FHTA Tourism Talanoa: Cruising Back

FHTA Tourism Talanoa: Cruising Back

FHTA, 18 August 2022 – There was a rising wave of excitement in the air earlier this week at one of our major seaports.

A long-lost part of the industry was making her way back to our shores and boy, were we stoked to welcome her home.

P&O Cruises Australia’s flagship Pacific Explorer brought her 830 crew and 1,147 passengers safely to Lautoka port and it closed out two and a half years out of the Pacific.

Not only is the Pacific Explorer the first cruise liner to visit Fiji since the pandemic, but she was also making headlines as the first to return to the entire Pacific region.

Cruise tourism was the first major industry casualty of the COVID-induced lockdowns as it was determined that cruise liners were a Petrie dish of viruses that could infect high numbers of passengers in a contained space, close to each other for much of the time and delayed COVID-19 incubation period for days on end.

We can all recall the early days of the pandemic when there were at least 10 ships around the world, carrying nearly 10,000 passengers, still stuck at sea after having been turned away from their destination ports in the face of the Covid-19 pandemic, according to a Guardian analysis.

Some of those ships were facing increasingly desperate medical situations and the world waited with bated breath to see what would transpire.

There were countless dramatic scenes of COVID-stricken cruises, such as the Grand Princess and the Diamond Princess, which soon became synonymous with the pandemic and cast a negative light on cruise ships in general.

The plight of those passengers and crew still stuck onboard highlighted how cruise ships became the pariahs of the sea, with cities wary of becoming the next home for a potentially infected vessel.

But then everything changed gears and the world focused elsewhere as it inevitably does (while still keeping a wary eye on cruise ships), but many placed long-term cruise vessel bans, with stringent requirements for even smaller vessels to land and even to travel between ports.

The International Finance Corporation’s (IFC) report notes some interesting key findings from their “Assessment of the Economic Impact of Cruise Tourism in Fiji” (October 2019).

This was the last full study on Cruise Tourism in Fiji before the lockdowns and border closures.

The study revealed that cruise companies, their passengers, and crew spent FJ$44.2 million in Fiji in 2018, which accounted for 0.66 percent of Fiji’s GDP for that year.

IFC estimated that indirect stimulus impact was at FJ$46.6 million and indirect stimulus resulted from local businesses using cash flows received from cruise ship activity to on- purchase to carry out their business activities.

For every FJ$1 spent by the cruise ship sector, an additional FJ$1.10 is generated in the economy, signalling a strong supply chain effect in Fiji.

Private businesses received 70 percent of the total economic impact (direct and indirect) and the Fijian Government collected 28 percent of the total economic impact (direct and indirect).

These businesses are generally the 3 large retail chains located in the 2 major cities in Fiji and to a lesser extent, the taxies, tour operators and handicraft sellers that cater to the passengers that might choose to disembark for a few hours over the 10-12 hours the vessel is berthed at either of the city ports.

Entertainers like musicians & dancers, restaurants and sightseeing activity tours make up the spectrum of supply chains adding value to cruising visitors to Fiji’s shores.

Before COVID, the cruise industry was estimated to generate up to 4,593 full-time employment opportunities.

That estimation would have changed due to the many tourism staff who have since left our shores for overseas exposure or moved into other industry work, and it is not well understood if this included the ports staff, immigration, customs and administrative staff that take care of general vessel management at a port that has oversight into international cargo and passenger shipping needs.

IFC approximated that each cruise ship voyage brings an average of FJ$305,000 in spending per port of call and one cruise ship passenger spends around FJ$90 each.

On average, cruise passengers spend FJ$118 in Lautoka, followed by FJ$104 in Suva, and when they do stop at Denarau or Savusavu, they then spend FJ$102 and FJ$56 per disembarking passenger respectively.

It is not clear exactly how much is spent for stops at outer islands like Kadavu.

Of the high number of cruise ship calls that the Port of Suva received (40 percent), it receives 44 percent of all direct expenditure in Fiji, while Lautoka (24 percent of calls) receives 31 percent of direct expenditure.

If we consider that these 2 main ports also accommodate mostly cargo vessels as part of the many vessels berthed; port rates and disembarkation rates are relatively high.

The survey found a strong positive correlation between passenger satisfaction and spending: the more satisfied passengers are with the variety of things to see, do and purchase – meaning that the longer they stay ashore, the more they spend.

It should be noted that only a small percentage of the total passenger numbers onboard actually disembark, having fully paid for the cruise that includes all meals.

Of those surveyed, the highest-rated port in Fiji for customer satisfaction was Port Denarau Marina, with its many restaurants, bars, accessibility to day trips and other sightseeing excursions and shopping options.

This makes sense, considering that the survey also noted that Fiji did not have sufficient spending opportunities for short-term visitations, with 24 percent of passengers reporting that they did not spend at all, and 47 percent citing that their expectations for spending were not met.

This should be a concern for tourism stakeholders looking to make cruise tourism a more substantial contributor to tourism revenue generally.

Yachting’s contribution to tourism for example is $61million annually with approximately 4,470 passengers coming in via yachts on an annual basis (pre-COVID), staying for longer periods, spending more (an average of $7,800 per passenger) and visiting outside of the tourism hotspots where that tourism revenue is much needed and goes further into the local communities.

Handicrafts, clothing, tours and excursions, and food and beverage present the strongest opportunities to capitalize on unmet spending needs.

We could also raise the standard of cruise vessel arrival and departure areas for our main ports, where other than fulfilling minimum requirements for the draft, berthing lines, and navigation channels for cruise ships; we provide also passenger cruise terminals.

These could have provisions for various spaces, including covered apron areas, terminal buildings that could manage efficient ground transportation for connectivity to the city, car parking, and public transport facilities.

These would encourage more passengers to disembark, allow easier accessibility for the mobility-challenged passengers and offer a more inviting welcoming or farewelling space.

There are definitely more economic benefits (including direct and indirect) estimated at approximately FJ$90 million over 10 years, that have been identified through priority investments profiled in IFC’s report.

These opportunities are focused on improving cruise experiences and providing Fiji businesses and individuals with improved access to the cruise market.

We certainly welcome back cruise tourism to the Fiji Islands and we wish them calm seas and fair winds, while we hope we can encourage more passengers to disembark and enjoy our Fijian hospitality.

By: Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 18 August 2022)