‘Very challenging’: Industry faces big issue

It’s an industry worth $5.6 billion in Australia – but it’s currently facing a “very challenging” problem that needs to be addressed before it’s too late.

Several cruise liners have pulled their ships from Australian shores, with fewer ships to enter the region in the upcoming season. But despite “concerning” withdrawals, Australia’s cruise boss remains optimistic about the future of the industry in the country.

Earlier this month, one of the most famous cruise liners to sail around Australia, P & O Cruises, made the shock announcement it will cease to exist from early 2025.

The P & O Australia brand will instead be folded into Carnival Cruise Line, its parent company, which has sailed across the South Pacific since 2013.

Several cruise liners have pulled their ships from Aussie shores and Cruise Lines International Association executive Joel Katz said it highlights the major costs and regulatory issues impacting cruise ships in Australia.

While the Pacific Encounter and Pacific Adventure ships, which are currently under the P & O banner, will carry on sailing under the Carnival name, the Pacific Explorer ship will no longer operate in Australian waters.

Meanwhile, in February, Virgin Voyages announced its cancellation of sailings into Australia.

The cruise line, owned by billionaire Richard Branson, revealed its adults-only ship Resilient Lady will cease operations to Australia starting later in 2024 and early 2025. It cited “safety concerns” in the Middle East for its decision.

P&O Australia will be no more from early 2025.

The $5.6 billion Aussie cruising industry copped another blow when Princess Cruises and Cunard announced it will ditch sailings from Melbourne from 2025 after it was revealed Ports Victoria would increase fees by 15 per cent.

Cruise Lines International Association (CLIA) managing director in Australasia, Joel Katz, said these recent announcements highlight the major costs and regulatory issues impacting cruise ships in this part of the world.

The P&O cruise brand will fold into Carnival Cruises from next year. Picture: Toby Zerna

“Australia and New Zealand are among the most expensive regions in the world for cruise operations, and a lack of consistent regulatory certainty makes it very challenging for cruise lines,” Mr Katz told news.com.au.

“The upcoming cruise season looks similar to the summer just gone in terms of overall cabins available, but future seasons are likely to bring fewer ships to our region and this will have an impact on local communities that depend on cruise tourism.”

Richard Branson’s Virgin Voyages ship Resilient Lady also announced it will leave Australia. Picture: NCA NewsWire / Damian Shaw

However, despite this, Mr Katz said the number of Australians taking cruise holidays is at near-record levels and there’s no doubt Australia will continue to be a major cruise region. “Billions of dollars’ worth of new ships are being introduced around the world and there’s a lot to be excited about in cruising, but the choices available in local waters could be limited without action to address current challenges,” he added.

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

“Our industry is actively advocating for more cruise-friendly government policies. By fostering a competitive cost structure and a more supportive regulatory environment, Australia can remain a top choice for cruise lines and their passengers.”

He said this includes an upcoming review of the Coastal Trading Act, which regulates cargo shipping in Australia but also affects cruising. The 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.

Despite this, cruising has become more popular among Aussies – particularly the younger generation.

“We need to ensure this process doesn’t harm cruise operations and that current provisions for domestic cruising in Australia can continue,” Mr Katz said.

It’s expected to come out in the next few months with the CLIA to develop its position accordingly.

It’s been one of the fastest sectors of travel to rebound post pandemic with 1.25 million Aussies having cruised in 2023, up on 1.24 million in 2019.

Mr Katz said ‘we need to create the right environment for cruising to continue to thrive and support jobs around Australia’. Picture: Jenny Evans/Getty Images

Meanwhile, 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.

“Cruise lines have spoken about the high cost of operating in this region and the regulatory complexities that make local cruising difficult, Mr Katz told Cruise Passenger in April.

“One of the consequences we are seeing is an increase in shorter cruises with fewer port calls.”

He told news.com.au that cruising is not only an enormously popular holiday choice for over a million Australians each year, it’s also a vital economic contributor worth more than $5.6 billion to communities around our coasts.

“We need to create the right environment for cruising to continue to thrive and support jobs around Australia.”