INVESTIGATION OF THE CRUISE LINER INDUSTRY

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INVESTIGATION OF THE CRUISE LINER INDUSTRY
SUMMARY of STUDY RESULTS 7.16.08 MITCHELL
DUPLESSIS PROJECTS (PTY) LTD LANDDESIGN
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CRITICAL TOPICS COVERED

• The modern cruise industry and the overall
  prospects for continued growth at a global and
  regional level
• Infrastructure and services required by homeports
  and ports-of-call
• Insights on other cruise regions business
  successnotably, Australia / New Zealand and
  South America
• Recommendations as to how Cape Town should
  consider moving forward and to become a greater
  participant within the industry

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SEC1 GLOBAL CRUISE CHARTERISTICS
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CRUISE INDUSTRY GROWTH IN PASSENGERS
GLOBAL PASSENGER LEVELS HAVE DOUBLED EVERY DECADE
SOURCES CLIA, 2006 AND CIN, 2008
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LEADING CRUISE CONGLOMERATES
ROYAL CARIBBEAN 5 brands, 38 Vessels, 79,446
total berths Celebrity Royal Caribbean
International Pullmantur CDF Azamara
NCL / STAR CRUISES 3 brands, 16 Vessels, 36,484
total berths NCL NCL America Star Cruises
MSC Cruises 1 brand, 10 Vessels, 19,530 total
berths MSC
CARNIVAL CORPORATION 11 brands, 89 Vessels,
169,584 total berths Carnival Cruise
Lines Iberocruceros Princess Cruises AIDA Cunard
PO Cruises - UK Seabourn Cruise Lines PO
Cruises - Australia Holland America Ocean
Village Costa Cruise
SOURCE CIN, 2008
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GROWTH OF INDUSTRY SUPPLY, 2000-2012
38 VESSELS ON ORDER 22.3 BILLION IN NEW
INVESTMENT
SOURCES CIN, 2008 AND WWW.CRUISECOMMUNITY.COM,
JULY 2008
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FORECAST GROWTH OF INDUSTRY SUPPLY
798,700
612,700
372,100
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FORECAST GROWTH OF INDUSTRY PASSENGERS
31.2 MIL
24.0 MIL
15.2 MIL
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SEC2 SOUTHERN AFRICA CRUISE CHARTERISTICS
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SOUTHERN AFRICA CRUSING REGION
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SOUTHERN AFRICA CRUSING REGION

• Southern Africa, which includes pan-Southern
  Africa offerings and often island destinations
• Seychelles and related cruises to the islands of
  Reunion, Mauritius and others
• Specialty cruises to St. Helena
• Repositioning cruises
• World cruises

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VESSELS OPERATING IN THE REGION, 2008/09

• An estimated 83 cruises are planned for the
  2008/09 season market capacity of 31,657
  passengers
• An estimated 16 different vessels in the region
• Vessels in the market on a variety of different
  segments and predominately directed toward a
  European cruise audience
• Average cruise duration is a lengthy 18 days
• The cruise season is generally from October to
  April most cruises offered December and January

SOURCES INDUSTRY WEBSITES, 2008,
WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
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VESSELS OPERATING IN THE REGION, 2008/09

• Itineraries contribute 102 vessels calls to South
  African ports, with an estimated 45 of these
  arriving to Cape Town (44)
• Of the leading four cruise industry
  conglomerates, Royal Caribbean is absent from the
  list of lines offering cruises in the region
• Primary regional homeports identified include
  Cape Town, Durban, Mombasa, and Mahe

SOURCES INDUSTRY WEBSITES, 2008,
WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
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CURRENT REGIONAL CHALLENGES

• Region is one of the smallest amongst other
  global deployment areas
• Generally not on the radar of primary cruise
  operators other than an occasional call /
  operation as part of a repositioning or world
  cruise
• Flight and vessel repositioning costs also limit
  some lines in their thinking about deployment to
  the region
• Concerns on regional safety and stability
• Uncertain size of regional consumer base

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CURRENT REGIONAL OPPORTUNITIES

• Key industry growth fundamentals
• Diverse region with similar characteristics and
  itinerary diversity as other successful areas
• Marquee ports-of-call and homeports
• The region has shown consistency in preserving
  its share of the growing global industry
• 2010 FIFA World Cup event
• Successfully delivered by South Africa, this
  event could serve as an important catalystmuch
  like Olympics in Barcelona and Australiato move
  the regional cruise market forward

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CLIA 2008 MARKET PROFILE
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REGIONAL FORECAST GROWTH IMPLICATIONS

• Business as usual will likely yield limited
  results low to medium trend line
• Activity in marketing and organizational
  components key to regional viability
• Assuming Cape Town continues to see 44 of
  capacity, passenger throughput could be 126,000
  by 2020 under the high scenario
• With cruise homeporting primary element of Cape
  Towns business, revenue passengers could
  approach 250,000

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SEC3 CRUISE INDUSTRY NEEDS FOR OPERATIONS
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CRUISE LINE DESTINATION SELECTION CRITERIA

• Appeal as a travel and leisure destination
• Type and quality of cruise tourism infrastructure
  needed to support vessel operations and movement
  of passengers
• A market basis and strategic fit within a greater
  cruise ship deployment scheme

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SEC6 RECOMMENDATIONS MOVING FORWARD
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RECOMMENDATIONS MOVING FORWARD

• Software. Programs and marketing efforts
  developed to ensure product quality, brand
  recognition, communication efforts and others.
• Operations. Functional enhancements that allow
  for improved cruise operations.
• Hardware. Strategies and action items to ensure
  that appropriate capital improvements are planned
  and developed to meet anticipated cruise industry
  throughput and facilities needs.

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SOFTWARE OVERARCHING OBJECTIVES

• A large portion of the ultimate success to be
  achieved by Cape Town and South Africa is reliant
  on moving forward with marketing efforts
• Establish a strong case for Southern Africa
  cruising with cruise lines
• Work to build a foundation of seasonal business
  with international consumers and,
• Foster a local consumer base for cruise products.
  
• Emphasis should be placed on organizing the
  messages and messengers first
• Resources beyond those presently committed by
  Cape Town and elsewhere are going to be required

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SOFTWARE RECOMMENDATIONS

• Cruise marketing plan
• It is critical that Cape Town refine and
  implement a specific cruise marketing plan for
  the City and region.
• Hold a marketing goals workshop
• Identify the marketing audience
• Message development and refinement
• Messenger identification
• Formulation of a Cruise Cape Town Committee
  (CCTC)
• In-house education program
• Incentives packaging for cruise lines

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SOFTWARE RECOMMENDATIONS

• Market to the Cape Town community
• Development a cruise passenger visitor's kit
• Lead in development of Southern Africa Cruise
  Association
• Establish a methodology for port costs
  benchmarking
• Hold cruise tourism provider education sessions
• Establish strategic relationships with key ports
  in the region

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SOFTWARE RECOMMENDATIONS

• Conduction travel agent education sessions
• International Cruise Trade Show Participation
• Hold North American and European cruise operator
  visits
• Hold North American and European cruise operator
  familiarization trips
• Possibly linked with FIFA 2010
• Work with tour providers to design new offerings
  suitable for cruise passengers
• Establish targeted provider program offerings
• Luxury, adventure, destination

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OPERATIONS OVERARCHING OBJECTIVES

• The smoothness of operations is as important as
  the quality of the facilities think destination
  delivery
• Operational planning and coordination
• Benchmarking
• Guest security and safety assessments and
  programs
• Organization and communication

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OPERATIONS RECOMMENDATIONS

• Become deeply involved with the FIFA 2010
  floating hotel destination delivery
• Sportscom (communication and sports marketing)
• Meet with Port / VA regularly on threat
  assessment and security issues
• Conduct assessments for cruise passengers and
  generate a specific plan to share with the lines
• Hold public safety education sessions
• Become involved in homeport and port-of-call
  operations planning, especially for peak days

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OPERATIONS RECOMMENDATIONS

• Develop and implement a cruise benchmarking
  strategy
• Develop a scheduling plan for the committee
• Establish an operations audit and enhancements
  program based on benchmarking feedback
• Establish Cape Town primary and secondary venues
  and tour provider assessments
• Establish a smart-pass program

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HARDWARE OVERARCHING OBJECTIVES

• Additional cruise berthing and related terminal
  spaces are needed over the medium- to long-term
• Options need to be explored associated with the
  future role of VA Waterfront, the Port of Cape
  Town (NPA) and City to create a win-win-win
  scenario that will be conducive to meeting future
  cruise industry opportunities
• To reduce risk as well as meet other needs
  observed in the maritime and commercial
  environment, multi- and mixed-use cruise
  development approaches should be pursued.

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HARDWARE RECOMMENDATIONS

• Establish a cruise facilities improvement plan
• Engage the cruise lines for assistance
• Financial component
• Prepare a MOU between VA Waterfront, the Port
  and City on plan implementation
• Ensure a working, interim capital improvements
  plan for delivery of homeport and port-of-call
  needs
• Prepare a detailed plan, with emphasis on
  development of a mixed-use facility with
  supporting revenue inputs
• Implement the detailed plan timed to market
  conductions (cruise or mixed-use components)

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Location C Duncan Dock Version 1 (Variants)
Multi-Use Ocean Terminal 9,290 m2
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INVESTIGATION OF THE CRUISE LINER INDUSTRY
DRAFT STUDY RESULTS 7.16.08 MITCHELL DUPLESSIS
PROJECTS (PTY) LTD LANDDESIGN