness of the Caribbean cruising region
CURRENT GLOBAL INDUSTRY OPPORTUNITIES
 Key industry growth fundamentals still in place
 Greatly improved reach into new consumer markets
– British, French, Italians, Germans, Australians, South
Americans, Asians
 Highly sophisticated operations
– Global sources for passengers, employees, and supplies
– Yield management for ticket pricing and onboard revenue
 Continued consumer demand
– CLIA’s indicates 33.7 million Americans intend to cruise next
three years
 Dollar weakness
GROWTH OF INDUSTRY SUPPLY
First Post - Panamax
Today’s
Post-Panamax
Tomorrow’s
Longest and Largest
Grand Princess
Queen Mary 2
Oasis of the Seas
Princess Cruises
Cunard
RCI
Carnival
Carnival
RCCL
Built
1998
2004
2009 (Anticipated)
Pax (LBs)
2,592
2,620
5,400
Pax (Max)
3,000
2,800
7,300
108,808
150,000
220,000
LOA (m)
289.5
345
360
Beam (m)
36
45
47
Draft (m)
8.29
10
9
Air Draft (m)
60.8
62
n/a
Type
Name
Operator
Group
GT
RCCL’S OAISIS OF THE SEAS
GROWTH OF INDUSTRY SUPPLY, 2000-2008
500,000
450,000
400,000
Berths
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Berths
New Berth Capacity
SOURCES: CIN, 2008 AND WWW.CRUISECOMMUNITY.COM, JULY 2008
GROWTH OF INDUSTRY SUPPLY, 2000-2012
38 VESSELS ON ORDER; $22.3 BILLION IN NEW INVESTMENT
500,000
450,000
400,000
Berths
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Berths
New Berth Capacity
SOURCES: CIN, 2008 AND WWW.CRUISECOMMUNITY.COM, JULY 2008
FORECAST GROWTH OF INDUSTRY SUPPLY
900,000
798,700
800,000
700,000
Berths
600,000
500,000
400,000
612,700
372,100
300,000
200,000
100,000
0
2008
Low
2010
2015
Medium
2020
2025
High
FORECAST GROWTH OF INDUSTRY PASSENGERS
35,000,000
31.2 MIL
30,000,000
Passengers
25,000,000
24.0 MIL
20,000,000
15,000,000
15.2 MIL
10,000,000
5,000,000
0
2008
Low
2010
Medium
2015
2020
2025
High
FORECAST GROWTH IMPLICATIONS
 Projection scenarios anticipate ports and destinations will rise to
meet this opportunity
– Create demand for a number of present homeport and portof-call facilities to expand over the mid- to long-term,
encourage expansion into new market regions
 Seasonal capacity placement challenges
 As a trend, expansion of supply and the subsequent need of cruise
lines to expand their overall regional coverage is a favorable trend
for Cape Town
SEC2
SOUTHERN AFRICA CRUISE CHARTERISTICS
SOUTHERN AFRICA CRUSING REGION
SOUTHERN AFRICA CRUSING REGION
 Southern Africa, which
includes pan-Southern
Africa offerings and
often island
destinations
 Seychelles and related
cruises to the islands of
Reunion, Mauritius and
others
 Specialty cruises to St.
Helena
 Repositioning cruises
 World cruises
ESTIMATES OF SOUTHERN AFRICA MARKET SHARE
2006 Passenger
Capacity
2006 Adjusted
Passenger
Capacity
Adjusted
Passenger
Capacity
(% of Total)
Africa
14,453
14,453
0.10%
Indian Ocean
86,715
28,905
0.20%
World
14,453
2,891
0.02%
46,249
0.32%
14,452,501
100.00%
Est. Southern Africa Market Share
Total CIN Reported Capacity
14,452,501
2008 Passenger
Capacity
2008 Adjusted
Passenger
Capacity
Adjusted
Passenger
Capacity
(% of Total)
Africa
16,286
16,286
0.10%
Indian Ocean
97,719
32,573
0.20%
World
16,286
3,257
0.02%
52,116
0.32%
16,286,475
100.00%
Est. Southern Africa Market Share
Total CIN Reported Capacity
16,286,475
SOURCES: CIN, 2008 AND MDA / LDI, 2008; Notes: *Assumes Southern Africa welcomes one third of Indian Ocean capacity and one-fifth
of world capacity.
VESSELS OPERATING IN THE REGION, 2008/09
SOURCES: INDUSTRY WEBSITES, 2008, WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
VESSELS OPERATING IN THE REGION, 2008/09
 An estimated 83 cruises are planned for the 2008/09 season;
market capacity of 31,657 passengers
 An estimated 16 different vessels in the region
 Vessels in the market on a variety of different segments and
predominately directed toward a European cruise audience
 Average cruise duration is a lengthy 18 days
 The cruise season is generally from October to April; most
cruises offered December and January
SOURCES: INDUSTRY WEBSITES, 2008, WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
VESSELS OPERATING IN THE REGION, 2008/09
 Itineraries contribute 102 vessels calls to South African ports,
with an estimated 45 of these arriving to Cape Town (44%)
 Of the leading four cruise industry conglomerates, Royal
Caribbean is absent from the list of lines offering cruises in the
region
 Primary regional homeports identified include Cape Town,
Durban, Mombasa, and Mahe
SOURCES: INDUSTRY WEBSITES, 2008, WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
VESSELS OPERATING IN THE REGION, 2008/09
Vessel
Cruise Line
Owner / Operator
Built
(Refurb)
Pax
Length
Beam (m) Draft (m)
(m)
GRT
Royal Star
African Safari Club
Star Line Cruises Ltd
1956 (1994)
200
5,067
112.0
15.6
5.6
Silver Wind
Silversea Cruises Ltd
Silversea Cruises Ltd
1995 (2008)
296
16,927
155.8
21.4
5.2
RMS St. Helena
RMS St. Helena
Andrew Weir Cruises
1989
128
6,767
n/a
n/a
n/a
MS Hanseatic
Hapag Lloyd
Hapag Lloyd
1993
184
8,378
123.0
17.0
4.8
MS Europa
Hapag Lloyd
Hapag Lloyd
1999
408
9,069
198.6
24.0
6.0
MS Deutschland
Peter Deilman Cruises
Peter Deilman Cruises
1998
520
8,264
175.3
23.0
5.8
Costa Europa
Costa Crociere SpA
Carnival Corporation
1986
1,773
27,624
243.2
29.0
6.5
Le Ponant
Compagnie des Iles du Ponant Compagnie des Iles du Ponant
1991
67
956
88.0
12.0
4.0
Aurora
P&O Princess Cruises
Carnival Corporation
2000
1,870
40,037
270.0
32.2
7.9
Saga Ruby
Saga Cruise Holidays
Saga Cruise Holidays
1973 (1999)
668
9,356
191.1
25.1
8.2
MS Hebridean Spirit
Hebridean Int. Cruises
Hebridean Int. Cruises
1991
98
4,280
90.5
15.3
3.7
Corinthian II
Travel Dynamics International Travel Dynamics International
1992 (2005)
114
4,200
90.9
15.2
3.7
Seven Seas Navigator
Regent Seven Seas Cruises
Regent Seven Seas Cruises
1999
490
33,000
172.2
24.7
7.0
Alexander von Humbodlt II
Phoenix Reisen GmbH
Phoenix Reisen GmbH
1990 (2008)
510
15,400
150.0
20.0
6.0
Rhapsody
MSC Cruises
MSC Cruises
1997 (2004)
764
17,095
163.0
22.8
5.8
Rotterdam
Holland America
Carnival Corporation
1,316
69,652
237.0
32.2
7.8
587
17,254
164.04
21.96
5.86
Averages
1997
SOURCES: INDUSTRY WEBSITES, 2008, WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
VESSELS OPERATING IN CAPE TOWN, 2007/08
Name of Vessel
Date
Length
Passengers
Crew
Spirit of Adventure
14-Mar-07
169.8m
The World
22-Dec-07
155.80m
266
218
11-12 Feb 2008
195m
766
Hebridean Spirit
11-13 March 2006
90.6m
63
77
Van Gogh
17-18 March 2007
402
221
Topaz
Silver Cloud
18-19 Jan 2008
160m
209
2-4 Feb 2007
204m
613
442
Black Watch
24-26 Jan 2007
205m
710
358
Saga Ruby
25-26 Jan 2007
169.8m
363
405
MV Explorer
2-8 March 2007
180.4m
813
196
C. Columbus
28-30 Jan 2008
144m
322
173
The World
29 Jan-3 Feb 2008
196.35m
Royal Star
31 Jan-4 Feb 2008
112m
Silver Cloud
4-5 Jan 2008
155.80m
286
218
Orient Queen
7-10 Jan 2007
160.13m
328
390
Seven Seas
SOURCES: V&A WATERFRONT, 2008
238
SOUTHERN AFRICA CRUSING REGION
 Southern Africa /
Africa, which includes
pan-Southern Africa
offerings and often
island destinations
 Seychelles and related
cruises to the islands of
Reunion, Mauritius and
others
 Specialty cruises to St.
Helena
 Repositioning cruises
 World cruises
FIT OF CAPE TOWN WITHIN MARKETS
Cape Town as a
Homeport
Cape Town as a Port-ofCall
Strong
Strong
Fair
Weak
St. Helena
Strong
Weak / Not Applicable
Repositioning
Strong
Strong
World
Strong
Strong
Southern Africa / Africa
Seychelles and related island
cruises
CAPE TOWN COMPETITION WITHIN MARKETS
 Cape Town has limited competition for cruise activities in the
region
 Durban the only facility with a similar arrangement of port
infrastructure, upland / shore excursion activities and strategic
position
 Other South African destinations—Richard’s Bay, Port Elizabeth,
East London, Mossel Bay—all present a reasonable port-of-call
option
– Unlikely to be selected over Cape Town by a cruise line
 A more important point is the opportunity and need for increased
collaboration among destinations
CURRENT REGIONAL CHALLENGES
 Region is one of the smallest amongst other global deployment
areas
 Generally not on the radar of primary cruise operators other than
an occasional call / operation as part of a repositioning or world
cruise
 Flight and vessel repositioning costs also limit some lines in their
thinking about deployment to the region
 Concerns on regional safety and stability
 Uncertain size of regional consumer base
CURRENT REGIONAL OPPORTUNITIES
 Key industry growth fundamentals
 Diverse region with similar characteristics and itinerary diversity
as other successful areas
 Marquee ports-of-call and homeports
 The region has shown consistency in preserving its share of the
growing global industry
 2010 FIFA World Cup event
– Successfully delivered by South Africa, this event could serve as
an important catalyst—much like Olympics in Barcelona and
Australia—to move the regional cruise market forward
CLIA 2008 MARKET PROFILE
REGIONAL FORECAST GROWTH IMPLICATIONS
 Business as usual will likely yield limited results; low to medium
trend line
 Activity in marketing and organizational components key to
regional viability
 Assuming Cape Town continues to see 44% of capacity, passenger
throughput could be 126,000 by 2020 under the high scenario
– With cruise homeporting primary element of Cape Town’s
business, revenue passengers could approach 250,000
SEC3
CRUISE INDUSTRY NEEDS FOR OPERATIONS
CRUISE LINE DESTINATION SELECTION CRITERIA
 Appeal as a travel and leisure destination
 Type and quality of cruise tourism
infrastructure needed to support vessel
operations and movement of passengers
 A market basis and strategic fit within a
greater cruise ship deployment scheme
CRUISE LINE DESTINATION SELECTION CRITERIA
Consumers
Venues
Leadership Cruise Line
Satisfaction
Hotels
Airport
Marine
Attributes
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales
Marine Operations
 Consumer awareness and marketability of a cruise
destination
 Access to consumers
 Fit with cruise brand philosophy
 Fit with consumer vacation patterns
 Marine navigation and access
 Berth, apron and terminal features
 GTA and parking
 Provisioning and Security
 History of operations from the port / destination
 Landside access
 Airlift
 Lodging
 Shore excursions and destination venues
 Terminal charges
 Labor, fuel and other operating costs
 Regulatory issues
 Maritime law
Logistics, Air-Sea and Shore Excursions
Finance and Legal
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales
Marine Operations
 Consumer awareness and marketability of a cruise
destination
 Access to consumers
 Fit with cruise brand philosophy
 Fit with consumer vacation patterns
 Marine navigation and access
 Berth, apron and terminal features
 GTA and parking
 Provisioning and Security
 History of operations from the port / destination
 Landside access
 Airlift
 Lodging
 Shore excursions and destination venues
 Terminal charges
 Labor, fuel and other operating costs
 Regulatory issues
 Maritime law
Logistics, Air-Sea and Shore Excursions
Finance and Legal
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales
Marine Operations
 Consumer awareness and marketability of a cruise
destination
 Access to consumers
 Fit with cruise brand philosophy
 Fit with consumer vacation patterns
 Marine navigation and access
 Berth, apron and terminal features
 GTA and parking
 Provisioning and Security
 History of operations from the port / destination
 Landside access
 Airlift
 Lodging
 Shore excursions and destination venues
 Terminal charges
 Labor, fuel and other operating costs
 Regulatory issues
 Maritime law
Logistics, Air-Sea and Shore Excursions
Finance and Legal
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales
Marine Operations
 Consumer awareness and marketability of a cruise
destination
 Access to consumers
 Fit with cruise brand philosophy
 Fit with consumer vacation patterns
 Marine navigation and access
 Berth, apron and terminal features
 GTA and parking
 Provisioning and Security
 History of operations from the port / destination
 Landside access
 Airlift
 Lodging
 Shore excursions and destination venues
 Terminal charges
 Labor, fuel and other operating costs
 Regulatory issues
 Maritime law
Logistics, Air-Sea and Shore Excursions
Finance and Legal
PRIMARY VESSEL INFRASTRUCTURE
 Channel, navigation and access features
 Secure vessel berth
– Berth and related infrastructure
– Apron area and gangway
– Water and other services to ships
 Passenger reception area
– Security, customs and immigration (inbound / outbound)
– Basic passenger services
 Ground transportation area (GTA)
– Tour buses parking,
– Taxi and shuttle areas for crew
– Parking
 Access features
CRUISE FACILITY PLANNING MODULE
Category
1,800 Pax
2,600 Pax
3,600 Pax
Channel Depth
Berth Depth / Length
Recommended
9m + overdraft
9m + overdraft / support 295m vessel with 236m to 242m for
provisioning access’
Apron
20m wide / allowances for truck turning
Individual Terminal
Baggage
2,400 m2
3,900 m2
5,400 m2
3,000 m2
BCBP Offices
300 m2
300 m2
300 m2
300 m2
BCBP Processing
800 m2
800 m2
800 m2
1,200 m2
Check-In
900 m2
1,400 m2
1,800 m2
1,400 m2
Lounge
700 m2
1,100 m2
1,600 m2
1,200 m2
Support
1,000 m2
1,000 m2
1,000 m2
500 m2
Totals for Individual Terminal
5,700 m2
8,500 m2
10,900 m2
7,600 m2
GTA
Parking
Source: B&A, 2005.
6 – 10 buses per vessel plus POV/taxi drop-off areas
570
825
1,150
600 to 800 per
operation
CHALLENGE FACED IN FACILITY DEVELOPMENT
 In their most simplistic development application, cruise terminals
have highly constrained revenue generating capabilities
– Port charges generally cannot cover terminal developments
 Majority of benefit is experienced at the community level
– In their role as facilitators of trade and commerce, ports
sustain large capital investments in docks, harbors, and
terminals
MOVEMENT TOWARD MULTI-USE FACILITIES
Mixed-Use Type
Retail
Entertainment
Restaurants
Most Desirable
Somewhat Desirable
Less Desirable
Mid-to upper level shopping (geared
to locals and cruise passengers);
luxury goods; duty free; high-end
prepared foods; some kiosk and
specialty retailers; others
Marketplace / bazaar; crafts market
Big box retail; low-end discount
shopping
Live theatre; specialty / Theme
entertainment; Nightclub
Standard cinemaplex; Sports facilities;
Gaming
-
All; White tablecloth; Food court; Mid-Range Establishments
-
Office*
Class A and B+; Maritime office
Class B and below
Hotel*
Four to Five Star, Greater than 120 rooms
Three star and lower
Residential*
-
-
All
All
-
-
Water Taxi; Mass Transit and Light
Rail systems; Local charter and tour
offerings
Ferry (inter and/or intra-regional);
Public bus
Industrial rail
-
All
-
All
-
-
-
-
All
Conference / Convention*
Multimodal Transport*
Marina*
Public recreation*
Industrial
Note: *Significant consideration needs to be given to Port security planning with incorporation of these uses.
MOVEMENT TOWARD MULTI-USE FACILITIES
Challenges
Opportunities







Create revenue opportunities
Reduce project risk
Higher utilization of infrastructure
Enhanced destination experience
Portrayal of community image
Urban renewal / redevelopment
Public access to the waterfront









Increased capital outlay
Transportation and parking
Conflicts among land uses
Conflicts among water uses
Regulatory environment
Future expansion
Management skill
Safety and security
Public access to the waterfront
BELL STREET PIER, SEATTLE
Bell Harbor International Conference Center
 Conference Center
– 4,366 m2 facility that can
accommodate groups from 10
to 1,000 guests
– One 300 person auditorium
– 14 banquet and meeting rooms
 Shared use of cruise terminal areas
for events and exhibits, especially
off-season
SEC4
CASE STUDY
CASE STUDY: AUSTRALIA + SOUTH AMERICA
CASE STUDY: AUSTRALIA + SOUTH AMERICA
 Australia / New Zealand and South America are emerging cruise
regions
 Operations in Australia / New Zealand and South America are
generally seasonal
 Both regions offer a mix of itinerary offerings and varied ports-ofcall
 Australia / New Zealand and South America showcase different
approaches to growing their businesses
AUSTRALIA / NEW ZEALAND CRUISE REGION
GROWTH IN ASIA CRUISE
PASSENGER CAPACITY
PRIMARY OPERATIONS AREA
1,200,000
50
45
40
35
800,000
30
600,000
25
20
400,000
15
10
200,000
5
0
0
2004
2005
2006
Pax Capacity
SOURCE: CIN, 2008
2007
Ships
2008
Ships
Passenger Capacity
1,000,000
AUSTRALIA / NEW ZEALAND CRUISE REGION
 Area hosts regional operators marketing their products to
predominately Asian and Australian consumers as well as North
American and European lines
 Star Cruises and P&O Cruises Australia comprise the primary
regional operators, offering itineraries on 8 different vessels
supporting 79.3% of passenger capacity in the region during 2008
 Primary non-regional operators in 2008 included Princess, Royal
Caribbean, Celebrity, Costa and Holland America
AUSTRALIA / NEW ZEALAND CRUISE REGION
 Strong organizational agencies: Cruise Down Under and Cruise
New Zealand
 Diversity of itinerary offer
 Continued success in building a home grown consumer base of
consumers
– 160,947 Australians—or 61% percent of total passenger
numbers of 263,435 in 2007—choose to sail in the region
 Homogenous, familiar market
 Access to growing Asian travel and leisure areas
 Challenged to keep up with port improvements
 High airlift costs for North American passengers
SOUTH AMERICA CRUISE REGION
PRIMARY OPERATIONS AREA
GROWTH IN SOUTH AMERICA
CRUISE PASSENGER CAPACITY
1,200,000
50
40
800,000
30
600,000
20
400,000
10
200,000
0
0
2004
2005
2006
Pax Capacity
SOURCE: CIN, 2008
2007
Ships
2008
Ships
Passenger Capacity
1,000,000
SOUTH AMERICA CRUISE REGION
 The South America cruising region includes the southern cone,
Brazil, the continent’s northwestern Pacific region, and the
Western Caribbean
 Costa Cruises, MSC Cruises, and Royal Caribbean comprise the
primary operators, offering itineraries on 9 different vessels
supporting 52.1% of passenger capacity in the region during 2008
SOUTH AMERICA CRUISE REGION
 Proximity to the Caribbean; low repositioning and airfare costs
– Caribbean “oversupply” has made pursuit of a strong South
America option a useful
 Strong primary and adjacent sub-regions
– Antarctica, Amazon River, Galapagos Islands
 Market supported by a diverse base of international visitors and a
home grown consumer base
 Improving facilities
 Historically challenged by cabatoge laws
 Disorganized promotional / organizational entities
CASE STUDY IMPLICATIONS
 Buildup of both cruise regions has been a patient, long-term
endeavor
– Long been welcoming small levels of cruise operations and
traffic, slowly building on the success of the industry overall
 The presence of a well-organized, regional entity marketing to the
cruise lines is felt to have had a positive impact in the Australia /
New Zealand buildup of cruise levels
 Both regions have growing local consumer base
 Multiple, marketable itinerary options
 Generally stable regions and markets
SEC5
OVERALL CAPE TOWN POSITION ASSESSMENT
OVERALL POSITION ASSESSMENT
Internal Factors
List Internal
Strengths (S):
1. …
2. …
3. …
List Internal
Weaknesses (W):
1. …
2. …
3. …
SO Cell: Most salient or strategically
important interactions of external
opportunities and the strengths of the
destination. Often the destination’s
competitive advantage.
WO Cell: Outlines the destination’s
weakness versus the opportunities available
and provides indication of where
investment/disinvestment strategies should be
placed.
ST Cell: Interaction between the
destination’s strengths and the external
threats in the marketplace and environment
overall. Suggests where mobilization and
improvement may need to occur to address
threats.
WT Cell: The mix weaknesses and threats
suggest the most vulnerable area of the
destination, and often, where a program of
“damage control” should be implemented.
External Factors
List External
Opportunities (O):
1. …
2. …
3. …
List External
Threats (T):
1. …
2. …
3. …
EXTERNAL OPPORTUNITIES
 Positive global cruise market growth fundamentals
 Desire of cruise lines and their clientele to explore new regions
and destinations
 Configuration of the Southern Africa region
 High travel and leisure enthusiast aspiration for an accessible
African travel experience
 Increased global brand identification with South Africa and Cape
Town as a destination
 Favorable government policies toward tourism and related
businesses and investment
 FIFA 2010 opportunity as a showcase
EXTERNAL THREATS
 Mobility of the cruise industry
 Regional safety and security issues, both real and perceived by
potential cruising guests
 Significant repositioning distances and costs associated with the
entire itinerary offer
 Limited / unknown, complex consumer base within the region
 Unclear vision and direction for the region
 Lukewarm reception by cruise lines for Southern Africa at present
 Eastern position of the Cape Town in the region
INTERNAL STRENGTHS
 Diversity of venues and the destination offer overall; total quality
guest experience
 Immediate engagement of primary waterfront amenities
 Basic port capability to welcome the industry’s largest vessels
 Quantity and quality of airlift and hotel capacity
 Established maritime components
 Availably of options for improvement to cruise related /
supporting facilities
INTERNAL WEAKNESSES
 Multiple parties involved in the primary delivery of cruise facilities
/ operations
 Varied local enthusiasm for the cruise enterprise overall
 Conflict / priority of cargo operations within the Port area / basin
 Lack of dedicated cruise facilities for homeport operations
OVERALL POSITION ASSESSMENT
Internal Factors
List Internal
Strengths (S):
1. …
2. …
3. …
List Internal
Weaknesses (W):
1. …
2. …
3. …
List External
Opportunities (O):
1. …
2. …
3. …
SO Cell:
Comparative Advantage
Cape Town’s offer is highly congruent with positive
global cruise market trends and the demand for new
and exciting cruise destinations. The basic parameters
are in place for Cape Town to emerge as a successful
participant in the role of homeport and port-of-call.
WO Cell: Investment/Disinvestment
With the positive market opportunities available, the
initial investment of resources required to leverage the
positive macro and micro opportunities are market and
organizational based over the short term, with capital
and operational improvements needed over the mid- to
long-term.
List External
Threats (T):
1. …
2. …
3. …
ST Cell:
Mobilization
In many aspects, Cape Town’s successes is reliant on
others within the external environment; showing
leadership in the region is one of the few ways the City
can chart a positive course. While the global market is
highly favorable, the region has a number of initial and
ongoing obstacles to overcome. The key starts with
marketing and organization.
WT Cell:
Damage Control
The changing and mobile nature of the cruise industry,
lack of substantial interest by cruise lines and regional
security/perception issues paired with disorganization
at home and a need for some facility improvements
suggests a marathon, not a sprint, is required. Key
outlier issues may be too great to overcome.
External Factors
SEC6
RECOMMENDATIONS MOVING FORWARD
RECOMMENDATIONS MOVING FORWARD
 Software. Programs and marketing efforts developed to ensure
product quality, brand recognition, communication efforts and
others.
 Operations. Functional enhancements that allow for improved
cruise operations.
 Hardware. Strategies and action items to ensure that appropriate
capital improvements are planned and developed to meet
anticipated cruise industry throughput and facilities needs.
SOFTWARE: OVERARCHING OBJECTIVES
 A large portion of the ultimate success to be achieved by Cape
Town and South Africa is reliant on moving forward with
marketing efforts
– Establish a strong case for Southern Africa cruising with cruise
lines
– Work to build a foundation of seasonal business with
international consumers; and,
– Foster a local consumer base for cruise products.
 Emphasis should be placed on organizing the messages and
messengers first
 Resources beyond those presently committed by Cape Town and
elsewhere are going to be required
SOFTWARE: RECOMMENDATIONS
 Cruise marketing plan
– It is critical that Cape Town refine and implement a specific
cruise marketing plan for the City and region.
– Hold a marketing goals workshop
– Identify the marketing audience
– Message development and refinement
– Messenger identification
 Formulation of a Cruise Cape Town Committee (CCTC)
 In-house education program
 Incentives packaging for cruise lines
SOFTWARE: RECOMMENDATIONS






Market to the Cape Town community
Development a cruise passenger visitor's kit
Lead in development of Southern Africa Cruise Association
Establish a methodology for port costs benchmarking
Hold cruise tourism provider education sessions
Establish strategic relationships with key ports in the region
SOFTWARE: RECOMMENDATIONS
Conduction travel agent education sessions
International Cruise Trade Show Participation
Hold North American and European cruise operator visits
Hold North American and European cruise operator
familiarization trips
– Possibly linked with FIFA 2010
 Work with tour providers to design new offerings suitable for
cruise passengers
 Establish targeted provider program offerings
– Luxury, adventure, destination




OPERATIONS: OVERARCHING OBJECTIVES
 The smoothness of operations is as important as the quality of the
facilities; think destination delivery
– Operational planning and coordination
– Benchmarking
– Guest security and safety assessments and programs
– Organization and communication
OPERATIONS: RECOMMENDATIONS
 Become deeply involved with the FIFA 2010 floating hotel
destination delivery
– Sportscom (communication and sports marketing)
 Meet with Port / V&A regularly on threat assessment and security
issues
– Conduct assessments for cruise passengers and generate a
specific plan to share with the lines
– Hold public safety education sessions
 Become involved in homeport and port-of-call operations
planning, especially for peak days
OPERATIONS: RECOMMENDATIONS
 Develop and implement a cruise benchmarking strategy
 Develop a scheduling plan for the committee
 Establish an operations audit and enhancements program based on
benchmarking feedback
 Establish Cape Town primary and secondary venues and tour
provider assessments
 Establish a smart-pass program
HARDWARE: OVERARCHING OBJECTIVES
 Additional cruise berthing and related terminal spaces are needed
over the medium- to long-term
 Options need to be explored associated with the future role of
V&A Waterfront, the Port of Cape Town (NPA) and City to
create a win-win-win scenario that will be conducive to meeting
future cruise industry opportunities
 To reduce risk as well as meet other needs observed in the
maritime and commercial environment, multi- and mixed-use
cruise development approaches should be pursued.
HARDWARE: RECOMMENDATIONS
 Establish a cruise facilities improvement plan
– Engage the cruise lines for assistance
– Financial component
 Prepare a MOU between V&A Waterfront, the Port and City on
plan implementation
 Ensure a working, interim capital improvements plan for delivery
of homeport and port-of-call needs
 Prepare a detailed plan, with emphasis on development of a
mixed-use facility with supporting revenue inputs
 Implement the detailed plan timed to market conductions (cruise
or mixed-use components)
INVESTIGATION OF THE CRUISE LINER INDUSTRY
DRAFT STUDY RESULTS | 7.16.08
MITCHELL DUPLESSIS PROJECTS (PTY) LTD | LANDDESIGN