Costly Waters: The Gold Coast’s Missed Opportunity in Cruise Tourism

Record Economic Contribution

As the Australian Cruise Ship Industry booms, the Gold Coast is being forced to reevaluate the economic cost of its deferred vision for an international cruise terminal. The previous financial year underscored this growth trajectory, with the cruising industry contributing a record $5.6 billion to the Australian economy, benefiting 62 ports and destinations nationwide[1]. However, the Gold Coast, despite its status as a premier tourist hub, was unable to benefit from this economic boon. Instead, smaller Queensland tourist destinations such as Airlie Beach, Moreton Island and Cairns are taking aggressing steps to attract this burgeoning market; between the three destinations they were able to log a staggering 216 cruise visits last financial year alone. These tourism centres are cleverly using cruise ship traffic to grow small tourism operators, fill the gap in international arrivals and justify the development of regional infrastructure.

Beyond its current strength, indicators suggest that the cruising market is set to continue to grow strongly over the medium term. This year marks a significant milestone, with projections indicating an influx of 81 cruise ships into Australian waters in 2024 – a notable 42% surge in passenger capacity compared to 2023[2]. The post-Covid recovery has ushered in an unprecedented expansion of the Australian cruising sector, evidenced by the entry of new players like Virgin Voyages, Disney Cruise Line, and Scenic, alongside the amplified presence of established companies such as Royal Caribbean.

A City’s Struggle With Cruising

The Gold Coast has debated the relative merits of a cruise terminal for more than two decades, with economic considerations regularly colliding with environmental, technical and political constraints. Proponents of a terminal were enthused when in 2019 the Gold Coast City Council lodged an Initial Advice Statement with the State Government for a proposed ocean-side cruise ship port facility at Phillip Park. On 19th November 2019, the Minister for State Development, Manufacturing, Infrastructure and Planning announced that the project had been given coordination status signalling that the Environmental Impact Assessment (EIA) could now be undertaken. Optimism around the project was, however, short lived as the arrival of Covid and shutdown of the cruise industry forced the Council to put the project on pause in May of 2020 – a status which it still retains in 2024. The exact timeframe for reviewing the paused cruise terminal is unclear, with city leaders adopting a wait-and-see approach with respect to the infrastructure initiative.

Do-Nothing Opportunity Cost

Barcley Consulting analysis sheds light on the significant opportunity cost incurred due to the absence of an international cruise terminal on the Gold Coast. With a projected capacity for 212 vessel calls, the fully operational terminal could inject over $800 million dollars annually into the Gold Coast economy – a transformative impact potentially driving a 10% growth in the city’s tourism sector and supporting around 2,400 additional full-time jobs.

The cruising sector contributes to a destination’s economy in multiple ways, including expenditure on port fees and reprovisioning, visitor spend pre- and post-cruise or during day trips as well as money spent by crew members. So significant is the economic contribution that a single ship visit on average generates some $4 million dollars in direct and indirect economic output.

Unfortunately, the city’s hesitation to fully leverage its enviable waterways and gateway location are likely to put it at a growing disadvantage compared to competitor destinations, such as Sydney and Brisbane. These cities are racing to welcome some of the world’s biggest boats to their shores and position themselves to attract one of the world’s fastest-growing tourism sectors. Beyond the economic hit of a ship visit, cruises also serve as feeders to introduce new destinations to customers – more than 6 in 10 people (63%) who have taken a cruise say that they have returned to a destination that they first visited via cruise ship.[3]

A Future to be Defined

The Gold Coast’s strategic location, near to key transport gateways and surrounded by world-class tourism assets, coupled with favourable year-round cruising weather, draws a compelling parallel with Miami, the world’s cruise capital. A noteworthy case study, Miami proves out the long-term benefits associated with a considered investment in the cruise industry over an extended period – indeed over some 30 years. Owned and operated by the local council, the Port of Miami is the world’s busiest cruise ship terminal with more than 5 million passengers supporting over 40,000 jobs. Beyond a direct contribution, the economic ripple effects of the cruise industry can be seen across the city in terms of infrastructure renewal, small business resilience and employment opportunities for locals. Of course, the future of Australian cruising is yet to be defined. Undoubtedly there is a genuine opportunity for the Gold Coast to be a regional hub for cruising similar to the way Miami has positioned itself in the North American market. Such a bold ambition would however need to be accompanied by similar bold action as has been undertaken by the Miami-Dade County to develop its significant infrastructure.

Opening up new tourism segments is difficult, requiring not only significant investment but also a paradigm shift in thinking towards developing new tourism products catering to varied consumer preferences. The Gold Coast has relied for more than half a century on a sun, sand and theme parks offering to bring tourism dollars to the city. While successful in the past, this approach limits the city’s appeal to an increasingly sophisticated and diverse travel market. Embracing the cruise industry has the potential of securing future tourism revenues as well as facilitating the development of a more comprehensive, diverse and resilient tourism offering.

[1] Source: The Value of Cruise Tourism economic impact assessment for Australia, AEC Group

[2] Source: CLIA Australasia Managing Director Joel Katz

[3] State Of The Cruise Industry 2023 – CLIA

Meet the authors

Luke.png

Luke Ingles
Managing Partner
luke@barcley.com.au

Sanuri

Sanuri De Silva
Consultant
sanuri@barcley.com.au

About Barcley Consulting

Barcley Consulting is a boutique management consulting firm based on the Gold Coast, focused on helping corporations and government with strategy, innovation and execution. For more information on their other publications, please visit www.barcley.com.au

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