Why New Zealand’s hugely popular cruise ports are losing ships and tourism dollars

• New Zealand’s cruise industry is facing big challenges. Yet it remains a hugely desirable destination.
• Its cruise association has reported a 40% decline in port calls, and has launched a campaign to persuade cruise lines to return.
• But new reports suggest the debate inside NZ is more profound – and asks: Do New Zealanders really want cruise ships?

New Zealand cruise industry is heading for a sharp decline in visitation at a time when the country’s economy is desperately looking for growth. With port calls dropping 40% over just two seasons, many in the New Zealand cruise industry are ringing alarm bells.

While the numbers clearly demonstrate what’s happening, the reasons behind this drop and what to do about it has sparked a debate in New Zealand.

A range of challenges have sprung up for the New Zealand cruise industry post-pandemic, as well as the unfolding of a similar situation in Australia, which is having a knock-on effect for New Zealand’s ability to attract cruise ships.

Two dilemmas appear to be the most pressing: government policies have removed the certainty cruise lines need when scheduling itineraries years in advance, and internally, NZ’s tourism sector is moving to fewer, higher-value visitors, posing the question: are the popular cruise lines the right fit for the country?

Biofouling concerns

The  New Zealand Cruise Association sent a significant delegation to Miami for the Seatrade Cruise Conference to discuss the future of cruising in the country a few weeks ago.

A number of issues, including biofouling, expensive fees, and tough regulations, have made it difficult for cruise lines to commit to the area.

“The size and cohesion of the New Zealand delegation significantly enhanced the country’s standing with cruise lines. Meetings with senior executives reinforced confidence in New Zealand as a destination and demonstrated our long-term commitment to the cruise sector.”

The NZCA revealed several key insights from cruise lines and their doubts in taking ships to New Zealand, with one particular concern that comes above all else. 

The issue of biofouling regulation continues to be the primary doubt for cruise lines that are looking to plan itineraries to New Zealand.

The regulations really highlight the dilemma New Zealand is facing. On the one hand, few believe that protecting local waters from pollution or the invasion of non-indigenous species is a bad thing. But the way they were applied, with ships bearing thousands of holidaymakers suddenly turned back, was what caused most concern in Miami, the headquarters of most cruise lines.

Things have certainly improved. Of the 44 ships that were assessed to enter New Zealand last season, only one needed extra cleaning. During the 2022/23 season, 11 ships were turned around, or the 2023/24 season that saw a further four ships denied initial access.

There has been speculation that some cruise lines that cancelled ports in Australia, only cancelled those stops as they knew they would need extra time for cleaning before entering New Zealand. And the expense of cleaning hulls also needs to be factored in.

One way or another, it’s clear that cruise lines are still feeling the heat of these regulations and their strictness.

The NZCA said: “Biofouling continues to be the number one concern raised by cruise lines looking to deploy to New Zealand. While cruise operators are committed to meeting New Zealand’s strict requirements, there is currently no safety net or margin for error, with significant consequences if compliance is misjudged. 

“Challenges around niche area cleaning and dry dock access are directly influencing deployment planning.”

While lines now know what is required to do in order that their ships don’t get turned away, they’re still finding it a challenge, and likely an expensive one, to organise, schedule and perform the cleaning. 

New Zealand has been considering building a hull cleaning station in Auckland, which would allow ships to forgo the planning and simply perform the procedure in Auckland.  But the Port of Auckland has previously told Cruise Passenger that it’s in the “very early” stages of trials and research into feasible ways to execute the plan of building a hull cleaning for cruise ships is still to be completed.

While other issues such as high costs, other regulatory requirements and less ships sailing out of Australia are definitely also proving to be barriers to the success of the industry, it does appear that biofouling continues to be the number one concern for cruise lines moving forward and should be a priority for all those across the industry to work to solve.

Does NZ want to get the ships back?

In an interview with The Press, a New Zealand publication, Shaun Vuletich, managing director of economic consultancy Fresh Info explained that cruise visitors only account for a small percentage of visitors to the country.

“Cruise accounts for around 2% of the national visitor industry … so a drop would not be very significant at a [tourism] industry-wide level.”

Vuletich also explains that cruise passengers have less value than other tourists. “Cruise visitors have much less value to us than a traditional visitor, because the cruise line is trying to clip as much of the ticket as possible.”

Therefore, while many people have their livelihoods deeply affected by the success or lack of success of the New Zealand cruise industry, the reality is that it simply isn’t the highest of priorities for the New Zealand government, which is facing a major economic downturn.

Vuletich says the key move for the cruise industry moving forward is to prove that cruise travel can align with New Zealand’s tourism goals, particuarly when considered in relation to sustainability and value.

“I think the key thing for New Zealand is that we don’t have a strong position on cruise at the moment. It’s kind of happened to us, and we have reacted to that in relatively ad hoc ways.

“I think the key thing for New Zealand is that we don’t have a strong position on cruise at the moment. It’s kind of happened to us, and we have reacted to that in relatively ad hoc ways.”

Australia’s own cruising problems

Australia is also seeing fewer cruise ships on its shores each season. 

Because of the symbiotic relationship between the two destinations, when cruise visitations decline in Australia, it declines in New Zealand as well. 

With cruise lines such as Cunard and NCL mostly withdrawing from Australia, and other cruise lines such as Royal Caribbean and Princess reducing their Australian fleets or bringing in smaller ships, it’s inevitable that New Zealand will feel the effects of this as well. 

Furthermore, we’re seeing cruise lines shift towards shorter itineraries out of Australia, which also in turn means less visits to New Zealand, and when they do visit, less port days. This is most easily demonstrated by an analysis in changing Royal Caribbean itineraries, where not only are individual itineraries visiting less ports, but the number of cruises offered to New Zealand out of Australia has declined by 70% over recent years. 

Royal Caribbean and Carnival generally seem to prefer the South Pacific as a destination at the moment. For example, in the 2026/27 season, Carnival will sail 46 cruises to the South Pacific, in contrast to just six cruises to New Zealand. 

The South Pacific isn’t known for high regulatory costs and appears to be providing a more attractive proposition for cruise lines in Australia. Royal Caribbean’s investment in a private destination at Lelepa further signals the intent of Aussie lines to look towards the South Pacific as the main international cruise attraction out of Australia.

It’s rare for large ships to homeport multiple cruises out of New Zealand, with Pacific Explorer, from the now defunct P&O Cruises Australia, being the only ship to offer this over recent years. Most ships visiting New Zealand come from Australia, therefore, New Zealand will likely struggle to recover their cruise numbers unless Australia recovers theirs.

Has New Zealand priced itself out of the mass cruise market?

The New Zealand Crusie Association’s Lloyd explained to News Talk ZB how New Zealand has not just got on the bad side of cruise lines, but may have also simply priced itself out of the market. 

Lloyd mentioned that New Zealand had implemented new regulatory fees when it was already too late for cruise lines to consider these in their costings. Itineraries are planned years in advance, and they are costed to the last dollar. The sudden imposition of a new charge on passengers when they number in the thousands can make a cruise less profitable, or even uneconomic.

Lloyd says cruise lines were upset due to “changes of regulation mid-season, cruise lines book and lock in their deployment 18 months to 2 years in advance.

“Over the last few years there have been regulation changes and cost increases that have been made within that booking window, and in that case, there’s no way for the cruise lines to pass these costs onto passengers.”

Furthermore, Lloyd explains that New Zealand has simply become too expensive for a lot of cruise lines.

“We are a very expensive destination, our costs are very high and have got higher. We’ve priced ourselves almost out of the market. We are one of the most expensive destinations that cruise lines visit.”

Key meeting with the tourism minister

The NZCA isn’t just making moves overseas, but is also looking to strengthen ties with the government and create more collaboration at that level. 

The  New Zealand Cruise Association has reported a very productive meeting with the Ministry of Tourism and Hospitality Louise Upst, as the industry attempts to get back on the front-foot. 

The Minister met for more than five hours with various industry stakeholders, including representatives from major cruise lines and from CLIA. During a tumultuous time for New Zealand cruise, where the country is seeing a 40% drop in cruise visitors, it was a welcome moment for the NZA to be able to convene with key industry players. 

The NZCA said in a statement: “The discussion provided a valuable opportunity to highlight both the challenges we’re facing and the significant potential cruise offers for New Zealand’s tourism future.”

“The Minister demonstrated a strong understanding of industry concerns, a willingness to explore solutions, and an action-oriented approach to making progress. NZCA’s close working relationship with MBIE Tourism has also been instrumental in helping the Government better identify the barriers to growth and the opportunities, if we can get the policy settings right.

“We’re not out of the woods yet, but we are encouraged by the level of engagement and recognition from both the Minister and this Government of cruise’s importance to the wider tourism system, and the critical role sea and air access plays in enabling growth.”

One big question that will have a profound impact is a long-awaited reaction to a report on cruising in Milford Sound, the popular and beautiful fjordland destination that is the most desired among foreign cruise tourists.

Cruise Passenger reported the New Zealand government was considering a proposal called ‘Milford Opportunities Project’ that would include a ban on all cruise ships to Milford Sound.

The cruise industry has yet to see what the government’s stance on this is – creating more uncertainty.

And the cruise lines Cruise Passenger has spoken to all maintain it is uncertainty is the biggest reason for the decline in cruise numbers to New Zealand.

Foreign tourists love the country. But for cruise lines, the importance of certainty is vital.