Cruise lines’ Dubrovnik deal seen as a way to combat overcrowding

T0319DUBROVNIK
Last year, Dubrovnik received 742,000 passengers on 538 ships.
FORT LAUDERDALE — Carnival Corp. CEO Arnold Donald said a new agreement in Dubrovnik, Croatia, illustrates how fears about crowding in favourite tourist areas can be managed by the cruise industry.

Speaking as part of a CEO panel at the Seatrade Cruise Global convention here, Donald took the occasion to disclose that major cruise lines have agreed to coordinate their schedules this summer in Dubrovnik.

That could mean some ships arrive later or depart earlier to keep their time in port from coinciding, or it could mean moving some ships to arrive during the week rather than on weekends.

The walled Old City of Dubrovnik was named a Unesco World Heritage site in 1979, but Donald said its mayor requested a meeting with cruise officials because it had been threatened with delisting by Unesco.

Donald and other cruise officials met several times with mayor Mato Frankovic, most recently in January when an agreement was apparently reached.

“In the end, our guests don’t want to go to a place that’s overcrowded,” Donald said. “If the sites that everybody wants to see are being abused, our guests won’t go. It’s in our self-interest, but it’s also in the interest of the places we go.”

Last year, Dubrovnik received 742,000 passengers on 538 ships. The city recorded about 3.4 million overnight stays, with many visitors drawn by Dubrovnik’s status as a filming location for the HBO series “Game of Thrones.”

Donald said cruise lines need to “listen with empathy for the issue of what some would call over tourism, not necessarily driven by cruise companies but by the fact that we’re a very visible symbol for it; our ships are large, and so forth. We have to listen with empathy to the ports that are out there and make sure we work with them to get the proper infrastructure.”

Dubrovnik’s over tourism concerns are shared by several other destinations in the Mediterranean, including Barcelona, Venice and the Greek island of Santorini.

Travel journalist Peter Greenberg, who moderated the CEO panel, said the World Travel and Tourism Council in a recent study listed “destination degradation” as one of three critical issues facing the travel industry.

Others on the panel took issue with the label “over tourism.”

“I think it’s a misnomer,” said Royal Caribbean Cruises Ltd. chairman Richard Fain. “What we’re really talking about is sustainable tourism.”

Fain cited Royal Caribbean’s development of Falmouth in Jamaica to offer an alternative to Montego Bay and Ocho Rios, as another successful response to crowding concerns.

After Falmouth opened in 2011, the number of cruise visitors actually rose, but they were more spread out.

“There were more people but less density,” Fain said.

“The opportunity, really, is to work together in these communities,” Fain said. “We work with them, and we find solutions that are to both of our benefits. And those we work with are very happy. You see that over and over again. Those who just want to make headlines, that’s a different story.”

The Celebtity Reflection in Dubrovnik.
The Celebrity Reflection in Dubrovnik.

Greenberg said that two cities where over tourism has been a hot-potato issue — Venice and Barcelona — are in the backyard of MSC Cruises, which has its headquarters in Geneva and its operations in Naples, Italy.

MSC executive chairman Pierfrancesco Vago said some perspective was in order.

“When you’re talking about Venice’s 30 million visitors a year, the cruise industry is 1 million of that,” Vago said.

He added that unlike the general tourism population, which ebbs and flows individually, cruise tourists come in groups that can be managed.

“We can actually coordinate,” Vago said. “We can actually ensure that there will never be an overflow, and we can control embarkation and disembarkation.”

A 2015 Unesco report recommended that the number of cruise passengers at Dubrovnik should not exceed 8,000 a day, arguing that when more than 8,000 visitors are inside the walls of the old city “tourist blight” becomes inevitable.

Research from the Port of Dubrovnik found that in 2016, arrivals exceeded 8,000 on 18 out of 243 total cruise days and that arrivals exceeded 10,000 on four days that year.

MSC has been looking for new destinations in the Adriatic to supplement hot spots like Dubrovnik. Last year, for example, MSC began calling at the port of Sarande, in southern Albania.

“Nobody knew that in Sarande, there were 10 different Unesco sites,” MSC CEO Gianni Onorato said in a recent interview. “This is the opportunity the cruise industry can give because there are options. That’s the only way to solve this problem.”

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Cruise: From $37 Billion to $55 Billion Industry

Image result for miami port terminal
The Biggest port of Miami

The cruise industry, which is forecast to post revenues in excess of $37 billion this year, could reach $55 billion over the next decade, according to the 2017-2018 Cruise Industry News Annual Report.(there is a charge for the report)

The projected growth track would make Carnival Corporation a $22 billion business in 2027, up from $16.3 billion last year, based on estimated passenger capacity, ship deployments and current spend per passenger per cruise of approximately $1,422 across all of its brands.

Royal Caribbean could see its revenues grow to $12.2 billion from $8.5 billion last year based on its current spend per passenger per cruise of $1,476; and Norwegian could reach $7.5 billion, compared to $4.9 billion last year, based on its current spend per passenger per cruise of $2,025 (including Oceania and Regent).

MSC Cruises could reach $6.6 billion from $2.4 billion last year. Being privately-held and not releasing financial results, the revenue for MSC is calculated based on an industry average spend of approximately $1,500 per passenger per cruise,

The average industry-wide spend per passenger per cruise has stayed in the $1,400 to $1,600 range for the past 10 years.

Cruise Fleet to Reach 315 Ships and $35.5 Billion in Revenue in 2016

The cruise industry will reach 315 ships this year, generating an estimated $35.5 billion in ticket and onboard revenue worldwide, up from $33.2 billion last year according to the 2016-2017 Cruise Industry News Annual Report.

The North American market will represent approximately 56 percent of the global industry in terms of passenger sourcing and revenue; Europe 27 percent, and the Asia/Pacific region 17 percent.

Year-over-year, the market shares for North America and Europe have contracted from 59 and 29 percent respectively in 2015, while the Asia/Pacific region has grown from 12 to 17 percent.

The global passenger capacity is estimated at 23.6 million this year, up from 22 million last year.

About the Annual Report:

The Cruise Industry News Annual Report is the only book of its kind, presenting the worldwide cruise industry through 2025 in 350+ pages. Statistics are independently researched. Learn more by clicking here.

The report covers everything from new ships on order to supply-and-demand scenarios from 1987 through 2021+. Plus there is a future outlook, complete growth projections for each cruise line, regional market reports, and detailed ship deployment by region and market, covering all the cruise lines. New for 2016-2017 based on customer feedback are detailed Chinese market statistics and projections.