Ports of Sydney Master Plan November 2007
APPENDIX A Marine Facilities Datasheets and Property Boundaries
Appendix A (This page intentionally left blank) Ports of Sydney Master Plan November 2007
Sydney Marine Terminal
Property Description Owner:CapeBretonRegionalMunicipalityLeasedBySydneyPortsCorporation. PropertySize:Approximately4.4Hectares(10.8acres) Locations:SydneyHarbour RoadAccess:MainArterialCollectors;Closeproximity(>1km)toSydneyPortsAccessRoad(seemapping) RailroadAccess:Requiressomeupgrading,notcurrentlyutilized. CurrentLandUseandZoning:SpecialUseDesignation LongRangePlans:Topurchasepropertiestothenorthandsouth.Installadolphintothesouthofexisting Wharftoexpandbirthto400to450ftallowingtwoships.Alsopossiblyluxuryyachtberthage.Thereis alsoadesiredtoinstallsomeadditional BaseMap:SeePlanNo.072430Ͳ6 GeneralLayout:SeePlanNo.072430Ͳ6 MarineStudiesAvailable:CapeBretonIslandTransportationServicesandInfrastructureMarketAnalysis andCBRMPortsStudy Current Cargo/Marine Related Facilities CurrentDock:SeePlanNo.072430Ͳ6,275meters(900ft)ofwharf,verygoodconditionwithawaterdepth atberthof12metres(39ft.) Current Equipment to Load/Unload Ships: Underground piping for petroleum offloading. Other miscellaneouscargooffloadedusingleasedshorecranesandforklifts,withtransfercargofromberthbeing petroleumbypipelineshorecranesandforklifts,trucksonly. MarineBuildings:CruisePavilion,approximately75mx30m(250ft.x100ft.) Function:CruisePassengers CruisePavilionSize:approximately75mX30m(250ftX100ft) SpecialFeatures:PastCargoWarehouse,couldaccommodatecargointermodaltransport AverageUtilization:Utilizesthree(3)tankerspermonth General Description and Usage of Building: Steel frame structure, cruise passenger entertainment /marshalling LongRange:topurchasepropertiestoNorthandSouth WharfBerthExpansionPlans:Installdolphinandexpandberthcapacityto120Ͳ150meters(400to450ft) Cargo/marineuseexpansionplans:Expandcargotoincludebreakbulk EnvironmentalRestrictions:none
Appendix A 1 Ports of Sydney Master Plan November 2007
Vessel Data VesselsUsingthisLocation:Cruise,Tanker,Commercial,GovernmentVessels VesselCallsPerMonth:3tankerspermonth(berth12to24hours),MayͲAug,4CruiseShips/month,SeptͲ Oct,20CruiseShips/month(berth10Hours) Current Maritime Cargo Data Cargo/MarketBeingServed:LocalPetroleum,MiscellaneousStorage AnnualVolumeofCargo,byCommodity:Petroleum315millionliters AnnualPassengerData:48,000passengers,35ships Petroleum:26,250kiloliters UtilizationofProperty:entireproperty Site Access and Transportation Data Intermodal transport systems provide for close coordination of facilities, services, and operations between ships and land or other water transport methods.
Rail RailAccess:ThePropertyhasrailaccess,however,requiresupgradingtobefunctional(seemapping,Plan no.072430Ͳ6) MarshallingYards:withinonekilometer Autos/Trucks AccessfromNearestHighway:Within1.5km EntranceGate:Yesfunctional,butithasasteepergradethandesirable
Appendix A 2 Ports of Sydney Master Plan November 2007
Sydney Marine Terminal Property Boundary
Appendix A 3 Ports of Sydney Master Plan November 2007
Atlantic Canada Bulk Terminal
Property Description Name of Property Owner: Sydney Steel Company, now Nova Scotia Lands Inc. Size: 40.5 hectares Location: Sydney Harbour Road and Rail Access: yes Current Land Use and Zoning: heavy industrial Future Plans for Site from Owner: bulk transshipping facility Show Property on Base Map: See plan No. 072430-4 for details Obtain General layout drawing of the property/marine facilities, if available: See plan No. 072430-4 for details
Current Cargo/Marine Related Facilities Size of Structure: 357 meters Condition: excellent condition 250 PSF design (heavy dock capacity) Water Depth at Berth:.12.7 meters To Load/Unload Ships: two 50 meter stack belts To transfer cargo from berth: loaders, truck, cranes which are leased as needed To load/unload trucks/rail: self unloaders, Panamax What are the current marine related buildings on the property? None Size: N/A Function: N/A Any special features: N/A Average Utilization: N/A General description of marine buildings and usage: N/A Property purchase plans: No Wharf berth expansion plans: No Cargo/marine use expansion plans: No Any existing Master Plans for the property.: No Are environmental rules and regulations that restrict property use? maintain low dust levels, accomplished through a misting system, rain birds and misters What role does the Sydney Port Corporation Play property operations: none
Vessel Data What vessels currently use the property’s berths and wharf? Panamax bulk coal carriers How many vessel calls per month? 1 What is the average length of stay at the berth? 1 to 4 days What is the maximum vessel size to use the berth? Handi max size 2
Appendix A 4 Ports of Sydney Master Plan November 2007
What is the typical vessel size: Lakers and Panamax What is a typical cargo load per vessel: coal, coke and slag How is the cargo/passengers/vehicles loaded/unloaded from the vessel? loaders for trains and trucks What is the time required to load/unload an average vessel? 1 to 4 days What is the average “utilization ‘ of the berth (as a % of time utilized): less than 5%
Current Maritime Cargo Data What is cargo/market currently being served? Aggregate, Slag, Coal, Scrap, fly ash
Annual volume of cargo, by commodity: 2003, 1 million tones: coal, 2004, 500,000 tonne: coal , 2005, 200,000 tonne: coal, 2006, 200,000 tonne; coal Annual Passenger data: N/A What are the historical cargo/passenger data, say last five years of data: as above
What geographical area is to be served by the marine activity? Strait of Canso Port What is the growth of demand for the cargos or products? predicted growth from transshipments of low sulfur coal How will the existing or planned improvements to the infrastructure (roads, rail, water, sanitary, electricity, etc.) impact on the terminal project? N/A
Site Access and Transportation Data Does the property have rail access? Yes If so, what are of current rail operations? Cape Breton and Nova Scotia Rail Way
What is the arrangement of the rail lines? See Plan No. 072430 Where are marshaling yards? How far from the property? one site with secondary located at CBNS rail yard Length and number of tracks, on site and in Marshalling Yard: N/A What tracks are available at the terminal? 5 each approximately 250 meters long
How many trains per day? N/A How many tons/TEUs per day? N/A What is the total annual tonnage/TEUs? N/A Who owns the trains? Cape Breton and Nova Scotia Railway Who operates the trains? Cape Breton and Nova Scotia Railway
Auto and Trucks How far is the property from the nearest highway? Within 1 km What is the average daily number of auto or truck trips generated by the property? N/A Is the existing entrance gate and access roadway adequate? Yes For ferry operations: N/A Size of existing queuing area: N/A
Appendix A 5 Ports of Sydney Master Plan November 2007
Time required to process loading and unloading: N/A Capacity of queuing area vs. capacity of vessels: N/A Percentages of Autos, trucks, buses: N/A For cargo/Truck operations n/a: N/A How many loading/unloading stations are there? N/A What is the capacity of each loading/unloading station? N/A What is the capacity of each truck? N/A How many trucks can the loading/unloading area accommodate? N/A What is the truck arrival pattern at the loading/unloading area: N/A
Appendix A 6 Ports of Sydney Master Plan November 2007
Atlantic Canada Bulk Terminal Property Boundary
Appendix A 7 Ports of Sydney Master Plan November 2007
Sydport Industrial Park
Property Description Size:81 hectares (200 acres) Industrial Park and 182 hectares (450 acres) Greenfield Site; additional486hectares(1,200acres)underoptionalongtherailroadsouthoftheIndustrialPark. Location:Edwardsville,southarmofSydneyHarbour Roadways:2Kmfrom100serieshighwaysystem Railroad:onsiterailspurwith3sidingsconnectedtoCBNSandCNRailnetwork Zoning:IndustrialParkZoning FuturePlans:Containerterminal BaseMap:SeeplanNo.072430Ͳ2fordetails GeneralLayout:SeeplanNo.072430Ͳ2fordetails Current Cargo/Marine Related Facilities DockorPierSize:SeeplanNo.072430Ͳ2fordetails,1370m(4500ft)wharffaceinexistingPark Condition:Circa1940'sconstruction,somerepairscompletedininterveningyears,somesections requiringrepair WaterDepthatBerth:6to10m(20to30ft) CurrentEquipmentUsed:Allequipmentengagedasrequired
Current Marine Building MarineBuildingSize:sizesrangefrom1,100to11,580m2(3,600to38,000ft2) Function:Warehouses,metalfabrication,paintingandsandblasting,truckandequipmentrepair, etc. Special Features: fully services with water, sewer and electricity; overhead cranes in some facilities General:Somenewconstruction,somecirca1940 Property Purchase Plans: N/A
Wharf Berth Expansion Plans: no expansion plans, but do have plans to repair and upgrade (heavy lift pad) plans Cargo/Marine Use Plans: various, on-dock fabrication and loading of steel structures and equipment, bulk products (wood, fly-ash) and offshore oil and gas related services and operations Environmental Restrictions: Some land in the existing Industrial Park has significant environmental issues, such that sale of land is made costly by the requirement to do extensive environmental testing. Sydney Ports Corporation Role: Services the few incoming foreign vessels Property Owner Role with Agencies: Co-coordinating port-wide efforts on marketing, security, and regulatory initiatives
Appendix A 8 Ports of Sydney Master Plan November 2007
Vessel Data Tugs and barges, survey and cable-laying ships, fishing vessels, bulk carriers Vessel Calls per Month: 3 on average Average Length of Stay at Berth: Some have been here for 2 years, some over winter, some 2 weeks, some overnight Maximum Size of use at Berth: 300m Typical Vessel Size: fishing vessels 30m, others 100m
Current Maritime Cargo Data Current Market: Pulpwood, liquid chemical bulk Annual Volume of Cargo: 8425 cubic meters of Pulpwood in two vessels 12,500,000ofliquidbulk Area Allocated for Marine Activity: 25 acres Major upgrades: (increase depth and wharf load bearing capacity) planned for wharf, as well as improvements to laydown and working area, and security improvements Competitive Facilities: Halifax Strait of Canso, Sheet Harbour
Site Access and Transportation Data Rail Access: Yes, Spur line and individual user sidings Marshaling Yards: In Sydney, and perhaps in North Sydney Length and Number of Tracks: 1 spur line, 3 sidings, perhaps 2km’s in total, all on site TracksAvailableatTerminal:SeePlanNo.072430Ͳ2 Trains Per Day: 2/3 per week Train Owner/Operator: Canadian National and Cape Breton Nova Scotia Railway
Auto and Trucks AverageDailyTruck/AutoTripsGenerated:Forthemarineoperation,perhaps3autoperday, and2truckspermonth.Fortheparkasawholethereare5movingandtruckingcompanies,so over100trucktripsperday AdequateAccessGate:Yes
Appendix A 9 Ports of Sydney Master Plan November 2007
Sydport Industrial Park Property Boundary
Appendix A 10 Ports of Sydney Master Plan November 2007
International Coal Pier
Property Description PropertyOwner:EmeraUtilityServicesInc. Size:20.3hectares Location:Sydney RoadandRailAccess:yes Current Land Use and Zoning: Industrial Future Plans for Site from Owner: Unknown Show Property on Base map: See plan No. 072430-3 for details Obtain General layout drawing of the property/marine facilities, if available: See plan No. 072430-3 for details
Current Cargo/Marine Related Facilities Size of Structure:180 meters (590ft) Condition: very good condition Water Depth at Berth: 15 meters To Load/Unload Ships: offload using ships self unloader/no loading capabilities To transfer cargo from berth: unload into receiving hoppers then conveyed to a range conveyor 300 tonnes per hours To Load/Unload trucks/rail: rails coal is retrieved from stock piles using loaders, placed on stacker conveyors, from stackers it is conveyed to a 1.4 meter train load out conveyor to silo and loaded onto rail cars. Trucks are loaded using front end loaders What are the current marine related buildings on the property? Only electric MMC building and small office Are environmental rules and regulations that restrict property use? Operation restrictions during high winds due to dust. Rain birds and misters are used to control dust
Vessel Data What vessels currently use the property’s berths and wharf? Panamax and Lakers size vessel How many vessel calls per month? 3 to 4 ships per month What is the average length of stay at the berth? Approximately 3 days but depends on capabilities of vessel in port. What is the maximum vessel size to use the berth? Panamax Typical vessel size: Panamax Typical cargo load per vessel: 50,000 tonnes How is the cargo/passengers/vehicles loaded/unloaded from the vessel? Self unloaders What is the time required to load/unload an average vessel? Approximately 3 days but depends on vessels in port What is the average “utilization ‘ of the berth (as a % of time utilized): 30% to 35%
Appendix A 11 Ports of Sydney Master Plan November 2007
Current Maritime Cargo Data: What is cargo/market currently being served? Coal, Nova Scotia Power Annual volume of cargo, by commodity: 2,294,787.4 metric tons of coal and petcoke (2006), 80,000 tonnes of scrap steel, 42,000 tonnes other bulk (rock, aggregate, etc), 75,000 - 85,000 tonnes of other general cargo Broken down by monthly data if possible: Approximately 200,000 tonnes What are the historical cargo/passenger data, say last five years of data: as above What geographical area is to be served by the marine activity? Local energy generation Where are the competitive facilities that presently serve the same market? Strait Region
Site Access and Transportation Data Does the property have rail access? yes If so, what are of current rail operations? Sydney Coal Railway What is the arrangement of the rail lines? Rail Loop with parallel lines beginning just outside loop Where are marshaling yards? How far from the property? Sidings on adjacent rail lines have capacitiy Length and number of tracks, on site and in Marshalling Yard: N/A What tracks are available at the terminal? Rail Loop with parallel lines beginning just outside loop How many trains per day? Depend on demand, at times 2 to 3 Who owns the trains? Sydney Coal Railway Who operates the trains? Sydney Coal Railway How much control over scheduling of the train does the port have? Facility is the only user of railway, so dictate need Are the trains dedicated to serving the port? Yes Cars per train: 21 cars per train Capacity of a car: 100 tones Is the car size uniform? Yes
Auto and Trucks How far is the property from the nearest highway? Within 200 meters Is the existing entrance gate and access roadway adequate? Yes How many loading/unloading stations are there? One for trains and one for trucks What is the capacity of each loading/unloading station? 1300 tonnes per hour What is the capacity of each truck? 150 to 200 tonnes per hour How many trucks can the loading/unloading area accommodate? 35 tonnes What is the truck arrival pattern at the loading/unloading area: N/A
Appendix A 12 Ports of Sydney Master Plan November 2007
International Coal Pier Property Boundary
Appendix A 13 Ports of Sydney Master Plan November 2007
Marine Atlantic
Property Description
PropertyOwner:Transport Canada Size:4.7hectares Location:NorthSydney RoadandRailAccess:yes Zoning:unknown BaseMap:SeeplanNo.072430Ͳ5fordetails GeneralArrangement:SeeplanNo.072430Ͳ5fordetails PreviousStudies:"AStrategyfortheFutureofMarineAtlanticInc.”TheCommittee’sReportͲ31March 2005http://www.tc.gc.ca/pol/en/report/tp14369/tp14369.htm,Seehttp://www.marineͲ atlantic.ca/en/company/publications Current Cargo/Marine Related Facilities SizeofStructure:PassengerBerth212meters.(700ft) CargoFreighterBerth:240meters,(787ft) ThirdWharf150meters,(492ft) Condition:VeryGoodCondition ToLoad/Unload:TrafficRamps TransferCargoMethod:Autohavedirectaccessviaramps,cargoviaadroptrailerservice;droptrailer serviceviabiͲlevelloadingramps Buildings:TerminalBuilding,AdministrationBuilding,andMaintenanceShop Vessel Data CurrentVesselsUsed: CargoMVAtlanticFreighter,154m(500ft),75droptrailers LeifEricson,157m(525ft),500ps,250auto MVJosephandClaraSmallwood,179m(587ft),1,200ps,370autoor77trailers MVCaribou,179m(587ft),1,200ps,370autoor77trailers VesselsUsed: CargoMVAtlanticFreighter–RoͲRoFreightͲDropTrailersand12LiveTrailers(Unitswithtractors) LeifEricson,CaribouandJosephandClaraSmallwood–RoͲPaxͲPassengers,Autos,DropandLiveTrailers Vessel Calls Per Month: Varies Depending on Time of year for details see http://www.marineͲ atlantic.ca/en/schedule/pabnsy.asp
Appendix A 14 Ports of Sydney Master Plan November 2007
Current Maritime Cargo Data MarketBeingServed:Newfoundland AnnualVolumeofCargo: 20052004200320022001 Passengers418,105419,820457,229528,975481,560 Passengervehicles137,751137,471151,188172,728153,880 Commercialvehicles86,60585,76981,16979,09278,963
CargoGrowth/Demand:Seereport"AStrategyFortheFutureofMarineAtlantic"Page21andsee item3notedinpreviousstudiesabove AreaAllocatedforMarineActivity:entireproperty CompetitiveFacilities:Airtransportation(HalifaxandStJohn's)OceanexShipping Site Access and Transportation Data RailAccess:no Auto and Trucks HighwayAccess:directhighwayaccess EntranceGateAccess:yes SizeofExistingQueuingArea:4.7ha(11.7acres)
Appendix A 15 Ports of Sydney Master Plan November 2007
Marine Atlantic Ferry Terminal Property Boundary
Appendix A 16 Ports of Sydney Master Plan November 2007
MV Osprey Limited Property Boundary
Appendix A 17 Ports of Sydney Master Plan November 2007
Harbourside Commercial Park Property Boundary
Appendix A 18 Ports of Sydney Master Plan November 2007
Victoria Junction Site Property Boundary
Appendix A 19 Ports of Sydney Master Plan November 2007
Petroleum Bulk Storage Facilities Property Boundaries
Imperial Oil
Irving Oil Petro-Canada
Appendix A 20 Ports of Sydney Master Plan November 2007
APPENDIX B Cruise Market Study
Appendix B (This page intentionally left blank) Chapter 1
2007 Port of Sydney, Nova Scotia Cruise Market Study
Prepared for TEC, Inc.
Final Report Submission September 13, 2007
Prepared by:
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 1 1.0 Worldwide Cruise Market Overview
1.1 Section Summary
This section analyzes the major trends prevalent for the worldwide cruise industry. Following is a summary that delineates the major issues that shape the current global cruise industry:
The cruise industry has emerged as one of the fastest growing and popular segments of the worldwide travel and leisure industry. Between 1990 and 2006, passenger levels have expanded from 4.4 to an estimated 14.5 million worldwide. With many of the fundamentals that contributed to the success of the industry still in place, cruise passenger volumes are expected to continue their positive growth trend. Projection of the worldwide industry suggests passenger carrying levels could expand from the present projected 14.5 million to between 19.3 and 30.1 million by 2020. Continued strong passenger growth is incumbent upon between 40 and 120 additional new vessels being placed into operation over the next 15 years, a trend that will create demand for a number of present homeport and port-of-call facilities to expand—especially those found within the industry’s most popular and profitable regions—and over the mid- to long-term, encourage expansion into new market regions.
x Three major cruise operators dominate the cruise industry worldwide—Carnival Corporation, RCCL and Star/NCL Cruises. These cruise consortiums have widespread influence on cruise marketing, operations and deployment trends worldwide. A fourth relatively newcomer to the industry, MSC Cruises is aggressively ordering ships entering the North American market.
x Inclusive of all cruise operators, the Caribbean remains the principal location for cruise capacity placement, followed by the Mediterranean, Northern Europe and Alaska. In total, over twenty different cruise sub-regions are present within the global marketplace, with many of these consisting of even smaller deployment characteristics and typical itineraries.
x Cruise line selection criteria for homeports and ports-of-call generally fall into three categories: Appeal and demand as a travel and leisure destination; type and quality of cruise tourism infrastructure needed to support vessel operations, movement and quality of experience for cruise visitors; and, a market basis and strategic fit within a greater cruise ship deployment scheme.
1.2 Worldwide Cruise Market
Over the past two decades, the cruise industry has emerged as one of the fastest growing and popular segments of the worldwide travel and leisure industry. In 1980, 1.4 million individuals embarked on a conventional cruise operated by a North American cruise line, a
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 2 level that has climbed to approximately 10.5 million by 2006.1 We estimate that 3.9- million international passengers were carried on European and Asian marketed vessels in 2006, elevating the worldwide cruise industry passenger total to nearly 14.5 million. Critical growth has been seen in the U.K., European Continental and to a lesser extent the Asian cruise markets over this time period. Growth of the conventional worldwide market provides cruise lines with the impetus to expand current market offerings and expand into new and growing market sectors worldwide. With continued cruise passenger growth, this points to further expansion of the cruise industry. For the Atlantic Canada region, specifically Sydney this means that the region overall is competing much more on a worldwide scale than in the past due to the deployment trends of the cruise line industry. In addition, growth in the industry has been tied to the deployment of larger ships into the worldwide fleet as is illustrated later in this report.
Figure 1: Conventional Worldwide Cruise Passenger Growth, 1990-2006 Source: CLIA, PSA, and B&A, 2007 While North American capacity remains over 70%, the European cruise market continues to grow at a significant pace with 24% of the world’s cruise capacity. Asia provides 4.5% in 2006. The industry’s continued success over this period is primarily a result of the following:
x Cruise lines created products that work to convert land-based resort guests into cruise passengers. Cruise lines were able to package and mass market an all- inclusive resort package-at-sea that is highly price competitive when compared to similar land-based resort vacations. These all-inclusive packages were marketed through a variety of distribution channels inclusive of travel agents, internet-based retailers, charter operations and cruise line based phone and internet networks.
x Cruise operators have effectively controlled competition, operational costs, and generated revenue streams from several sources beyond net ticket sales.
1 North American operators are those lines that market the majority of their vessels to North American consumers in the U.S. and Canada. Similarly, European and Asian operators market a majority of their vessel offerings to each respective consumer market.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 3 Innovations in cruise vessel design and the move toward larger vessels allowed cruise lines to reap increased economies of scale. The majority of cruise industry capacity is held by a handful of cruise conglomerates, a factor that has served to reduce competition by keeping barriers to entry into the market high; increased leverage on cruise destinations to keep cruise fees low; and, allowed for significant cost-savings resulting from a high degree of vertical integration throughout the cruise onboard and destination delivery cycle. This trend has magnified with the creation of a super-cruise group – Carnival Corporation, whose combined brand capacity exceeds that of its next nearest rival by some 80,000 berths and which accounts for over half the new vessels on order over the next five years.
x Cruise industry products consistently deliver a high level of passenger satisfaction. The Cruise Lines International Association (CLIA), through its annual passenger surveying efforts, has year after year reported the cruise experience consistently exceeds expectations on a wide range of important vacation attributes, and on a comparative basis versus other vacation categories, cruising consistently receives top marks. Satisfaction with cruise vacations keeps customers coming back; several cruise lines report client retention levels of well over 45%. Cruise lines place considerable emphasis upon passenger retention, as it is easier and less costly to retain a current passenger than to market to and cultivate new passengers.
x The cruise industry is supply-led in nature, continually increasing passenger throughput by the development and introduction of new vessel berth capacity. Over the past decade and more the cruise industry has grown through the introduction of new cruise vessels into the worldwide fleet. While some have been smaller niche vessels, the majority have continued to increase in physical size and passenger capacity over the past thirty years. In conjunction with this newbuild trend, the cruise line industry has concentrated on developing new cruise markets through the introduction of onboard products and services, distribution chains and other partnerships to fill the vessels introduced to the fleets. With the North American market growing well, the industry has turned their attention to the development of the European cruise consumer market that has similar demographics to that of its North American counterpart. As this area develops, the cruise industry has now begun to actively study and participate in the development of the Asia-Pacific cruise market through the development of distribution systems, products and services for the consumer and placement of vessels into the region to further stimulate growth.
1.3 Future Direction of the Worldwide Cruise Industry
Without question, the events of September 11 and its aftermath created a period of uncertainty and flux both within the cruise industry and for tourism and leisure providers worldwide. Immediate reactions by the cruise industry to September 11 were increased financial conservatism, deployment drawback to North American and other home waters and amplified flexibility in deployment.
By October 2002, confidence was returning. The cruise industry, however, was due to face further challenges brought on by a combination of war, terrorism concerns, health issues and a relatively weak economic outlook. In particular, the Iraq War (March 2003),
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 4 terrorism threats and the SARS pandemic in Asia had a dramatic impact on international travel. These major events led to a dramatic collapse in demand for air travel, especially to Asia. This experience was mirrored by the cruise industry throughout the world, but particularly in the Asia-Pacific region where a number of cruise calls were cancelled and itineraries redrawn to take tonnage out of the region. These events and others have caused a significant increase in North American based deployments through the addition of more than 20 new homeports over the period. However, overall Atlantic Canada has not seen the expected overall growth this may have produced primarily due to the draw of competing destinations (primarily Caribbean, Alaska and Mexico West).
Presently, signs point to the cruise industry moving into a boom period with all the major lines, comprising improved profitability and higher yields. Cruise industry sensitivities, and thus, a degree of financial and operational conservatism still remains due to the issues outlined above. For the near term, North American and European lines will continue to be cautious in deploying their fleet to more distant and potentially less financially productive regions. This is due in part to both a cost increase in regular and low-sulfur content fuels and the subsequent impacts on the purchasing and supply chain for those vessels deployed farther a field from normal North American and European suppliers.
Terrorism also continues to be a major point of worry for cruise lines, especially given the high profile of a cruise vessel as a potential target. In November 2005, the Seabourn Spirit was attacked 100-miles off the Somali Coast by pirates with machine-gun fire and rocket- propelled grenades. In August 2004, UK press reported that a terrorist plot to blow up the Queen Elizabeth 2 during a cruise was uncovered. Similar terrorism concerns and threats exist for all shipping activities in the Straits of Malacca. While cruise lines and ports have radically improved port security, we anticipate lines will continue to take a somewhat conservative approach with deployment.
In looking forward at the direction of the market in the mid- to long-term, each of the industry fundamentals responsible for its dramatic rise over the past two decades are expected to remain in place and continue to propel the industry forward in terms of passenger and financial expansion. Strong second half 2006 cruise passenger growth and future bookings showed marked improvement over 2005 levels. Despite short-term impacts of major world events, demand for cruises has shown particular resilience in times of conflict, recession and economic downturns. Industry experts suggest significant consumer demand also exists in the marketplace to continue with increased new-build orders which further enhance the potential opportunities for the industry.
Barring some unpredictable event, the industry will see continued gradual revival in new building from 2006 and beyond. Controlled growth and an emphasis on increased vessel berth capacity, size and amenities will be more likely. Our scenarios for cruise vessel supply expansion for North American/European capacity - as measured in vessel berths over the next several years are:2
x Scenario 1 (Low). Two to three new vessels and an expansion of total supply by an additional 4,800 to 5,400 net new berths per annum.
2 Scenarios present berths in net terms and envisage some withdrawal of older vessels, and thus, capacity from service. This occurs on a fairly regular basis at present. New Safety of Life at Sea (SOLAS) rules in 2010 will inevitably hasten the withdrawal from service of a considerable number of vessels that were built at or before 1969. This series of SOLAS rules looks to eliminate all wood from cruise vessels.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 5 x Scenario 2 (Medium). Three to six new vessels and an expansion of total supply by an additional 12,100 to 13,500 net new berths per annum.
x Scenario 3 (High). Six to nine new vessels and an expansion of total supply by an additional 19,300 to 21,600 net new berths per annum.
Figure 2: Historic and Projected North American Industry Berth Supply Source: B&A, 2007 Our forecast for the growth of North American capacity is presented in Figure 2. As shown, total berth inventories are anticipated to grow from approximately 265,400 lower berths in 2006 to between 353,500 (low) and 551,900 (high) lower berths by 2020. Our projection model includes a number of assumptions extrapolated over the 13-year horizon, including anticipated rates of berth utilization, vessel occupancy, cruise itinerary duration, growth in average vessel size and other factors. Our model also assumes that consumer demand keeps pace with vessel supply over the period reviewed. Due to cruise lines placing cruise vessel orders at a maximum of four to five years into the future, our model is inherently less reliable beyond 2011.
Passenger forecasts for the worldwide industry- inclusive of North American, European and Asian carriers were generated and are presented in Figure 3. As shown, worldwide passenger carryings are expected to grow from 13.9 million to between 23.8 million (low) and 31.5 million (high) by 2020. The base North American passenger carryings are anticipated to grow to between 13.5 million (low) to 21.2 million (high) by 2020. The medium and high projections include additional factors which take into account more aggressive growth of European and Asian markets over the mid- to long-term.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 6 Figure 3: Projected North American & World Passenger Levels, 2006 – 2020 Source: B&A, 2007 Projection scenarios herein anticipate that ports and destinations will rise to meet this opportunity of continued expansion of the cruise industry. With medium and high future growth scenarios above suggesting between 60 and 120 additional new vessels in operation, continued new vessel deliveries will place additional demand for port facilities. This trend will create demand for a number of present homeport and port-of-call facilities to expand - especially those found within the industry’s most popular and profitable regions and over the mid- to long-term, encourage expansion into new market regions. Placement of new vessels will be especially challenging during the months of November through April when operations in profitable, cold-water regions are unfeasible.
Worldwide, there are approximately 135 to 165-homeport berths with the majority of these (55 - 65) in North America and (45 - 65) in Europe/U.K. destinations. In addition, there are many ports that provide berths for both homeport and port-of-call accommodations. Based on estimated growth we envision more than 200-plus homeport berths worldwide over the next 5 to 10-years to support vessel growth and regional expansion. Overall, there are well over 500 worldwide berths considering all port-of-call and homeport berths. As a continuing cruise industry trend, the expansion of berth supply and the subsequent need of cruise lines to expand their overall regional cruise deployment coverage is a favorable trend for the Atlantic Canada region. This means more vessels are being delivered into the worldwide marketplace and subsequently deployments must reflect the desire of the lines to expand passenger levels in all market demographics inclusive of the Atlantic Canada region if cruise passenger demand and per diem return are met. This trend could impact Sydney in terms of an expansion of the overall cruise season, deployment of larger ships to the region, and subsequent demand for additional ship calls on given peak days during the high fall cruise season of September and October.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 7 1.4 Cruise Lines, Vessels and Other Industry Characteristics
1.4.1 Leading Cruise Operators
Today, three major cruise operators dominate the cruise industry worldwide (see Figure 4). The “big three” were formed through merger and consolidation to provide each with better economies of scale, progressive marketing options and increased channels of distribution. In spring 2003, the Carnival Corporation and Princess Cruises merger was officially accepted by shareholders of P&O Princess, plc, thus forming the nucleus of a cruise company that, at the end of 2006, had 47% of total berth capacity worldwide. This merger continues to reshape the industry, creating one large super cruise consortium with widespread influence on cruise marketing, operations and deployments. RCCL (23%) and Star/NCL Cruises (11%) are the other major industry participants. The remaining 19% of industry capacity is shared among over 50 cruise lines, ranging from medium-sized lines typically operating between two and five vessels to small cruise line operators with one vessel.
We summarize several attributes of each of the major cruise lines as well as several smaller operators in the following section. Cruise line information is summarized in Table 1.
Figure 4: Cruise Capacity by Group Source: B&A, 2007
x Carnival Corporation. Publicly held and traded, Carnival Corporation controls over 155,710 lower berths on 83 vessels. Carnival Corporation presently has an additional 17 cruise vessels on order. Carnival Corporation’s portfolio of 10 brands is remarkable and includes many of the gold standard cruise companies: Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 8 Line in North America; P&O Cruises UK, Cunard Line and Ocean Village in the United Kingdom; AIDA in Germany; Costa Cruises in Southern Europe; and, P&O Cruises Australia.3 These brands combine to offer a range of vacation products to consumers with varied tastes, income levels, and national origins. Combined, more than 8-million people sail on Carnival brands annually. Carnival is currently working to finalize deals with Iberojet Cruceros as well as TUI Group for additional leverage in the European consumer market.
x Royal Caribbean Cruises, Ltd. (RCCL). Under its five brands Royal Caribbean International (RCI), Celebrity Cruises, Pullmantur, Celebrity Xpeditions, and Azamara operates a fleet of 40 vessels with 7 additional vessels set for delivery before 2011. Current fleet capacity is slightly over 92,000 lower berths. In 2005, RCCL’s brands combined to host more than 3-million cruise passengers. RCCL is also a publicly held corporation.4 Pullmantur S.A. was acquired by RCCL. This is a major advancement in RCCL’s efforts to increase their presence in the European cruise market. This move allowed for a vehicle for the large consumer market and it will also allow RCCL to advance other efforts worldwide, inclusive of their plans to move smaller vessels into the Celebrity Xpeditions fleet, impact key markets such as Bermuda and create additional synergies in the European and South American marketplace. Royal Caribbean International is going international with much of its fleet, while deploying Celebrity Cruises to a greater degree to fit an expanded North American clientele.
x Star/NCL Cruises. Star Cruises is the leading cruise line in Asia, and with the acquisition of NCL Holdings 2000, is the third largest cruise line operator in the world. Star Cruises’ combined fleet consists of 18 vessels and over 41,000 lower berths. The NCL and Orient brands are marketed primarily to consumers from North America, Europe and Australia.5 The Star Cruises brand is focused on tapping into the Asia Pacific consumer markets. As NCL is expanding its fleet through new vessel deliveries the plan was then to move older tonnage from NCL to Star Cruises (5 in total). However, to date only one vessel has been transferred to the Star fleet. NCL is preparing to become a publicly traded company; however they have had consistent earnings issues mainly due to the Hawaii product cost. NCL has just entered into a Billion dollar deal with Apollo Management to allow for additional fleet expansion. NCL has three vessels on order with two 4,200- passegner ships set for delivery in 2009 and 2010.
x While lines in the “other” category are far smaller in terms of fleet size than the “big three,” the remaining 19% of the cruise industry includes a number of important and unique brands that provide increased diversity within the industry overall. Representative lines include:
o Disney Cruise Lines. Disney Cruise Lines is the leading family entertainment cruise provider with 3-, 4-, and 7-night itineraries to the Bahamas and Caribbean offered on two cruise vessels (Disney Wonder and Disney Magic). While linking cruise offerings to upland facilities is not unique in the industry, Disney’s combination of family brand and upland theme parks creates inherent
3Carnival Corporation owns two land-based tour operations in Alaska—Holland America Tours and Princess Tours—that operate coaches, hotels/lodges and train cars for sightseeing. 4 RCCL owns Royal Celebrity Tours in Alaska. 5 Star/NCL recently purchased a tour operation in Hawaii to support cruise operations.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 9 interest their cruise product. In 2005, Disney Cruise Lines took their formula to Los Angeles with 7-night Mexican Riviera cruises during the peak summer season. These cruises were very successful based on feedback from the cruise line. Disney has expanded into Europe and is looking to further diversify its cruise base of operations. Disney has two new 2,500-passenger cruise vessels set for delivery in 2010 and 2011.
o Crystal Cruises. Crystal Cruises offers ultra-luxury cruises to destinations worldwide and is a sizable cruise line contributor to the West Coast marketplace. With headquarters in Los Angeles, Crystal Cruises is wholly owned by Nippon Yusen Kaisha (NYK), the largest shipping company in the world. Crystal Cruises has a two-vessel fleet - Crystal Symphony and Serenity.
o MSC Cruises. MSC Cruises offers mid-class cruises to destinations throughout Europe and the Caribbean. MSC North America caters to a more upscale niche market with its vessels. This is a private family held Swiss/Italian company backed by MSC Cargo and privately held by the Aponte family. While they have strong financial backing, some industry analysts are hesitant as to what their level of success will be in the North American market due to brand placement. They currently have a fleet of 9 vessels with approximately 17,000-lower berths. They have an additional 4 vessels on order set for delivery over the next three years. While unlikely that they will grow to the dominance of either RCCL or Carnival this line will certainly impact the industry worldwide over the next decade.
o Regent Seven Seas, Oceania Cruises and Silversea Cruise Line is luxury- class cruise lines offering itineraries throughout the world to a mainly North American clientele. Each company is privately held. Silversea Cruises and Oceania are both expanding their fleets through new-build capacity in line with what they currently offer. x Similar in composition to the hospitality industry, each major cruise group is comprised of several cruise line brands with vessels positioned to appeal to different geographic markets and consumer tastes. The majority of cruise brands generally fall into one of the following four segments:
o Luxury. The luxury segment offers cruises of greater than seven days on high quality, small and medium-sized vessels. Luxury vessels tend to sail worldwide and offer superior food and service.
o Premium. The premium segment is geared towards more experienced cruisers, often older and more affluent with time to vacation. Service and food quality are emphasized under the premium segment.
o Contemporary. Vessels found in the contemporary segment appeal to passengers of all ages and income categories with a focus on middle-income levels. While this segment has a healthy rate of past-passenger participation (estimated at between 30% to 50% of the industry), this segment is highly dependent on the continued introduction of new cruise passengers to the marketplace.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 10 o Budget. The budget segment tends to be a less expensive version of the contemporary market, with vessels generally older, smaller and offering fewer amenities. There are many of these operations existing in Europe. However, it is unclear with the implementation of the SOLAS regulations by 2010, whether this segment will be one that will be able to continue any growth through the acquisition of older vessels in the major world fleets.
Several other secondary market segments exist, including: Exploration and soft adventure cruises; niche cruisers; river cruises; and coastal operations. In addition, several tour operators have chartered vessels for their niche market segments.
Cruise capacity from the contemporary and premium segments of the North American consumer segments comprise the majority of Sydney’s cruise base. Holland America Line, a North American contemporary/premium brand, is the largest provider of domestic conventional cruises for the Atlantic Canada Region, particularly Sydney with more than 50% of the ports cruise capacity. This is mainly due to a summer deployment for the Maasdam which provides 18 sailings into the region. European and other North American cruise brands also visit Sydney, emphasizes the fall foliage months of September and October. We anticipate that the seasonal fall trend will continue over the mid- to long- term. However, we would also envision the deployment of at least two cruise vessels sailing during the summer season in the region over the long-term.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 11 Operator Market
Vessels Brand Group Segment Geo. Consumer
Carnival Cruise Lines 25 C NA
Princess Cruises 17 C / P NA
Cunard Line Carnival Corporation 3 P / L NA / UK
Seabourn Cruise Line 5 L NA
Holland America 13 P NA
Sub-total Carnival – North American brands 63
Costa Crociere 15 P E / A
AIDA Cruises 7 C Germany
P&O Cruises UK Carnival Corporation 7 C / P UK
P&O Cruises Australia 3 C AUS
Ocean Village 2 C UK
Sub-total Carnival – UK, European, others 34
Total for Carnival Corp. 99
Celebrity Cruises 13 P NA
RCI 24 C / P NA RCCL Pullmantur 3 C UK
Celebrity Xpeditions 2 P NA
Total for RCCL 42
Orient Line 1 C / P NA / E
NCL Star Cruises 13 C NA
Star Cruises** 4 C A / AUS
Total for Star Cruises 18
Selected Other Leading Operators
Crystal Cruises Crystal Cruises 2 L NA
Disney Cruise Line Disney Cruise Line 2 P NA Fred Olsen Fred Olsen Cruises 4 C / P UK Louis Cruise Lines Louis Cruise Lines 8 C / B E
MSC Cruises Mediterranean Shipping Cruises 11 C / B E
Regent Seven Seas Radisson Seven Seas 4 P NA
Silversea Cruises Silversea Cruises 4 L NA / E Key: Segments: C = Contemporary, P = Premium, B = Budget, L = Luxury Geo. Consumer: NA = North American, E = European, A = Asian, AUS = Australia, UK = United Kingdom Table 1: Primary Cruise Groups by Brand, Vessels & Market Segment, 2007 Sources: Cruise Industry News Annual and B&A 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 12 1.4.1 Cruise Vacationer Demographics
Although the cruise industry continues to strive toward globalization, the majority of cruise passengers are still sourced from two significant locations – North America and the United Kingdom. In 2006, these source markets accounted for more than 80% of the total worldwide cruise bookings. Continental Europe and Asia provide solid cruise numbers as well, although growth overall has been much slower.
Record cruise bookings were achieved worldwide despite the Iraq War and other security concerns, proving the resiliency and ability of the cruise industry to perform within the overall vacation market. The Passenger Services Association (PSA), the U.K. based cruise marketing group and Cruise Lines International Association (CLIA), North America’s cruise marketing body released studies that provide some indication as to the consumer trends of the industry and more importantly the potential cruiser profile that is critical to the long-term success of the industry within the vacation market. Much of the detail provided below is gleaned from these survey reports and other market sources as indicated.
North American Consumers
Consumer trends continue to be supportive of further industry growth worldwide. We highlight several of these6:
x Almost 51-million people have cruised at least once; and of these, nearly 29- million (10% of U.S. Population) have cruised within the past three years.
x The most likely number of North American cruisers over the next three years is 31-million with the best case of more than 50-million with incomes of more than $40,000 annually.
x Cruise passengers spent approximately US$1,690 per person on a typical contemporary weeklong cruise vacation inclusive of cruise fare and onboard expenses. Cruisers spend nearly 40% more than non-cruising visitors (US$1,180).
x The average cruiser has taken 3.4 cruises. Luxury cruise line passengers sail more with 9.1 cruises, followed by those who cruise with destination-driven cruise lines (8.4), premium cruise lines (5.9) and contemporary cruise lines (3.7).
x The average age of actual and potential cruise consumers continues to increase (age 48.3 in 1992 vs. 49 in 2006). Household incomes for cruise passengers are high, averaging US$104,000 in 2006 for North Americans, increasing from US$58,400 in 1992 and US$79,000 in 2000. As products continue to diversify, however, cruising (as evidenced by cruise prospects) continues to be considered by individuals with lower household incomes.
6 CLIA 2007 Cruise Market Profile, April 2007. Study conducted by TNS Travel & Transport.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 13 Representative Non-Cruise Category Cruisers Sample Vacationers
Average Age Mean Years 47 49 45
Average Income (1,000’s) US$94 US$104 $90
Male 46% 49% 49% Gender Female 54% 51% 51%
Married 80% 83% 79% Marital Status Divorced/Sep. 10% 10% 9% Single 10% 7% 12%
Full-time 56% 57% 56% Employment Status Retired 13% 16% 11% College Grad or 52% 57% 50% Education Higher Post Graduate 20% 23% 30%
Table 2: Cruise Demographic Profiles, North Americans Source: Cruise Market Profile, CLIA, 2007
x Approximately 67% of cruisers plan vacations between 4 months and 1 year in advance.
x Four out of five cruisers (79%) are interested in taking a future cruise. More than half (56%) of non-cruisers are interested in taking a cruise in the next three years.
x There is an increasing perception that online travel retailers provide the best cruise prices. Less than one in five cruisers and non-cruise vacationers now believe that the best price is available through a travel agency.
x Destination is paramount in vacation decision, followed by pricing.
x Canada & New England rankled 11th amongst the “Top 12” most appealing places for a next cruise – with the top ten being Caribbean/Eastern Mexico; Alaska; Bahamas; Bermuda; Hawaii; Mediterranean/Greek Islands/Turkey; West Coast of Mexico; Europe; Panama Canal; and Coastal U.S.
x Cruising is seen by a large majority of passengers as a good way to sample a geographical area/destination for future vacations. After sampling the geographical areas/destinations on their recent cruise, more than 75% say they will return for another type of vacation.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 14 1.6 Primary Regions of Cruise Deployment
Once focused primarily on the Caribbean and Mediterranean cruising regions, cruise operations are now found around the world. CLIA remains the primary source of detailed data on deployment by cruise sub-regions, and while not inclusive of all operators worldwide, this data provides a good overview of each of the primary cruise sub-regions present in the global marketplace.7 Inclusive of all cruise operators, the Caribbean remains the principal location for cruise capacity placement, followed by the Mediterranean, Northern Europe, Alaska and Mexico West (see Figure 5).8 In total, over twenty different primary cruise sub-regions are present within the global marketplace, with many of these consisting of even smaller deployment characteristics and typical itineraries.
N.N. EuropeEurope AlaskaAlaska 44 33 CaribbeanCaribbean 55 22 11 MediterraneanMediterranean MexicoMexico WestWest
Figure 5: North American Capacity Placement by Region, 2007 Source: Cruise Industry Annual and B&A, 2007 For North American lines, the Caribbean received a significant increase in terms of capacity placement between 1995 and 2006—over 15 million bed-nights—resulting from delivery and deployment of several of the industries new large vessels. Capacity growth was also very strong in the Mediterranean, with North American operators increasing their presence annually.
7 CLIA data, while one of the best data sets available, is not comprehensive as it largely excludes non-members. However, membership is not exclusively North American and many European-based lines increasingly choose to join CLIA. Member’s lines as of July, 2006, include: American Cruise Line, Carnival Cruise Lines, Celebrity Cruises, Costa Cruises, Crystal Cruises, Cunard Line, Disney Cruise Line, Holland America Line, MSC Cruises, Norwegian Coastal Voyages, Norwegian Cruise Line, Oceania Cruises, Orient, Princess, Regent Seas Cruises, Royal Caribbean International, Seabourn Cruise Line, Silversea and Windstar Cruises.
8Operations in seasonal cruising regions usually occur over a six- to eight-month period, with vessels repositioned to another seasonal or year round cruising region during the off-season. By example, operations in Alaska typically occur from late April through late September, with vessels transiting the Panama Canal to return to the Caribbean to offer cruise itineraries through the winter.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 15 % Change Region Bed-Nights 05 to 06
00 01 02 03 04 05 06 Caribbean 21,510,142 21,833,347 26,741,052 28,999,049 31,210,605 31,450,239 31,955,041 1.61% Alaska 4,197,332 4,698,538 5,052,907 5,265,159 5,913,967 6,417,134 6,356,226 -0.95% Bahamas 3,200,346 4,698,724 2,876,295 3,305,636 3,656,705 4,397,472 6,072,650 30.10% Bermuda 988,391 1,269,952 1,226,806 1,476,443 1,324,690 1,329,274 1,389,118 4.43% Transatlantic 1,015,625 1,129,669 1,005,665 1,145,651 1,425,596 1,747,363 1,467,492 -15.02% Canada / New 1,107,689 1,138,975 1,150,950 1,105,274 1,488,585 1,174,160 1,233,276 5.03% England World 414,342 613,046 582,314 375,384 462,934 460,670 336,027 -26,23% U.S. Coast East 1,402,429 80,312 147,422 837,540 60,072 34,056 80,951 137.70% Table 3: Cruise Capacity Placement by Region, North American Operators Source: CLIA, 2007 As presented deployment by North American operators in the Caribbean and Bahamas sectors have shown continuing annual increases with homeport deployments beyond the typical region – such as the Northeast US. Those areas of significance to Atlantic Canada are presented and include Canada & New England, Transatlantic and World cruises. Atlantic Canada receives a portion of cruise vessel calls from each of these market sectors. As such, the Region is dependent upon the continued development of these deployments over time. Table 3 provides a look at the specific markets of influence for the region. The Canada & New England market sector provides the majority of cruise traffic for the region. This sector is seen to a great degree as a regional niche market, and deployment trends are reflecting this within the cruise industry. Expansion will continue to occur through the influence of marketing activities directly to the cruise line industry, but to a greater degree growth will be influenced by consumer demand. Both Transatlantic and World sectors have seen minimal declines over 2006. However, growth is likely in each of these areas as vessels are deployed into the world cruise fleet.
The region competes to a much greater extent today with the worldwide cruise regions due to the expansion of the fleets, consolidated marketing efforts and ease of access for consumers to information on each of the cruise regions worldwide. Continued influence of the cruise line industry to focus on expanding per diems will further define their seasonal and weekly deployment patterns. This will be a primary factor in the continued deployments to the Atlantic Canada region and may well further define the cruise patterns therein as a niche market.
1.6 Cruise Vessel Growth Trends
Within this section cruise vessel growth trends and the relevant physical requirements of cruise facilities to meet the needs and expectations of the cruise vessel, operator and passenger are presented. This chapter specifically illustrates the requirements of the industry relevant to the construction and deployment of cruise vessels into the worldwide
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 16 cruise market and Atlantic Canada in general. A summary of the points include the following:
x In February 2006 Royal Caribbean International announced an order for the next generation of cruise vessel – Project Genesis - for delivery in fall 2009. Following, in September 2006 NCL contracted with Aker Yards to build two new 150,000- GT, 325-meter LOA cruise vessels capable of accommodating more than 4,200- passengers and crew. The vessels are scheduled for delivery in 2009 and 2010.
x Four small ships were also ordered in 2006 for the first time in more than five years – since the advent of American Classic Voyages. Pearl Seas Cruises have ordered two ships being built at Irving Shipbuilding in Halifax, Nova Scotia. These vessels accommodate 210-passengers each and are tentatively scheduled to be deployed along the Eastern Seaboard. For Sydney this could provide additional small ship deployments.
x The evolution of the cruise vessel has been one of the principal mechanisms propelling industry growth. Over the past five years, the newest and most popular generation of vessels continues to have greater volumes and lengths to accommodate the area needed for large scale outside cabin development. These vessels range in length from 965 – 1,200 feet and have lower berth passenger complements of between 1,950 and 3,600.
x For Sydney, the net result of the cruise vessel development trends is that current and future pier facilities, anchorages, tendering facilities and uplands areas will be needed to accommodate these large cruise vessels for the destination to remain competitive in the regional marketplace and be able to fully accommodate the future generation cruise vessels’ service requirements. This will include the ability to offer industry operators facilities and venues capable of accommodating a passenger complement upwards of 3,000 – 6,000 persons per vessel.
x Selection of a model design vessel(s) dictates a programmatic response for Sydney, one that will allow the destination to meet industry needs, maintain competitiveness in the region, and plan port-of-call operations as deemed viable and within best management practices in order to be a cruise tourism destination. Presently, Sydney is used by a variety of vessels as a port-of-call. We anticipate that this will continue into the future unless Sydney specifically chooses to focus on a particular type of cruise line or tourist. This is likely not in the best long-term interest of Sydney due to the overall stature of the port relevant to the competing ports in the region.
1.6.1 Cruise vessel newbuild program
Cruise lines have been highly successful in introducing new vessel inventory and developing onboard products that generated sustained interest in cruising. Lines continually work to improve the quality and quantity of on-board experiences with more diverse food and beverage venues, entertainment and deck activities, meeting and conference facilities, and recreation areas.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 17 Amongst the largest of their efforts is the discarding of smaller vessels and older capacity, and the creation of larger and more lavish vessels furnished with veranda-style outside cabins, grand central atriums, health spas, and other amenities found in the best land-based resorts became the norm in the mid-1990s. This trend has continued as cruise line brands introduce innovative products and services on the newest vessels to further differentiate themselves from the competition and generate renewed public interest in cruising. Consumers generally meet each new vessel launch with enthusiasm, and ultimately, increased passenger bookings. Atlantic Canada is in a unique position to benefit from the deployment of newbuilds into the major Northeast market as well as provide a cruise sector for the placement of secondary-tier vessels of more than 5-years old that provide added capacity to the region without taxing cruise line deployments.
Review of future vessel deliveries remains the primary tool used to project future industry passenger growth. Responding to cruise passenger demand, cruise lines continue to order new vessels, although at a more restrained pace than observed at the peak of vessel orders in the late 1990s and early 2000’s. As of August 2007, 37 new cruise vessels with a total berth capacity of 96,645 are scheduled for delivery through 2012. For comparison purposes, in December 2002 the forward cruise vessel order book contained 26 vessels with a berth capacity of 56,428. This is an increase of 32% in terms of berth capacity over a 5-year timeframe, with each new vessel currently on order carrying an additional 719 berths.9
In February 2006 Royal Caribbean International announced an order for the next generation of cruise vessel – Project Genesis - for delivery in fall 2009. It is approximately 43% larger than their current largest vessel delivered in spring 2006 – Freedom of the Seas. In addition, NCL contracted with Aker Yards to build two new 150,000-GT, 325- meter LOA cruise vessels capable of accommodating more than 4,200-passengers. The vessels are scheduled for delivery in 2009 and 2010. A third sister vessel in the series is on option for delivery in 2011. This move provides Star/NCL with the new large vessels required to fully develop the NCL fleet into a competitive North American brand, while also allowing for the transfer or deployment of older NCL vessels into the Star fleet.
Lower Berth Cruise Operator Vessel Name Gross Tonnage Cost (US$ Millions) Capacity
2007 AIDA Cruises AIDAdiva 68,500 2,030 $390 Carnival Cruise Line Carnival Freedom 110,000 2,974 $500 Costa Cruises Costa Serena 112,000 3,004 $627 Cunard Line Queen Victoria 90,000 2,014 $468 (To Be Delivered) MSC MSC Orchestra 90,000 2,568 $630 Princess Cruises Emerald Princess 116,000 3,100 $525 NCL Norwegian Gem 93,000 2,384 $500 (To Be Delivered) RCI Liberty of the Seas 158,000 3,643 $750
9 Project Genesis and the NCL newbuild orders account for a majority of berths per vessel. These figures are not inclusive of four small ship newbuild orders identified in Table 4.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 18 2008 AIDA Cruises AIDAbella 68,500 2,030 $378 Carnival Cruise Line Carnival Splendor 112,000 2,974 $584 Celebrity Cruises Celebrity Solstice 118,000 2,850 $641 Holland America Line Eurodam 86,000 2,044 $450 MSC MSC Poesia 90,000 2,568 $425 MSC MSC Fantasia 133,500 3,300 $550 P&O Cruises Ventura 116,000 3,100 $602 Princess Cruises Ruby Princess 116,000 3,100 $570 RCI Independence of the Seas 158,000 3,643 $828
2009 AIDA Cruises Unnamed 68,500 2,030 $390 Carnival Cruise Line Carnival Dream 130,000 3,608 $668 Celebrity Cruises Celebrity Equinox 118,000 2,850 $641 Costa Cruises Costa Luminosa 92,700 2,260 $528 Costa Cruises Costa Pacifica 112,000 3,004 $579 MSC MSC Splendida 133,500 3,300 $550 RCI Project Genesis 220,000 5,400 $1.2B NCL F3 150,000 4,200 $575
2010 AIDA Cruises Unnamed 68,500 2,050 $414 Celebrity Cruises Celebrity Eclipse 118,000 2,850 $698 NCL F3 150,000 4,200 $575 Costa Cruises Unnamed 92,700 2,260 $548 Holland America Line Unnamed 86,000 2,100 $567 MSC Cruises MSC Magnifica 90,000 2,568 $548 Oceania Cruises Unnamed 65,000 1,260 $530 P&O Cruises Unnamed 116,000 3,076 $535 RCI Project Genesis 2 220,000 5,400 $1.4B
2011 Carnival Cruises Carnival Magic 130,000 3,652 $738 Celebrity Cruises Unnamed 118,000 2,850 $798 Disney Cruise Line Unnamed 124,000 2,500 $899 Oceania Cruises Unnamed 65,000 1,260 $530
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 19 2010 Disney Cruise Line Unnamed 124,000 2,500 $899 Totals 33 95,325 Small Cruise Line Vessels Pearl Seas Cruises (2008) Unnamed 8,700 210 $64 Pearl Seas Cruises (2009) Unnamed 8,700 210 $64 Seabourn Cruises (2009) Unnamed 32,000 450 $250 Seabourn Cruises (2010) Unnamed 32,000 450 $250 Totals 4 1,320 Grand Totals 37 96,645 $22.2 B Table 4: Cruise Vessels on Order Worldwide, August 2007 Source: www.cruisecommunity.com and B&A, 2007
In addition, four small ships have also been ordered in 2006 for the first time in more than five years – since the advent of American Classic Voyages. Pearl Seas Cruises have ordered two ships being built at Irving Shipbuilding in Halifax, Nova Scotia. These vessels with 210-passengers are tentatively scheduled to be deployed along the Eastern Seaboard. It is anticipated that the last of the larger 100,000-GT plus vessels for delivery into the worldwide cruise fleet is far from over. Carnival Corporation has yet to jump into the fray with the potential for development of a mega-cruise vessel. However, based on recent decisions it is anticipated that Carnival Cruise Line may choose to build additional ships of their current class to provide new deployment capacity instead of opting for larger mega- ships. This trend will further affect deployment in the region as the market matures and the region continues to develop new cruise tourism offerings and provides enhanced incentives for potential cruise consumers.
1.6.2 Cruise vessel evolution
The evolution of the cruise vessel has been one of the principal mechanisms propelling industry growth. It has also required that cruise destinations—both the maritime port facilities handling homeport and port-of-call operations as well as the destinations themselves—evolve to meet the challenges presented by these vessels if they wish to participate in the large-scale segment of the cruise industry. Cruise vessels have advanced through a number of developmental phases; from the small, 500-passenger vessels of the 1970s to the rise of the Post-Panamax, 3,600-passenger vessels of the late 1990s to the sophisticated ultra-vessels of today (see Table 5).
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 20 Period Length (ft.) Draft (ft.) PAX Characteristics of the Period 1960 508 36 500 Vessels acquired & refurbished. Standard business model used with profitable 1970 705 32 650 results until the fuel crisis. Change in business model; experimentation 1980 803 29.5 1,500 with larger vessels and operating itineraries. Larger vessels becoming the destination. 1990 902 26.25 2,600 Shallower drafts. Mega-vessels that are floating cities. Focus on maximizing passenger capacity. One- 1997 965 26.25 3,600 region vessels not capable of Panama Canal Transit. Larger vessel volume concentrating on creating efficiencies with vessel design, 2000 1,000 29.5 3,000 outside cabin development, vessel services and flexible deployment. Freedom class, 160,000-GT. Allows for increased onboard revenue areas, largest 2006 1,000+ 29.5 4,000 vessel in the world status and large economies’ of scale. Product and service led design; new innovative marine hull design to support more Next 1,100 – 1,400 29 – 36 5,000+ above water structure. Separate apartment Generation towers, entertainment zones and amenities. Limited port deployment options. Table 5: Evolution of the modern cruise vessel Source: B&A, 2007
Over the past five years, the newest and most popular generation of vessels continues to have greater volumes and lengths to accommodate the area needed for large scale outside cabin development. These vessels range in length from 965 – 1,200 feet and have lower berth passenger complements of between 1,950 and 3,600. Cruise lines have focused on improved operational cost savings by ordering standardized hulls for multiple brands. By example, Carnival Corporation uses its Spirit-class vessel hull for Carnival, Holland America, P&O and Costa vessels.
Grand-, Destiny-, Voyager-class vessel orders, however, are not expected to disappear; several orders for each of these type vessels are still outstanding and it is likely that more will continue to be issued over the next decade. Costa was the first European operator to order a Concordia-class vessel based on the Spirit-class hull design. Carnival Corporation’s Queen Mary 2, Pinnacle project and RCCL’s newest Genesis Project vessel suggests that the quest for larger cruise vessels is not over (see Table 6). As illustrated
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 21 above Star/NCL has also placed a firm order for two 150,000-GT vessels carrying more than 4,200-passengers each in 2,100-lower berth cabins.
First Post - Today’s Tomorrow’s Tomorrow’s Type Panamax Post-Panamax Largest Vessel 1 Largest Vessel 2 Name Grand Princess Freedom of the Seas Genesis Project F3 Operator Princess Cruises RCI RCI Star/NCL Group Carnival RCCL RCCL Star Built 1998 2006 2009 2009/10 Pax (LBs) 2,600 3,634 5,400 4,200 Pax (Max) 3,000 4,200 6,400 5,200 GT 108,000 160,000 220,000 150,000 + LOA (ft) 950 1,112 1,181 1,066 Beam (ft) 118 150 154 / 214 Max 131 Draft (ft) 27 28 30 28 Air Draft (ft) 200 210 213 203 Table 6: Sample of Large Cruise Vessel Types Source: B&A, 2007 For Sydney, the net result of the cruise vessel development trends is that current and future pier facilities, anchorages, tendering facilities and uplands areas will need to be able to accommodate these large cruise vessels for the destination to remain competitive in the regional marketplace and be able to fully accommodate the future generation cruise vessels’ service requirements. This will include the ability to offer industry operators facilities and venues capable of accommodating a passenger complement upwards of 3,000 – 6,000 persons per vessel.
Based on our cruise line interviews and understanding of the cruise line market these next generation vessels (more than 1,050 to 1,400-ft.) will be for the most part purpose-built and intended for specific deployments. They become much more of a destination than even today’s vessels. Thus, while they are built and deployed for world cruising it does not necessarily imply that Sydney will be a port-of-call for this vessel type or they will sail within the region. It is more likely these will stay in itinerary patterns such as the Caribbean and Mediterranean where they have access to a variety of ports that can support cruise activities within a short distance in the region.
1.6.3 Design vessel requirements
Based on cruise line interviews and projection scenarios we have developed a design vessel requirement for port-of-call operations in Sydney. Based on the design vessel consideration can be given to each of the primary infrastructure types (criteria) required to support design vessel operations for Sydney with specific emphasis on the primary infrastructure of entrance channels, turning basins, anchorages, berth(s), any new
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 22 passenger terminal facilities, GTAs (Ground Transportation Areas) and other elements used to service cruise vessels in port.
Sydney presently has demand to serve both Panamax and post-Panamax vessels. In 2007, Sydney will welcome Princess Cruises’ Grand Princess.
In considering the types of vessels likely to be operating in the region over the short- (today through 4-years), mid- (5 to 9-years) and long-term (over 10-years), several important trends are worthwhile of consideration:
x The average length and size of cruise vessels on an international basis continues to increase. At present, the average vessel is approximately 700-ft. long, carries 1,400 passengers at 100% occupancy and is 12 years old. Based on our market assessment and specifically cruise line input cruise vessels with lengths of between 850-ft. and 985-ft. will likely become the operational norm and be deployed in most major cruise regions—inclusive of the Atlantic Canada region—today and over the next decade. Some larger vessels, such as the Queen Mary 2 will also call periodically.
x New SOLAS rules in 2010 will inevitably hasten the withdrawal from service a considerable number of vessels that were built before 1969. This series of SOLAS rules looks to eliminate all wood from cruise vessels. There are very few vessels left in the conventional worldwide fleets, thus there will be no significant impact on the region, specifically Sydney as most, if not all vessels from the North American fleet currently calling meet and exceed these standards.
x All of the 33 large vessels scheduled for introduction over the next five years have a capacity of over 2,000 passengers. Twenty-one vessels have capacity of over 2,500-passengers. Project Genesis and the NCL vessels, scheduled for delivery in 2009/10, each has an estimated capacity of more than 4,000 to 5,000-passengers.
Based on deployment practices of several of the major North American and European lines—both regional and international—we envision that they intend to place larger vessels in the region in the mid to long-term. These ships are likely to replace smaller vessels in fleets and would not necessarily be the largest ships of the worldwide fleet. A Voyager-class ship has already sailed in the region and is presently calling in Bermuda. The 3,840-passenger Explorer of the Seas is scheduled to call in Sydney 4 times in 2008.10 This will challenge the limits of the city’s tourism infrastructure as well as the shore excursion operations in the region.
1.6.4 Suggested design vessels for Sydney
The previous discussion, cruise line stakeholder outreach and data provided throughout this report had as one of its purposes the discovery of what design vessel(s) Sydney should plan demand scenarios and cruise operations planning scenarios on for the future. Selection of a model design vessel(s) dictates a programmatic response for Sydney, one that will allow the destination to meet industry needs, maintain competitiveness in the
10 This is the full capacity of the vessel. Lower berth capacity is 3,114-passengers.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 23 region, and plan port-of-call operations as deemed viable and within best practices to be a viable cruise tourism destination. As a result of the previous analysis, the following design vessel particulars were established (See Table 7):
Type Design Vessel 1 (Panamax) Design Vessel 2 (post-Panamax)
Pax / Crew 2,000 to 2,600 (pax) / 850 (crew) 3,000 to 4,000 (pax) / 1,200 (crew) GRT Up to 100,000 + 100,000 LOA (ft) 900 to 985 985 to 1,200 Beam (ft) Up to 118 Over 118 (generally 130 to 165) Draft (ft) Up to 28 28 to 32.8* Air Draft (ft) Less than 195 Up to 210 Note: Suggested design vessels represent primary ranges of the majority of vessels within these categories. *Queen Mary 2 has a vessel draft of 10m. Table 7: Suggested Design Vessels for Sydney Source: B&A, 2007
These design vessels incorporate the features of the various classes that are industry standards, including the Destiny, Grand, and Voyager. The Freedom, Genesis and F3 classes as Super post-Panamax vessels are not incorporated as these ships will primarily not sail on itineraries that would encompass the Port of Sydney over the long-term. Planning for these design vessels as described, along with smaller ships currently sailing within the region and those on the new-build order list provides Sydney the flexibility it needs over the mid- to long-term to absorb changes in the cruise industry.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 24 2.0 Atlantic Canada Cruise Region
2.1 Atlantic Canada Cruise Trends
The region generally consists of cruise operations originating from northern U.S. Atlantic Seaboard homeports to ports-of-call in the US New England states and Eastern Atlantic Canada. Cruises range from 4- to 12-days in length and run from May through October, with the majority of offerings occurring during the months of August through October. Key cruise itineraries influencing deployments and thus cruise passenger throughput to the region include World, Transatlantic, Bermuda, small ship coastal and other niche markets with smaller influences on individual ports and Provinces within Atlantic Canada.
Overall, the Atlantic Canada region is relatively new to the modern cruise industry despite its relationship to the development of Cunard Line.11 As illustrated within the World Cruise Market section below the region has mainly developed over the past 10-years in terms of increasing passenger throughput. This evolution continues as the region develops from a North American niche cruise tourism market into a world cruise market sector. While the region is focusing on its growth in the lucrative cruise tourism sector, over the past five plus years the main Canada & New England cruise sector has now begun competing for cruise vessel deployments with worldwide cruise sectors such as Bermuda, Alaska, Mediterranean, Scandinavia & Russia and the Caribbean amongst others. This is a reflection of the growth of the cruise industry over time and the continuing development of cruise vessel deployments based on more accurate business models inclusive of marketing input based on cruise passenger demand cycles, financial revenue and expense analysis, and other key factors. Competition for cruise deployments has grown significantly over this period.
Royal Viking Cruise Line was first credited with developing the “Fall Foliage” cruise in the early 1980’s that the Atlantic Canada region is most well known for overall. Sailing from New York City, this cruise was typically a 10- to 12-day voyage calling on small New England towns and Atlantic Canada cities, terminating in Montreal, Canada. From this point, the cruise pattern would reverse and return to New York City. It wasn’t until the tremendous growth of the cruise industry centered on the newbuild programs in the mid- 1990’s that this market started its ascent as a more mainstream itinerary pattern. Part of the reason for this is due to the number of cruise vessels making Transatlantic sailings from the shipyards in Europe and repositioning from the increasingly lucrative European summer cruise markets of the Mediterranean and Northern Europe. Even then, the itinerary was concentrated during the months of September and October to capture the fall colors with cruise operators typically making a limited number of 7-, 10- or 12-day sailings through the region before departing for their winter markets in the Caribbean. In concentrating the sailings into small groups the cruise lines have been able to keep passenger pricing at a high level.
North American industry capacity placement in Canada & New England grew by 240% between 1995 and 2001, with several cruise lines—most notably, Carnival—pointing to this region as the next Alaska. Since that time growth has become steadier overall with
11 Cunard Line’s founder – Samuel Cunard was a resident of Halifax, Nova Scotia.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 25 normal saw-tooth patterns of growth reflecting deployment trends related to both regional and worldwide cruise capacity movements. In 1998, Holland America began a series of 7- day cruise patterns into the region. In 1999 and 2000 Carnival Cruises, Premier and Regal began a series of 3-, 4-, 5- & 7-day cruise itinerary patterns from New York marketed to take advantage of the tremendous drive-cruise and short fly-cruise passenger potential of the northeast. Additionally, NCL extended the season in 2001 from May through October to tap into their share of the North American market. For 2002, Carnival offered additional 7-, 10- and11-day cruise options from New York. Celebrity Cruises offered 11-day sailings from Baltimore placed into off-peak sailing times (late May & early Sept.) to attract a market that may typically opt for a Fall Foliage sailing in late September or October.
The events of September 11th have influenced homeport deployments of cruise vessels worldwide and stimulated growth of several niche regions. For the Atlantic Canada region the primary homeports of New York and Boston have now expanded their offerings further diluting the overall potential of cruise passengers to the region. As an example, all of the major cruise lines now offer seasonal or year-round cruises to the Caribbean and Bahamas. Additionally, new US homeports along the East Coast, such as Philadelphia, Baltimore, Norfolk, Jacksonville and others have provided key homeport options for further cruise deployments.
In 2003, the major cruise lines began to experiment with the deployment of larger ships within the region. Princess, Carnival and Royal Caribbean all placed post-panamax vessels into the region on a number of itinerary patterns. In 2004 Royal Caribbean operated the Voyager of the Seas on 5- and 9-day itinerary patterns mixing Canada & New England (5-day) and Caribbean (9-day) destinations. This rotation was compared to similar 5-/9 rotations where Bermuda was exchanged for the 5-day leg. The apparent result, based upon 2005 itinerary changes, was that the Bermuda leg delivered greater ultimate earnings for the cruise line and resulted in a 2005 reduction in Canada & New England capacity placement.
Figure 6: Length of Sailings for Atlantic Canada, 2007 vs. 2008 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 26 For 2006 and 07 HAL was the primary operator due to its summer deployment of the Maasdam from May through October. Princess, RCI, NCL and Celebrity each offered a variety of cruise patterns in this sector in the fall foliage months. The European cruise brands of Hapag-Lloyd, Classic International, Saga and P&O Cruises each made their way through the region as part of a Transatlantic or World cruise pattern. Traditional ports-of- call include Halifax, Saint John, Bar Harbor and Quebec City. For sailings of more than 7- days, Sydney, Saguenay, Charlottetown, Newport and Portland all compete for cruise traffic as well.
For 2007 and moving forward the cruise industry appears to be moving toward longer cruise itineraries in the region (7-days plus) from the larger markets of New York and Boston. See Figures 6 and 7 for further detail in terms of the growth of the length of sailings for 2007 and 2008 based on current advertised cruises. The longer cruises provide less direct passenger impact to the marquee destinations, as the overall number of cruise call opportunities falls as length of sailings increase in the region. Thus, as the region grows the overall spread of passengers to more ports throughout the region will increase. This is beneficial to the Provinces overall as the “wealth” of the cruise industry is spread out more widely. This trend of increased sailing lengths reflects the cruise industries renewed marketing efforts in the region of promoting sailings as a premium niche cruise market experience. Cruise brands are preferring to concentrate on increased per diems and fewer cruises during the season overall. As shown, from 2007 to 2008 the total number of sailings of more than 7-days has increased almost three-fold. Passenger numbers have followed this trend to a degree as well with larger vessels being placed in the 7-day plus market. While longer sailings provide less total passenger impact to the region due to fewer sailings within the cruise season, this will likely allow for more stable growth over the mid- to long-term. Whereas the prevalence of shorter cruise patterns in the region results in more unstable growth as reflected in the past deployment efforts of RCI and others.
Figure 7: Passenger Throughput Length of Sailings - Atlantic Canada, 2007 vs. 2008 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 27 Table 8 provides an overall view of the 2007 Atlantic Canada cruise capacity as broken down by fleet and brand. This is only a part of the broader Canada & New England Region that also encompasses the East Coast of the US, Transatlantic, World and other niche sailings that do not necessarily call within the Atlantic Canada ports, but pass nearby due to deployment planning, market demand or other factors. As illustrated some 103 cruises with more than 217,000-passengers were identified in the region. The Carnival Group provides the majority of the sailings in the region with 63 cruises and 129,000- passengers on Canada & New England cruise patterns. Three European brands are also represented in the cruise mix on either Transatlantic or World cruises passing through the region. Atlantic Canada ports also provide support destinations to Bermuda on some sailings due to weather conditions and vessel requirements. Small ships (Cruise West and ACCL) sail around the Atlantic Canada region, staying within the lower US East Coast or St. Lawrence Seaway.
Passengers Total Group Cruise Line Vessel Sailings Throughput (Pax Capacity)
Carnival Carnival Victory 2,758 23 63,434
QE2 1,890 1 1,890
Cunard QM2 3,108 2 6,216
sub-total 4,510 3 7,106
Maasdam 1,258 17 21,386
HAL Veendam 1,258 4 5,032
sub-total 2,532 21 26,418
Artemis 1,260 2 2,520 Carnival Carnival P&O Aurora 2,050 1 2,050
sub-total 2,520 3 4,570
Crown Princess 2,600 6 15,600
Princess Grand Princess 2,600 4 10,400
sub-total 5,200 10 26,000
Seabourn Seabourn Pride 208 3 624
Sub-Total 63 129,152
Celebrity Constellation 2,000 3 6,000
Explorer of the Seas 3,840 6 23,040
RCCL RCI Grandeur of the Seas 2,440 8 19,520
sub-total 6,280 14 42,560
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 28 Sub-Total 17 48,560
Norwegian Dawn 2,224 5 11,120 NCL Norwegian Spirit 2,340 9 21,060 Star Star
Sub-Total 14 32,180
Crystal Cruises Crystal Symphony 940 5 4,700
Fred Olsen Black Watch 798 2 1,596
Hapag-Lloyd Deutschland 650 1 650
Saga Holidays Saga Ruby 655 1 655
Other Operators Leading Sub-Total 9 7,601
TOTAL 103 217,493 Table 8: Cruise Capacity Placement by Cruise Operator, 2007 Source: ACCA and B&A, 2007 Another key growth indicator is the continued development of European cruise operators in the region. In 2008, AIDA will place a vessel in the region along with Japan Cruise Line, P&O, Saga, Fred Olsen, Phoenix Reisen and Cunard Line. This continued development will allow the region to slowly trend toward the further seasonal deployment of cruise patterns for the European market. Due to the potential growth opportunities of the European consumer market and the historical linkages of the Atlantic Canada region to Europe, it makes sense for an improved cruise standing overall.
Passengers Total Group Cruise Line Vessel Sailings (Pax Capacity) Throughput
Aida AIDAaura 1,266 5 6,330
Carnival Carnival Victory 2,758 23 63,434
QE2 1,890 1 1,890
Cunard QM2 3,108 1 3,108
sub-total 2 4,998 Carnival Eurodam 2,044 4 8,176
HAL Maasdam 1,258 17 21,386
sub-total 21 29,562
P&O Aurora 2,050 1 2,050
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 29 Caribbean Princess 3,100 9 27,900
Royal Princess 710 5 3,550 Princess Sea Princess 1,950 4 7,800
sub-total 18 39,250
Sub-Total 70 145,624
Celebrity Constellation 2,000 3 6,000
Explorer of the Seas 3,840 8 30,720
Grandeur of the Seas 2,446 3 7,338 RCI
RCCL Jewel of the Seas 2,501 7 17,507
sub-total 8,280 18 55,565
Sub-Total 21 61,565
Norwegian Dawn 2,224 4 8,896
Norwegian Dream 2,159 4 8,636
NCL Norwegian Jewel 2,376 3 7,128
Star Star Norwegian Majesty 1,462 4 5,848
Norwegian Spirit 2,340 6 14,040
Sub-Total 21 44,548
Crystal Cruises Crystal Symphony 940 4 3,760
Fred Olsen Balmoral 1,011 2 2,022
Hapag-Lloyd M/V Bremen 164 3 492
Japan Cruise Line Pacific Venus 720 1 720
Pearl Seas Cruises Pearl Seas 165 12 1,980
Phoenix Reisen Amadea 600 1 600
Other Leading Operators Operators Leading Other Polar Star Expeditions Polar Star 94 1 94
Saga Holidays Saga Ruby 655 2 1,310
Sub-Total 26 10,978
TOTAL 138 262,715 Table 9: Cruise Capacity Placement by Cruise Operator, 2008 Source: ACCA and B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 30 In 2008, sailings within the Atlantic Canada region expand to at least 138 sailings with more than 262,000-passengers. This may increase further over the course of the next few months as some cruise operators finalize their 2008 schedules. The percentage disbursement of sailings and passengers by corporation and brand remains relatively even as that of 2007. Finally, the regional development of small cruise vessel deployments, such as Pearl Cruises and Polar Star Expeditions will also greatly assist in the enhancement of smaller ports catering to these vessel types and the additional consumer marketing strength of this small robust cruise niche market. This last factor long-term may provide the greatest impetus for growth as the Atlantic Canada region competes in the global cruise tourism market.
Figure 8: Historic Canada & New England Cruise Passenger Capacity, 2000 - 2007* Source: ACCA and B&A, 2007 Historically, the Canada & New England region overall (encompassing Atlantic Canada, New England, US East Coast, Transatlantic, World and niche sailings) has grown at a relatively consistent pace. See Figure 8.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 31 Figure 9: ACCA vs. Regional Annual Capacity Changes, 1997 - 2007 Source: ACCA and B&A, 2007 From 2000 and a passenger level of approximately 172,000-passengers the region has grown to almost 240,000-passengers in 2007. This is marked by an approximate 31% growth over the period, or 3.93% per annum.
Deviations from this growth have occurred in specific segments of the Canada & New England region encompassing ports within Atlantic Canada. As illustrated in Figure 4, from 2000 to 2002 the region experienced an overall loss of traffic due to the demise of Premier Cruises and the movement of 2 NCL vessels and 1 Carnival vessel from the region. This directly affected throughput to the main Atlantic Canada ports of Halifax and Saint John. Recovery then took place in 2003 with the deployment of RCI’s Voyager of the Seas to the region. The following year this vessel was pulled due to lower than anticipated per diems, as well as the potential opportunity for increased expansion to the highly regarded Mediterranean cruise region for a Voyager-class ship in 2004.
Recovery from this downturn has continued over the past two years within the overall Canada & New England cruise market. Growth has been much slower over this period for Atlantic Canada ports as the deployments have preferred longer sailings, which provide less direct impact to individual ports and more overall impacts to additional ports in the region such as Charlottetown and St. John’s, amongst others. Moving forward it is envisioned that the Atlantic Canada region would benefit from the increased deployments of cruise vessels into the non-traditional cruise itineraries inclusive of Transatlantic, World and niche small cruise vessels sailing along the Atlantic Canada Coast and venturing into the Newfoundland & Labrador and St. Lawrence regions. This increase in deployments will generate additional throughput outside of the Canada & New England season.
Figure 10 provides a snapshot of the overall growth of the individual ports in the region over the 10-year period. All of the ports have seen some level of growth over the period dependent upon their value to the cruise line industry in terms of tourist destination driver, location characteristics for itinerary planning purposes, and other more subtle factors that
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 32 are mainly driven by each cruise line’s specific consumer market. Distribution of passengers amongst the Atlantic Canada ports has become more through as the industry has adjusted itinerary patterns to adjust for consumer market demand. Essentially, this is driving longer sailings in the region. Halifax and Saint John continue to be the key recipients of cruise tourism traffic to the region. However, Sydney and Charlottetown have made strides in capturing more market share as well. These are primarily second tier ports that capture vessels sailing on cruises longer than 8-days. As the growth continues in the region there is also a strong likelihood that smaller ports may also see additional cruise calls aimed at the small niche cruise markets.
Figure 10: Cruise Passenger Throughput - Atlantic Canada Port, 1997 - 2006 Source: ACCA and B&A, 2007 Statistics provided by the ACCA and confirmed through similar numbers found in the 2007 Cruise Industry News Annual Illustrate the overall growth of the region in the combined cruise port throughput in Figure 11. Total estimates are provided for the years 2007 and 2008 based on current cruise line berth requests as provided through the ACCA and public cruise sales. This illustration indicates an overall rise from 92,000-passengers to more than 525,000-passenger calls in the Atlantic Canada ports over the period. This is more than a 400% increase. Due to the small overall cruise capacity in the region at this point in its cruise tourism evolution, even minor movements of vessels or changes in vessel size significantly impact the overall growth numbers.
It is also important to note that the throughput illustrated in the chart below offers significant economic impacts to the communities and surrounds through cruise passenger participation in shore excursion programs, independent sightseeing, retail and restaurant, and a variety of other experiences. Additionally, many studies on the cruise tourism
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 33 industry also indicate the potential for increase return visitation based on the visit of a cruise passenger.12
Figure 11: Historic Cruise Passenger Throughput (All Ports) to Atlantic Canada Region, 1997 – 2008* Source: ACCA, CLIA, and B&A, 2007
Figure 12: Total Cruise Calls to All Ports in Atlantic Canada, 1997 – 2008* Source: ACCA and B&A, 2007
12 The Florida-Caribbean Cruise Association conducts annual passenger surveys in the Caribbean region. Surveys indicate return visitation can fall between 5 to 35% based on the destination. ACCA has also conducted similar surveys.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 34 Similarly, overall cruise calls to the ports in Atlantic Canada have also grown over the period. The obvious shift in vessel deployment is more prevalent when analyzing Figure 12 due to the increasing vessel capacity in the worldwide cruise fleet. Additional cruise vessel information provided within the world section of this letter report further supports this argument. Again, estimates based on ACCA figures to date are applied for the years 2007 and 2008. Growth of vessel calls will likely remain relatively flat over the long-term based on world trends. However, we also see that the majority of the cruise brand vessels in Atlantic Canada today are smaller than the worldwide norm. This trend is likely to continue simply due to the nature of the region as a niche market. This means that the industry will likely grow the region more slowly with smaller vessels over time and concentrate on growing the per diem by deploying vessels onto longer itinerary patterns with more ports-of-call in and outside of the Atlantic Canada ports region to entice consumer market participation.
Figure 13: Cruise Passenger Vessel Capacity in Atlantic Canada, 1997 – 2008* Source: ACCA and B&A, 2007 Finally, to begin assessing the region overall we have looked at the figures provided by the ACCA for the Atlantic Canada region overall and provided a comparison with similar numbers produced by the Cruise Line International Association and Cruise Industry News Annual for the Canada & New England market in terms of overall port visit throughput.
First, this comparison illustrates that the growth trends in the figures are consistent and can provide a baseline for use as future projection indicators. Additionally, the ACCA numbers account for vessels outside of the standard Canada & New England patterns. The CLIA statistics only consider those cruise operators that are a part of the association, thus some small international lines that call in the Atlantic ports may not be included.
Growth of the region in the long-term will likely resemble the trends over the past 10- years. The continued expanding new-build order book demands new destinations over at least the next 3 to 6-years in order to meet the supply-led interests of the cruise industry. While our projections will look to a 15-year horizon, we concede that projection numbers
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 35 over the 5 to 7-year range are subject to many world political and consumer market factors that are difficult to predict today.
Figure 14: Historic Passenger Throughput for Atlantic Canada, 1997 - 2006 Source: ACCA, CLIA, Cruise Industry News Annual and B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 36 3.0 Sydney Cruise Operations
3.1 Sydney overview
This section analyzes the current situation for the Port of Sydney in terms of cruise tourism and looks at the cruise sub-regions and itinerary patterns directly relevant and impacting the Port of Sydney cruise operations. In the section that follows, each is discussed in terms of the characteristics of vessel deployment, passenger demographics and volumes, leading regional operators and itinerary composition. We also discuss the relevance to each for present and future operations to Sydney.
x In 2007 the Port of Sydney will host approximately 48,812-cruise passengers (based on lower berths) on 35 sailings, a 0.9% increase over the previous year. In 2008 the Port of Sydney will see an approximate 76.4% increase in cruise passenger traffic to more than 86,000 on 51 cruise calls. This increase is driven by increased large vessel deployments by Princess, RCI, Celebrity and NCL Cruises;
x Over the past five years (2003 – 2007) overall growth has been poor for Sydney (- 1.1%) due to a combination of leveling in the region, competition and a focus on shorter than 7-day cruise patterns. This has shifted for the 2008 cruise season and is reflective of the general trend in cruise growth which features a step up pattern over time;
x Sydney’s strength in terms of strategic fit is to serve primarily as a port-of-call for the regional Canada & New England deployment patterns; and,
x In general, Sydney fits into most of the cruise sectors given its geographic location. However, its visitor-appeal is likely lower than its marquee competitors in the region – namely Halifax. For the most part, Sydney competes directly with Charlottetown, PEI and Saint John, NB for cruise traffic on the Canada & New England itinerary patterns and secondarily with Halifax, Nova Scotia.
3.2 Sydney’s current situation
In 2007 the Port of Sydney will host approximately 48,812-cruise passengers on 35 sailings, a 0.9% increase over the previous year. In 2008, Sydney will see an approximate 76.4% increase in cruise passenger traffic to more than 86,000 on 51 cruise calls. Over the past five years overall growth has been stagnant in Sydney (-1.1%) due to a combination of leveling in the region, competition and a focus on shorter than 7-day cruise patterns. This has shifted for the 2008 cruise season. HAL continues to be the predominant cruise line for Sydney in 2007 and 2008 with 25 and 24 calls respectively and more than 34,000- passengers annually. In fact, for the whole of the region at present HAL is the dominant operator due to the summer deployment schedule.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 37 Figure 15: Sydney Cruise Line Activity, 2007 Source: B&A, 2007
Figure 16: Sydney Cruise Line Activity, 2008 Source: B&A, 2007 In 2008, with increased throughput for the Port of Sydney additional vessels and passenger capacity are supplied by RCI, which had no presence in Sydney in 2007; Princess Cruises; and 4 calls by AIDA (German cruise vessel). HAL is still dominant, but the overload capacity for Sydney is spread out amongst more cruise lines, which is beneficial to Sydney due to the transient nature of the industry. In 2008, there are 5 dates which will have two cruise ships in port and one date (Sept. 27, 2008) with three vessels and approximately 5,500-passengers (Sea Princess, Explorer of the Seas, Saga Ruby) with the two latter ships at anchor. Due to the number of tender passengers from the RCI vessel, this will be a very operationally challenging day for the Port of Sydney from a transportation and tourism perspective; however, in 2007 the Port appears to have met three-ship challenges similar in
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 38 scope on two separate occasions. There is a concern on behalf of the cruise industry as to the volume of visitors that can be supported in Sydney based on the present tourism infrastructure. The lack of a second berthing facility provides a limiting factor for larger ships as it is difficult to conduct tender operations due to the passenger volume. Other prohibitive factors include timing of the shore excursion operations, movement of independent passengers, and direct economic impacts from both visitors and crew due to the requirements and additional time required for a tender operation.
Figure 17: Cruise Passenger Throughput, 2000 – 2008* Source: B&A, 2007
Figure 18: Cruise Calls, 2000 - 2007 Source: B&A, 2007 Over an eight year period Sydney has seen tremendous growth in cruise tourism as illustrated by Figure 17. The largest jump in activities occurred following the
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 39 redeployment of the North American cruise fleet to homeland cruise patterns following the September 11 terror incident. Since that time Sydney has seen minimal growth in passenger throughput. The year 2008 will see a large jump for the Port of Sydney in passenger throughput. Cruise calls to Sydney have decreased the past three years since a high in 2004 of 66 calls. See Figure 18. The vast majority of cruise calls are seen during the months of September and October. Sydney receives many of the large vessels that sail in the region. The overall capacity of cruise ships calling in Sydney has more than tripled over the time from 564 to 1,688-passengers per ship in 2008. The jump in capacity from 2007 at 1,395 to the 2008 average is driven to some degree by the Explorer of the Seas calling with 3,114-passengers. At Present, Sydney does not capture any of the smaller coastal cruise vessels or yacht-types sailing within the region as they prefer the ports of Louisburg and Baddeck. The average annual increase in passenger capacity per ship has been approximately 11%. See Figure 19.
Figure 19: Cruise Passengers Per Vessel, 2000 – 2008* Source: B&A, 2007 As discussed in section 3.1 the Atlantic Canada region is primarily dependent upon 7-day plus sailings based on the “fall foliage” cruise market to increase overall cruise passenger capacity at present. Figure 20 illustrates the throughput trend pattern for the Port of Sydney over the past 8 cruise seasons. Primarily, the fall foliage pattern with the majority of cruise calls occurring in the months of September and October has continued throughout. However, there has also been a subtle increase in cruise calls in May and June due to the HAL summer deployment program. The drop in July is due to the movement of vessels to other markets with increased per diems during that particular period such as the North Atlantic, Northern Europe or Bermuda as shown for 2006 and 2007. Based on our cruise line discussions we anticipate that the trend will continue into the mid-term, and there is a possibility for increased summer deployments as consumer demand grows and higher per diems can be obtained.
Figure 21 provides a similar illustration using vessel calls on a monthly basis. The pattern reflects the seasonality of the Atlantic Canada cruise region, the overall increase in
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 40 capacity of the vessels over time and the increased summer deployment from 2004 onwards.
Figure 20: Historical Passenger Throughput Pattern by Month, 2000 - 2007 Source: B&A, 2007
Figure 21: Historical Vessel Throughput Pattern by Month, 2000 - 2007 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 41 Figure 22: Historical Percentage of Passenger Throughput by Day, 2000 - 2007 Source: B&A, 2007 Figure 22 shows the vessel call patterns by day of the week. This pattern for Sydney is reflective of 7- and 8-day cruise patterns.
Figure 23: Historical Calls Per Day, 2000 - 2007 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 42 Based on the regional trends we anticipate that the mid-week days will continue to carry the majority of cruise calls. However, the patterns may not be as clearly defined as the industry moves into 10-day and open-jaw patterns in the region.
Finally Figure 23 reflects the combined annual calls for the Port of Sydney and begins to address the future requirements for berth and/or anchorage capacity. Based on this chart, a vast majority of days when cruise vessels visit the Port of Sydney are single calls. In 2004 Sydney peaked with 9 days with 2 ships in port. In 2006 there was a maximum of four days with 2 ships in port and for 2007 there are two days with 3 ships in port with 6,000- passengers. For 2008 we see five days with 2 ships in port and one day with 3 vessels and more than 5,700-passengers.
3.3 Cruise sectors and itinerary patterns impacting Sydney
To provide an understanding of the vessel movements, sub-regions, and itineraries offered in the Atlantic Canada region, specifically those with relevance to port-of-call operations to Sydney, we have identified and reviewed several cruise market deployment patterns in detail. Cruise sub-regions and itinerary patterns reviewed include the following:
x Canada & New England;
x Atlantic Coast (Small Ship Deployments);
x Transatlantic; and
x Round-the-World.
Canada & New England
Overview
The region generally consists of cruise operations originating from northern U.S. Atlantic Seaboard homeports (primarily Boston, Cape Liberty and New York) to ports-of-call in the New England States and Canadian Maritime Provinces. To a lesser extent the ports of Montreal and Quebec City are also used for homeport operations. Cruises range from 3- to 12-days in length and run from May through late October, with the majority of offerings occurring during the months of September and October.
In the mid-1990’s this sector started its ascent as a mainstream itinerary pattern due to the number of ships making Transatlantic sailings from the shipyards in Europe, and repositioning from the increasingly lucrative European summer cruise markets of the Mediterranean and Northern Europe. Today, the itinerary is primarily concentrated during the months of September and October to capture the fall colors with cruise lines typically making a limited number of 7-, 10- or 12-day sailings through the region before departing for winter cruise sectors in the Caribbean. In concentrating the sailings into small groups the cruise lines have been able to keep per diems13 at a mid to high level.
13 Per diems in the cruise industry represent fares per day, per passenger. It is commonly used to compare the fares of different cruise lines.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 43 All of the major cruise consortiums are present in this market sector, with HAL as the primary operator due to its summer deployment of the Maasdam on 18 calls from May through October. Princess, RCI, NCL and Celebrity each offer a variety of cruise patterns in this sector in the fall foliage months. The European cruise brands of Hapag-Lloyd, Cunard, AIDA (2008), Fred Olsen, Saga and P&O Cruises each make their way through the region in this sailing sector or as part of a Transatlantic or World Cruise pattern.
Traditional ports-of-call on round trip sailings from the northeast US homeports of 7-days and less include Halifax, Bar Harbor and Saint John. For sailings of more than 8-days and some one way patterns using Quebec City and Montreal as homeports will also use the ports of Sydney, Corner Brook, Saguenay, Charlottetown, Newport and Portland which all compete for additional regional cruise traffic. Most of the ports-of-call listed have invested into the development of marine and upland infrastructure to support the growth of the cruise industry in the region, while also supporting local business and regional tourism development.
Impact / Relevance to Sydney
Sydney is in a solid position to accommodate regular port-of-call activities associated with the Canada and New England market sector on sailings of greater than 7-days in duration and those that are not round trip to either Boston, New York, etc. given its distance from the region’s principal homeports and ports-of-call in the region. Based on our analysis and cruise line feedback the cruise industry is moving toward extended cruise itineraries in the region (more than 8-days) from the larger markets of New York and Boston. This bodes well for increased opportunities for the Port of Sydney to increase its cruise throughput. The mainstream ports (particularly Bar Harbor and Halifax) provide a high level of name recognition to potential cruise passenger familiar with the region, while Sydney is a secondary port in this regard. Based on cruise line feedback, this lower recognition factor actually plays well for Sydney, by lowering the passenger expectation level of the port. Sydney is in a poor geographic position to provide for product offerings due to speed & distance patterns from which 4-, 5-, and some 7-day cruise itinerary patterns on closed-jaw itineraries14 can be derived. The primary ports of Bar Harbor (USA) and Halifax (Nova Scotia) provide the initial basis for building an itinerary on this pattern. Following the placement of these key “marquee” ports in the itinerary the cruise lines then choose between the secondary ports of Portland (USA), Newport (USA), Saint John (New Brunswick), Charlottetown (Prince Edward Island) and Sydney (Nova Scotia).
Presently, New York and Boston are the drivers of growth for the Canada & New England cruise market. They provide the essential berth capacity, airlift, hotel and access to the critical passenger source marketplace, besides being geographically well positioned to offer several itinerary patterns and cruise durations. Both homeports are serviced by large hub airports with significant scheduled airlift at reasonable price levels, are very attractive in terms of pre- and post-cruise stay-over packaging, and have an expanding port infrastructure base that can serve the largest cruise vessels. These strengths will likely keep the vast majority of U.S. cruise embarkation traffic at these two facilities as the Canada & New England market continues to mature. Cruise lines may need to re-think deployment patterns based on berth availability in New York in the summer months, should the sector expand into the mid- to long-term, due to increasing use of berths on key weekend days for Bermuda and Caribbean sailings.
14 A closed-jaw itinerary is one that returns to the same port from where it started its voyage.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 44 Atlantic Coast (Small Ship Deployments)
Overview
The Atlantic Coast cruise sector is seeing increasing growth opportunities associated with operations by small, niche regional cruise operators. The sum contribution in terms of annual passenger throughput, however, is small resulting from the use of vessels with capacity levels generally below 200-passengers. Additionally, larger mass-market vessels are using a routing inclusive of some Atlantic Canada ports and U.S. East Coast destinations en route to the Caribbean from a Canada & New England cruise season. Mainly these larger ships depart from Montreal, while the smaller vessels, such as American Cruise Lines, American Canadian Caribbean Line and Clipper Cruise Line may use Bucksport, Bangor, Portland, Boston, New York and others for homeport options.
The Atlantic Coast sector is seen as mainly a seasonal early summer and fall pattern due to the cold Atlantic winter months; transitional cruises to Canada and New England; the high return summer markets of Alaska and Europe; and the hurricane season. The smaller lines are stretching this season into the summer months to capture increased market share. Additionally, large lines such as Princess and Holland America have added a significant number of cruise ports to their coastal offerings such as Gloucester, Gaspe, Lunenburg, Newport, Rockland, Castine, Camden, Belfast and Portland. This cruise sector provides a small in-road in terms of extended sailings within and through the region from which Sydney is a part.
Overall, this is a relatively small market with approximately 25 sailings with 1,700- passengers being identified within 2007 that move along the Eastern Seaboard. This is a strong niche market for small cruise ships sailing within the region on a seasonal basis.
Impact / Relevance to Sydney
Sydney receives no cruise calls from this cruise segment at present due to its geographic position and overall tourism ambience as related to this type of cruise. These lines prefer smaller more intimate ports in the region such as Baddeck. It is clear that the philosophy of these cruises is the exploration of the smaller ports along the Eastern Seaboard and to not compete with the larger vessels in the region. Larger North American lines move southbound from their existing homeports in New York and Boston on similar routings as part of repositioning sailings to the Caribbean region. These one-off itineraries take in a variety of cruise ports-of-call (i.e. ports that are visited on a cruise voyage) and are generally low cost from a speed and distance perspective.
Transatlantic
Overview
Transatlantic itineraries typically involve the repositioning of North American and European cruise fleets from the European summer market, transitioning to the Canada and New England "fall foliage" cruises, and then down to the winter market in the Caribbean. Additionally, this route is used by newly-built ships moving from European shipyards to the U.S., with introductions in New York and along the lucrative U.S. East Coast marketplace. Some cruise lines also offer round-trip transatlantic sailings that touch key U.S., European and Canadian East Coast cities popular with their passenger base. These
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 45 cruises are typical for the German and English cruise markets in particular with Hapag- Lloyd, Fred Olsen and P&O operating cruises from their significant homeports in Germany and England respectively.
The transatlantic itineraries consist of 10- to 14-day sailings that include several port-of- call visits in England, Ireland, Norway, Iceland, Greenland, Bermuda, Newfoundland and Labrador, The Azores and Canadian Maritime Provinces before ending the voyage in New York, Boston or other East Coast port. Over the past several years, some cruise lines have chosen to forego the northern sailings, in favor of a more southerly route that deliver the ship directly into the Caribbean or further along the lower east coast of the U.S. Cruise lines will continue to use the Transatlantic crossing to move their fleets into seasonal regions that generate the highest revenues, while also offering a unique repositioning voyage for repeat passengers to the line. These cruises do not typically generate good per diems for the cruise line, and often these sailings are not full.
The general prospect for continued growth of the traditional transatlantic region is fair to good based on our assessment as the European market expands and additional vessels are placed into the consumer market. In 2007, Sydney captured a Transatlantic sailing from Saga Cruises, while in 2008 additional calls will come from HAL (2), as well as Saga.
Impact / Relevance to Sydney
Sydney is in a fair position to support port-of-call operations for traditional Transatlantic voyage movements for medium and large vessels given its location in the region. Due to marquee value factors and speed & distance, Sydney is a secondary port in this pattern.
Round-the-World Cruises
Overview
The round-the-world cruise sector is very limited and mainly caters to higher-income passengers able to take extended time away from home on luxury cruise vessels. These sailings are typically 80- to 120-days in duration, divided into more modest 15- to 55-day cruise segments. These cruises pass through several regions of the world as they navigate the globe, thus all calls on the itineraries are usually one-off calls (i.e., they do not repeat ports). These sailings are also seen as exotic, and as such, cruise operators do not spend a significant amount of time in the larger, mass-market cruise regions. With the lower marquee value of Sydney this sector may provide very few port-of-call visits overall. New York and Boston will see segmentation homeport visits from the world cruise ships. There are no World Cruise calls identified for Sydney in 2007 or 2008.
Impact / Relevance to Sydney
Sydney is in a fair to poor position to be a port-of-call for World Cruises. The growth of this sector is limited and as such Sydney may be well served to meet the needs and expectations of its current clients while concentrating on its other core market sector product (Canada & New England) that offers the greatest degree of potential calls and growth over time. New York will most likely continue to play a leading role on the Atlantic Coast for homeport operations in this cruise sector due to its overall cruise homeport logistics and marquee value.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 46 Fit of Sydney within Identified Target Sectors
Each of the target sectors identified above affords Sydney varying degrees of potential cruise line port-of-call operations. In Table 10, we summarize Sydney’s general potential for participation in each of the target market sectors reviewed. Sydney’s strategic position in each sector was assessed either as being strong (Å), fair ( ), or weak (Æ).
Target Market Sydney as a Port-of-Call
Canada & New England Å
Atlantic Coast (small ship deployments) / Æ
Transatlantic
World Cruises Æ
Key: Strong (Å), Fair ( ), Weak (Æ) Table 10: Fit of Sydney within Identified Target Sectors (Summary) Source: B&A, 2007 As presented above, Sydney’s strength in terms of strategic fit is to serve primarily as a port-of-call for the regional Canada & New England deployment patterns. As a port-of- call, Canada & New England (durations over 7-days) sailings have a strong appeal given present cruise line deployment strategies. In general, Sydney fits into most of the cruise sectors given its geographic location. In the mid- to long-term, changes to push other sectors may occur through strategic marketing efforts and other cruise tourism travel factors that may then provide new cruise port-of-call opportunities for Sydney. However, based on cruise line feedback it is apparent that the key to future success for Sydney is to address the current itinerary patterns and level of service associated with this Canada & New England cruise pattern in order to plan for growth accordingly.
3.4 Cruise port competitors impacting the port of Sydney
Several regional competitors were reviewed as to their potential short and long-range impact to cruise port-of-call operations to Sydney. A summary of their general attributes is presented in Table 11. Generally, based on cruise line feedback the Port of Sydney appears to be in a unique competitive position. Each of the cruise lines surveyed had a different opinion as to the main competitor for Sydney based upon their passenger demographic, type of itinerary pattern and historical preferences. Thus, while it would appear that Charlottetown, PEI would be the direct competitor for traffic, in reality it appears that it is more of a competitive subtlety related to the length of sailing in the region. On the shorter 7-day round trip sailings, Sydney competes with the ports of Saint John (NB), Halifax (NS) and Bar Harbor (ME). Generally, these sailings do not cruise to Sydney, but turn back after Halifax. In the case of NCL, Sydney is an additional port in this itinerary pattern.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 47 For 8-day plus and open-jaw Canada & New England itinerary patterns, Sydney is often a complementary port to Charlottetown, PEI and not an either or proposition. While Corner Brook may provide the highest level of competition due to the speed & distance factors associated with utilizing this port in any pattern and thus eliminating or reducing the hours of call in another Canadian Maritime port. Due to the secondary value of Sydney in conjunction with the length of cruise and geographic placement, most ports in the region can be viewed as complementary ports with each benefiting due to the influences of each other on the overall marketing value of the itinerary pattern. Simply, each itinerary should include ports that offer different types of experiences and offerings to make it successful for the cruise consumer.
From the review of primary attributes, strengths, and weaknesses of each of these facilities, an evaluation of the general competitive threat potential for each was prepared (see Table 12). The Ports of Montreal, Boston and New York (inclusive of Cape Liberty and Brooklyn) are Sydney’s primary contributor of cruise traffic into the region. Their future development directly impacts the overall cruise passenger throughput potential of the Canada & New England cruise sectors. Charlottetown, PEI appears to be the closest direct competition for port-of-call traffic in the mid-term based on our review. While Sydney and Charlottetown are geographically competitive, each falls well within the Canada & New England cruise patterns assembled and provide different types of experiences conducive to being included on several types of cruise line brand itinerary patterns.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 48 Cruise Facilities (S) Strengths / (W) Port Future Plans / Notes Weaknesses Cruise Berth(s) Cruise Terminal(s)
(S) Excellent access to the 3 Berths: Pugsley downtown area via walking / A/B is 1,270- shuttle, (S) Solid reputation for ft./387 m. (35- Working in conjunction assistance with Port and Tour Large tent structure ft./10 m. depth); with City to develop Operators; (S) Good brand Port of Saint terminal to Lower Cove is waterfront area. A new recognition by North American John, New accommodate 2 735-ft./225 m. cruise terminal will be and European operators; (W) Brunswick vessels; Lower Cove (34-ft./9.5 m. completed for the 2008 City does not always meet open. depth). Tidal season. expectations; (W) Downtown range of 28-ft./8.8 area somewhat lacking for m. independent persons – lack of shopping, venues, etc.
New cruise terminal 1 Main Berth: facility adjacent to 900-ft./275 m.; (S) Solid secondary port as a main berth and with depths to 39- destination; (S) Good tourism anchorage areas. ft. (12 m.). Two access to Cape Breton; (S) Cruise Used for passenger Port of Sydney, anchorages are Port of Sydney Master facility offers excellent operation reception, retail, Nova Scotia available within Plan underway. elements; (W) Uphill walking museum and market close proximity. access to downtown area. (W) area. Wide open A private berth is Very limited tourism atmosphere apron for equipment also available - in the downtown area. movement and good 1,000-ft./305 m. GTA.
(S) Strong airlift and hotel Began renovation to Black Falcon components; (S) Excellent 5 Berths: Black expand terminal for Terminal tourism infrastructure; (S) Strong Falcon has 3,000- multi-use ships. accommodates 1 to brand recognition in conjunction Port of Boston, ft./914 m. usable Stopped following 2 ships with another with regional and international Mass. (32 to 35-ft. – 9/11. Plan to begin using adjacent shed tourists; (W) Extremely high 9.75 to 10.6 m. - work in fall 2007, to area. Other ships stevedoring costs from ILU; (W) depth). refurbish Black Falcon may use tents. Procedures for homeporting for facility. FIS/stevedoring are poor.
3 Piers (88,90,92) 5 berths; 4 berths All piers in three tier at 1,040-ft./317 terminal(s) for Currently renovating (S) Strongest marquee value; (S) m.; 1 berth at stores; parking, Manhattan berths. Excellent tourism infrastructure, Port of New 774-ft./236 m. (all processing of (RCI has a two berth hotel and airlift; (S) Strong brand York City, New 34-ft./10.3 m. + passengers. Original complex in New Jersey recognition in conjunction with York depth). Brooklyn warehouses with no – Cape Liberty - regional and international Cruise Terminal apron areas for work (1,000+ft. berths). tourists. (1,000-ft. + berth in Manhattan. supporting cruise operations.)
(S) Good venue for regional tourism; (S) Nice downtown area Port of 495-ft. berth; New $18M Cruise Currently completing within walking distance; (S) Charlottetown, (39.6-ft./12 m. Passenger Terminal. renovation work from Good reputation for working PEI depth) Open area for GTA. master plan. with cruise lines; (W) Limited but strong tour product; (W) Can only berth 1 ship. Table 11: Competitor Ports in the Region (Summary) Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 49 (S) Unique access to National Park; (W) Due to speed & Cruise/cargo berth distance issues, time change it is Port of Open cargo area 1,188-ft./362 m. No plans for future difficult to have a full day in port; Corner with no terminal (30-ft./10-m. development. (W) Weak tourism infrastructure; Brook, NFL facility. depth). (W) Limited tourism offerings due to time in port; (W) Limited independent activities.
4 available berths Port completed a along downtown waterfront master plan (S) Popular venue for regional seawall – (2) 800- and is currently under Port of Large terminal tourism; (S) New homeport/port ft./260 m., (2) 600- phase 1 of the Halifax, Nova facility complex and call to differentiate products; (S) ft./180 m. plus renovation process Scotia GTA. Good local tourism infrastructure; overflow. (all 29 – with new facilities for (S) Access to downtown area. 40-ft. – 8.8 to 12.1 local and tourism m. depths). needs. Table 11: Continued Source: B&A, 2007
Table 12 identifies the threat levels of each of the Ports identified in this section as they relate to port-of-call operations to Sydney.
Competitor Competitive Port-of-Call Threat Potential
Port of Saint John, New Brunswick
Port of Boston, Massachusetts (complementary)
Port of New York City, New York (complementary)
Port of Charlottetown, PEI / Å
Port of Corner Brook, NFL
Port of Halifax, Nova Scotia / Å
Key: Strong (Å), Fair ( ), Weak (Æ) Table 12: Sydney Competitors for Cruise Operations Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 50 3.5 Cruise line needs and selection criteria
This section provides for a means to further assess the potential opportunities for cruise tourism to Sydney. It is important and relevant to understand cruise line criteria in making deployment decisions. Their selection of homeports and ports-of-call generally fall into three categories:
x Appeal as a travel and leisure destination;
x Type and quality of cruise tourism infrastructure needed to support vessel operations and movement of passengers; and,
x A market basis and strategic fit within a greater cruise vessel deployment scheme.
European and North American Cruise Lines are focused on development of products that deliver high levels of satisfaction and a vacation experience superior to land-based options. The cruise vessel and itinerary are the primary tools used to achieve this goal.
Cruise lines and their respective decision-making groups—marketing and sales, marine operations, logistics, and finance—expend significant effort in evaluating a destination (whether homeport or port-of-call), and congruently, an itinerary to ensure it meets the various criteria established to differentiate their product offering and sell desirable and profitable cruise products.15 A general list of cruise line decision-making groups and their primary focus in the selection process is provided in Table 13.
Marketing and Sales Marine Operations
x Consumer awareness and marketability x Marine navigation and access
x Access to consumers x Berth, apron and terminal features
x Fit with cruise brand philosophy x GTA and parking
x Fit with consumer vacation patterns x Provisioning and Security
x History of operations from the port / destination
x Landside access x Terminal charges
x Airlift x Labor, fuel and other operating costs
x Lodging x Regulatory issues
x Shore excursions and destination venues x Maritime law
Logistics, Air-Sea and Shore Excursions Finance and Legal
Table 13: Destination Selection: What is Important to the Cruise Lines? Source: B&A, 2007
15 While we have presented the groups in general terms; in reality and depending upon the size of the cruise line, the groups can include several departments and decision-makers as part of the overall destination and itinerary selection process.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 51 Marketing and sales followed by marine operations are the driving forces in cruise line decision-making. The essential concern of the marine operations group is the actual functionality of a destination and itinerary in its ability to accommodate their cruise vessels. Can the vessel maneuver into the port, complete docking operations safely at the selected pier? Are the upland facilities capable of accommodating the needs of the vessel, passengers and crew? Is the region and port safe? These and other questions are central in marine operations evaluation of a destination and itinerary.
Cruise lines have different needs for port-of-call and homeport operations, and accordingly, cruise line decision-making groups focus on different attributes for each type of facility and destination for which it is a part. Similarly, a cruise terminal is a much greater element of the homeport process; terminals are generally not needed at a port-of- call as the majority of cruise passengers want direct access to the shore excursion programs via Ground Transportation Areas, access to taxis and public transportation or access to tourism and shopping areas. The marine/land logistics operations group will spend time reviewing and evaluating a homeport destination as to the suitability of its cruise terminal and GTA to support vessel and passenger operations.
Cruise lines are also concerned with assembling destinations that are complementary to one another on an itinerary. Ideally, destinations visited need to be a balance of shopping, natural areas, cultural and historical attractions among other amenities. Destinations have a greater amount of influence on ensuring cruise tourism infrastructure meet cruise line requirements for vessel placement and the operational fit of a destination within an itinerary pattern. Through focusing on creating or improving these attributes, destinations can advance their chances of being included in an itinerary and having certain types of vessels operates from/to their port.
For Sydney the primary focus of cruise operations are port-of-call logistics – the ability to serve the needs and expectations of the cruise visitor; to be moved efficiently and effectively from the vessel to shore and through a Ground Transportation Area that offers a safe and practical area for the movement of coaches and other forms of transportation as required to venues, sites and other locations; the movement and satisfaction of independent cruise visitors and crew to the destination and the ability to spend a reasonable amount of time in the port-of-call are all critical focus factors.
Successful Destination Characteristics
Whether homeport or port-of-call, successful cruise destinations have two basic features in common:
“Supply Side” Characteristics: Those items that attract and retain cruise lines and passengers to a destination; and,
x Regional and/or international appeal as a travel/leisure destination.
x Cruise tourism infrastructure needed to support vessel operations.
“Demand Side” Characteristics: A market basis or strategic fit within a greater cruise ship deployment.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 52 x As outstanding a destination is in terms of cruise tourism offerings and facilities, it must fit within a greater deployment, operational and regulatory scheme to be a viable option.
Sydney matches well with the demand side of the equation for cruise line deployment due to its geographic location and tourism offering inclusive of access to Fortress Louisbourg, Baddeck, Iona and the adjacent Cape Breton Island sites. There is an appeal of Nova Scotia (particularly Cape Breton Island) for both European and North American consumers as a travel destination; and the ability of the port to accommodate large vessels in the worldwide fleet are critical factors in delivering this product. Additional primary strengths of Sydney include:
x Quality shore excursion offering. Sydney offers numerous excursions in many different price ranges, which meet the needs and expectations of a wide range of consumer demographics. Sydney can deliver a large portion of Cape Breton Island with the only limiting factor being the time in port. At least 8 to 10 hours are needed for a full delivery of the Cabot Trail. Most lines do not have this time in port due to itinerary pattern requirements related to speed & distance to other ports in the region to/from Sydney. Princess Cruises did see a lower shore excursion rating in Sydney than they would like from a port in the region;
x Deepwater marine access. Sydney provides an entry channel able to accommodate the largest cruise vessels currently operating and those planned for future deployment to the region overall. The short distance from pier to international waters is also of great benefit to cruise lines allowing for lower expenses and additional flexibility in speed & distance issues involving itinerary planning;
x Destination appeal. At present, Sydney provides for a secondary tier tourism offering with a low level of expectation from the cruise visitor. Overall, based on cruise line feedback, Sydney exceeds the expectation level, thus allowing for a better rating overall. While the name brand appeal of Sydney is presently low, its position along the coastline and in to the marquee ports of Halifax and Quebec City are of substantial import for future cruise operations.
x Cruise infrastructure and offering. Sydney has invested in a substantial multi-use cruise terminal facility that provides for a welcome reception area, retail venue, museum and other facilities for the community. This is an excellent ISPS compliant cruise facility that also provides a large adjacent Ground Transportation Area. One large cruise berth is available at present along with two anchorage positions. Management of the entire cruise area with two or more large ships in the port would be challenging.
While Sydney has the ability to compete with ports in the region for future cruise operations, the entirety of the region is now more competitive overall with other cruise regions worldwide for traffic, such as Alaska, Bermuda, Northern Europe and others. To achieve long-term growth the region as a whole must deliver an outstanding passenger experience, continue to develop a consumer demand for the region, and provide the cruise lines with a competitive per diem in relation to other worldwide destinations.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 53 The Port of Sydney has one of the premiere multi-use cruise terminal facilities in Atlantic Canada. Besides a main cruise pier, the facility also provides for two additional tender landing areas in close proximity to the main Ground Transportation Area and terminal facility. While there are limited days thus far with more than one ship in Sydney, the operations and potential revenues associated with a ship visit are somewhat curtailed due to the tender operations. It is also an additional expense and safety concern for the cruise line. A second berth in close proximity to the existing cruise GTA would be preferred.
The SYSCO facility could be pursued as a second berth for cruise vessels. This provides close access and a shuttle system can be employed to move passengers as required. A third option is the Sydport Facility on the other side of the bay. While this can work, it is not ideal due its distance from the downtown area (approximately 45-minute round trip between the dock and Sydney). Additionally, there are very limited to no facilities available for independent passengers and crew. Long-term, an expansion of the current dock facilities to the south, utilizing the Robin Hood Flour Building and site could provide for a unique new facility and adjacent tourism uplands area. The challenge will be to justify the facilities. More emphasis may need to be placed on the current cruise terminal and future facilities in terms of alternative uses to generate additional revenues, other than cruise.
Based on Tour Operator feedback, up to 6,000-passegners can be managed at the destination on shore excursion programs. However, there is a significant challenge with motor coaches as locally Sydney has 10 coaches and additional 25 must be brought into the destination to service the cruise passengers. This problem can be further exacerbated when the Port of Halifax also has a high demand day for coaches due to cruise vessels in port. There are sufficient numbers of qualified guides to support operations. There is a shuttle service operating from the cruise terminal through the downtown area for a $5.00 fee. This is “mildly successful” and offers passengers the opportunity to visit the downtown.
Sydney’s main weaknesses lay in the lack of a tourism infrastructure within the community to support independent visitor activities, retail (other than the terminal marketplace) and sites and venues in the community with a draw for visitors. Access to the entirety of Cape Breton as a tourist area is also restricted due to port time. Related to the lack of tourism infrastructure is the fact that Sydney is a secondary port in the region with low consumer demand.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 54 Table 14: Attractiveness of Sydney vs. Cruise Line Criteria Source: B&A, 2007 Table 14 provides a summary assessment for the potential opportunities envisioned for Sydney in terms of future cruise activities. Overall, Sydney fares well in many categories. However, the overall success of any cruise port-of-call is incumbent upon the success of marketing the destination to the cruise consumer and industry overall and then meeting the needs and expectations of the visitor over time. With an appropriate forward-thinking strategic cruise tourism plan in place the Port of Sydney could provide many of the key elements inclusive of the marine and upland components to satisfy the cruise line appeal.
Further cruise line participation in Sydney’s effort to meet the needs of the cruise visitor will assist in ensuring continued success. Potential cruise projections are explored in depth in Chapter 5. Based on our preliminary assessment the following conclusions can be made:
x Sydney is a solid cruise destination on the Canada & New England itinerary;
x The port will continue to serve primarily as a cruise port-of-call for North American and some European cruise brands;
x Expanding the tourism infrastructure and tourism offering overall is a key element in the overall delivery of Sydney as a cruise port-of-call; and,
x Defining a marketing strategy that allows for more advance communication of the offerings for the Port of Sydney and surrounds is an important element long-term.
3.6 Cruise line feedback
Feedback received from cruise line decision-makers has been positive. This information received from the questionnaires sent out to the cruise line decision-makers was essential in formulating the analysis conclusions, projections and future strategic recommendations associated with cruise operations to the Port of Sydney. We received a 78% response rate.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 55 The only cruise line not to provide direct input was Carnival Cruise Line which has no cruise ships calling in Sydney at present. An overview of this feedback is illustrated below:
Holland America Line
x From a marketing perspective, Sydney is a port that is considered a surprise port for our guests. It works out to be a “free” port in our itinerary and is little known by our guests. However I also believe it is a port that could be communicated much more and going forward our plan is to do exactly that. We have begun to talk about the variety the region holds and the importance of taking a tour in the Sydney port call to experience the Cabot Trail, Fortress Louisbourg, etc.
x The biggest competitor for Sydney isn’t necessarily another Canada/New England port but rather, another destination. Strong summer programs in Alaska and Europe are where the remainder of our ships is deployed. We currently do not have a summer Caribbean ship which is instead in the CNE market. Looking at CNE competition, I’d consider the roundtrip BOS or NYC itineraries that only travel as far as Halifax as the competition to Sydney. Having said that, the open- jaw Boston/Montreal (or Quebec City) is very strong with our guests.
x Currently they don’t know much about the port until they arrive or when they are reading their brochure and shore excursions. The awareness of Sydney is very low especially when compared to Montreal, Quebec City, Halifax, etc. They likely do not have very high expectations either.
x When they choose to explore the town of Sydney independently rather than taking a Shore Excursion we tend to get lower ratings. Those that take excursions rate the port higher.
x We are committed to primarily offering the open-jaw Boston/Montreal and NYC/Quebec itineraries for the foreseeable future which includes the port call in Sydney every 7/10 days.
x The Sydney port facility itself is beautifully done. I like the local craft market and the variety of shops that are being offered.
x I’d like to see Sydney gain more awareness with our guests to assist with influencing their purchase decision but also to improve the port ratings even more.
x Sydney is a hidden gem. We have begun to share with our sales force the importance of setting appropriate expectations for this port as the balance it provides within the itinerary is fantastic.
x I’d encourage the tourism community to make sure the full season of product offerings is consistent as we visit from May through October and need to be providing complete programs throughout.
x Sydney is a good fit out of a Marine perspective, situated about halfway between Halifax and Prince Edward Island.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 56 x Out of a Marketing perspective it performs well, there are several relatively well known sites such as Louisburg.
x There is not really a competitor for Sydney. Less port intensive cruise lines might leave it out and have a day at sea instead as the port is hemmed in between the higher rated ports of Halifax and Prince Edward Island.
x There are most of the times, no real issues for marine, Terminal Reception, Shore Excursion Programs or Independent Options. x We envision a slight increase beyond 2009 / 2010. We might increase our presence in the region.
x Sydney, together with St. John New Brunswick, is not rated as high as other ports in the region, I would consider this the main weakness of the port.
x You should try to run a survey in your port from passengers who return to the port to find out the likes and the dislikes, the passengers will know best.
Crystal Cruise Line
x As you know, we do visit Canada/New England every year and there is a possibility that we could add it to our schedule for cruises in this area in the future.
x Mostly Halifax is the key competitor for Sydney, but to some degree St. John, NF. Halifax has matured as a destination and the tour options have proven successful in the past.
x As with most cruise lines, we were looking for new ports or ports we have not visited too often in this region so we added St. John, NF and St. Johns, NB.
x There is a possibility that we could consider this port in the mid-term 2009 / 2010.
x We have found that our Canada/NE product does extremely well with core ports such as Halifax, Bar Harbor and Newport. These ports compliment our overnight stays in Boston, Quebec City and Montreal. We also know from experience that the tours on these ports deliver.
AIDA Cruises (First calls in fall 2008)
x Sydney is a good port in the region of Atlantic Canada, as it fits well in the schedule according to distances and into the good mixture of big cities and more natural ports.
x There are not really competitors – due to distances. Next ports are Halifax and Charlottetown (PEI).
x We haven’t called it yet, but it looks like a “familiar” port. Passengers feel safe and can easily walk around.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 57 x Marine berth and even tender piers looked in good shape and condition.
x Terminal Reception is well constructed with all needs inside.
x Due to the times in port, some of the nature highlights might not be reachable. In general, a shore excursion program with good varieties.
x Not so many shopping opportunities as passengers might expect in a North American/Canadian port.
x As long as we call the region, Sydney might be included. Fred Olsen Cruises
x Sydney fits well into our Canada/Greenland programme with turnarounds in UK and New York.
x Any Canadian port between Greenland and Boston/New York is competition for Sydney. Basically, because these ports form the “Canada” part of the Greenland/Canada cruises. Therefore, we take in a limited number of Canada ports en-route to and from Greenland.
x Relatively easy to get to and not subject to any restricting issues with canals, water depth or constant tendering calls. Only one previous call has been at anchor.
x Always welcoming and enjoyed by the passengers.
x Good range of interesting excursions and prices.
x Interesting city to explore.
x We will continue to have one ship operating 3 Canada/Greenland cruises annually (up to 2009 so far).
x Sydney’s strength is that it is en-route to and from New York for the Greenland/Canada cruises; the availability of the berth and that it is an overnight cruise away from Halifax (next port to schedule on cruise).
x Don’t overbook cruise calls. This call only really works if the ship is alongside.
x With Balmoral and Braemar being extended to 218m and 193m respectively, we would appreciate your comments on whether we will be able to berth in future. Currently, we have received a positive response and are berthing – is this still the case?
Princess Cruises
x Passenger survey averages for 2006 about Sydney:
o Why you chose this cruise, port importance? 69.10%
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 58 o How much you enjoyed each area? 74.62% As this percentage is above Why you chose this cruise, it indicates that the passengers had a slightly better time than they expected.
o Overall quality of shore excursions? 81.27% We like to see a minimum of 85% for overall tour quality. Only Port Saguenay was lower for overall shore excursions on this itinerary.
x There could be more to do for independents. Saga Shipping
x Saga Shipping typically includes one cruise per year to Atlantic Canada, a month long voyage that departs and returns back to Southampton in the UK. The majority of our cruise programme remains in the Mediterranean and Northern Europe.
x At present there is no real competition, as we have been repeating the same itinerary for the last three years; Sydney ‘fits’ perfectly between Quebec and New York. Were we to change the structure of the cruise in future years then Sydney would face competition from other Atlantic Canada ports.
x We have been pleased with the reception from the port in the past.
x The Port has been proactive in assisting us in securing a berth in the past when the port was scheduled to receive two ships. This is very much appreciated by us given the age of our passengers and the difficulties associated with a tendering operation.
x Passengers have commented favorably on the wide range of shops in the terminal.
x Our collaboration with Atlantic Cruise Ship Services has been very successful, and we typically see over 65% of our entire passengers take an organized shore excursion.
x There is no change expected to our current deployment.
x Passengers receive a friendly welcome – along with all Canadian ports passengers feel more valued here by the local community than when the ship calls to US Ports. The proximity of the terminal to the downtown area is also well-received by our passengers.
x The only concern we have is the impact of the mega-ship’s on a relatively small port of call. Whilst it would not cause us to change our itinerary, we feel that being in port on the same day as one of the 3000 passenger vessels is something we would like to avoid.
Seabourn Cruise Line
x Our past experience, be it limited, with Sydney calls have not received the desired degree of guest satisfaction. Apart from that Seabourn ships prefer to call at Baddeck and cruise the scenic Bras d’Or, also passing through the Strait of Canso
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 59 into the Gulf of St. Lawrence, though occasionally we pass through the Cabot Strait like this year en route to St. Pierre & Miquelon.
x In Nova Scotia, apart from Baddeck we call at Halifax, Lunenburg and Louisbourg. They are typical small-ship destinations with more “character” that Sydney.
x The main advantage is that ships can dock. However, that also means that Sydney can handle large cruise vessels which make it less attractive to a “yacht” operator such as Seabourn.
x Sydney would need to expand in terms of shoreside infrastructure and develop more upscale shore experiences to satisfy the needs of our guests.
x For 2008 and 2009 we have discontinued our Canada/New England operation as achievable per diems are lower than those in W. Europe during the same period. We anticipate resuming two cruises in 2010.
x As we can’t see the region being able to generate per diems for Seabourn comparable to those in the Baltic and the Fjords as well as Western Europe, while the US East Coast is an additional repositioning challenge that is hardly better than the transatlantic, there is not much incentive for Seabourn to cruise in the region, despite its many attractions and quality destinations and operators.
Norwegian Cruise Line
x This depends on the cruise length. 7 or less days and Sydney is out of the question. On a 10 day, it’s almost an assured call. The trend has been towards 7 or less days, but there is a market for longer Atlantic Canada cruises.
x Given its geographic location, Sydney is well situated to fight-off competition. Its main competitor might be Cornerbrook, but not really (Cornerbrook and Charlottetown are the two cross-town rivals) Sydney is sort of the perennial winner.
x If I had to pick a port that would be competing with Sydney for the business I would choose Saint John or Bar Harbor. The issue isn’t Sydney or someplace else, its do we turn around after Halifax or keep going.
x Shore excursion revenues aren’t as strong a Halifax and name recognition isn’t nearly as strong, but guest satisfaction (port visit) is OK.
x Given the raw material, Sydney does a fine job. The highlight has to be Louisburg and (if there’s time to deliver) the highlands of Cape Breton. It really depends on the spending patterns of the guest. If they have money and want to spend it, there’s good tour product to buy.
x The town really isn’t geared strictly for tourism like Bar Harbor nor is it large enough to have tourism as one of its legs like Halifax. Its value to the independent guest is based on the individual guest’s perception and expectations.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 60 x If the trend to 7+ day cruises grows, Sydney will grow. If not, Sydney will probably stagnate (status quo).
Royal Caribbean International & Celebrity Cruises
x Canada & New England itineraries are a distinct, but limited, product offering.
x Quebec City is the main draw for the non - summer departures.
x In general, Sydney is not a marquee port for our Canada/ New England itineraries.
x We have 15 calls over a two year period for our combined brands. This is normally only during the fall.
x Sydney does not have as strong name recognition, but more importantly it receives the lowest experience rating of all of the Canada / Northeast ports except for Martha's Vineyard. The rating is not bad (6.8 out of 10) but is not as strong as the others. The rating does however exceed guest’s initial expectations.
x It has appeal from a time / speed / distance perspective which makes it work from an itinerary perspective.
x While the tour program is not as strong as some of the other ports in the region, there is a good selection of tours with sufficient capacity. Unless things have changed during the past several years, the challenge in Sydney is the city/town itself has very little to offer the independent guest.
x The ability to accommodate VY class increases the appeal and opportunity to utilize the port.
x We do not have FR class in Canada yet but if we do in the future that would be an opportunity.
x See Sydney berthing for 2009 for RCI & Celebrity Cruises. This provides for 2 additional Explorer calls, 1 Jewel and 2 Constellation calls: Date Ship Name FRI 07/17/2009 Explorer FRI 08/14/2009 Explorer FRI 08/28/2009 Explorer FRI 09/11/2009 Explorer WED 09/16/2009 Jewel FRI 09/25/2009 Explorer THU 10/01/2009 Constellation FRI 10/09/2009 Explorer WED 10/14/2009 Constellation TUE 10/27/2009 Constellation
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 61 Table 15: Cruise Line Feedback Source: B&A, 2007 As illustrated in the comments received from the cruise line industry and outlined in Table 15 the Port of Sydney fares well in most of the major categories. Many of the comments and ratings as such for Sydney are also based upon the cruise brand and consumer demographic, which requires different types of infrastructure destination experiences to meet the demands of the cruise consumer. By example, Seabourn Cruises prefers small ports with direct access to sites for its passenger, such as Louisbourg and Baddeck. HAL or RCI looks to accommodate there cruise vessels and passengers at larger facilities with greater capacity. Overall, the cruise line feedback provides the Port of Sydney with a map to provide for further strategic planning and concentration in those areas where the port requires further development, while also maintaining and excelling in those areas, such as tourism venues, where the destination fares well.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 62 4.0 Sydney Cruise Growth Opportunities
4.1 Projections overview
This chapter examines the potential future cruise passenger and vessel throughput for the Port of Sydney based on our current knowledge of the region overall and historical data collected during the study. This projection base can assist the Port of Sydney in determining future requirements for physical infrastructure in relation to berth requirements, anchorage needs, ground transportation and supporting upland tourism infrastructure. Based on an assessment of the berth demand required to support cruise operations long-term (through 2030), a total of necessary accommodations for the Port of Sydney can be established. A summary is found below:
x Cruise passenger volumes under Approach A - Natural Growth scenario are envisioned to increase to between 216,839 (low) and 259,700 (high) passengers by 2030. Similarly, vessel calls are forecasted to be between 83 (low) and 99 (high) calls in 2030;
x Under Approach B, cruise passenger throughput expands from approximately 86,000 passengers in 2008 to between 127,348 (low) and 183,697 (high) passengers by 2030. Cruise calls reach between 49 (low) to 70 (high) in 2030; and,
x Under Approach C, cruise passenger throughput expands to between 165,590 (low) and 265,894 (high) passengers by 2030. Cruises increase to 63 (low) to 102 (high) based on our projection models.
4.2 General approach to forecast preparation
4.2.1 Growth Scenarios
From information assembled as part of the 2007 Study, we have assembled three general scenarios that reflect the most likely assumptions for growth for Sydney over the study period (2030). These are discussed in the following section.
x Approach A - Natural Growth (Baseline plus 5-year average of Atlantic Canada and Sydney Cruise Growth). Under this scenario, cruise passenger and vessel volumes expand within the limits of Sydney’s present cruise offer. Local and Provincial Government as well as regional stakeholders take little or no role in the expansion or implementation of cruise tourism improvements or expansion to existing marine or upland facilities. Thus, cruise operations continue to occur primarily due to the availability of operators in the region, the notoriety of Sydney as a desirable secondary place to conduct cruise call operations, the availability of cruise facilities to accommodate traffic and other similar factors.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 63 x Approach B – Regional Market Capture of Sydney. Approach B looks at the historical and projected future capture rates of Sydney in conjunction with the overall throughput envisioned for the region. Sydney’s growth is specifically tied to the capture rate in the regional marketplace. This Approach contemplates the expansion of Sydney’s cruise passenger throughput based on low to high capture rates over the study period.
x Approach C – Expansion of Cruise operations on Scenario-based projections. Under this growth scenario, Sydney focuses on growing its cruise capacity by expanding its potential cruise operations. Approach C considers all of the relevant scenarios presented under the Approach A Natural Growth and Approach B scenario, and also adds vessels into the region based on interviews with cruise line operators and our knowledge of the region. This Approach also further grows the seasonality of Sydney through the moderate development of cruise operations in the summer season.
Each of the three approaches described above are not mutually exclusive. For example, it is likely that progress toward Approach B will help bring about more realistic market viability for Approach C and additional vessel placement in the region, specifically Sydney.
Figure 24: Port of Sydney Historical Growth, 2000 to 2007 Source: B&A, 2007 Growth for Sydney will also depend to some degree on cruise vessel capacity. Based on the newbuild order vessel trends and regional cruise vessel capacity growth, this is an area that will continue to influence the tourism operations in most ports in the Atlantic Canada region. Vessels are continuing to increase in passenger capacity affecting the volume of cruise passengers in port at a given call date and reducing to some degree overall the actual total number of cruise calls to most ports, particularly those with passenger throughput counts of less than 500,000-passengers and destinations that may not be considered of marquee value. Figure 25 outlines the current and future numbers of cruise passengers per vessel over the study period.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 64 Figure 25: Cruise Passengers Per Vessel Projections at 2.0% Growth, 2008 to 2030 Source: B&A, 2007 For the purposes of this study we are using a slightly lower annual growth rate of 2.0% (world avg. is 2.5%) due to the historical capacity growth rate of the region and our assessment of future deployments to the Atlantic Canada region. While larger vessels will continue to be deployed into the region long-term, Sydney will see an overall smaller percentage of these vessels due to its geographic position and cruise tourism climate. However, long-term this may change as well.
4.3 Forecasts of cruise passengers and vessel throughput to Sydney
4.3.1. Approach A – Natural Growth
In preparation of a Natural Growth projection for Sydney, we have assumed the following:
x Cruise vessel activities in Sydney reflect a normal growth parameter for the region and continually improving consumer perception.
x Regional 5-year averages of growth rates of between 12.2% and 16.2% were utilized to generate this projection model. Over the 23-year growth period average annual rates of growth were 4.50% (low), 4.97% (mid) and 5.40% (high) as a baseline for this scenario. The higher percentage under the more aggressive scenario reflects consideration that the Port of Sydney will slightly exceed the expected regional annual average of growth rate.
As presented, conventional cruise passenger volumes under Approach A - Natural Growth scenario are envisioned to increase to between 216,839 (low) and 259,700 (high) passengers by 2030. Similarly, vessel calls are forecasted to be between 83 (low) and 99 (high) calls in 2030.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 65 Figure 26: Approach A Natural Growth Projection, 2008 to 2030 Source: B&A, 2007 4.3.2 Approach B – Regional Market Capture
Approach B contemplates that Sydney’s growth continues based on overall market capture levels of between 22.6% (low) to 32.6% (high) over the study period. This may involve Sydney taking an active role in growing its cruise business through fostering the success of cruise line operators serving international (more European) consumers.
Figure 27: Approach B Market Capture Projection, 2008 to 2030 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 66 Under Approach B, cruise passenger throughput expands from approximately 86,000 passengers in 2008 to between 127,348 (low) and 183,697 (high) passengers by 2030. Cruise calls reach between 49 (low) to 70 (high) in 2030.
4.3.3 Approach C – Scenario Based
Under Approach C, cruise lines, finding the right incentives, pricing points, and products to put into place in the region allow for slightly greater deployment levels beyond those occurring presently. Based on feedback from cruise lines, we believe this is still a favorable assumption, albeit deployment trends (occurring later in the projection formula) are difficult to project at this point due to world factors not yet contemplated. A baseline annual growth of 2.2% is used over the projection period. Success as envisioned under this scenario allows for a single or several medium- to large-sized cruise vessels of 1,800 to 3,100 passengers to operate seasonally in the region—from 2 to 16 calls—focusing on open- and closed-jaw deployments. Likely candidates for this operation include HAL, Oceania, NCL and RCI amongst others. For Approach C, the following specific deployment assumptions apply:
Figure 28: Approach C Scenario Based Growth Projection, 2008 to 2030 Source: B&A, 2007
x For the low projection, an additional 2 calls of a large 3,100 and medium 2,200- passenger vessel are projected for deployment in 2009. An additional vessel comes on line with 8 calls for a moderate summer season and fall capacity with 2,000-passengers.
x For the medium projection, a similar approach as described above includes 2 large ship and 2 medium-sized vessels deployed from 2009 along with 1 medium (2,000-passengers) on 8 calls in 2012; a large (3,100-passengers) from 2013 with 6 additional calls and an extended summer season vessel with 1,844-passegners and 16 calls from 2015. This is a total of 34 additional calls overall.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 67 x Under the high projection, an additional large ship (2,600-passengers) is deployed on 12-sailings from 2014. Additionally, a 2,600-passenger vessel is deployed in 2017 on 8 sailings. This is an additional 20 calls for Sydney.
Under Approach C, cruise passenger throughput expands to between 165,590 (low) and 265,694 (high) passengers by 2030. Cruises increase to 63 (low) to 102 (high) based on our projection models.
2013 2018 2023 2030
A Low (4.50% growth) 115,823 145,533 175,244 216,839
A Mid (4.97% growth) 120,693 155,275 189,856 238,270
A High (5.40% growth) 125,564 165,016 204,468 259,700
A Low Cruise Calls 62 71 77 83
A Mid Cruise Calls 65 75 84 91
A High Cruise Calls 67 80 90 99
B Low (1.88% growth) 82,389 93,395 106,486 127,348
B Mid (2.85% growth) 100,616 114,057 130,021 155,523
B High (3.67% growth) 118,844 134,720 153,575 183,697
B Low Cruise Calls 44 45 47 49
B Mid Cruise Calls 54 55 57 60
B High Cruise Calls 64 65 68 70
C Low (3.16% growth) 128,596 113,284 132,876 152,504
C Mid (4.42% growth) 128,596 128,907 151,250 173,592
C High (5.51% growth) 128,596 144,567 169,623 194,679
C Low Cruise Calls 66 65 64 63
C Mid Cruise Calls 76 88 85 82
C High Cruise Calls 76 114 108 102 Table 16: Projection Range of Cruise Passenger and Vessel Call Throughput to Sydney, 2008 to 2030 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 68 As noted above, over time cruise calls do fall slightly in some of the scenario options mainly due to the continuing expansion of the cruise passenger capacity of the vessels sailing in the region. See Table 17 attached for complete projection overview.
In Figure 29 below we have outlined the most likely cruise throughput scenarios for the Port of Sydney over the study period.
Figure 29: Most Likely Approach Scenario Projections, 2008 to 2030 Source: B&A, 2007 In order to fully assess the overall seasonality and traffic demands of the cruise facilities in Sydney the total cruise traffic must be reflected and assessed over the study period. Table 16 provides an overall reflection of this anticipated traffic for the period from 2008 through 2030. This will also allow us to review the future potential seasonality for the Port of Sydney and further assess the strategic planning for cruise passenger throughput over time.
4.4 Port of Sydney future traffic analysis
Part of the process in accurately identifying long-term berth demand is to develop an understanding of the traffic patterns to the port or facilities in question. In the case of Sydney, there is a defined seasonal, monthly and daily traffic pattern that emerges through analyzing the historical traffic data as outlined in section 3.2. The drivers associated with the Sydney traffic patterns are inclusive of regional cruise market sector seasonality, profitability and competition from cruise regions throughout the year based on the same factors. In this context, we have assembled our traffic analysis for Sydney with a primary emphasis on the potential for future berth development. Based on our traffic evaluation the following factors have been identified:
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 69 x Seasonal and monthly traffic patterns are primarily driven by the fall foliage season with a focus on September and October. A secondary factor is the shoulder season redeployment of vessels from the European cruise patterns to those in North America, primarily the Caribbean region.
x All of the models envision some level of growth over the period with ranges from 48,000 to 56,000-passengers in the peak month in 2013; 75,000 to 77,000- passengers in the peak month in 2023; and between 85,000 to 95,000-throughput passengers during the peak month in 2030. Overall, on a percentage basis, September (40.84%) and October (40.01%) continue to be the peak months for the Sydney model.
x Sydney, as with the entire region has a distinct seasonality for cruise tourism. To a great degree the success of Sydney as a cruise tourism destination is very much linked to the fall foliage identity. Changing cruise patterns that may predominantly utilize Sydney during the peak summer months are unlikely and may provide a negative impact on the destination’s appeal long-term if the destination itself is not prepared to service the needs of the cruise visitor during this time. Providing for a limited cruise guest satisfaction over time is possible, if expansion of upland and tourism infrastructure is not incorporated to meet demand.
4.4.1 Monthly traffic analysis
Figure 30 provides a model of the future monthly passenger traffic for Sydney based on historical monthly traffic throughput. Typically, the peak months are September and October, with cruise passenger vessel traffic ceasing thereafter. There are no winter cruise activities to speak of with very few exceptions over the period. Seasonal cruise activities can also be attributed to outside influences, primarily Europe, Bermuda and Caribbean markets.
Figure 30: Monthly Passenger Model, 2003 - 2007 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 70 Over the long-term we believe a similar track related to the past five year average will continue. There is limited summer traffic with May averaging approximately 5.36% over the period. This is likely based on repositioning traffic. Traffic in the peak summer months is diverted to destination with high per diems at that period such as Europe and Bermuda. Although this consistency is essential to maintain and build for the future, it also clearly shows a very limited seasonality overall in the region to date.
Based on our projection assumptions for this study most growth is envisioned to occur on a consistent seasonal pattern for regional traffic growth on sailings of more than 7-days. Traffic growth is also envisioned for the period from May through August on a very limited basis. There is very little aggressive growth envisioned for the summer months based on the projection assumptions. This is primarily due to the competition from other worldwide summer destinations whereby the revenues will continue to draw traffic out of the Atlantic Canada cruise market catchments over the study period. Overall, on a percentage basis, September and October continue to be the peak months for the Sydney model over time.
Figure 31 refers back to the passenger projections with an illustration of the overall growth from 2008 to 2030 on a peak month basis – using September for the illustration as the month with the highest percentage of cruise traffic over time. If Sydney chooses to assist cruise line operators with regional growth, it will be imperative to serve the industry by looking to meet the demands of the peak month and peak days.
Figure 31: Peak Month Passenger Traffic, 2007 - 2030 Source: B&A, 2007 Figure 32 provides a snapshot for the number of cruise calls for Sydney over the study period. The figure also provides a look at the potential development of additional cruise berths for Sydney in order to accommodate the forecasted growth overall. Sydney’s growth is not constrained due to a lack of berthing facilities and upland infrastructure. However, cruise lines and Sydney may not get the full potential of visitor satisfaction and
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 71 economic impacts if an additional berth is not available for peak days for long-term growth opportunities.
Figure 32: Peak Month Cruise Vessel Calls, 2007 - 2030 Source: B&A, 2007 Based on our assessment we envision a range of between 28 to 37 cruise calls per peak month. Much of the long-term passenger growth (not cruise call growth) will be a reflection of the cruise vessel passenger capacity. This will be defined by the type of cruise sailing from the key regional homeports over the period. We have estimated an approximately 2.0% annual growth per passenger vessel for Sydney over the study period. However, we envision the overall regional passenger vessel load factor to exceed this factor. As we move further out into the projection study period it is more difficult to accurately reflect this outcome due to the number of influencing factors on vessel size and capacity. However, based on our projection model we foresee a minimum of two berths needed in 2012 to support cruise growth, and an additional anchorage should Sydney grow to more than 90,000-throughput passengers per month in the long-term.
4.4.2 Daily traffic analysis
Figure 33 shows the Sydney daily passenger traffic comparison from 2000 through 2007 based on annualized cruise passenger traffic. From a passenger volume perspective Wednesday along with the rest of the mid-week days consistently had the highest passenger throughputs and will likely continue to be the busiest cruise days throughout the study period. This pattern is indicative of a long cruise duration market with an emphasis on 8-day through 10-day sailings.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 72 Figure 33: Daily Passenger Traffic Comparison, 2000 – 2007 Source: B&A, 2007
This figure illustrates the relationship between cruise passenger throughputs on the days shown over time. Cruise patterns and homeport operations days have changed slightly over the historical period. Overall, Sydney daily traffic is driven by weekend homeporting, open-jaw sailings and 7-day plus cruise durations.
Figure 34: Peak Day Traffic, 2007 - 2030 Source: B&A, 2007
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 73 Sydney will climb from peak day traffic on mid-week days from 2,918-passengers in 2008 to between 7,200 and 8,000-passengers in 2030. Based on tour operator and cruise line feedback the port can handle the 6,000-passenger level of traffic with three vessels in port. However, two of these ships are at anchor which affects the passenger experience. The preference for vessels is to be at berth in a destination such as Sydney.
For cruise destinations, the consistency of cruise traffic calling on a year-round basis is a positive attribute. This provides the destination with the ability to manage the cruise facilities through revenue planning, personnel scheduling and other defined areas of operations. If cruise traffic is inconsistent on an annual basis this poses challenges in terms of portioning reserves to maintenance during low cruise traffic periods and places more demands on other aspects of the cruise operation inclusive of manning, maintenance, marketing and others. However, this formula primarily applies to cruise homeport operations. Sydney is a significantly different port-of-call with a distinct seasonality for both cruise and land-based tourism.
Based on the Facilities Demand Analysis the following conclusions have been formulated:
x Future passenger growth is dependent to a small degree on the addition of a berth and strategic planning to entice and support cruise lines in the region and operations to Sydney. This is a supply led industry both in terms of cruise vessels spurring demand and the need for additional tourism infrastructure in a region to assist with growth;
x Sydney will have the demand for 2 berths by approximately 2012. Based on market demand Sydney may require an additional anchorage(s) if it wants to meet the needs of the cruise industry with their long-term deployments;
x Regional cruise growth and Sydney cruise expansion offer some level of social and economic opportunities. However, Sydney must determine to what extent they wish to support cruise tourism using the limited infrastructure available at the Port and within the community of Sydney at present.
One of the keys to growth for the region and ports is who has the capacity to expand cruise facilities and tourism infrastructure and product offers. Thus, Sydney has an opportunity to capture additional deployments with new cruise infrastructure in place.
4.4.3 Peak daily facilities demand
Translating cruise passenger traffic assessment and forecasts into berth or facility demand over the projection period is an essential element in the overall evaluation and planning process for Sydney. This process looks to provide the facility need over time and more specifically to focus on the timing of the facilities needed by Sydney to accommodate future traffic demand. Facilities demand forecasting relies on identifying cruise deployment patterns, establishing vessel sizes of the future and forecasting vessel calls.
Figure 35 shows the combined annual calls for the Port of Sydney and begins to address the future requirements for berth and/or anchorage capacity. Based on this chart, a vast majority of days when cruise vessels visit the Port of Sydney are single calls. In 2004 Sydney peaked with 9 days with 2 ships in port. In 2006 there was a maximum of four days with 2 ships in port and for 2007 there are two days with 3 ships in port with 6,000-
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 74 passengers. For 2008 we see five days with 2 ships in port and one day with 3 vessels and more than 5,700-passengers.
Figure 35: Historical Calls Per Day, 2000 - 2007 Source: B&A, 2007 Based on the high day projection scenario under each approach we envision that the peak day berth demand found in Figure 36 illustrates the requirements for Sydney. This exercise provides for the maximum facility demand should the Port of Sydney choose to further pursue the overall goals of the projections as illustrated from 2008 through 2030. From a planning perspective this allows for future decision-making processes to envision the potential maximum use and required facilities – whether they are berth, anchorage, upland GTA or others. In addition, based on this assessment the Port of Sydney can also adjust operations management accordingly to better utilize the facilities in order to ensure a daily traffic balance that may provide the ability to better manage tourism infrastructure.
Currently, Sydney uses one berth and two anchorage locations based on the size of the present vessel configurations calling. Our analysis of peak day activity indicates that based on the Approach C MID scenario a third anchorage/berth may be utilized after 2015 as illustrated in Figure 36. The other most likely scenarios provide for berth needs much further down the study period as shown.
However, we would also envision that adequate facility management practices will provide the opportunity for Sydney to utilize its facilities to their maximum efficiency over the study period. Working with cruise line operators on scheduling will be required to prevent peaking difficulties on key days. This likely will be mid-week (being the most prevalent days when congestion at facilities may be an issue) in the peak fall season. This is due to the primary fall foliage period for tourists, and transportation requirements for movement of passengers to and from the cruise homeport hubs serving the cruise region.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 75 Figure 36: Peak Day Berth Demand (Wednesday), 2007 - 2030 Source: B&A, 2007 Based on the projection approaches, newbuilding trends and deployment strategies of the cruise industry the development of a second berth in Sydney to accommodate Super post- Panamax vessels is likely not mandatory within the next 5- to 10-years. However, if a berth able to support vessels of more than 130,000-GT and more than 3,000-passengers could be provided to the cruise industry within the next 2 to 3-years, this may provide a platform for additional cruise growth for Sydney.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 76 5.0 Sydney Strategies for Cruise Growth and Service
5.1 Overview
As part of the Port of Sydney Master Plan, a cruise review process was undertaken to offer recommended management, operations and development action Items to assist the Port of Sydney in addressing hardware and software issues related to cruise tourism. Recommendations presented herein were derived from results assembled as part of this study as well as cruise line and other project stakeholder feedback. Strategies and action items were also derived from the Consultant Team’s direct experience with developing cruise port-of-call business in destinations and ports worldwide.
While this Chapter specifically identifies strategic plan recommendations related to cruise operations, Chapters 2 and 3 offer background discussion, observations and insight into the recommendations contemplated. Strategies and action items for development of cruise operations to the Atlantic Canada region, specifically Sydney are grouped into three categories:
x Hardware. Strategies and action items to ensure that appropriate capital improvements are planned and developed to meet anticipated cruise industry throughput and facilities needs.
x Operations. Functional enhancements that allow for improved cruise operations.
x Software. Programs and marketing efforts developed to ensure product quality, brand recognition, communication efforts and other tourism support topics.
While each of the above groups is described separately in this section, there is significant interrelationship between specific action items identified for each. Where needed, we have identified the “critical path” of several of these items to allow for an improved understanding of these relationships. See Table 18 attached for a complete overview of the Strategic Cruise Growth and Service Recommendations.
Recommendations and approaches under each of the above categories are divided into three time frames specified. These categories include:
x Short Term (2008 -11). Those improvements designed to see immediate results and set the stage for future phase actions.
x Medium Term (2012 - 2014). Intermediate term projects that grow from the foundation created under early phased work to help achieve a long term vision.
x Long Term (beyond 2015). Projects whose realization results in the achievement and maintenance of the long term vision and ultimate goal(s).
Strategies identified in each of the improvement categories—Hardware, Operations, and Software—were also formulated and organized as to its intended direction toward
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 77 achievement of step change growth opportunities envisioned under Approach C (see Chapter 4).
The progression suggested by each of these approaches establishes a preliminary, timed framework for which Hardware, Operations, and Software strategies can be arrayed in general terms. It is assumed that certain action items provide progress toward multiple approaches; this is especially true of Hardware and Operational improvements, where implementation of specific efforts—such as a port security plan and improvements program—work to the benefit of all approaches as well as maintain Sydney’s ability to continue to accommodate anticipated Natural Growth inherent in the region, while looking to expand operations as identified in Approach C.
5.2 Recommended development strategies and action items
Recommended development strategies and actions items are presented in detail in the following discussion. Our intent is for these strategies to serve as a roadmap for implementation of specific actions as well as provide a graphical representation of the anticipated timing and relationships between items.
5.2.1 Hardware Improvements
Achievement of projected cruise passenger and vessel growth levels will require additional cruise berth(s) and upland tourism facilities to be identified and/or developed.
Risks are always inherent in the planning and development of cruise facilities and related tourism infrastructure; cruise lines can always relocate vessels to meet new market 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.
Short Term
Hardware improvements are central to the long-term success of Sydney’s continued growth as a cruise port-of-call in the Atlantic Canada region. Hardware improvements— more pointedly, the identification and development of an additional berthing option, and secondarily, adjacent upland support, cruise and land based tourism infrastructure—are needed to support projected cruise activity. From the perspective of the Consultant Team, the process through which this occurs is as crucial to Sydney’s success as the actual development of infrastructure. Why? First, while overall economic impacts associated with cruise operations are estimated to be sizable for the Sydney community, actual direct revenues generated through port charges are unlikely to fully cover capital costs associated with development of expanded berthing options. Thus, if it is the goal of the Port of Sydney to produce cost feasible additional berthing options, these will need to reflect conservative, phased facility development approaches and/or embrace multiple marine and upland uses that could potentially add additional revenue streams to cover capital costs.
Second, the cruise industry is highly mobile, able to reposition vessels at will. This factor exposes destinations to a high degree of investment risk in contemplating cruise facility development. Third, the Port of Sydney has a vested interest in retaining cruise operations
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 78 at the existing cruise terminal complex. The introduction of a competing venue or one that may erode the service level provided at the Port of Sydney to the cruise visitor may not assist in the future efforts of the port to expand cruise throughput. This would be considered an unhealthy option for a cruise destination (similar to having two competing airports serving a single city), it is highly desirable that win-win-win (Sydney, Port of Sydney, and Harbor stakeholders) options are fully explored to efficiently maximize long- term opportunities and economic contributions. Finally, while they are important to cruise operations, cruise berths and terminals do not by themselves generate cruise port-of-call activities. A cruise destination is a function of all of the supply and demand side characteristics. Cruise lines in certain destinations may be more responsive to increasing vessel activities through a significant increase in potential revenue opportunities or a reduction in port charges rather than development of a new cruise berth or facility.
With these and other issues in mind, Hardware action items identified for the Port of Sydney over the short-, medium, and long-term are generally grouped as follows:
H-ST 1 – Cruise Berthing Inventory. Prepare a comprehensive inventory and use strategy for cruise berthing options for the short, intermediate, and long term. This analysis should include review of the possibility of extending the current pier, redevelopment and expansion of piers north or south of the existing Terminal (including SYSCO and Robin Hood Properties), development of facilities at Sydport, and others. This step will help in the critical development of an interim berthing plan to accommodate peak operations (see Short and Intermediate Cruise Berthing Plan) as well as provide for needed data to prepare a strategic plan and program for any future mixed-use facilities envisioned.
H-ST 2 – Cruise/Marine/Tourism Facility Demand. Assess the need for facilities to accommodate other marine and tourism type operations. This information will help build a strong multi-use program associated with current facilities use as well as provide future options for the possible long-term evolution of the Sydney Cruise Terminal and adjacent areas as a tourism node. As described above, all marine modes should be considered, including ferry operations, visiting military ships, winter storage, yachts and others, as well as upland tourism concepts to assist in promoting local and regional tourism over the long- term.
H-ST 3 – Strategic Plan and Program for Mixed-Use Cruise/Marine/Tourism Facility Development. Prepare a multi-phased program and plan for a mixed-use facility to meet the long-term needs of the cruise, marine and combined cruise and land-based tourism industries as well as other community goals. With the completion of the above, the Port of Sydney should have the full spectrum of information needed to make an informed and final decision as to how and where additional berth and mixed-use venue should be considered and what uses such a facility could provide/serve inclusive of and beyond cruise operations. From this foundation, a strategic development plan that includes preliminary facilities design, cost, permit acquisition, financing and transition / implementation could be developed.
The achievement of the most likely passenger forecasts under Section 4 would require two medium to large (250 – 300-meter) cruise berths and related cruise tourism upland and ground transportation areas to support cruise operations on their own. Additional tender facilities could support a third ship on peak days as required long-term.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 79 Any new facility should consider the design vessel requirements discussed under Chapter 2 in terms of water depth, apron area, and space requirements to service the needs of the capacities of these design vessels. New facilities should also be developed under a multi- use scheme and take advantage of both appraised tourism and community demand for retail, marine office, conference, and entertainment demand. Other marine needs should also be considered. A multi-use approach will undoubtedly improve the cost feasibly of any new facilities.
As part of any plan formulation, input from cruise lines should be sought.
Medium Term
Action items identified under the medium term include:
H-MT 1 – Design Mixed-Use Cruise/Marine/Tourism Facility. Design, finance, and permit early phase(s) of the Strategic Plan and Program for Mixed-Use Facility Development. With the activation of specific targets identified cruise growth projections, Sydney should move forward with its facilities development / expansion plan to allow for any new facilities to come online in 2011 or 2012. We estimate design, financing, and permit acquisition would take 12 to 24 months to complete.
H-MT 2 – Construct Mixed-Use Cruise/Marine/Tourism Facility—Early Phase(s). Construct early phase(s) of the Strategic Plan and Program for Mixed-Use Facility Development. As needed, construction of the new facility would take place under this H- MT 2 commencing in (estimated) 2010 or 2011.
H-MT 3 – Design New Facility Support Cruise Tourism Infrastructure–Early Phase(s). As needed, design, finance, and permit cruise tourism infrastructure needed that supports new/expanded facilities, as developed under the early development phase(s)– roadways, signage, transportation areas and others. It is likely that a number of off-site improvements adjacent to the existing and proposed development sites may need to be designed and implemented associated with the development of any new mixed-use facility. These off-site improvements could include roadways, walkways, transportation facilities, signage programs and others. The design and construction (H-MT 4) of these improvements would be timed to the completion of the Mixed-Use Facility.
H-MT 4 – Construct New Facility Support Cruise Tourism Infrastructure–Early Phase(s). As needed, construct cruise tourism infrastructure needed to support new/expanded facilities developed under the early development phase(s). This could include roadways, signage, transportation areas and others.
Long Term
Action items identified for 2015 and beyond include:
H-LT 1 – Design Mixed-Use Facility–Latter Phase(s). Design, finance, and permit latter phase(s) of the Strategic Plan and Program for Mixed-Use Facility Development. As needed and market opportunities present, a latter phase(s) of the Mixed-Use Facility is envisioned for design post 2015 to support additional tourism and commercial opportunities in Sydney. Additional phases could include cruise and land-based
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 80 infrastructure needed to support passenger growth through the year 2030 as well as upland real estate opportunities.
H-LT 2 – Construct Mixed-Use Facility Development—Latter Phase(s). Construct latter phase(s) of the Strategic Plan and Program for Mixed-Use Facility Development (H- LT-1).
H-LT 3 – Design New Facility Support Cruise Tourism Infrastructure—Latter Phase(s). As needed, design, finance, and permit cruise tourism infrastructure needed to support new/expanded facilities developed under the latter development phase(s). This could include roadways, signage, transportation areas and others. Similar to H-MT 4, support infrastructure would be designed under this task.
H-LT 4 – Construct New Facility Support Cruise Tourism Infrastructure—Latter Phase(s). As needed, construct cruise tourism infrastructure needed to support new/expanded cruise facilities developed under the latter development phase(s). This could include roadways, signage, transportation areas and others.
5.2.2 Operational Improvements
Planning for a heightened passenger experience in Sydney, development of a second / interim berthing solution, and development of a benchmarking strategy—one that includes passenger, cruise line, and travel agent survey tools and assessment programs—support must be made a top priority. Properly executed, annual benchmarking efforts will provide a continuous list of important (but often minor) operational projects for pursuit over the short-, intermediate-, and long-terms.
Small destination enhancements over time can bring about significant rewards and help Sydney toward achievement of its cruise forecast goals.
The successful expansion and development of cruise tourism relies on several factors, not the least of which includes a comprehensive understanding and strategy for transitioning cruise line clients and project stakeholders seamlessly into a new operational environment as the Port of Sydney moves forward with numerous objectives related to the overall Master Plan associated with the entirety of the harbor. Cruise is a portion of the overall formula, but can be severely affected if not included in the process.
Short Term
Several immediate operational improvements were identified for consideration by Port of Sydney staff and cruise line stakeholders. These include:
O-ST 1 – Confirmation of Threat Assessment and Security Plan. Conduct a security threat assessment and terrorism deterrence plan for the existing Cruise Terminal to reduce/eliminate the potential of terrorist acts against cruise ships and other vessel traffic. Involve cruise lines. The evolving body of standards for cruise port security established by the IMO (ISPS), Transport Canada, U.S. Coast Guard, the EU, and CLIA should also be consulted.16 Security assessment is a critical item for all cruise ports.
16 The IMO adopted the ISPS in 2002 for regulations to enhance ship and port security and avert shipping from becoming a target of international terrorism.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 81 O-ST 2 – Security Plan Implementation. Implement recommendations of the Terminal Security Plan. The threats and countermeasures identified above should immediately be put in place in a cooperative environment in Sydney. While we did not actively review the current security plan for the Port of Sydney as part of this study, it is incumbent that an annual review takes place to confirm the proper security is in place to meet the national and ISPS code demands.
O-ST 3 – Short and Intermediate Cruise Berthing Plan. Prepare and implement a cruise berthing plan to provide for berthing solutions on peak cruise operation days when facilities at the existing Terminal / berth are unavailable. Instances will continue to arise where a second berth is required or a vessel is too large to be accommodated via anchorage to adequately support good tourism operations. Thus, the Port of Sydney, working with cruise lines and others needs to put into place a plan that presents a desirable berthing and operation options for these incidences. This contingency plan should be submitted to all cruise line operations departments and be a part of Sydney’s Cruise Marketing Plan (S-ST 1) and the Cruise Operations and Scheduling Plan discussed below (O-ST 6).
O-ST 4 – Cruise Benchmarking Strategy. Establish an annual benchmarking process for measuring cruise passenger, line, and community satisfaction of Sydney as a cruise port-of-call. Economic impacts should also be included. The establishment of benchmarks for maintaining a high level passenger and cruise line satisfaction is essential as it pertains to positioning the port within the region for port-of-call operations, as well as for continued community support of cruise industry related development. It is essential to track the economic and social impact of the cruise industry on Sydney and the surrounds inclusive of Cape Breton Island. Additionally, benchmarking must also be established for the collection and implementation of passenger and cruise line feedback of the services, venues and other aspects of Sydney and the surrounding area that impact a port-of-call visit.
Conducting such a survey, with the methodology and research questions kept constant, allows for yearly comparisons to be made. The survey effort should include not only large samples of ships, including looking at different operational days and seasons, but it should also measure spending and satisfaction levels of crew members–a major source of economic impact. The Port of Sydney should also consider issuing a similar survey to cruise lines, including both individuals at a corporate level as well as those key crew members in leadership positions that monitor both Sydney and onboard passenger comments.
O-ST 5 – Implementation of Cruise Benchmarking Strategy. Implement on an annual basis Sydney’s Cruise Benchmarking Strategy (O-ST 4). Survey efforts should occur on an annual basis and be consistent in methodology and sample size from year to year to provide for a good comparative analysis. Once complete, survey comments should be processed and, as needed, a series of smaller enhancement efforts should be planned and implemented (see O-ST 8).
O-ST 6 – Cruise Operations and Scheduling Plan. A cruise operations and scheduling plan and process should be prepared and implemented to streamline the delivery of information and identify potential conflicts arising from limited berth availability. Port of Sydney, ship’s agents, tour operators, and other stakeholders should work together to assemble a system by which future bookings for cruise vessel arrivals are scheduled and coordinated to help avoid conflicts for berths, and as needed, present alternatives to cruise
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 82 lines when berth space is at a premium. The Port of Sydney should be designated as having the primary responsibility for collecting (often from the ship’s agent) booking information and organizing the database. Many destinations and regions accomplish use of this type of database on the Web. This information should then be shared with all groups identified above and conflicts resolved for berth space as soon as possible. All cruise lines should be made aware of the Sydney booking program, including procedures and the process to identify contingency plans for berth space as needed (see O-ST 3). Additionally, this system may be included in a region-wide system of booking to assist the cruise line industry in formulating the best itinerary pattern to avoid berthing conflicts and congestion in all ports of Atlantic Canada and the surrounds associated with Canada & New England cruise itineraries and other patterns.
O-ST 7 – Cruise Terminal Enhancements Package. Study, design, and implement a terminal enhancements package aimed at improving any elements within and immediately surrounding the Sydney Cruise Terminal as directed by the cruise line industry, stakeholders, etc. to provide for increased visitor satisfaction levels. This may also serve to enhance alternative uses of the facility on non-cruise days in season and use during the off-season for additional events. Small modifications may work to enhance the cruise passenger experience while in Sydney.
O-ST 8 – Operations Audit and Enhancements. Based on feedback derived from benchmarking efforts, an audit and related package of small operational improvements should be conducted on an annual basis. This is a reoccurring task based on the benchmarking effort.
Medium Term
Action items identified under the medium term include:
O-MT 1 – Waterfront Tourism Plan. Study and implement a waterfront tourism plan that encourages activities along the Central Sydney waterfront areas. Emphasis should be on activity sequencing and placement of information kiosks, signage, and historical overviews. Sydney’s waterfront is a destination, one that should be encouraged to be enjoyed by cruise passengers and all area visitors. To further facilitate activity on the waterfront by cruise passengers, a waterfront tourism plan that seeks to find innovative ways lead visitors along the waterfront to activity areas (shopping, landmarks, parks and others) as well as learn about Sydney’s past, present, and future should be pursued. The waterfront tourism plan should establish a comprehensive Environmental Graphic Design (EGD) program that includes wayfinding and interpretive signage locations.17 The plan should contemplate both cruise passenger movements and exploration from the Cruise Terminal as well as any new tourism facilities.
O-MT 2 – Primary and Secondary Venue Assessment and Management Plan. Study cruise passenger visitation levels and the carrying capacity of Sydney’s and surrounds primary and secondary venues/attractions. Cruise passengers have a limited amount of time to sightsee, especially those in port for a single day. As such, passengers need to be quickly transported from sightseeing venues and coordinated with other ship and land- based visitor traffic to ensure the quality of the experience at these attractions. The Port of Sydney should investigate present cruise passenger visitation patterns and carrying
17 EGD refers to the planning, design and execution of graphic elements in the built environment. It includes graphic communication systems that identify, direct, inform, interpret and visually enhance the environment.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 83 capacity levels of attractions and sites visited most often by passengers to identify: (a.) The reasonable number of visitors and, if required, ground transportation vehicles that accommodate primary cruise passenger venues; (b.) Peak times of day, week, and year cruise passengers visit these venue to identify “crunch” periods; (c.) Assess venues in terms of accessibility for passengers, signage, restrooms, and other attributes; and (d.) Strategies to efficiently move passengers to and from attractions, keep destinations attractive and address identified venue deficiencies. Share results with cruise lines.
O-MT 3 – Venue Enhancement and Management. Implement findings of the Sydney and surrounds Primary and Secondary Venue Assessment and Management Plan (O-MT 2).
O-MT 4 – Smart-Pass Program. Develop and implement a Smart- or One-Pass Program that provides a single access card to ground transportation, attractions, and other areas of cruise passenger interest within and adjacent to Sydney. Many destinations are experimenting with the creation of smart cards that allow for cruise passengers (and other tourists) to have easy access to transportation services and attraction venues. A smart card system could provide easy access for cruise passengers to transportation modes and encourage passengers to explore Sydney and surrounds. Information on cruise passenger movements could be stored in a returned card to learn of the travel and possible attraction and shopping patterns of cruise passengers.
Long Term
O-LT 1 – New Facility Transition and Operations Plan. Develop and implement a transition plan to provide for seamless operation and information transfer to users and stakeholders related to the new multi-use facilities (latter phase).
5.2.3 Software Improvements
A large portion of the ultimate success to be achieved by Sydney is reliant on moving forward with a series of marketing efforts that work to (1.) Preserve Sydney’s existing clientele and (2.) Expand opportunities identified under the various Projection Approaches. Emphasis should be placed on organizing the messages and messengers first followed by those action items that work to increase opportunities for growth across the board and a focus on regional operators looking to expand operations.
Resources beyond those presently committed by the Port of Sydney will likely be required to move Software efforts forward.
Short Term
Of immediate concern in order to move forward with regards to software improvements for Sydney includes:
S-ST 1 – Cruise Marketing Plan. It is critical that the Port of Sydney refine and implement a specific cruise marketing plan for Sydney and tie that together with the Atlantic Canada Cruise Association and cruise region as a whole. A cruise marketing plan establishes the foundation for cruise tourism. A well conceived plan should identify the
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 84 message, means, and mode for expanding cruise activities to the Port of Sydney. In the development of this type of plan, the following steps should be included:
x Hold a Marketing Goals Workshop. Conduct a cruise marketing goals workshop to frame the project and identify short-, medium-, and long-term project goals and objectives. The strategies identified as part of this project effort should serve as a foundation.
x Identify the Marketing Audience. Prepare a comprehensive list of those key individuals and groups for targeting Sydney cruise marketing efforts, including cruise lines (including key executive, planning, marketing, and operations individuals), cruise associations, travel agent and charter companies, and others.
x Message Development and Refinement. Develop individual and group messages to be used as the baseline for building focused materials for each of the audiences. These messages should be aimed at presenting the best-possible compelling cases for the targeted audience to consider Sydney as a port-of-call option, as defined through the analysis of each target. In the short term, refining message development should be focused on Approach C (Focus on regional operators expanding over the short-term in the region).
x Messenger Identification. Critical to the success of the cruise marketing plan is the focus and consistency of both the message and the messenger(s). Under this task, the identification of the different individuals and groups to deliver the marketing message needs to occur. The development of relationships with the cruise lines is very important, and as such, those individuals that can foster trust between the destination and cruise line as well as “deliver the goods” in terms of answering cruise line inquiries, solving problems, and negotiating fees should be considered. The Cruise Sydney Committee or Cruise Advisory Board identified under S-ST (All) 2 described below may serve as a starting point to identify this messenger. We recommend that this messenger ideally be sourced from the Port of Sydney; a group or entity that has the entirety of Sydney and surrounds and the delivery of the entire cruise destination in mind.
Once complete, the Port of Sydney should move forward with the marketing plan’s implementation. Sydney already has a part-time position that can be used to move this and other efforts identified throughout this report forward.
S-ST 2 – Formulation of a Sydney Cruise Committee (SCC). Form a core team of community leaders and stakeholders to proactively communicate, manage, plan, and market the development and expansion of cruise operations to Sydney. Leadership, coordination and communication efforts to ensure the success of the delivery of Sydney as a premier destination for cruise operators and passengers must be established and followed by the cruise tourism stakeholders. These groups should share in the leadership role. It is a merging of the private and public sectors that will make this group work effectively in coordinating the many levels and areas needed to accomplish the goals and objectives of the committee. All sectors of the destination should be included in the planning and management functions, drawing representation from the following: Tourism stakeholders in the private sector (Port of Sydney, port agents, tour operators, venues and sites, hoteliers, retail associations); local resident groups (downtown development council, regional organizations; key Government offices (Parks Canada, ACOA, ACCA, Canada
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 85 Tourism Commission, port management authorities and others); special interest groups (taxi drivers, guides, vendors, the environment and others).
A core team of 5 to 7 individuals should be considered to lead the tourism body with solid representation of the cross-section of those stakeholders within the community. These members should be invited to participate on the basis of: Knowledge and experience of the area of Sydney and surrounding tourism region; a commitment to the advancement of tourism opportunities for the public and private sector; a comprehensive view of the Sydney and the cruise industry. In order to facilitate the rapid development of the cruise tourism body, we would recommend that one of the major stakeholders, preferably the Port of Sydney, act as the catalyst (Secretariat) for the implementation and development of the organization. Without this push, it may be difficult to establish this body for a long- term role. Terms on the core group can range from 1-year to 3-years with a standard rotational basis. The entire core group should never be assembled or dismantled during the same period. A Chairman, Vice Chairman, and Secretary should be nominated and elected by the entire body. Terms in these positions should coincide with those of the standard rotation.
Subcommittee issues include Marketing and public relations; product development; surveys and benchmarking; and, training and development.
Any structure, while rigid in form, should be flexible in practice. This means that the members of the organization should foster the principles of incorporating the social and economic issues of the community within the needs and expectations of the visitor to accomplish its goals. This group should act as a purveyor of information and a catalyst for development within the community by providing research and ideas to and from government, the private sector and individual community groups.
The Cruise Sydney Committee should establish communication procedures to ensure "one message" is being sent to cruise lines, travel agents, potential cruise visitors, and others concerning marketing, shoreside and operational issues. It will be essential for all entities to work together on this task. As Sydney continues its marketing campaign for future long-term growth and development, the message needs to be thoroughly consistent.
S-ST 3 – Retention of Dedicated Staffing. Retain a full time Cruise Terminal manager and/or team to be directly responsible for communication, coordination, plan preparation, marketing, product development and mixed-use activities in the current and future cruise / marine / tourism facilities. This position is likely the same as or concentrated separately on the terminal operations themselves, from the current position of Manager, Cruise Marketing & Development. A dedicated budget should be established. The team leader for the cruise marketing / management effort should be seasoned manager and have experience with working with the major cruise lines as is now the case in Sydney. The Cruise Terminal Manager should assist in the development of the cruise market, but focus on year-round facility operations targeting additional opportunities outside of cruise operations.
S-ST 4 – In-House Education Program. Conduct a workshop(s) for cruise stakeholders as to the opportunities and challenges to growing the cruise business in Sydney. The knowledge base of the Port of Sydney cruise team should be transmitted to all persons responsible for marketing and expanding Sydney as a tourism destination. Cruise serves as a component piece of Sydney’s and surrounds tourism offer.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 86 S-ST 5 – Tariff Strategy and Bundled Fee Package. Work to reevaluate port charges and provide, where possible, bundled tariff packages to attract increased cruise operations. Sydney will develop an ever greater knowledge of the costs incurred by cruise lines in operating in the area through a tariff analysis. This knowledge should be used to identify where and how certain costs of operation can be lowered. Where these costs are already low, the Port of Sydney can use this information as a marketing piece to cruise lines. Bundling all fees to the cruise lines (passenger, berth, harbor entrance, tug, terminal fee, security, transportation shuttles, etc.) will assist the cruise lines in budgeting and revenue production. This will further enhance the per diems in the region. When fees are bundled into a single passenger fee they can be passed through to the cruise consumer. This assists in alleviating direct expenses to the cruise line’s operating components – such as the Marine Department.
S-ST 6 – Market to the Community of Sydney and Surrounds. Develop a method and format for a campaign and public relations effort to keep the Sydney and surrounds community informed and involved in growing cruise tourism operations. Focus should be on building consensus for facility and tourism product development. Having the community buy into the future of cruise tourism development will greatly assist in Sydney’s efforts to provide a level of service consistent with its targeted demographic. Creating value for the citizen through employment opportunities, community pride, and other opportunities will lay the foundation for sustained future growth and community cooperation efforts. A campaign conducted to increase community, business and government support for the efforts of the Port of Sydney should be established to produce the desired product delivery effects and support.
S-ST 7 – Cruise Passenger Visitor's Kit. Develop a specific visitor's kit resource for cruise passengers that can be disseminated onboard and onshore. The Visitor’s Kit— provides a good overview and tool for individuals visiting Sydney and surrounds. The Port of Sydney should take this brochure a step further, developing a similar but more specific resource for cruise passengers that can be disseminated on board the cruise ship and at special information kiosks in and around the Cruise Terminal. The brochure should focus on identifying many issues of specific concern to cruise passengers, such as: (a.) The cruise terminal location in relation to major sightseeing venues/sites/areas in Sydney and surrounds; (b.) Walking tours starting from the cruise terminal; (c.) The best and most cost effective ways to move around Sydney, especially if only in port for a day; (d.) Address frequently asked questions by visitors (e.g., what is the exchange rate); (e.) Provide very legible maps, especially to the main shopping area or small venues; and (f.) Provide a hotline for cruise passengers in case of emergency or if they are separated from their cruise ship. The brochure should make it easy for a cruise passenger with only six to eight hours to spend in Sydney and surrounds. Information should also be provided on special programs, websites, or other items that would serve as information and incentive for cruise passengers to return to Sydney and Cape Breton Island as part of a land based vacation. The cruise portion should be focused on providing information to the general consumer as well as detailed data and content of use to cruise lines and possibly other tourism providers. Ease of information access is important to promote cruise line activity.
S-ST 8 – Port Costs Benchmarking. Prepare a bi-annual comprehensive round table discussion on all costs of operation by cruise ships at Sydney and compare these against primary competitors for port-of-call traffic in the region. This analysis should review all of a cruise lines potential costs associated with operations.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 87 S-ST 9 – Create a Cruise Website and Newsletter. Create and update monthly a cruise dedicated website for Sydney. Also develop a Cruise Sydney newsletter for quarterly distribution to international cruise line decision-makers passengers and their clientele. Both of these elements should be linked to the Atlantic Canada Cruise Association’s site and sent directly to key cruise line and travel industry decision-makers.
S-ST 10 – Cruise Tourism Provider Education. Conduct annual workshops for cruise tourism service providers (marine, transportation, venues, guides, and others) to enhance delivery and quality of cruise products in order to meet the needs and expectations of cruise lines and passengers. These types of workshops ensure that all individuals in the tourism delivery pipeline serve as proper ambassadors for Sydney.
S-ST 11 – Strategic Relationships with Key Atlantic Canada Regional Ports. Continue strategic relationships with several key ports in Atlantic Canada (Halifax, Saint John, Charlottetown, and et. al. as well as New York, Boston, Bar Harbor and others) to foster communication and possible partnership in the development of regional cruise products and programs. This is a critical element to the overall success of the continued emergence of Atlantic Canada cruise programs with Sydney as an element. Strategic relationships allow for information sharing, consistent product delivery throughout an itinerary and other meaningful benefits. The current ACCA relationship meets this requirement. Further associations may also be warranted as the region expands. Close contact with the feeder homeports is also important.
S-ST 12 – Cruise Trade Show Participation. Identify speaking and participation opportunities in cruise and tourism trade shows to increase awareness of Sydney and promote cruise tourism overall in the region. The Canada & New England Cruise Symposium and Seatrade Miami are beneficial. As European vessels look to call in the region it may also be beneficial to participate in Seatrade Europe.
S-ST 13 – Focus on the Success of Holland America Line. Collaborate on marketing efforts, develop incentive packages, and look for other ways in which win-win scenarios can be created between HAL and Sydney. This is your biggest partnership at present and there appears to be a solid incentive for HAL to move Sydney to the next level of cruise tourism. Following on this success other lines can then be focused on for a similar project.
S-ST 14 – Regional Travel Agent Education. Conduct an educational campaign for regional travel agents on the opportunities of Sydney cruise product offerings. A powerful travel agent base can often convince a cruise line that they can sell beyond what is present in the marketplace or region, and as such, serve as useful group in expanding cruise itinerary offerings for a region or port. Education and familiarity of the destination’s cruise specific offerings is a key.
S-ST 15 – Regional Consumer Education. Initiate a focused media campaign and public relations effort to educate potential regional cruise consumers (Northeast region) of cruising (in general) and offerings to Sydney (specifically). Use existing Canada Tourism and ACCA marketing network as a foundation.
S-ST 16 – North American and European Cruise Operator Visitation. Continue to conduct a series of marketing calls/efforts to North American cruise operators, additionally those cruise operators in Europe should also be targeted as the region spreads out and additional bed capacity is placed in the European consumer market. These visits may be
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 88 well served to be done via an ACCA group mission, dependent upon the client and there current role with Sydney. Focus these calls to expand specific cruise itineraries identified below (S-ST 17).
S-ST 17 – Regional Cruise Itinerary Packages. In partnership with ACCA, develop a series of itinerary packages for regional cruise consumers and operators to encourage increased cruise activities to Sydney. Packages may include discounts on port charges for increased passenger throughput production, visitor programs, special “behind the scenes” tours of regional high value venues not readily available to most tourist, and/or other incentives, and others.
S-ST 18 – Form Marketing Partnerships with HAL and Other Regionally Impactful Cruise Lines. Form a targeted marketing partnership with HAL and other cruise lines to promote Sydney and Atlantic Canada as a cruise destination. Include shared media related spending to target regional consumer prospects. This is likely a higher dollar value project and as such may require shared planning with the ACCA, ACOA or Canada Tourism.
S-ST 19 – International Cruise Trade Show Participation. Participate at the international Seatrade Cruise Shipping Convention, CLIA, IAPH, AAPA and others that have a high degree of cruise line participation.
S-ST 20 – Formulate Transportation Provider Guidelines. Develop transportation guidelines associated with tourism operations in Sydney inclusive of traffic movements, parking, operations, monitoring, licensing, and other elements for cruise tourism based transportation.
S-ST 21 – Ground Transportation Area Management. Encourage cooperation between cruise vessel staff and Tour Operator(s) to increase the efficient use of the GTA, specifically with peak days. Promote onboard grouping of shore excursion coach tour loads and movement via single tender moves to the loading area when anchorages are in use. Encourage overall cooperation amongst tour operators, transportation providers, taxis and other as a common courtesy to the overall efficiencies of the area.
S-ST 22 – Wayfinding Signage and Kiosk Development. Provide for wayfinding signage throughout Sydney in key locations to provide information and encourage pedestrian movement and flow throughout the community, specifically tourism and retail areas. Staffed tourism kiosks in primary access areas to the downtown area.
Medium Term
S-MT 1 – Update Cruise Marketing Plan. Update, refine and implement a specific cruise marketing plan for Sydney and the Cape Breton area. Emphasis should be placed on fostering increased European presence and their respective consumer bases.
S-MT 2 – Market to the Community of Sydney and Surrounds. Review, and as needed, readjust media campaign and public relations efforts to keep the Sydney and surrounding communities informed and involved in efforts and successes associated with growing cruise operations.
SM-T 3 – Facility Design Process Involvement. Include cruise operators in the design process of developing a mixed-use cruise tourism facility and waterfront development.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 89 SM-T 4 – Long Term Contract Issuance. Work with cruise lines to establish one/several long-term agreements for cruise berth use at existing and planned facilities.
SM-T 5 – Form a Relationship with the Ports of New York and Boston. Form "sister port" relationships with the Port of New York and Boston to share ideas and information related to facilities development and operations, especially associated with homeport traffic destined for the region. Quebec City and Montreal amongst others may also serve as good sister port participants.
SM-T 6 – Focus on the Success of HAL and Other Cruise Lines. Continue to collaborate on marketing efforts, develop incentives, and look for other ways in which win-win scenarios can be created between HAL and other key cruise lines and Sydney.
S-MT 7 – North American and European Cruise Operator Visitation. Conduct a series of marketing calls/efforts to North American and European cruise operators. This is a continuation of the relationship building and meetings undertaken as S-ST 16.
S-MT 8 – North American and European Cruise Operator Familiarization Trips. Organize and execute a familiarization (FAM) trip for European and North American cruise line decision-makers. This may be done in conjunction with the ACCA as in past efforts.
S-MT 9 – Itinerary Package Formulation. Develop a series of itinerary packages, especially those focused on Coastwise Atlantic Canada Cruising as a marketing tool for small and international cruise lines focused on key demographic markets.
S-MT 10 – International Consumer Education. Initiate a focused media campaign and public relations effort to educate potential international consumers of cruising and offerings to Atlantic Canada and to Sydney (specifically). Use existing ACCA, Canada Tourism and other marketing networks as a foundation. The education of international travel and leisure consumers that cruising offers an exciting, good value for money vacation will be important to growing the business overall and to Sydney specifically. The Port of Sydney in conjunction with the ACCA could work alongside European cruise operators to focus on key cruise consumer demographic groups.
S-MT 11 – Tour Provider Offerings. Working with Sydney and surrounds tour providers, identify and assist in the development of a series of new 4 hour, 6 hour, water and harbor oriented and other land tour offerings geared to different demographics of cruise passengers inclusive of nationality, age, income level, education level, etc. A continued evolution of tour offerings is always essential to keeping a destination fresh, especially for repeat cruise visitors.
S-MT 12 – Targeted Provider Program Offerings. Working with niche, luxury, and incentive focused cruise line operators, develop a series of offerings, programs, and others that would appeal to their specific target demographics.
Long Term
S-LT 1 – Update Cruise Marketing Plan. Update, refine and implement a specific cruise marketing plan for Sydney and the Cape Breton region. Emphasis should be placed on transforming European and niche operators into regional successes.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 90 S-LT 2 – Market to the Community of Sydney and Surrounds. Review, and as needed, readjust media campaign and public relations efforts to keep the Sydney and surrounds community informed and involved in efforts and successes associated with growing cruise operations.
S-LT 3 – Facility Design Process Involvement. Include cruise operators and local cruise stakeholders in the design process of developing and implementing the latter phases of the mixed-use facility development.
S-LT 4 – Future Market Education Initiative. Develop future market education program(s) targeted to children and young adults to introduce these audiences to the cruise industry. The focus is to increase the regional consumer base over the very long term. At this point we do not have a solid grasp as to where the future cruise consumer or target demographic for the region will lay. Thus an overall education program is essential for growth of cruise and continued high levels of cruise visitor service in the region and Sydney specifically.
S-LT 5 – Complementary Port Support. Provide operations and facilities development expertise to assist the development and maturation of key regional ports. Focus on those facilities that have had difficulty emerging given favorable market trends.
S-LT 6 – Business Planning for Regional Expansion of Cruise Operators. The Port of Sydney in conjunction with the ACCA should meet and provide support to leading cruise operators—HAL, RCI, NCL, Princess—to assist them in developing distinctly branded cruise offerings with appeal to their cruise consumers.
2007 SYDNEY PORT CRUISE MARKET STUDY – SEPT. 13, 2007 (FINAL REPORT) - PAGE 91 (This page intentionally left blank) Port of Sydney Master Plan November 2007
APPENDIX C Cost Estimates
Appendix C 1 (This page intentionally left blank) SYDNEY MASTER PLAN Cost Estimate - Coal Export Terminal at International Coal Pier
Item Unit Unit Cost Quantity Cost (US $) Cost (CAN $) Dredging Costs Mobilization Lump Sum 1 $0 $0 Berth Dredging ($5.89/cy) Cu.m $7.70 $0 $0 Sub-Total Dredging Costs $0 $0 Engineering & Contingency 25.00% $0 $0 Total Dredging Costs $0 $0
Marine Structures Mobilization Lump Sum $1,000,000 1 $1,000,000 $1,016,000 Berthing Dolphins for Cape Vessels EA $750,000 3 $2,250,000 $2,286,000 Mooring Dolphins (w/ Bollards and Catwalks) EA $500,000 2 $1,000,000 $1,016,000 Shiploader Quadrant Beam and support structures EA $1,500,000 1 $1,500,000 $1,524,000 Shiploader Slewing Structure Support Pedestal EA $1,000,000 1 $1,000,000 $1,016,000 Sub-Total Marine Costs $6,750,000 $6,858,000 Engineering & Contingency 25.00% $1,687,500 $1,714,500 Total Marine Sturctures Costs $8,437,500 $8,572,500
Landside Terminal Development Cost: (US $) (CAN $) Mobilization / Insurance / Bonding LS $2,000,000 1 $2,000,000 $2,032,000 Site Preparation - Clearing & Grading Coal Yard LA $100,000 1 $100,000 $101,600 Earthen Dike and Fill Pond for Coal Yard LS $1,000,000 1 $1,000,000 $1,016,000 Storage Yard Surfacing (soil/cement) LS $1,500,000 1 $1,500,000 $1,524,000 Retention Pond and Drainage Structures LS $1,000,000 1 $1,000,000 $1,016,000 Internal Access Roads LS $250,000 1 $250,000 $254,000 Fire Water systems / Dust Control / etc. LS $500,000 1 $500,000 $508,000 MCC Rooms, Electrical Rooms, Pumping Station LS $500,000 1 $500,000 $508,000 Misc. Terminal Buildings sq.m $570 4000 $2,280,000 $2,316,480 Stacker/Reclaimer Runway m $1,000 500 $500,000 $508,000 Railcar Unloading Station - Cover Building sq.m $160 7700 $1,232,000 $1,251,712 Railcar Unloading Station - Hoppers and other structures LS $1,000,000 1 $1,000,000 $1,016,000 Lighting, Communications and Electric Ha. $37,000 10 $370,000 $375,920 Fencing, Security & Site Control m $40 3000 $120,000 $121,920 Sub-Total Terminal Development Costs $12,352,000 $12,549,632 Engineering & Contingency 25.00% $3,088,000 $3,137,408 Total Terminal Development Costs $15,440,000 $15,687,040
Equipment Cost (US $) (CAN $) Slewing Shiploader (Reach for Cape Vessels) Ea $7,500,000 1 $7,500,000 $7,620,000 Rail Unloading to Yard Conveyors (3 elevated belts) m $4,250 400 $1,700,000 $1,727,200 Yard Stacking Conveyor m $3,500 500 $1,750,000 $1,778,000 Yard Reclaim Conveyor m $3,500 500 $1,750,000 $1,778,000 Export Conveyors (4 belts including tunnel belt under rail) Ea $4,250 540 $2,295,000 $2,331,720 Transfer Towers (Double - inbound/outbound in each) Ea $300,000 3 $900,000 $914,400 Transfer Towers (Single Transfer) Ea $150,000 2 $300,000 $304,800 Traveling Stacker/Reclaimer for Coal Ea $5,000,000 1 $5,000,000 $5,080,000 Railcar Unloading Station Equipment (Bottom Dump Lot $1,000,000 1 $1,000,000 $1,016,000 Sub-Total Equipment Costs $22,195,000 $22,550,120 Engineering & Contingency 25.00% $5,548,750 $5,637,530 Total Equipment Costs $27,743,750 $28,187,650
Summary: (US $) (CAN $) Dredging Costs $0 $0 Marine Structures $8,437,500 $8,572,500 Landside Terminal Development Cost: $15,440,000 $15,687,040 Equipment Costs $27,743,750 $28,187,650 Total Development Cost $51,621,250 $52,447,190 SYDNEY MASTER PLAN Cost Estimate - ACBT Multibulk Terminal and Option for Bulk Coal Export Item Unit Unit Cost Quantity Cost (US $) Cost (CAN $) Marine Construction Mobilization Lump Sum $250,000 1 $250,000 $254,000 Berth Dredging ($5.89/cy) Cu.m $7.70 $0 $0 Wharf Repairs and Upgrades LS $650,000 1 $650,000 $660,400 Sub-Total Wharf and Dredging Costs $900,000 $914,400 Engineering & Contingency 25.00% $225,000 $228,600 Total Marine Construction Costs $1,125,000 $1,143,000
Terminal Development Cost: (US $) (CAN $) Mobilization Lump Sum $1,000,000 1 $1,000,000 $1,016,000 Site Preparation - Clearing & Grading Ha. $6,000 5 $30,000 $30,480 Pavement Heavy - Storage Yards Ha. $371,000 3 $1,113,000 $1,130,808 Tracks ln. m $410 550 $225,500 $229,108 Switches Ea. $50,000 3 $150,000 $152,400 Storage Building sq.m $1,345 6000 $8,072,933 $8,202,099 Power and Controls for Export System Ls $1,500,000 1 $1,500,000 $1,524,000 Utilities and Drainage Ha. $74,000 5 $370,000 $375,920 Lighting, Communications and Electric Ha. $37,000 5 $185,000 $187,960 Fencing, Security & Site Control m $40 1000 $40,000 $40,640 Internal Roadways/Paved Parking sq.m $48 2,000 $95,679 $97,210 Sub-Total Terminal Development Costs $12,782,112 $12,986,625 Engineering & Contingency 25.00% $3,195,528 $3,246,656 Total Terminal Development Costs $15,977,640 $16,233,282
Equipment Cost (US $) (CAN $) Mobile Harbor Crane Ea $4,000,000 1 $4,000,000 $4,064,000 Coal Export Conveyors (at grade) ln. m $3,500 250 $875,000 $889,000 Coal Export Conveyors (Elevated) ln. m $4,250 450 $1,912,500 $1,943,100 Shiploader Gantry Conveyor (Elevated enclosed gallery) ln. m $8,000 130 $1,040,000 $1,056,640 Transfer Towers (Single Transfer) Ea. $150,000 2 $300,000 $304,800 Traveling Shiploader - Reach for Panamax Vesse Ea $6,000,000 1 $6,000,000 $6,096,000 Sub-Total Equipment Costs $14,127,500 $14,353,540 Engineering & Contingency 25.00% $3,531,875 $3,588,385 Total Equipment Costs $17,659,375 $17,941,925
Summary: (US $) (CAN $) Marine Construction $1,125,000 $1,143,000 Terminal Development Costs $15,977,640 $16,233,282 Equipment Costs $17,659,375 $17,941,925 Total Development Cost - Multibulk Option $34,762,015 $35,318,207
Option for 125,000 DWT Bulk Coal Carriers Incremental Costs: Marine Construction Mobilization Lump Sum $500,000 1 $500,000 $508,000 Berth and Accessway Dredging & Disposal ($7.5/cy) Cu.m $9.81 300,000 $2,942,890 $2,989,976 Wharf Repairs and Upgrades-Supplemental LS $1,000,000 1 $1,000,000 $1,016,000 Sub-Total Wharf and Dredging Costs $4,442,890 $4,513,976 Engineering & Contingency 25.00% $1,110,722 $1,128,494 Total Incremental Marine Construction Costs $5,553,612 $5,642,470
Terminal Development Cost: (US $) (CAN $) Coal stockpile area/ rail unloader w/ mob. and related items LS 10,000,000 1 $10,000,000 $10,160,000 Engineering & Contingency 25.00% $2,500,000 $2,540,000 Total Incremental Terminal Development Costs $12,500,000 $12,700,000
Equipment Cost (US $) (CAN $) Extended Shiploader Reach for 125,000 DWT Bulk Carrier Ea $1,500,000 1 $1,500,000 $1,524,000 Total Incremental Equipment Costs $1,500,000 $1,524,000 Total Development Cost - Bulk Coal Option $54,315,627 $55,184,677 TEC inc. 11/21/2007
SYDNEY MASTER PLAN Sydport Container Terminal -Capital Cost Estimate - Phase 1 and Phase 2 (Sydport Greenfield Site) Phase 1 Phase 2 Item Unit Unit Cost Quantity Cost (US $) Cost (CAN $) Quantity Cost (US $) Cost (CAN $) Dredging Costs: (US $) (CAN $) (US $) (CAN $) Mobilization LS $1,500,000 1 $1,500,000 $1,524,000 1 $1,500,000 $1,524,000 Berth Dredging ($5.89/cy) cm $7.70 587,200 $4,523,690 $4,596,069 1,330,500 $10,249,948 $10,413,947 Fill (Land Reclamation) ($2/cy) cm $2.62 587,200 $1,536,058 $1,560,635 1,795,500 $4,696,852 $4,772,002 Sub-Total Dredging Costs $7,559,747 $7,680,703 $16,446,800 $16,709,949 Contingency 15.00% $1,133,962 $1,152,106 $2,467,020 $2,506,492 Engineering 6.00% $521,623 $529,969 $1,134,829 $1,152,986 Total Dredging Costs (rounded) $9,220,000 $9,360,000 $20,048,649 $20,369,427
Terminal Development Cost: (US $) (CAN $) (US $) (CAN $) Mobilization LS $2,000,000 1 $2,000,000 $2,032,000 1 $1,000,000 $1,016,000 Site Preparation - Uplands Clearing & Grubing Ha. $6,000 65 $390,000 $396,240 0 $0 $0 Fine Grading, with grader, for paved areas sm $0.74 360,000 $265,731 $269,982 150,000 $110,721 $112,493 Shoreline Rip-Rap Stone (Rock Dike) sm $93.15 67,320 $6,270,609 $6,370,939 10,000 $931,463 $946,366 Marginal Wharf (w/ Crane Rails) m $57,000 750 $42,750,000 $43,434,000 750 $42,750,000 $43,434,000 Pavement Light - Phase 1A Ha. $247,000 20 $4,940,000 $5,019,040 $0 $0 Pavement Heavy - Containers Ha. $371,000 26 $9,646,000 $9,800,336 26 $9,646,000 $9,800,336 Working Tracks - ICTF - Phase 1A m $410 7,700 $3,157,000 $3,207,512 0 $0 $0 Switches - ICTF - Phase 1A Ea. $35,000 8 $280,000 $284,480 0 $0 $0 Storage Tracks - Phase 1A m $410 9,300 $3,813,000 $3,874,008 $0 $0 Switches - Storage Tracks - Phase 1A Ea. $35,000 8 $280,000 $284,480 $0 $0 Rail Bridge sm $1,076 2300 $2,475,699 $2,515,310 $0 $0 Adiminstration Building (2-story, 8,000 sq.ft.) sm $954 743 $709,080 $720,425 $0 $0 Marine Operations Building (2,000 sq.ft.) sm $527 186 $97,965 $99,532 $0 $0 Maintenance & Repair Buildings (3,000 sq.ft.) sm $954 279 $265,905 $270,159 0 $0 $0 Gate/Guard House (600 sq. ft.) sm $954 56 $53,181 $54,032 $0 $0 Signage, Marking & Signals Ha. $30,000 26.5 $795,000 $807,720 15 $450,000 $457,200 Utilities and Drainage Ha. $74,000 26.5 $1,961,000 $1,992,376 15 $1,110,000 $1,127,760 Lighting, Communications and Electric Ha. $37,000 26.5 $980,500 $996,188 15 $555,000 $563,880 Fencing, Security & Site Control m $40 3000 $120,000 $121,920 $0 $0 Internal Roadways/Paved Parking sm $48 7500 $358,797 $364,538 $0 $0 Sub-Total Terminal Development Costs $81,609,467 $82,915,218 $56,553,184 $57,458,035 Contingency 15.00% $12,241,420 $12,437,283 $8,482,978 $8,618,705 Engineering 6.00% $5,631,053 $5,721,150 $3,902,170 $3,964,604 Total Terminal Development Costs (rounded) $99,480,000 $101,070,000 $68,938,331 $70,041,345
Equipment Cost (US $) (CAN $) (US $) (CAN $) Ship-to-Shore Container Cranes Ea $7,500,000 4 $30,000,000 $30,480,000 4 $30,000,000 $30,480,000 RTG Container Yard Gantries Ea $3,000,000 4 $12,000,000 $12,192,000 4 $12,000,000 $12,192,000 Reach Stackers Ea $850,000 5 $4,250,000 $4,318,000 5 $4,250,000 $4,318,000 Other Equipment - Containers - Phase 1A LS $2,000,000 1 $2,000,000 $2,032,000 1 $2,000,000 $2,032,000 Total Equipment Costs (rounded) $48,250,000 $49,020,000 $48,250,000 $49,020,000
Off-Site Transportation Improvement Costs (US $) (CAN $) (US $) (CAN $) Access Roads (Incl. clearing & site prep) m $820 2000 $1,640,415 $1,666,662 0 $0 $0 Water Crossing - road only (culverts) Ea. $25,000 1 $25,000 $25,400 0 $0 $0 Main Line track (Incl. clearing & site prep) m $820 1500 $1,230,311 $1,249,996 0 $0 $0 Main Line Switches Ea. $35,000 1 $35,000 $35,560 0 $0 $0 Water Crossing - Rail and Road (Culverts) Ea. $50,000 3 $150,000 $152,400 0 $0 $0 Sub-Total Off-Site Transportation Costs $3,080,726 $3,130,018 $0 $0 Contingency 15.00% $462,109 $469,503 $0 $0 Engineering 6.00% $212,570 $215,971 $0 $0 Total Terminal Development Costs (rounded) $3,760,000 $3,820,000 $0 $0
Summary: (US $) (CAN $) (US $) (CAN $) Dredging Costs $9,220,000 $9,360,000 $20,048,649 $20,369,427 Terminal Development Costs $99,480,000 $101,070,000 $68,938,331 $70,041,345 Equipment Costs $48,250,000 $49,020,000 $48,250,000 $49,020,000 Off-Site Transportation Costs $3,760,000 $3,820,000 $0 $0
TOTAL DEVELOPMENT COST (Rounded) $160,710,000 $163,270,000 $137,236,980 $139,430,772
P:\Sydney Port Master Plan\Draft Master Plan\FINAL MASTER PLAN\Sydport Container Terminal Greenfield Site estimate 112007.xls Alt 2A SYDNEY MASTER PLAN Cost Estimate - Sydport Breakbulk Terminal
Item Unit Unit Cost Quantity Cost (US $) Cost (CAN $) Marine Constructiun: Mobilization Lump Sum $1,000,000 1 $1,000,000 $1,016,000 Demo Existing Structures Lump Sum $1,000,000 1 $1,000,000 $1,016,000 Fill (Land Reclamation) Cu.m $6.54 216,000 $1,412,587 $1,435,188 Marginal Wharf ln. m $26,000 570 $14,820,000 $15,057,120 Sub-Total Marine Construction Costs $18,232,587 $18,524,308 Engineering & Contingency 25.00% $4,558,147 $4,631,077 Total Marine Construction Costs $22,790,734 $23,155,386
Terminal Development Cost: (US $) (CAN $) Mobilization Lump Sum $1,000,000 1 $1,000,000 $1,016,000 Site Preparation - Clearing & Grading Ha. $6,000 5 $30,000 $30,480 Pavement Heavy - Storage Yards Ha. $371,000 3 $1,113,000 $1,130,808 Tracks ln. m $410 2400 $984,000 $999,744 Switches Ea. $50,000 3 $150,000 $152,400 Storage Building sq.m $1,345 6000 $8,072,933 $8,202,099 Utilities and Drainage Ha. $74,000 5 $370,000 $375,920 Lighting, Communications and Electric Ha. $37,000 5 $185,000 $187,960 Fencing, Security & Site Control m $40 1000 $40,000 $40,640 Internal Roadways/Paved Parking sq.m $48 2,000 $95,679 $97,210 Sub-Total Terminal Development Costs $12,040,612 $12,233,261 Engineering & Contingency 25.00% $3,010,153 $3,058,315 Total Terminal Development Costs $15,050,765 $15,291,577
Equipment Cost (US $) (CAN $) Mobile Harbor Crane Ea $4,000,000 1 $4,000,000 $4,064,000 Total Equipment Costs $4,000,000 $4,064,000
Off-Site Transportation Improvement Costs (US $) (CAN $) Ea. $0 $0 Sub-Total Off-Site Transportation Costs $0 $0 Engineering & Contingency 25.00% $0 $0 Total Off-Site Transportation Costs $0 $0
Summary: (US $) (CAN $) Marine Constructiun: $22,790,734 $23,155,386 Terminal Development Costs $15,050,765 $15,291,577 Equipment Costs $4,000,000 $4,064,000 Off-Site Transportation Costs $0 $0 Total Development Cost $41,841,498 $42,510,962 Cruise Terminal Estimate SYDNEY MASTER PLAN Cost Estimate - Cruise Terminal Item Unit Unit Cost Quantity Cost (US $) Phase 1 Phase 2 Canadian Berth Dredging cm $15.00 $0
Fendering /Mooring Dolphins $350,000 2$ 700,000 Caisson-type Docking Structure $10,000,000 1 $10,000,000 Bollards & Fenders $1,500,000 1 $1,500,000 $11,500,000 Contingency 20% $140,000 $2,300,000
TOTAL $840,000 $853,440 $13,800,000 $14,020,800 Sydney Master Plan Dredging to -17 meters using Industry Estimate
Item Unit Unit Cost Quantity Cost (US $) Channel Dredging Costs: (US $) (Canadian) Mobilization/Demobilization LS $2,500,000 1 $2,500,000 $2,540,000 Channel Dredging cm $5.50 4,086,200 $22,474,100 $22,833,686 Disposal Site Preparation ($2 US/cy cm $2.65 4,086,200 $10,828,430 $11,001,685 Sub-Total Dredging Costs $35,802,530 $36,375,370 Contingency 15.00% $5,370,380 $5,456,306 Engineering 6.00% $2,148,152 $2,182,522 Total Dredging Costs (rounded) $43,321,061 $44,014,198
Separate Dredging from Site Prep. Channel Dredging/Disposal Mob/Demob LS $2,500,000 1 $2,500,000 $2,540,000 Channel Dredging/Disposal cm $5.50 4,086,200 $22,474,100 $22,833,686 Sub-Total Dredging Cost $24,974,100 $25,373,686 Contingency of 15% 15.00% $3,746,115 $3,806,053 Engineering of 6% 6.00% $1,498,446 $1,522,421 Estimated Dredging/Disposal $30,218,661 $30,702,160
Disposal Site Prep/Material Manag. Unit cost cm $2.65 4,086,200 $10,828,430 $11,001,685 Contingency 15.00% $1,624,265 $1,650,253 Engineering 6.00% $649,706 $660,101 $13,102,400 $13,312,039 Ports of Sydney Master Plan November 2007
APPENDIX D Port Governance Case Studies
Appendix D 1 (This page intentionally left blank) Ports of Sydney Master Plan November 2007
Port Governance Case Studies
Representative Canadian and US Ports
Several ports have been investigated for similarity to Sydney Harbour. The characteristics include: publicly and privately owned facilities; mix of cargoes and passenger traffic; marine facilities in separate jurisdictions; and relative scale of business. The information is assembled in several categories including: overview of the port activities in each harbour, governance, funding and marketing.
Charlottetown, Prince Edward Island: Charlottetown, in the Province of Prince Edward Island, describes itself as a deep water commercial port that provides ice-free conditions from April 15 through December 31 of each calendar year, with an ice breaker available when needed. The port of Charlottetown is physically located on the west side of the Hillsborough River on the southern shore of Prince Edward Island and is situated along Charlottetown Harbour1.
The port is used mostly for cruise passenger service, which contributes to the tourism sector of the local economy. A new passenger terminal has recently opened. Product imports include aggregate (for construction) and petroleum products. Product exports include potatoes and cole products (e.g., cabbage, cauliflower, brussel sprouts, broccoli, etc.)2.
Port Governance in Charlottetown, PEI The Charlottetown Harbour Authority Inc. (CHAI),3 owns and operates the seaport. CHAI became the owner of the port because of Transport Canada’s4 implementation of a Divestiture Program in April 2005. The organization is comprised of a “community based company” that includes members of various stakeholder interests from numerous communities.
Management & Operations, an arm of CHAI, includes a Chief Executive Officer (CEO), an Executive Chairman, and a Terminal Operations Manager. Two private firms, including Fenton Marine and FK Warren Limited, serve as the Authority’s shipping Agent. Cruise East/Prince Edward Tours and Atlantic Cruise Ship Services, respectively, serve as the CHAI’s “Shore Excursion Providers,” while National Port Security Services serves as the “Security Providers.” Lastly, a Director of Cruise Ship Development has the role of promoting cruise passenger service.
1 Newfoundland Ocean Industries Association (NOIA). 2 Historic Charlottetown Seaport Web site. 3 Historic Charlottetown Seaport Web site. 4 Transport Canada is a federal governmental entity known as a "department" that manages transportation issues on a national level (Source: Transport Canada's Web site).
Appendix D 2 Port Governance Case Studies Ports of Sydney Master Plan November 2007
The CHAI obtains revenue in the form of various fees and charges, from the following sources: Berthage and Anchorage Charges, Cruise Passenger Tariffs, Harbor Fees, Security Charges, Storage Charges, Wharfage Charges, as well as Utilities and Other Services Charges (including Fresh Water Charges, Electricity Charges, Sewage Services’ Charges, and Garbage Services’ Charges).
Strait of Canso Superport Corporation: The Strait of Canso is a natural, deepwater strait that divides Cape Breton Island from mainland Nova Scotia5. The Strait of Canso Superport Corporation, located in Mulgrave, Nova Scotia, is situated on the west bank of the Strait of Canso, and manages terminals on both the west and east sides of the Strait, with the east side located on the island of Cape Breton.
During the mid-1990s, Transport Canada through its divesture program shifted responsibility and authority from the federal government to the local government in the Strait. As a result of this decentralization process, the Strait of Canso Superport Corporation Limited was founded (and has also been known as “Strait Superport”), which is an organization that owns, operates, and manages Mulgrave Marine Terminal and the Port Hawkesbury Pier in the communities of Mulgrave and Port Hawkesbury, respectively.6
The Mulgrave Marine Terminal, located on the west side of the Strait of Canso, is advertised as being ice-free, and the terminal provides service to the offshore oil and gas industry, as well as for marine cargo. There is also warehousing and an area near the docking facility for providing space to unload various products from ships.
Port Hawkesbury Pier, located on the eastern shore of the Strait of Canso, is geared toward providing berthing for pleasure craft and cruise ships. Berthing is also available for service vessels, fishing vessels, and tug boats.
Strait Superport is accommodates the following cargoes:
x Manufactured goods x Petroleum products x Pulp x Newsprint x “Supercalendar” Paper x Gypsum x Seafood x Break bulk
The entire Strait of Canso, including privately owned and operated terminals, consists of seven terminals on the eastern shore, and three on the western shore. The eastern shore
5 Web site for the Strait of Canso Superport Corporation. 6 News Release: Energy Web site.
Appendix D 3 Port Governance Case Studies Ports of Sydney Master Plan November 2007
(on Cape Breton Island) consists of the following terminals, all of which are privately owned and operated, except where noted with an asterisk (*), the latter of which are owned and operated by the Corporation:
1) Liquid Natural Gas (LNG) Terminal 2) Petroleum Products Terminal 3) Power Plant (for generation) with a Terminal 4) Newsprint and “Supercalendar” Paper Mill, 5) Gypsum Wallboard Manufacturer with an Export Facility 6) Gypsum Export Facility 7) *Port Hawkesbury Pier
The western shore includes the following terminals: 8) Quarry with Terminal 9) *Mulgrave Terminal 10) Petroleum Products Terminal
Port Governance in the Strait of Canso The Strait of Canso Superport Corporation consists of a Board of Directors, comprised of volunteers, to represent a multitude of stakeholders within the Strait of Canso. The Board members are appointed by various parties who nominate them for the positions including three who were nominated by shippers, two nominated by Ship Service Providers, five by municipalities abutting the port, one by the provincial government, and one by the Chamber of Commerce that represents the vicinity around the Strait.
The Strait of Canso Superport Corporation obtains funding from berthage charges, storage rates, utilities and other services’ charges, and wharfage fees.
Portland, Maine: Portland Harbour has marine facilities within the cities of Portland and South Portland. There are three marine terminals in the City of Portland that are publicly owned and managed. A private marine terminal is also located in Portland. There are seven privately owned located within the City of South Portland. Approximately 600 ships per year visit Portland Harbour.
The three publicly owned marine terminals in the City of Portland are: x The Portland Ocean Terminal at the Maine State Pier (new passenger facility) x The Portland Fish Pier x The International Marine Terminal (containers and ferry)
One terminal in Portland is privately owned: x Merrill Marine Terminal (multi purpose cargo)
Seven privately owned marine terminals (primarily oil imported shipments) are located on the opposite side of the Harbour within the City of South Portland:
Appendix D 4 Port Governance Case Studies Ports of Sydney Master Plan November 2007
x Sprague Energy Terminal x Mobil Oil Terminal x Cargill Petroleum x Motiva Terminal x Portland Pipe Line Pier One x Gulf Oil Terminal x Portland Pipe Line Pier Two
Annual Average Cargo Tonnage in Portland Harbour, Maine
For 20057: Total Domestic Foreign Imports Exports
29,285,943 1,092,817 28,193,126 28,038,852 154,274
Port Governance in Portland Harbor The City of Portland Department of Ports and Transportation is the governing authority for managing the Port of Portland within the municipality of Portland, and is comprised of eight (8) employees, four (4) of whom are in administration, while the other four (4) are in maintenance. This Department is part of the municipal government that also collects revenues from leases, wharfage and dockage. The Ports Department is part of larger City Department of Transportation that also encompasses the Portland Jetport. The City Ports Department does not involve itself much with the private marine terminals. This Department is the focal point for Harbor wide issues such as dredging and uses the large volume of petroleum imports as the rationale to market the Port of Portland as the largest in New England.
Additionally, a consortium of tourism marketing groups markets the Port of Portland to increase passenger service on cruise ships. The staff at the City of Portland’s Department of Ports and Transportation promotes the use of their facilities for both passengers and cargo.
Albany, New York: The Port of Albany accommodates general cargo, break bulk, liquid bulk (including molasses, liquid fertilizer, and liquid calcium), petroleum oils, grain, and aggregates. The Port also includes liquid storage tanks, outdoor storage space, eight major cargo warehouses and sheds, as well as a grain elevator. The five northernmost berths on the Albany (west) side of the Hudson River are designed for project cargo, general cargo, and bulks and liquids, while the four southernmost berths are designed for grains, aggregates, other bulks, and liquid petroleum. Two other berths (one being on the Albany side, and the other on the Rennsselaer side) are available, however, improvements would be necessary prior to become fully utilized.
7 Figures represent Calendar Year 2005 Tonnage for three U.S. Ports, based on statistics from the Waterborne Commerce Statistics Center at the US Army Corps of Engineers Navigation Data Center.
Appendix D 5 Port Governance Case Studies Ports of Sydney Master Plan November 2007
In 2005, there were 53 ship and 73 barge visits to the port. (Albany Port District Commission8).
There are 11 berths – 10 on the Albany side (west bank of the Hudson River) and one (1) on the Rennsselaer side (east bank, respectively). All of the berths at this Port are publicly owned by the Albany Port District, a public corporation that is a self-sustaining entity with 32 tenants leasing land or buildings, and is governed by the Albany Port District Commission (APDC).
According to Tony Vasil, Port Marketing Representative of the APDC and from A.J. Vasil Associates, Inc., there are no privately owned terminals within the Port of Albany's jurisdiction, the APDC, however, works in conjunction with regional privately owned terminals on port security issues.
Annual Cargo Tonnage at the Port of Albany, New York
For 20059: Total Domestic Foreign Imports Exports 7,249,629 6,090,377 1,159,252 856,437 302,815
Port Governance in Albany: Established in 1925, the Albany Port District is a public corporation managed by the Albany Port District Commission (APDC), with property in the City of Albany (201 acres) and the City of Rensselaer (35 acres). The APDC is comprised of a Commissioner who is appointed by the Governor of New York, four other Board Members, a General Manager, and eleven staff members
The APDC markets the Port lands as a whole, with a focus on promoting the Port for water dependent commerce. The APDC has utilized a Marketing Agent, Public Relations personnel, and Local Sales and Media Advertising, in order to market the port. The APDC has an outsourced Port Marketing Representative it utilizes as well. In recent years, the APDC has focused on charging higher fees for renting space to non-marine tenants, in order to encourage increased water dependent business activities.
The APDC had aggressively pursued (and ultimately succeeded), for close to a decade, to have the Port designated for cocoa exchange on the New York Board of Trade, which allows cocoa stored on-site to be traded on the commodity market. In order to upgrade the aged wharfing infrastructure, the organization pursued and subsequently received a $1 million Federal grant toward rehabilitation.
MASSPORT, Boston, Massachusetts: MASSPORT is an example of a common form of port authority in the US that was created by state law. MASSPORT is a quasi public transportation authority that owns and operates marine terminals in Boston Harbor, Logan International Airport and other
8 Albany Port District Commission. 2005. Port of Albany Annual Report 2005. 9 Ibid.
Appendix D 6 Port Governance Case Studies Ports of Sydney Master Plan November 2007
facilities in this region. There are seven marine terminals within MASSPORT’s jurisdiction. MASSPORT marine terminals accommodate containers, cruise passengers, bulk, break bulk, auto processing, and petroleum. Conley Terminal supports containerized cargo, while Cruiseport at the Black Falcon Terminal provides cruise passenger service. Boston Autoport, which is privately leased, specializes in the importation and subsequent distribution of automobiles. Mystic Piers 48/49/50 is a terminal that supports bulk cargo (for salt importation), and the Medford Street Terminal is used for cargo. The Boston Fish Pier provides a facility for fish/seafood processing that allows vessels to dock and unload shellfish and finfish cargo for processing and distribution. The MASSPORT Marine Terminal/North Jetty is a privately operated terminal that is now used on an ad hoc basis, but will be utilized as a bulk terminal regularly in the future.
There are also 15 marine terminals in Boston Harbor that are privately owned and operated. MASSPORT has no jurisdiction over private terminals within the Port of Boston.
Two hundred fifty nine (259) container vessel (including barges), 18 auto vessel, 478 bulk cargo vessel or barge, and 81 cruise vessel visits occurred in Boston Harbor in a recent year10.
Average Annual Cargo Tonnage in Boston Harbour
For 200511: Total Domestic Foreign Imports Exports 22,377,751 7,218,887 15,158,864 14,090,568 1,068,296
Port Governance in Boston Harbour The Massachusetts Port Authority (MASSPORT) is a self-contained, quasi-governmental entity that operates the publicly owned terminals. MASSPORT is an independent public authority involved in developing, promoting, and managing airports, the Port of Boston, and various transportation infrastructures. They are an independent agency that receives no state funding for conducting its operations, and as such, the organization is self- supporting from a financial perspective.
MASSPORT owns and operates Logan International Airport, L.G. Hanscom Field (a general aviation airport), Worcester Regional Airport, the Tobin Memorial Bridge (which connects Boston to communities to the north), as well as the Port of Boston. MASSPORT is governed by a seven member Board who are appointed by the Governor of the Commonwealth. The Chief Executive Officer (CEO) is charged with implementing decisions made by the Board. There is an Executive Staff comprised of 13 people, including the Chief Executive Officer (CEO)/Executive Director. The port facilities are managed by the Maritime Department of MASSPORT.
10 Data from the Web site “Massport,” http://www.massport.com/default.aspx 11 Ibid.
Appendix D 7 Port Governance Case Studies Ports of Sydney Master Plan November 2007
MASSPORT, with its designation as a “revenue bond authority,” has the authority to issue bonds and notes, and to create, alter, and charge tolls for those using MASSPORT’s facilities. In addition, MASSPORT has the authority to purchase and to acquire property via eminent domain, however, the organization does not have the authority to institute taxes, nor does the organization receive taxpayer revenue through the Commonwealth’s Treasury.
Its largest source of revenue is from Logan International Airport. Revenues are collected in the form of landing fees, parking fees, terminal and other rental fees, concession revenue, Bridge tolls, ground renting, other fees and charges to cover operating expenses, as well as passenger facility charges.
As mentioned, MASSPORT takes a lead in representing the maritime interests of Boston Harbor including several important dredging projects.
Prince Rupert, British Columbia: The Prince Rupert Port Authority is a self-sufficient organization that is one of the designated Port Authorities under the Canada Marine Act. The Port Authority serves as the administrative body for Prince Rupert Harbour, and is accountable to its Board of Directors, comprised of five members who are appointed by three levels of government, some of whom are also Port clients. The Port Authority is financially self-sufficient, as the organization receives no government funding for its operations, and does not receive government guarantees for borrowing monies.
The Board of Directors consists of an Executive Committee Chair, an Audit Committee Chair, a Code of Conduct Committee Chair, a National Executive Board Member, Pulp Paper & Woodworkers of Canada Negotiator/Facilitator, as well as a Senior Vice- President, Sales & Marketing and Catalyst Paper.
The Prince Rupert Port Authority receives revenues from harbor fees, wharfage fees (for laden and un-laden containerized goods), berthage fees, dockage fees, service and facilities fees, and water service fees (in addition to an ad hoc type of miscellaneous surcharge fee for materials furnished by the Authority).
The Prince Rupert Port Authority promotes itself as the “shortest and most efficient land- sea route to Asia,” according to the Authority’s Draft Land Use Plan for the Port. The Authority works as a market development agency that works to fully use port assets. The Authority has aggressively pursued further development of the Port and to position itself as a location that provides efficient access to the Northern Pacific shipping lanes, which has the deepest inner harbor.
Prince Rupert is the location of a new container terminal that has been developed and will be operated by Maher Terminal. It will receive container vessels from the Far East and provide direct rail access to Canadian National Railroad with service the Canadian and US Midwest.
Appendix D 8 Port Governance Case Studies Ports of Sydney Master Plan November 2007
Saint John, New Brunswick: The Saint John Port Authority is mandated by the Canada Marine Act to provide oversight in the operation of the Port of Saint John, as well as to provide port infrastructure in order to facilitate maritime trade for the port, in addition to working toward enhancing the best interests of maritime commerce in Canada. The Port Authority manages facilities, services, and business development expertise for the port.
The Saint John Port Authority consists of a Board of Directors, including a Chair, Vice- Chair, and five (5) other members. Senior Management consists of a President & Chief Executive Officer (CEO), an Executive Assistant & Corporate Secretary, a Vice President of Finance & Administration, and a Vice President of Marketing & Business Development. The Authority also consists of other staff members as well. As of July 6, 2007, the Saint John Port Authority had recently announced that the Minister of Transport appointed one new member to the Board of Directors, while the Board of Directors recently elected a new Chairman of the Board and elected a new Vice- Chairman, respectively.
The port staff consists of the President & CEO, in addition to the Executive Assistant & Corporate Secretary. There are also departments of Finance, Engineering, Marketing, Port Operations, Security and Administration
The Saint John Port Authority receives funding in the form of tariffs and fees. Facilities’ use charges apply toward break bulk cargo, containers, and bulk cargo, while storage rates apply toward break bulk cargo and containers. Storage rates do not apply when the Port Authority gives customers the option to rent space on its property. Furthermore, the aforementioned rates do not apply to private operators who lease terminals. The Authority imposes harbor dues for vessels utilizing the harbor for commerce. Moreover, the Authority imposes berthage and wharfage charges, in addition to special wharfage rates and minimum wharfage charges. A demurrage charge is imposed on goods that stay on the Authority’s property after the expiration of what is known as “free time.” Other fees include water service charges, electricity service charges, and passenger charges for those using the Port of Saint John.
In early 2006, the Saint John Port Authority, in conjunction with other stakeholders (including the City of Saint John, the Province of New Brunswick, as well as interests in the private sector), forged a partnership for marketing purposes to promote the passenger cruise sector at the Port of Saint John. The Port Authority is also interested in increasing container commerce, and it has made it a priority to enhance container traffic in the terminals it owns. Furthermore, the Port Authority has plans to focus its business development efforts on increasing marine commerce, especially in the cargo and cruise line sectors. Moreover, the Authority will focus marketing efforts on increasing commerce in niche areas that can distinguish the Port differently from other ports, with the goal being to make Saint John the center of port activity in the Atlantic Provinces.
Appendix D 9 Port Governance Case Studies Ports of Sydney Master Plan November 2007
According to Andrew Dixon, Vice President Marketing and Business Development, Saint John Port Authority works in conjunction with privately operated marine terminal companies in marketing use of the port. The Authority does not regularly work, however, in conjunction with privately owned terminals. Privately owned terminals market their own interests, according to Betty MacMillan, Manager, Trade Development at the Saint John Port Authority. Ms. MacMillan indicated that marketing of the port is conducted on an individual basis, based on the nature of the industry and the need for the Authority’s assistance on the part of the operators. For instance, the Authority leases land for potash activities, but the operator owns the buildings and the company markets themselves. Yet, as far as forest products are concerned, the Port Authority collaborates with the operator for marketing purposes, despite their having a private building that they own and manage. The Authority works in conjunction with the tourism sector to enhance business for its cruise terminal. The Authority recognizes that the various terminals vary in the types of products handled, and therefore, the Port Authority works with the terminals on an individual basis to promote their economic vitality.
Appendix D 10 Port Governance Case Studies