Australia’s cruise industry is sounding the alarm on jobs and $7.3 bn of economic activity

• Australia is the world’s fourth-largest cruise economy with 1.45 million passengers.
• The industry is worth $7.3 billion to the economy and employs 22,000.
• Yet the number of ships visiting is in decline, thanks to high costs and over-regulation.

Australia’s cruise industry and the people who supply produce and services to our local fleet have launched an unprecedented campaign to warn governments that the nation is in danger of losing its place as one of the world’s premier cruise destinations, despite Australians being among the world’s most enthusiastic cruise travellers.

The new Paddock to Port Alliance says Australia is losing ships – and the jobs, farmers and tourism businesses that depend on them, and the cost is almost $1 billion in economic activity.

A new coalition, the Australian Paddock to Port Alliance, has united everyone from farmers and food suppliers to travel agents, ports, hotels, tour operators and cruise lines in a bid to demonstrate that cruising is far more than a holiday industry. Together, they support more than 22,700 Australian jobs and generate $7.32 billion in annual economic activity.

But behind the impressive headline figures lies a troubling reality.

The industry’s latest Economic Impact Report shows cruise’s contribution has fallen by almost $1 billion compared with previous years, reflecting the steady reduction in cruise ships deployed to Australian waters since the pandemic.

For regular readers of Cruise Passenger, the warning comes as no surprise.

For more than two years we have reported on the shrinking number of ships based in Australia, the reduction in available cabins and suites, and the growing concern that international cruise lines are shifting vessels to more competitive markets in Asia and North America.

As we have previously revealed, capacity during Australia’s traditional wave season has been down by as much as 30 per cent year-on-year as fleets have been redeployed overseas.

Australia is the world’s fourth-largest cruise market. Australians cruise in record numbers and consistently rank among the world’s most passionate cruise travellers. Demand has never been stronger.

“Australia is becoming uncompetitive”

The industry’s message is blunt: “Cruise is more than ships. It is an Australian economic ecosystem that supports businesses, jobs and communities across the country,” said Cruise Lines International Association (CLIA) Australasia Managing Director Joel Katz.

“However, the sector’s economic contribution has fallen by almost A$1 billion.”

Katz says cruise operators are increasingly questioning whether Australia remains commercially attractive.

“Cruise lines have been warning that Australia is becoming uncompetitive as a destination and risks losing cruise tourism to other countries, due to regulatory uncertainties and rising costs. This is despite the fact that demand is very strong and Aussies are cruising in record numbers.”

The report argues that every cruise ship arriving in Australia triggers spending long before passengers board.

Cruise lines spend around $1.5 billion each year with Australian suppliers, while passengers contribute a further $1.82 billion on hotels, restaurants, tours, shopping and transport. Altogether, the industry supports 22,720 full-time equivalent jobs, pays $2.36 billion in wages and brings visitors to 56 Australian ports and destinations.

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From paddock to plate

The campaign deliberately moves the conversation away from cruise terminals and onto Australian farms. The Alliance was launched at Select Fresh Providores in Sydney, one of Australia’s largest suppliers of fresh fruit and vegetables to cruise ships.

Few people realise the sheer scale of provisioning required. According to the report, an average 10-day cruise consumes around 3,500 kilograms of watermelon, 3,200 kilograms of chicken, 2,000 kilograms of beef, 4,000 litres of milk, 4,000 dozen eggs, 2,000 kilograms of potatoes and 1,400 kilograms of tomatoes.

For Steven Biviano, Group Director of Sales & Cruise Supply at Select Fresh Providores, those numbers translate directly into Australian jobs.

“Cruise has been an integral part of our growth strategy. At times it can be worth up to 50 per cent of our business during peak season,” he says in the report. “A single voyage can involve supplying 4,000 apples, 2,000kg of potatoes or 1,000 bunches of bananas.”

His company works with farmers across Queensland, New South Wales and Victoria to plan crops specifically for cruise demand.

“We have many producers who rely on cruise business. It gives them the volume they need through the year. It benefits not only the farmers and producers, but also the wider regional communities, the transport workers, the forklift drivers and people working on the wharves.”

Why are ships leaving?

The industry points to two major reasons.

The first is cost. Sydney’s Overseas Passenger Terminal has become one of the most expensive cruise ports in the world. Industry sources say a large cruise ship can pay up to $300,000 for a single visit, or around $46 per passenger, while NSW Ports earns around $32 million annually from cruise operations.

Those costs are up to twice the charges at Miami, the Florida home of the cruise industry.

Cruise executives privately acknowledge Sydney Harbour remains one of the world’s great sailaways, but argue operators are increasingly forced to weigh that experience against significantly cheaper alternatives elsewhere in Asia.

The second issue is regulation. The industry continues to criticise the Coastal Trading (Revitalising Australian Shipping) Act 2012, under which temporary coastal trading licences typically operate for only one or two years.

Cruise lines say deploying billion-dollar ships requires planning horizons of five to 10 years. The uncertainty surrounding Australia’s licensing arrangements makes long-term deployment difficult and encourages companies to position ships in destinations such as Singapore, Japan and other Asian hubs where regulatory settings are viewed as more stable.

The report itself stops short of naming specific legislation but concludes Australia must “enhance competitiveness, streamline regulation, and provide the certainty needed for long-term deployment planning”. It warns that without reform Australia risks “losing further ground to other markets that are moving faster to attract new ships and investment.”

A shrinking fleet

The consequences are already visible. Last year saw the end of an era when P&O Australia disappeared after almost a century, following its merger into Carnival Cruise Line.

This year another Australia-based vessel, Carnival Adventure, will spend half the year in the United States, leaving Australia with just two year-round ships instead of four.

Fewer ships mean fewer hotel stays before and after cruises, fewer restaurant meals, fewer shore excursions, less fresh produce purchased from Australian farmers and fewer transport bookings.

As Joel Katz points out: “Every cruise that comes to Australia creates activity before, during and after the voyage, from the food loaded on board, to the hotels passengers stay in, the tours they book, the transport they use and the local businesses they support.”

New Zealand shows another way

Perhaps the biggest contrast comes from across the Tasman. Earlier this year, New Zealand Tourism Minister Louise Upston led a delegation of more than 50 government officials and tourism leaders to Seatrade Cruise Global in Miami, the world’s largest cruise industry conference, in a coordinated campaign to win ships back to New Zealand after a difficult few years.

The highly visible delegation sent a clear message to global cruise executives that New Zealand wanted their business.

By contrast, no equivalent Federal Australian ministerial presence was evident. It is a difference not lost on Australian industry leaders, who argue competing destinations are aggressively courting cruise investment while Australia risks taking the sector for granted.

A call for certainty

The Paddock to Port Alliance is not asking for subsidies. Instead, it wants governments to recognise cruise as a national economic asset and create a more competitive operating environment through lower costs, streamlined regulation and long-term policy certainty.

As Cruise Passenger has consistently argued, Australia’s challenge is no longer attracting passengers. We already have them.

The challenge is persuading the world’s cruise companies to keep bringing ships here.

If Australia cannot do that, it won’t simply be cruise holidays that disappear; it will be thousands of Australian jobs stretching all the way from the paddock to the port.