With Australia welcoming an unprecedented number of cruise ships this summer, the industry is wondering if it can sustain the hike in capacity.
A record 41 vessels will sail local waters over the coming season, including eight ships making their maiden visits Down Under.
That compares with 38 ships over the same period last year. Between them, the ships will make almost 900 calls to ports around Australia over that period – up 10% on last year’s port calls numbers.
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But is filling this growing number of ships leading to a “race to the bottom” burst of dramatic discounting?
The subject made for an interesting discussion at this year’s Traveltech conference in Sydney last week.
Norwegian Cruise Lines marketing manager Ben Angell described it as an “ongoing challenge”.
He told delegates that although discounting wasn’t the ideal scenario, it is often necessary to grow the local market in line with the rising volume of ships deployed here.
“The longer term picture is that we are actually stimulating the market and creating new lifetime cruisers,” he said.
“If you want to grow market by 20% a year over 10-year period, then you need to bring new capacity down and if you are bringing on new capacity, then you need to attract the new to cruise and you have to tempt them with numbers.”
After all, once travellers have been tempted aboard a cruise, then there are numerous opportunities to generate revenue from them during the voyage making the decision to slash last minute prices a “no-brainer”.
But Angell highlighted advances being made by cruise lines, with product becoming increasingly “sophisticated” and innovative – progress he believes will enable them to fill ships without cutting prices.
“What we’re thinking about now is building a product and itineraries that suits consumers needs and wants,” he said.
Meanwhile, APT chief executive Chris Hall stressed the river cruise operator has a “different economic situation” as a result of its all-inclusive price structure.
“Sure we want to go out 100% full, but it’s more about retaining price integrity where we can, particularly for a higher end brand like APT,” he said.
Retailers too face a similar challenge when dealing with discounted inventory, according to general manager of online specialist site Cleancruising.com.au Dan Russell who revealed the company is also trying to find the right balance as it seeks to compete against innovative online rivals.
“The trick is we don’t want to be caught up in a space where we’re competing with distressed inventory and getting into the discounting war,” he said.
“We want to try and keep prices pretty much as they come through from cruise lines and appeal to customers that appreciate our full service offering.”
He warned of the dangers of getting the Australian public “accustomed” to these types of discounts.
