Business

Transnet pleased with 29% cruise passenger increase

Transnet pleased with 29% cruise passenger increase
DURBAN - Transnet National Ports Authority(TNPA) in Durban says the 29 percent cruise passenger increases spell better prospects for the local sector in the future. 
TNPA  has processed 255 422 passenger embarkations and disembarkations at the port of Durban up from the 197 382 recorded in the 2017/2018 season. 
During the cruise season, which is typically from late October to late April, the port enjoyed 63 calls by 16 different cruise vessels. 
Durban’s acting port manager Nokuzola Nkowane attributed the passenger growth largely to MSC Cruises, which uses the Port of Durban as a home port. 
“MSC Cruises had the larger MSC Musica offering her first cruises locally last season. She made 42 calls to the Port of Durban, representing the lion’s share of total embarkations and disembarkations recorded. However, we are proud to have also welcomed 12 other world-class operators to the port last season,” says Nkowane. 
In the next season, the cruise will be introducing yet another vessel, called the MSC Orchestra, with which it intends to entice cruise tourists to return for their next adventure. 
Dineo Mazibuko, the senior manager for Corporate Services at the Port of Durban, says the inbound cruise tourists generally depend on the cruise line sailing in and the voyage it was on. These tourists were typically from the US, the UK, Italy, Germany and other European countries.  
The Port of Durban says it is also seeing a growing interest every year among domestic tourists who take cruises. Most of them were said to be sailing on the local cruises provided by MSC Cruises from Durban and Cape Town to various locations including Mauritius, the Reunion Islands, and Mozambique’s Pomene Bay and Portuguese Island. 
Nkowane says investments made by the TNPA and MSC Cruises into the Port of Durban are aimed at attracting more cruise line companies to the city and Southern Africa as a whole. The cruise liner itineraries were planned at least two years in advance with exciting local excursions being the biggest draw cards.  

New cruise vessels were promising a different experience over the suitable port infrastructure.
The KwaZulu Cruise Terminal (KCT) consortium, in which MSC is a partner, holds a 25-year port concession from TNPA to finance, construct, operate, maintain and transfer a new Cruise Terminal Facility in the Port of Durban at an estimated value of more than R200 million. 
Nkowane’s says KCT is presently finalising the detailed design of the Cruise Terminal Building with the anticipated commissioning of the project set for next year. 
Capital investment for the new Durban cruise terminal project by KwaZulu Cruise Terminal has been estimated at R200 million. The current passenger facility, N-Shed, was also upgraded jointly by TNPA and MSC Cruises ahead of the 2015/16 season.
Amongst the challenges encountered throughout the past season, Mazibuko says the existing cruise terminals are situated within a cargo operational area of the port.
“The cruise hub ports of Cape Town and Durban are undergoing significant facelifts to address these challenges and to become more competitive against other global and national players,” she says.
Mazibuko says other challenges include restricted access to transport, coaches and local tourist experiences. 
However, she says, South Africa offers a myriad of lifestyle and tourism prospects for visitors, which includes local excursions, restaurants and shopping experiences. 
The last SA Cruise Tourism Report of 2010, predicted that cruise passenger throughput could increase to 1 million passengers by 2025 Durban and Cape Town expected to achieve the highest market share.
An analysis based on medium-passenger projections reveal that total net benefits to the country are worth R41.3m in 2010 and could increase to total R356.4m by 2025.
The cruise industry value chain assessment commissioned by Durban’s eThekwini Municipality and conducted by business management consultant Grant Thornton, the Durban cruise industry is estimated to account for 2 700 jobs in the tourism sector. Direct spend of the Durban cruise industry for 2013 was R1.38 billion (of which passenger spend accounted for R1.3bn) , which pointed to good growth opportunities. 
The Grant Thornton study reiterated that cruise tourism was one of the world’s fastest growing tourist activities, enjoying dynamic growth over the past 30 years. It also highlighted that there was increased demand for new cruise destinations and increased interest in African cruise destinations in particular. 
In its October 2016 outlook, KZN Tourism said that passenger spend while in port, on shopping and excursions, was a valuable contribution to the tourism economy of the province. Even more valuable, however, was the re-provisioning of the ships while in port. That activity creates value in a wide range of economic sectors ranging from fuel, to water, to foodstuffs, wine and other beverages, ship-board shops restocking and the like. 
A study done on cruise tourism revealed the following that for passengers and crew, there was an average shore spend of R1m to R2m per day per cuise ship port-of-call.
For reprovisioning, there was a potential spend of approximately R3mm per cruise ship port-of-call. Reprovisioning provides up to four times the value of passenger spend. 
The year just concluded, 2018, was a record year for the global cruise industry, which did not only show strong growth in passenger bookings and fares, but  onboard revenues that continued to be one of the key revenue drivers for the leading cruise companies. 
The industry trade group, Cruise Lines International Association (CLIA), reported nearly 6 percent growth with more than 1.5 million passengers in 2018 driven in part by the addition of 11 new ships with more than 30000 berths. 
CLIA was forecasting consistent growth of better than 6percent in 2019 to 30 million passengers worldwide.
Wells Fargo Securities financial analyst Timothy Conder told investors in a March equity report that strong secular growth trends for experiences, multi-generational and family travel continued to drive the industry’s growth. 

The cruise industry is increasingly working with the destinations as it seeks to ensure that passengers can have unique experiences. They are also supporting efforts to expand port infrastructure to meet the needs of more and larger cruise ships.

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