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Le tourisme de croisière : territorialisation, construction des lieux et enjeux de développement

Economic Risk in the Cruise Sector

Le risque économique dans le secteur de la croisière
Wendy R London

Résumés

Cet article examine les risques économiques qui pourraient potentiellement menacer la compétitivité et la durabilité des destinations de croisière telle que la Nouvelle-Zélande. Les risques économiques inclus dans cet article relèvent des décisions compagnies de croisières que d'envoyer ou non leurs navires vers une destination et la capacité de la destination pour accueillir ces navires et leurs passagers. Un cadrage du cycle de vie de la croisière a été établi pour fournir de base de discussion: le développement de produits (a), le développement des infrastructures (b), la distribution(c) ; la consommation(d), et l'élimination(e). Cinq stratégies pour gérer les risques économiques sont présentées : la formation d'un comité de financement de pointe adéquat, le développement d'une culture de la croisière, la fourniture d'une formation appropriée, la création d'un manuel de croisière nationale et la conception, le développement et la mise en œuvre d'une marque « croisière ». Chacune de ces stratégies repose sur une approche de gestion des risques qui appelle à une vision positive du risque et de la façon dont il peut être appréhendé avec succès dans la compétition.

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Texte intégral

Introduction

1The cruise industry worldwide is subject to a wide range of risks, threats and vulnerabilities (collectively, risks). These risks can attach to any aspect of cruising and invariably, at some time, do. Risks can affect the cruise line itself, individual ships, ports and terminals, passengers, and onshore providers. The manifestations of these risks can be as high profile as building a new terminal which is unreachable by big cruise ships or more routine such as a powerful storm resulting in the cancellation of all outdoor shore excursions. The overriding risk for the destination, though, is that no ships will turn up because of a loss of confidence by the cruise line in that destination.

2Many risks are magnified in remote, isolated destinations as well as in destinations which experience rapid growth. New Zealand (NZ) falls into both categories: it is a two-day sail from any other destination (ie Australia and the South Pacific Islands), and as the following table illustrates, is experiencing rapid growth:

Table 1. Cruise sector growth in NZ

Season

Cruises

Passengers

Total direct spend

(NZ $)

1996/1997

27

19,400

$ 42.0 million

2009/2010

81

109,951

$271.2 million

2010/2011

2011/2012

96

124

138,242

199,942

$305.4 million

$347.3 million

2012/2013 (forecast)

130

210,000

$410.0 million

Source: Market Economics Ltd 2010.

3Therefore, it should be clear that destinations such as NZ can reap enormous benefits from the arrival of cruise ships. However, where mistakes occur, the cruise ships may stay away resulting in substantial economic loss to the destination. In other words, the stakes are extremely high.

4Much of the discussion in this article focuses on the NZ cruise sector because of its vulnerability as a remote and fast growing cruise destination. However, the risks which are presented are no different from those faced by other destinations. The primary difference to be borne in mind, though, is that any such risks are often exacerbated for destinations such as NZ where the loss of any scheduled port calls can have a more profound effect. In this article, the author explores the economic risks associated with the cruise ship-passenger-onshore relationship, evaluates the potential of these risks to threaten a destination’s position as a competitive cruise destination and then proposes appropriate strategies which not only champion the development of a competitive cruise industry but also a sustainable one.

Risk, generally

5Before proceeding any further, it is worth engaging in a brief discussion of the concept of risk. For the most part, risk is an indefinite term, with each definition providing a different interpretation. In its most common iteration, risk carries negative connotations (see eg Webster 1960 – “injury, damage or loss”). Roehl and Fesenmaier, on the other hand argue that risk is underpinned by “[a] choice [which] involves risk when the consequences associated with the decision are uncertain and some outcomes are more desirable than others” (1992, p 16). Thus, risk is no longer considered to be a matter of mere loss but instead involves choice. It is from this point that a discussion of risk in the cruise sector can commence. In other words, the risks identified in this article represent a loss of some degree but the strategies proposed in section 3 outline choices which may be available to manage those risks and therefore provide a foundation for a competitive and sustainable cruise sector.

A life-cycle analysis

6Whatever construct of risk is adopted, however, some logical structure or framework must be adopted in order to establish the context in which individual risks can be analysed and managed. On the basis of this requirement, the author takes the view that the adoption of a life-cycle framework is a pre-condition for the management of economic risks.

7However, none of the extant tourism life-cycle models appears to be applicable to the cruise sector because of their emphasis on fixed tourism assets, eg a land-based resort or attraction (see eg Butler 1980; Hovinen 1981; Prideaux 2000). Instead, “cruise” involves tourism assets which, like the turtle, are at least partially carried around as part of the cruise experience during any given itinerary (ie. mobile capital in the form of a cruise ship). Accordingly, the author expands the British Airways (BA) life-cycle methodology (BA 1994; Johnson 2002) to encompass and describe the full life-cycle encountered by cruise ships. In this article, the author uses the phases found in the BA methodology and adapts them to a cruise ship’s transit:

Table 2. Cruise sector life-cycle model based on the BA model(a)

Life-cycle phase

Input

Product development

Attracting passengers and ships

Tourist infrastructure – raw materials

Itinerary planning – attracting ships

Marketing and promotion – attracting (the right) passengers

Leadership, coordination and knowledge – attracting local support

Infrastructure

Operations, infrastructure and the regulatory environment

Infrastructure operations – production

Air connections

Ports and passenger facilities

Regulation and the political environment

Distribution

Moving, serving and assisting passengers onshore

Transport - distribution

Transport

Services

Amenities

Use and consumption

The onshore experience

Use and consumption - use

Shore excursions

Crisis and disaster

Disposal

What the cruise passengers leave behind

Disposal

Environment

Economy

Note: (a) Text in italics represents the life-cycle phase determined by BA (1994).

Approach

8It should be evident from the discussion above that there is an urgent need to identify and manage the risks facing the high value, growing cruise sector. In simple supply and demand terms, the challenge for destinations is to ensure that the demand for cruising and its attendant risks do not outstrip that destination’s ability to deliver a first class cruise experience. The risks discussed in this article seek to address this concern, a concern which underpinned the author’s discussions with cruise sector stakeholders both onshore and during two cruise voyages in and around NZ and Australia. These discussions produced a catalogue of risks which the informants felt could jeopardise NZ’ success as a cruise destination. In addition to the interviews undertaken, the author also drew upon her own own experiences as an avid, frequent cruise passenger to provide a contextual background and critical view of the information gathered.

1. Risk – what can go wrong before, during and after the cruise

9In this section, many of the risks which face cruise destinations are discussed. However, this discussion should not be considered as a proposal to de-construct the cruise industry nor should any of the individual risks be considered in isolation. In fact, it is this very silo approach that has led to many of the weaknesses and vulnerabilities are perceived to exist within the NZ cruise sector and which undoubtedly also exist in other destinations.

1.1. Phase 1: Product development

1.1.1. Itinerary planning – attracting ships

10It is the cruise industry version of a tautology that the development of a cruise sector by a port destination is dependent on that destination’s ability to attract ships. Thus, the failure to do so will render a planned or developing cruise sector illusory, resulting in a loss of investment as well as revenues and jobs. However, the success of attracting ships is in part based on a complex itinerary planning exercise involving a series of factors which are not entirely within the control of the destination.

11Itinerary planning for NZ is governed by two inter-related seasonality issues: (1) the fact that NZ’ own international cruising season is relatively short running from October until April; and (2) the practice of cruise lines to deploy their ships to the Southern Hemisphere during the Northern winter. Both of these factors, which effectively render NZ a “part-time” international cruise destination, mean that NZ is particularly vulnerable to itinerary-related risks. Some of those risks are set out in the following table:

Table 3. Itinerary-related risks in NZ

Risk

Impact

Itinerary variations

The traditional 12 to 14 days Australia/NZ itinerary is being supplanted to some degree by voyages to the South Pacific islands, resulting in fewer visits to NZ ports.

Rising fuel costs

Some NZ ports may be bypassed because of the expense of getting to NZ and the navigational challenges faced once there

Widening of the Panama Canal

A wider canal able to accommodate mega-liners will have a profound impact on itinerary planning, especially with respect to repositioning cruises because of increased flexibility to reposition ships between the East and West Coasts of North America, thereby potentially bypassing NZ

1.1.2. Marketing and promotion – attracting (the right) passengers

12A passenger’s decision to cruise is based on a complex matrix of many factors such as whether to go on a cruise in the first place, where to go, the choice of cruise line and the choice of ship (Petrick, Li & Park 2007, p 10). That decision can be motivated by such diverse factors as a desire to return to a familiar destination; own research; the influence of friends, family and travel agents; brand loyalty to a cruise line; or even preference for a particular ship (Petrick et al 2007, p 11). Cruise destinations must both understand and address these factors in order to attract not only cruise passengers but also the type of passenger who will make a positive economic contribution to the destination. Otherwise, the destination risks attracting passengers who spend very little whilst onshore.

13In order to attract ships and their passengers, however, destinations must market to the cruise line executives who make the decisions as to where their ships will go. This effort can often be hampered by a lack of information and the consequent lack of understanding by the cruise lines of the destination. In cases where the destination’s share of the global cruise market is small (eg NZ), the cruise lines are unlikely to invest substantial sums to undertake their own research to familiarise themselves with those destinations. Therefore, it is incumbent upon the destination not only to market itself, but also to ensure that the information it provides is specifically targeted to those cruise passengers who it wishes to attract. However, these efforts must be counterbalanced against the reality that the cruise line’s first priorities are to sell its ships and encourage passengers to spend money onboard, thereby potentially rendering the promotion of the destination superfluous to the cruise line’s primary revenue-gathering objectives.

1.1.3. Leadership, coordination and knowledge – attracting local support

14The competitiveness, sustainability and therefore economic success of a destination’s cruise sector can be threatened by a lack of leadership and structure. Evidence of this is apparent in NZ where port operations personnel have often acted on their own initiative to directly manage coordinating passengers’ onshore activities, even beyond the port. According to two such individuals, their own proactive response is the result of the lack of an adequately funded national cruise organisation. Other areas of concern include (a) the high turnover of staff within local or regional tourism organisations thereby making long-term planning difficult; and (b) the pre-disposition of national tourism agencies who are more attuned to the needs of tourists arriving by air rather than cruise passengers arriving and touring by sea. Within the community itself, the community’s response to welcoming cruise ships can make the difference between a positive port call (signaling the return of the ship on a regular basis) and a negative one (acting as a harbinger of elimination from the itinerary). Communities which exhibit negative or even complacent sentiments risk losing the economic benefits which would otherwise accrue to them.

1.2. Phase 2: Infrastructure

1.2.1. Air connections

15New Zealand’s own small domestic cruise market and remote location make it highly dependent on air transport to supply its market. The vast majority of passengers who either join or leave their cruise in NZ (Auckland) must take an international flight of between three and 24 or more hours. Therefore, fears brought about by terrorism, long flights and even the carbon footprints left behind can pose significant threats to cruising to remote destinations such as NZ (see Floyd, Gibson, Pennington-Gray & Thapa 2004, p 20; Roehl & Fesenmaier 1992, p 17; Sönmez, Apostolopolous & Tarlow 1999, p 15). Another significant concern is the availability of affordable connecting flights, particularly where the cruise embarkation city is far from major originating markets. Expensive connections can result in a decision not to travel, as evidenced by the propensity of Americans to stay closer to home during the 2007-2010 recession (McKnight 2009).

1.2.2. Ports and passenger facilities

1.2.2.1. Terminal location

16The decision of where to locate a cruise terminal depends on a wide spectrum of factors including the ability of ships to navigate to the terminal; the terminal’s proximity to air and surface transportation; and the type of port in issue. According to the captain of one ship, terminals in turnaround ports should not be sited in a congested city centre but instead, be built outside the city centre, along convenient transportation routes for air and ground transportation and city hotels. On the other hand, ports of call can and should be sited in or near the city centre to maximise passengers’ time onshore instead of in shuttle buses or taxis. Other issues governing the physical siting of cruise terminals include:

Table 4. Considerations in siting a cruise terminal

Barrier

Barrier

Examples

Infrastructure barriers – natural or constructed

Low bridges preventing ships from reaching terminals

Sydney – Harbour Bridge; Brisbane – Gateway Bridge; Jacksonville – Dames Point Bridge; Shanghai – Yangpu Bridge

Turning basins are too narrow for longer ships

Ships longer than 270 metres are too long to turn around in the Brisbane River

Wharves are too short

Longer ships cannot dock at Circular Quay – Sydned

Neighbourhood attitudes

Pedestrian congestion resulting in local residents feeling overwhelmed

Charleston, South Carolina; Key West: small communities in Alaska

Traffic congestion causing delays for passengers, supply vehicles and local residents

Circular Quay – Sydnedy; Princes Wharf – Auckland

Noise emanating from ships’ loudspeakers causing disquiet amongst nearby residents

Seattle and Brisbane

Facility use leading to congestion and confusion

The entrance to the Princes Wharf (Auckland) cruise terminal is difficult to find because of its nestled position amongst shops, apartments and a hotel; meet and greet, baggage and marshalling areas for ground transportation are severely limited.

1.2.2.2. Terminal facilities

17Passengers’ first impression of a port destination is often the port and its facilities. The port must be able to “provide a pleasing environment” (Marti 1990, p 161) and maintain excellence in all areas of service (Destination Victoria 2002, pp 50-51) because any negative experiences will have an equally negative impact on passengers’ perceptions of the port and therefore the cruise lines’ willingness for their ships to return. Concerns about ports and their facilities are reflected in a quandary of Shakespearian proportions currently facing NZ, and that is: “to build or not to build,” or more specifically, whether to build purpose-built cruise facilities, or not. Ajamil (2005) notes that the demand for cruise terminals is predicted to rise significantly through 2017 but that the port industry has responded with low cost solutions, including utilising dockside warehouses. However, he further notes that cruise lines are beginning to expect terminals which are better located and have better amenities and facilities which can handle large numbers of passengers (Ajamil 2005). With the possible exceptions of Princes Wharf in Auckland and Wellington’s cruise terminal, all of NZ’ cruise passenger facilities fail under Ajamil’s definition of an acceptable terminal, thereby potentially leading to the sanction of a loss of cruise ship visits.

18There is, however, the lingering issue of whether substantial investment makes sense. Jackson (nd, p 14) addresses this concern, stating that the level of investment in dedicated wharfs and cruise terminals is not justified “when compared to [sic] the level of return in visitor expenditure and revenue to governments.” In NZ, the decision to build will need to be balanced between (a) the port companies’ willingness to invest in an activity (cruise) which they do not necessarily perceive to be either core or profitable business (TourismNZ 2008, p 12); and (b) the port community’s willingness to provide welcoming facilities for cruise ships and their passengers. An example of a port community whose significant investment did not result in the expected returns is the Canadian port of Nunavut. Port calls scheduled for the 2009 cruise season became erratic and were often cancelled (CBCNews.ca 2009).

1.2.2.3. Port clashes and mega-ships

19One of the most critical logistical problems facing many destinations, including NZ is overcrowding at its cruise berths, or port clashes. The challenges for NZ are not dissimilar to those facing the Caribbean where, according to Farquharson (2006, p 13), the key short-term challenge is to be able to accommodate the sheer growth in the cruise line industry and the parallel growth in the numbers of mega-ships. Atherley (2003, p 8) comments that “[a]t a minimum, a Port serving the cruise industry today needs at least two mega-ship berths if they are to make an impact.” In the case of NZ the continued growth in cruising in NZ and its relatively short cruise season contribute to competition for its limited berth facilities. In both cases, the desire to have more ships and more revenue needs to be balanced against the necessity to avoid port clashes because of the problems which can ensue.

20The sheer size and capacity of mega ships also pose significant threats to the destination community itself:

Table 5: Threats posed by mega-ships

Locus of threat

Threat

Impact

Character of the cruise

Passenger may elet to remain on board – ship as resort

Passenger spend onshore will be less

Ports and port facilities

Length of wharf

Longer ships may not be able to dock or may interfere with port operations

Passenger and crew exchanges

Insufficient hotel rooms and transport options to meet increased demand

Environment

More rubbish

Destinations may not be able to cope with the added burden and additional costs

Shore excursions

Incrased demand

Local attractions may be forced to deal with long queues or close when mega-ships discharge their passengers into the port community

Communities may feel overwhelmed

Restaurants, shops and roads may become over-crowded, causing dissatisfaction amongst local residents and land tourists

1.2.3. Regulation and the political environment

1.2.3.1. Regulation

21The operation of cruise ships within a destination in large part depends on government regulation which is consistent and fair to all stakeholders and which does not impose any extraordinary costs for compliance. In other words, regulation which is obscure, inconsistent or fragmented can pose a significant risk to the smooth operation of a cruise ship as well as lead to added costs for compliance. Some of the regulatory issues facing a destination’s cruise sector include:

Table 6: Regulatory issues

Table 6: Regulatory issues

1.2.3.2. The political environment

22Public sector employees, including elected councilors can knowingly or unknowingly influence a destination’s response to its cruise sector development. Public sector officials who understand the cruise sector can contribute not only to the welcome which cruise ships and their passengers are afforded, but more significantly, can also participate in the dialogue leading to a well-managed, commercially viable and highly rated cruise sector. On the other hand, public sector officials who have been described as obstreperous can act as barriers to the development of a sustainable and competitive cruise sector.

1.3. Phase 3: Distribution

1.3.1. Transport

23Port and city shuttles can present logistical and financial issues for cruise lines and the service providers. The basis of provision varies and is a function of whether the cruise line funds the supply of shuttles, whether the passenger pays on a per ticket basis, or whether the destination provides them on a courtesy basis. However, with the provision of free shuttles comes the risk that the service may not be as frequent as the passengers would like. On the other hand, where passengers pay for their use of the shuttle, the expectation is that there will be sufficient capacity and frequency. One respondent commented that “either the passenger pays, or [it] costs the cruise company… if [the cruise lines] are charged, they will move out of those ports.” Whether this is a view which is prevalent throughout the industry is not clear, but it was of concern to this senior officer and therefore should be considered as a potential risk.

1.3.2. Services

1.3.2.1. Retail

24Shopping is a mainstay activity for cruise passengers (Dwyer & Forsyth 1998; Douglas & Douglas 2004). Many passengers will spend their entire port call shopping, whilst others will shop as part of their shore excursions or other activities. Port destinations need to provide a welcoming retail environment which includes ensuring that the shops are open on those days when the ships are in port; that prices are not increased for the duration of port calls; and that all outlets provide passengers with a high level of customer service. A welcoming retail environment is particularly necessary in order to encourage passengers to spend money onshore in the face of the introduction of more shops and even malls onboard the ships (eg Oasis of the Seas).

1.3.2.2. Restaurants and cafés

25The patronage of restaurants and cafés is an activity closely allied to that of shopping. Two issues are of particular significance where eating outlets wish to attract cruise passengers: (a) an understanding of passengers’ eating habits; and (b) cost. Whilst there will be those passengers who seek to experience the local cuisine at any cost, the majority of passengers will seek out the best value for money, knowing that they can return to the ship for lunch if they find nothing suitable. In addition, destinations need to understand the national and cultural characteristics of visiting passengers. For example, Australasian passengers traditionally spend less on both onboard and onshore services than their American or European counterparts: meat pies are definitely “on” for Australians whilst the Europeans are more likely to head to upmarket cafés and restaurants with a respectable wine list.

1.3.3. Amenities

26The provision of well-managed wharf side amenities such as trained “meet and greet” staff, informative signage, toilets, basic post office and foreign exchange services, and Internet and telephone services is one way to demonstrate a welcoming environment. A failure to provide foreign exchange services on all days when ships are in port can pose not only a source of major frustration for the passengers but can also result in substantially lower revenues for the destination because of passengers’ inability to exchange their foreign currencies as and when funds are required.

1.4. Phase 4: Use and consumption (the onshore experience)

1.4.1. Shore excursions

27Cruise passengers represent a wide spectrum of interests, travel styles and expectations. However, there is one overriding benchmark for assessing both the successes and risks of shore excursions, and that is that passengers have a limited time in port. Overall, passengers seek port destinations which have “a good climate, access to an area possessing either a landmark of historical importance or an exotic or foreign culture” (Marti 1992, p 366). However, even in destinations where shore excursions rank highly (as they in NZ), there is the potential for a wide range of risks. These risks can attach to all aspects of the shore excursion planning and fulfilment process:

Table 7: Shore excursion risks

Risk

Manifestation

Poor quality or an insufficient number of shore excursions

Cruise lines may withdraw ports because of an insufficient number of shore excursions or a lack of added value to those which were offered ((see eg Northern Economics Inc 2002: 1-2 and 1-5).

Lack of flexibility

Passenger preference as to the content of shore excursions will vary some passengers may wish to spend most of their time visiting one attraction whilst others will prefer more variety (Nilssn et al., 2005: 21).

Higher proportion of repeat cruisers seeking new experiences

Destinations must refresh their shore excursions offerings to continue to attract repeat cruises.

Changing tastes and increased sophistication of cruise passengers placing new demands on shore excursions content

Destinations must understand and be able to respond to changes in passenger interest, eg. Increasing popularity of culinary tours, visits to wineries and adventure activities.

A wide demographic may render some shore excursion content unattractive or unsuitable

The increasing number of children and older passengers must be considered:

  1. Children: (i) commentary on tour buses must be adapted to appeal to children as well as adults; (ii) tour bus operators should consider making booster seats available to enable children to look out the window; (iii) shore excursions may need to be added or modified to accommodate children (eg wineries and jet boating may not be appropriate);

  2. Older and impaired passengers: shore excursion activities must be reviewed carefully to ensure that there are no barriers which could make it difficult for passengers to participate.

Inability to manage the disparity between cruise tourists and land-based tourists

Because land-based attractions are for the most part designed for land-based tourists, the presence of cruise passengers over a relatively short period during any given day places intense pressure on those attractions, including “congestion, scheduling and control problems” (Atherly, 2003: 9).

The pre-disposition of destinations to focus on land-based tourism

A lack of understanding about and investment in cruise tourism can result in poor or inadequate service.

High cost of shore excursions

Onshore visitor centres and attraction providers must be able to accommodate cruise passengers who opt to purchase their shore excursions onshore rather than purchased shore excursions onboard.

Onshore providers must be aware of and price their products according to the nationalities of the passengers: Australasian passengers are less likely to purchase the ship’s shore excursions because the perceive them to be too costly.

1.4.2. Crisis and disaster

28Natural disasters, civil emergencies and operational risks can seriously impact cruise tourism thereby causing economic as well as personal damage or loss. Such events can affect both a decision to travel in the first place, render a port unable to handle ships and passengers and severely disrupt onshore activities:

Table 8: Risks relating to natural disasters, civil emergencies and operations

Table 8: Risks relating to natural disasters, civil emergencies and operations

29Any of the events described above can also lead to the cancellation of cruises. The effects of such cancellations are particularly acute for turnaround ports:

Table 9: Impacts of a cancelled cruise

Resource

Impact

Ground transportation

Embarking passengers and crew who have already arrived in the embarkation city will be diverted to other facilities, thereby requiring transportation providers to respond.

Accommodation providers

Passengers who have already arrived in the embarkation city may be forced to make significant changes to their travel plans placing unanticipated pressure on hotel rooms.

Shore excursion providers

Although shore excursions in turnaround ports are generally limited to city tours as part of airport transfers, shore excursion providers will be affected.

Air transportation

Passengers who have already arrived in the embarkation city will require changes to their air itineraries therefore placing demands on customer service support.

Port services suppliers

Contracts for provisioning and bunkering will be disrupted because of a non-existent or re-allocated need

30In addition, there will be legal and financial ramifications for the port and the cruise line. For example, the cruise line will have contracted and paid for access to the berth several years ahead, whilst the local cruise industry may experience significant economic consequences resulting from a loss of visitor revenue and jobs.

1.5. Phase 5: Disposal

1.5.1. Environment

31Shipping pollutes and pollutes absolutely. Although cruise ships represent less than 20 percent of the world’s ocean-going fleet, they receive the most public attention for the waste they leave behind (Nilsson et al 2005, p 38; Brida & Aguirre 2008, p 3). Although the International Council of Cruise Lines (ICCL) has enacted a standard entitled the Cruise industry waste management practices and procedures and many jurisdictions have enacted their own legislation to regulate the disposal of cruise ship waste, where there is even the perception of harm (whether it is realised or not) that perception can pose a threat to port destination communities.

1.5.2. The local economy

32Cruise tourism can also represent a threat to land-based tourism investment (see eg Wilkinson 1999; Atherley 2003, p 9). Negative impacts which can be experienced by port destination economies include:

Table 10: Negative economic impacts on port destination economies

Table 10: Negative economic impacts on port destination economies

Sources: Behnke (1999); Brida & Aguirre (2008); Hritz & Cecil (2008); Littlepage (2008); and McConkie (2004).

33Thus, the overarching issue for port destination communities is whether a cruise tourism economy can be sustained whilst at the same time “minimising [its] undesirable consequences” to the community and its commercial sector (Hritz & Cecil 2008, p 176).

2. Optimisation of risk – what can go right before, during and after the cruise

34Each of the risks identified in the preceding section can be managed through the application of appropriate countermeasures. However, it is not within the scope of this article to develop a detailed risk management plan for each of those risks. Instead, the author briefly outlines five key strategies upon which a framework for a competitive and sustainable cruise sector can be built. Each of the strategies outlined below has its foundations in best practice and as such can be considered to be acceptable tools for managing risk.

2.1. Appointment of a national coordinating committee

35The creation and empowerment of a lead body is key to building an efficient, competitive and sustainable cruise sector. A coordinated approach is necessary to address such diverse activities as marketing (McKenzie Wilson Network Partnership Group (MWP) 2004, p f); attracting cruise ships (Vojvodić 2003, p 205); creating a positive cruise culture (Farquharson 2006, p 18); mediating port clashes and overseeing port security planning (Vojvodić 2003, p 205); distributing funds received from a passenger tax for port projects (Smith 2009, unp); taking responsibility for development, training and knowledge management (MWP 2004, pp f-h); maximising the benefits of cruising to a region (Brida & Aguirre 2008, p 1); and securing the cooperation of stakeholders (Nillson et al 2005, p 18). A coordinating committee needs sufficient funding, an appropriate governance structure and sufficient resources to enable it to undertake ongoing industry research.

2.2. Cruise culture development

36Concomitant with the establishment of a coordinating body is the promotion and introduction of a cruise culture. Destinations which seek to build a sustainable cruise sector need to recognise and appreciate the importance of cruise. Development of a cruise culture requires a high degree of proactivity, stakeholder support spearheaded by strong leadership and the cooperation of three major constituencies: (a) the tourism sector as a whole; (b) the private (business) sector; and (c) the community itself (residents).

2.2.1. Tourism Sector

37The successful creation of a cruise culture depends on the support of the tourism industry as a whole. One way to evidence this recognition is to include in the charters governing tourism organisations a statement outlining the organisation’s understanding of the importance of the cruise industry.

2.2.2. Private sector

38The second constituency is the private sector. In fact, the involvement of the private sector may be the primary catalyst for developing a competitive and sustainable cruise destination. The success of a destination may ultimately depend on the private sector’s willingness to accommodate and cater to the needs of cruise passengers.

2.2.3. Community

39The importance of securing the support of the community is vital. Destination Victoria (2002, p 54) argues that “[l]ocal communities likely to be directly affected by cruise-ship visits need to be actively embraced, informed and made to feel that any concerns have been addressed” whilst Jugovic (2007, p 709) argues that a port must work with the town to meet the needs of “ship operators, passengers, tourists, tour operators and others.” Behnke (1999, p 24) echoes this view, advocating that the industry must be made part of the community through, eg inviting cruise line representatives to participate in any public consultations or local tourism advisory groups.

2.3. National cruise manual and best practice

40Destinations should consider the creation of a national cruise manual which documents all of the regulations, policies, procedures, codes of practice, customary practices and general advice relating to the operation of cruises within their waters. A national cruise manual can provide a single source of accurate, up-to-date baseline information for all stakeholders, including the cruise lines and their ships. It can also provide the basis for the development of a regime of continuous improvement as well as a mechanism for filtering out political biases and vested interests.

41Underpinning the content of a national cruise manual should be a framework based on best practice. Internationally recognised standards such as Total Quality Management (TQM) (Eraqi 2006, p 470) and ISO 9001:2008, Quality management systems (International Organization for Standardization 2011) can provide the basis for transforming the risks discussed earlier in this article into a competitive and sustainable direction for a destination’s cruise sector. Adoption of a quality standard for the destination’s broader cruise sector (as opposed to its constituent parts such as shore excursion providers, retailers or port management) can be considered to be a robust mitigation strategy.

2.4. Education and training

42The creation and implementation of a national cruise manual and the development of a cruise culture both demand and are dependent on a high level of education and training within the industry and the community. According to Destination Victoria (2002, p 51), training should be available to “service providers [including shore excursion providers] detailing cruise ship segmentation and implications of passenger spending levels and service expectations” (Destination Victoria 2002, p 51). Specific and substantial training about the cruise industry needs to be provided to all organisations and local communities which are involved with the cruise sector because cruise tourism is so fundamentally different from land-based tourism. In other words, it cannot be assumed that the rules, policies and practices which apply to land-based tourism apply equally to cruise passengers.

2.5. Building confidence and recognition through branding

43Any given cruise destination may be “hot” for several seasons, but it will always be vulnerable to competition from other destinations. One of the most effective ways of communicating and building confidence and recognition in any destination is to develop a brand which clearly communicates its positive attributes and therefore establishes the product’s brand equity. For example, whilst a significant amount of money has been spent developing a recognisable and highly successful brand for NZ tourism as a single destination (Morgan, Pritchard & Piggott 2002), no development has taken place of a brand or sub-brand which communicates the “hot-ness” of NZ as a cruise destination. Thus, as a strategy for mitigating the threat (risk) of competition, consideration should be given to the development of a cruise tourism brand.

Conclusions

44At the start of her research, the author channeled her thoughts solely to assessing the risks which would ordinarily be associated with the movement of visitors through NZ ports, eg. gangways blowing off their moorings, natural disasters, and the lack of dedicated cruise terminals and cruise berths. Whilst these and other “traditional” risks still form the core of the discussion found in this article, a significant, over-arching risk emerged and that is the economic risk represented by competition. Interviews with a broad range of stakeholders from many parts of the cruise industry gave rise to the premise that unless a destination such as NZ can more aggressively differentiate itself from other cruise destinations, it might find itself yielding its position to other remote or exotic destinations. Therefore, instead of focusing solely on risk as a negative concept, the author adopted the “choice” definition of risk proposed by Roehl and Fesenmaier (1992, p 16). In other words, this article focuses on conveying the message that there is an immediate need to find out who is most likely to cruise to a given destination; why they would consider a cruise to that destination; what will contribute to making their cruise visit memorable, safe and good value for money; and what they are likely to enjoy when they arrive. It is in this context that the author concludes that an overall, long-term cruise destination strategy is required which incorporates effective and appropriate marketing and promotion, infrastructure investment, product design, crisis planning, research and policy. It is a strategy which needs to be documented in a national cruise manual and managed, implemented and continuously improved upon by a national peak committee. It is the author’s contention that only by managing all known and potential risks and promoting and building upon the destination’s strengths can destinations such as NZ continue to evolve into competitive and sustainable cruise destinations.

45Because many of the risks and impacts discussed in this paper are beyond the control of any single destination, further research needs to be undertaken as to how the cruise lines’ global power affects an individual destination’s ability to create its own competitive cruise destination. In the meantime, the challenge is to undertake a risk identification and analysis exercise such as the one proposed in this article so that the question posed at the outset can be answered by the cruise sector itself, ie whether the application of an accepted risk model can sufficiently optimise the economic risks which face a destination’s cruise sector so that its growth can continue to be competitive and in the future, sustainable.

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Table des illustrations

Titre Table 6: Regulatory issues
URL http://journals.openedition.org/etudescaribeennes/docannexe/image/5134/img-1.jpg
Fichier image/jpeg, 124k
Titre Table 8: Risks relating to natural disasters, civil emergencies and operations
URL http://journals.openedition.org/etudescaribeennes/docannexe/image/5134/img-2.jpg
Fichier image/jpeg, 120k
Titre Table 10: Negative economic impacts on port destination economies
Crédits Sources: Behnke (1999); Brida & Aguirre (2008); Hritz & Cecil (2008); Littlepage (2008); and McConkie (2004).
URL http://journals.openedition.org/etudescaribeennes/docannexe/image/5134/img-3.jpg
Fichier image/jpeg, 123k
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Référence électronique

Wendy R London, « Economic Risk in the Cruise Sector », Études caribéennes [En ligne], 18 | Avril 2011, mis en ligne le 15 avril 2011, consulté le 13 décembre 2017. URL : http://journals.openedition.org/etudescaribeennes/5134

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Auteur

Wendy R London

AB, MSLS, JD, PGDipTour (Dist), MTour, PhD Candidate, Victoria University (Wellington), haweranz@gmail.com

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Licence Creative Commons
Les contenus d’Études caribéennes sont mis à disposition selon les termes de la Licence Creative Commons Attribution - Pas d'Utilisation Commerciale 4.0 International.

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