Cruise Australia cruising makes big gains By Tom Stieghorst / May 20, 2013 Share 1 -- While Europe sputters, and North America plods along, Australia is emerging as a boom market for cruising.Cruise lines are sending more ships there, and travel retailers are growing along with the Australian source market.The latest sign of Australia’s emergence is Carnival Cruise Lines’ decision this month to deploy a second ship there seasonally.The Carnival Legend arrives in September to join the Carnival Spirit, which is deployed year-round. Thus, in 2014, the cruise industry’s biggest brand will have two ships in Australia and none in Europe.Carnival cited the high cost of flying between North America and Europe as the reason to redeploy the Legend, which this summer is sailing from the U.K. to Norway, the Baltic and around the British Isles.Airfares to Australia are also high, but Carnival expects that, for the most part, its ships there will attract Australians, rather than the Americans and Canadians who fill its cabins in Europe.About 84% of passengers departing a roundtrip cruise from Australia are domestic, according to CLIA Australasia’s latest figures. (Click here or on the on the image for a larger view of a chart of the number of Australian cruisers from 2002-2012.) At the Miami Cruise Shipping convention in March, Carnival Cruise Lines CEO Gerry Cahill said that the decision to source passengers from outside North America was a big step for Carnival. “We very deliberately picked Australia,” he said. “We did it because Australians have somewhat of a reputation of being fun-loving. They view life optimistically, they like other people, and we’ve always felt that’s a good fit for our brand.”There will be no lack of competition for the Legend and the Spirit. Royal Caribbean International’s Rhapsody of the Seas has been in Australia for the winter season for seven years. It will be joined by the Radiance of the Seas and Voyager of the Seas this winter.The number of passengers cruising from Australia has doubled in the past four years, to 694,000. Last year alone it grew 11%, putting it in a tie with Germany as the fastest-growing major cruise market.Moreover, 3% of Australians cruised last year, below the 3.3% rate for North America but ahead of markets such as the U.K. (2.7%), Germany (1.9%) and Spain (1.2%).Les Farrar, who has a master franchise for Cruise Holidays in Australia, said that the appetite for cruising is being fed by the growing number of ships available, price competition and Australia’s ties to Asian countries.“Ten years ago there was one ship permanently operating out of Sydney,” Farrar said. “Now there are seven throughout Australia, plus the same number again on a seasonal basis.“This of course has brought with it an increased awareness, marketing spend and competition to attract new cruisers,” he said. The fastest growth, according to CLIA, is in short cruises of one to four days, which rose 38% last year, accounting for one in 10 Australian cruisers.The most popular destination for Australians is the South Pacific islands, which account for a third of all cruises, followed by intra-Australian cruises and voyages to New Zealand. (Click here or on the image for a larger view of a chart showing where Australians cruised in 2012.)Farrar said he considers the strongest brands in Australia to be Princess Cruises, Royal Caribbean International, Holland America Line and Cunard Line, along with P&O Australia, a long-established name.Carnival and Celebrity Cruises are newer entrants, he said.Cruise Holidays has 14 franchises in Australia, after a little less than a year in the market. Other names include Cruiseabout, which lists 37 stores on its website, and Ecruising, an online specialist. Another trend fueling growth in Australia is the deepening interest in Asia on the part of Western cruise lines. Royal Caribbean’s Voyager of the Seas made its Sydney debut this year, part of its deployment to China. At 3,664 passengers, it is one of the largest ships yet to sail from Australia.The Sun Princess has sailed seasonally out of Sydney since 2007 and this summer is pioneering Princess Cruises’ new product in Japan.With multiple lines basing multiple ships in Australia, pricing has become more competitive, another fuel for growth. Farrar said there are “incredibly good deals” on quality ships such as the Celebrity Solstice.“The challenge for operators is to increase per diem rates while continuing the growth in passenger numbers,” he said.Vicki Freed, senior vice president for sales at Royal Caribbean International, said pricing remains very attractive in Australia. “We’ve been able to hold onto our rate,” because of the value of newer ships like the Voyager, she said.“Our brand has the sizzle and the appeal that no other brand has in that market,” she said.Although Royal’s passenger mix in Australia is similar to other lines, Freed said Australia is a desirable destination for Americans because it is safe, friendly and a once-in-a-lifetime experience.“A nice percentage of North Americans want to go the distance to experience something very special and unique,” she said.The big barrier is air, which can run more than $2,000 roundtrip from Los Angeles. One strategy, Freed said, is to accumulate frequent flyer miles toward an international ticket to go with the cruise. “A lot of people save their credit card miles and airline miles for these big trips,” she said.Cruise lines say a constraint on their growth in Australia has been Sydney’s berthing capacity, which is limited to three ships at a time. That is especially tricky in January and February, the peak months.Last month, one of two passenger terminals in Sydney was relocated to the new $60 million White Bay Cruise Terminal, which will mainly cater to cruises in Australian domestic waters.Sydney Ports Corp. recently installed a new mooring point at the Overseas Passenger Terminal to accommodate the increasing number of larger ships visiting Sydney.A record 265 cruise ships called at Sydney last year, up from the previous season’s record of 199. There are 302 calls booked so far for 2013.Follow Tom Stieghorst on Twitter @tstravelweekly.