Cruise lines question viability of UK visits
Is your new development a reaction to a strategic demand or is it a strategic decision to create a demand? This interesting question put by one cruise executive, came out of the International Cruise Summit in Madrid for ports contemplating a new cruise facility.
A&P Falmouth managing director Peter Child said: “A very profound question. The Falmouth strategy is the former. We know ships are getting bigger and all indications are this will continue in the coming years.
“The older, smaller cruise ships are being phased out due to a combination of age, failing to meet SOLAS regulations and economics for owners and cruise operators. Therefore the proposed new development is a reaction to strategic demand – the market exists and is growing. We must invest to get part of it or it will continue to sail by as it does at the moment.”
Captain Mark Sansom, chief executive of the Falmouth harbour commissioners and harbour master, said: “The demand for cruise facilities has been investigated in a number of studies (including the Port Masterplan) which have all concluded strong demand at the time that they were undertaken.”
As another year comes to an end there is little sign of the Marine Management Organisation (MMO) making any decisions on the capital dredging scheme for Falmouth until next spring.
Captain Sansom said: “Work is currently ongoing to provide the MMO with sufficient information to re-consider its Appropriate Assessment decision. We are hoping that this will be in the first quarter of 2015.”
In the meantime, other European ports and the cruise lines have new challenges to overcome.
Cruise Europe, the organisation representing more than 100 member ports in Europe, points out cruise lines, ports and passengers face economic challenges with many ports reluctant to invest. At Madrid the members clearly emphasised, “a port is primarily only a vehicle of entry to a region.”
Even if Falmouth spends millions of pounds on dredging the harbour and investing in new port infrastructure it will be up to Cornwall as a region to promote itself to the cruise industry – a point made by cruise line executives at the summit when discussing shore excursions in general.
The Falmouth Harbour Commissioners and A&P Falmouth will have to closely monitor their port charges, pilotage and towage fees if they are to win over the big names in the cruise sector.
Captain Michael McCarthy, chairman of Cruise Europe, warned ports earlier this year when he said: “The deployment strategies of the cruise lines are showing divergent regional trends as they boost onboard revenue to offset potential income loss through low ticket prices.
“A challenge for our members is the cruise lines’ strategy to ‘relentlessly drive down costs’ which includes fuel costs, selected itineraries and steaming speed between ports. Long established cruise ports and itineraries are no longer safe in the knowledge that they are on the lines horizon as port profitability is assessed by balancing shorex revenue and port costs, including pilotage.”
But McCarthy warned that although port experiences are reported to be a crucial factor in the selection process and appeal to customers, the cost-saving measures which include shorter times in ports, slow steaming and the review of many ‘outlying ports’, are playing an increasingly important role in the itinerary planning.
European ports in general have experienced years of growth both in the number of calls and visiting passenger numbers. This trend has flattened out with many ports now reporting a slight dip in the number of calls for 2014 and 2015.
With a large number of 300 metres plus mega cruise ships now positioned in Europe during the cruise season ports are recording higher or static passenger numbers.
Immigration regulations are also proving difficult for the cruise lines to operate efficiently, especially in the UK.
In 1995 the Schengen Agreement was signed by 26 European countries which abolished passport and any other type of border control at their common borders, also referred to as internal borders.
The Schengen visa is a document allowing visitors to travel freely within Europe but the UK is not included and this is causing some major headaches for cruise lines on certain itineraries.
Addressing the summit, Adam Sharp of Royal Caribbean Cruises Lines (RCCL) said: “When planning itineraries these days whether ports are within the Schengen area or not and how the immigration officials of a particular country police their borders can dictate the success or demise of a port call.
“Another example is that of an itinerary leaving Harwich and calling Le Havre, Portland (UK), Madeira and Azores where immigration checks were carried out in both Harwich and again in Portland due to the vessel calling at France in between.
“It is these types of absurdities that make UK cruises tougher to operate. Cruise lines are now questioning whether the UK is the right place to operate cruising. RCCL have to accept it but we are beginning to have conversations about, for example, leaving Portland out.”
A major impact on cruise ships and the region as from January will be tougher regulations governing emissions in Emission Control Areas, whereby ships will be burning cleaner more expensive fuel. Cruise companies have already been introducing slower steaming speeds on their ships whilst also cutting out ports from itineraries in order to cut costs.
Mega cruise ships are in the majority these days with many of the new builds 300 metres long with a tonnage in excess of 100,000. Some 30 ships are on order for delivery within the next five years.
Clearly, it will not all be plain sailing for the Port of Falmouth unless the relevant organisations pull together for the success of the town and Cornwall.