Cruises pull out of Melbourne after tax hike

Two cruise brands have pulled out of Melbourne after a hike to port fees, with fears other cruises with follow suit.

Princess Cruises and Cunard are ditching Melbourne from 2025 after it was revealed Ports Victoria would increase fees by 15 per cent and there are fears other cruise companies may follow suit.

Teresa Lloyd, chief strategy officer at Carnival Australia, whose brands include Princess Cruises and Cunard, as well as P&O Cruises, Carnival, Holland America and Seabourn, said Melbourne was the “gateway into southern Australia” and “much-loved”.

“However, the decision to homeport these popular cruise lines in other markets, is in no small part due to the recent decision made by Ports Victoria to significantly and unexpectedly increase fees and charges,” Ms Lloyd said.

“We understand these fees will be ongoing and will largely go towards the ongoing costs of maintaining Station Pier.”

Princess Cruises and Cunard are pulling out of Melbourne from 2025. Picture: NCA NewsWire / Andrew Henshaw

Ms Lloyd said Princess Cruises and Cunard wanted to continue to operate from Melbourne and would be open to working with Ports Victoria and the Victorian Government to “finding a long-term solution together”.

“Our economic benefit to Victoria is immense and we appreciate the importance of maintaining our ports but to be expected to carry a 15 per cent increase with no notice is unreasonable,” she said.

A government spokeswoman said Ports Victoria had not increased the fees it charges cruise operators to use its facilities and services in the Port of Melbourne for more than two and a half years.

Victorian Ports Minister Mel Horne said the cruise sector was “thriving” and the 15 per cent increase on January 1 was “modest”.

“A modest increase to the port fees, set at less than inflation, will help deliver the maintenance and safety work that keep cruise ships choosing Melbourne and attract more ships to our state,” she said.

“With our investment and support in the cruise sector, Station Pier is currently operating at record capacity – with 126 ships set to dock at Station Pier this year, compared to 67 in the 2013/14 season.”

Victoria Tourism Industry Council’s fears other ships may follow suit if a plan is not put in place to improve infrastructure with the funds. Picture: NCA NewsWire / Andrew Henshaw

However, Victoria Tourism Industry Council chief executive Felicia Mariani told news.com.au Melbourne’s port was lagging behind Sydney and Brisbane, and there was a risk more cruise companies would ditch the city to head north to find a new home port.

“This tax without any plan or commitment or interpretation of how that money is going to be invested in improving the facilities and infrastructure is only going to harm our reputation with these cruise ships,” she said.

Ms Mariani has been calling for a 10 year strategy for the cruise sector.

“If cruise lines like Disney and Virgin Voyages get a better offer out of Sydney or Brisbane who has far improved docking facilities from what we’ve got, we stand to lose those two as well,” she said, referring to the two cruises that will call Melbourne home for their first ever season in Australia this year.

“And where does that leave us then in terms of our benefit from the cruise industry?”

Ms Mariani said not only did the economy benefit from visitors staying in the city before and after their cruise, and spending money in shops and restaurants, but also from replenishing the ship like the need to wash linens and restock produce.

“Our food producers, our wine producers, they have an opportunity to stock their produce on those ships in massive proportions,” she said.

“That’s where the big economic contribution comes.”

Ms Mariani said the cruise sector was worth $5.6 billion nationally, with $2.7 billion of that going to NSW, $1.7 billion going to Queensland and $379.5 million to Victoria.

She said Brisbane and Sydney both had dedicated cruise strategies, which led to significant investment in their cruise infrastructure.

“You only have to look at Brisbane. They’ve just renovated their Brisbane International Cruise Terminal and in the past year for 2022-23, their economic contribution from cruises has gone up by 10 per cent as a consequence of that improved infrastructure,” she said.

News.com.au understands Ports Victoria has only been notified by one cruise operator that they will redeploy two ships, totalling seven visits, in the 2025-26 cruise season – a decrease of 6 per cent.