BEV MITCHELL City of Cape Town Presentation

1
INVESTIGATION OF THE CRUISE LINER INDUSTRY
SUMMARY of STUDY RESULTS 7.16.08 MITCHELL
DUPLESSIS PROJECTS (PTY) LTD LANDDESIGN
2
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

3
SEC1 GLOBAL CRUISE CHARTERISTICS
4
CRUISE INDUSTRY GROWTH IN PASSENGERS
GLOBAL PASSENGER LEVELS HAVE DOUBLED EVERY DECADE
SOURCES CLIA, 2006 AND CIN, 2008
5
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
6
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
7
FORECAST GROWTH OF INDUSTRY SUPPLY
798,700
612,700
372,100
8
FORECAST GROWTH OF INDUSTRY PASSENGERS
31.2 MIL
24.0 MIL
15.2 MIL
9
SEC2 SOUTHERN AFRICA CRUISE CHARTERISTICS
10
SOUTHERN AFRICA CRUSING REGION
11
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

12
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
13
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
14
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

15
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

16
CLIA 2008 MARKET PROFILE
17
(No Transcript)
18
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

19
SEC3 CRUISE INDUSTRY NEEDS FOR OPERATIONS
20
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

21
SEC6 RECOMMENDATIONS MOVING FORWARD
22
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.

23
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

24
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

25
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

26
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

27
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

28
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

29
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

30
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.

31
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)

32
Location C Duncan Dock Version 1 (Variants)
Multi-Use Ocean Terminal 9,290 m2
33
INVESTIGATION OF THE CRUISE LINER INDUSTRY
DRAFT STUDY RESULTS 7.16.08 MITCHELL DUPLESSIS
PROJECTS (PTY) LTD LANDDESIGN