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 panSouthern 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
Adjusted
Passenger
Capacity
(% of Total)
2006 Passenger
Capacity
2006 Adjusted
Passenger
Capacity
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
14,452,501
100.00%
2008 Passenger
Capacity
2008 Adjusted
Passenger
Capacity
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
Est. Southern Africa Market Share
Total CIN Reported Capacity
16,286,475
Adjusted
Passenger
Capacity
(% of Total)
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
GRT
Length
(m)
Beam
(m)
Draft
(m)
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
Carnival Corporation
Compagnie des Iles du
Ponant
Carnival Corporation
1986
1,773
27,624
243.2
29.0
6.5
1991
67
956
88.0
12.0
4.0
Aurora
Costa Crociere SpA
Compagnie des Iles du
Ponant
P&O Princess Cruises
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
Hebridean Int. Cruises
Travel Dynamics
Corinthian II
International
Regent Seven Seas
Seven Seas Navigator
Cruises
Alexander von
Phoenix Reisen
Humbodlt II
GmbH
Rhapsody
MSC Cruises
Hebridean Int. Cruises
1991
Travel Dynamics
1992 (2005)
International
Regent Seven Seas
1999
Cruises
Phoenix Reisen
1990 (2008)
GmbH
MSC Cruises
1997 (2004)
98
4,280
90.5
15.3
3.7
114
4,200
90.9
15.2
3.7
490
33,000
172.2
24.7
7.0
510
15,400
150.0
20.0
6.0
764
17,095
163.0
22.8
5.8
Rotterdam
Carnival Corporation
1,316
69,652
237.0
32.2
7.8
587
17,254
164.04
21.96
5.86
Le Ponant
MS Hebridean Spirit
Averages
Holland America
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 Portof-Call
Southern Africa / Africa
Strong
Strong
Seychelles and related
island cruises
Fair
Weak
St. Helena
Strong
Weak / Not Applicable
Repositioning
Strong
Strong
World
Strong
Strong
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
FORECAST GROWTH OF REGIONAL SUPPLY
450,000
417,711
400,000
Market Capacity
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
87,644
52,117
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
Low
Medium
High
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
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
Retail
Entertainment
Restaurants
Residential*
Conference / Convention*
Multimodal Transport*
Marina*
Public recreation*
Industrial
-
-
All
All
-
-
Water Taxi; Mass Transit and
Light Rail systems; Local
charter and tour offerings
Ferry (inter and/or intraregional); Public bus
Industrial rail
-
All
-
All
-
-
-
-
All
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-of-call
 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. …
List External
Opportunities (O):
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.
List External
Threats (T):
1. …
2. …
3. …
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
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, multiand 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