By Adam Carey
A major cruise operator’s decision to quit berthing two of its premier cruise lines in Melbourne this year is set to blow an estimated $37.6 million hole in Victoria’s economy, as more than 100 ships bypass the city over the next four years.
New analysis reveals Victoria’s cruise economy has gone into reverse after Carnival’s Melbourne boycott, which was ostensibly triggered by the Allan government’s November 2023 decision to hike berthing fees by 15 per cent.
Cunard’s cruise liner Queen Elizabeth home-ported at Station Pier in 2022-23 but will not return.Credit: Chris Hopkins
Carnival’s luxury cruise ship brands Cunard and Princess ceased home-porting in Melbourne at the beginning of this year, with Cunard exiting Australian ports entirely, while Princess now berths in Sydney and Brisbane.
Cunard and Princess were a major feature of Melbourne’s cruise ship schedule before their exit, berthing at Port Melbourne’s Station Pier a total of 25 times in 2024. Their exit will reduce the total number of cruise ship berths in Melbourne by about 113 visits between 2025 and 2028, according to new analysis by the Parliamentary Budget Office commissioned by the state opposition.
The levies, termed a “site occupation charge”, were raised on January 1, 2024, from $28.50 per passenger for the first 24 hours to $32.78, and from $1.19 to $1.37 for each hour beyond 24 hours.
The government has said the increased port fees will help pay the maintenance of Station Pier, which is almost 100 years old, but the PBO’s analysis suggests the revenue-raising initiative has backfired.
The projected drop in visitation at Station Pier over the next four years will cut the state government’s tax intake from cruise ships by about $9.8 million between 2025 and 2028.
The decline will deliver an even bigger hit to Melbourne’s tourism sector, where about $27.8 million will be lost as about 138,200 fewer cruise passengers visit the city, the analysis says.
The analysis found the impact of Cunard and Princess discontinuing routing their ships through Melbourne was significant to the local tourism economy because their vessels have about double the average passenger capacity of other cruise lines.
“The passenger cruise industry is a significant contributor to the tourism industry in Victoria. A total of 128 vessel berths were recorded during the 2023-24 cruise season, with the average vessel hosting more than 1500 passengers,” it says.
Cunard and Princess vessels, meanwhile, have capacity to carry about 3093 passengers.
The analysis was commissioned by Liberal MP Roma Britnell, the opposition’s ports spokeswoman, who said the cruise industry “warned at the time the decision to move their popular cruise lines into other markets was largely due to Labor’s significant increase to fees and charges”.
The forward schedule for cruise ship berthings at Station Pier, published on the Ports Victoria website, reveals there will be a 66 per cent fall in expected visits to the city in the next four years, dropping from 103 visits in 2024-25 to 75 in 2025-26, 71 in 2026-27 and just 36 in 2027-28.
Britnell said Melbourne’s diminished cruise ship economy was now on public display.
“In addition to the economic loss to Victoria, the sheer incompetence of this government is on display with their decision to hike up port fees only to lose millions of dollars in port revenue because of their decision,” she said.
Carnival Corporation’s country manager Peter Little said Melbourne’s cruise economy had declined in part due to the rise in port fees and charges, which had made it one of the world’s most expensive cities for a cruise line to visit.
“Home-ported ships are incredibly valuable to the Victorian economy because many of our guests will stay in Melbourne before or after their cruise, to explore city attractions or dine in restaurants,” he said. “We also sourced an enormous volume of food and beverages locally, when our ships were based in Melbourne.”
Credit: Matt Golding
Little said the company was looking forward to the release of the government’s cruise strategy, which is in development, in the hope it would reduce the cost burden of berthing in Melbourne.
Kenny Sandhu, the owner of limousine hire business Melbourne Chauffers, said bookings from cruise passengers had evaporated in the past six months after booming when pandemic lockdowns lifted.
“There has been a decrease in travel for cruise transfers and I don’t know why. After COVID, it was very busy, but now there is a decline,” Sandhu said.
The Age contacted Ports Victoria, which referred questions to the Department of Transport and Planning. The department referred questions to the Allan government, which did not respond by deadline.
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