Tourism Sample Paper on Cruise Ship Tourism in New Zealand

Cruise Ship Tourism in New Zealand

            New Zealand has firmly established itself as a cruise ship tourism destination and cruise tourism contributes substantially to the economy of New Zealand. Other than providing customers for hotels, cruise ships have a unique potential to offer a city more than 3500 new visitor for a day or more in a single visit. Many of these tourists come with the intention of exploring and experiencing the destination`s attractions culture and to shop, and they are always ready to pay to achieve these intentions. This paper discusses the PEST analysis of Port of Auckland as a destination and cruise port, its distinctiveness to cruise ship tourism, impacts of cruise ship tourism, limitations of the Port and passenger analysis, the infrastructure offered to this new cruise ship port and relationship to other ports in NZ and Australia. Finally, the paper examines some social-cultural impacts associated with cruise ship tourism.

Importance of Cruise Ship Tourism in New Zealand

The port of Auckland provides significant support to the cruise ship tourism by providing marine, berth age, and logistics services. Auckland port is an important exchange port, where tourists begin or complete their cruise. This has significantly increased the economic benefits not only to the city, but also to New Zealand as a whole. Many tourists often spend several days in Auckland prior to or after the cruise. Auckland port is a lucrative exchange port because of its closeness to the central business and entertainment district, and the city`s International Airport. In addition, the port is also the only winter cruise port in New Zealand. Cruise ship companies in countries such as Australia operate their cruise ships in New Zealand during both summer and winter. In addition, cruise ships on their way to Antarctica also have to pass through Auckland as they move to the south. Some of the popular cruise ships that have called at the port of Auckland include Queen Mary 2, one of the world`s largest passenger ships(Ports of Auckland, 2015).The port of Auckland has three cruise berths, which include Princes Wharf, Queens Wharf, and the newly created Queens Wharf’s Shed 10. Cruise ship tourism continues to have a major and growing importance not only to Auckland, but also to New Zealand. In the fiscal year 2009/2010 and 2011/2012, the contribution of cruise tourism to GDP in New Zealand was estimated at$190.9 million and $190.9 million respectively. A substantial share of revenues from cruise tourism goes to the city of Auckland. For example, in 2009/2010, the city received $65.6 million in direct tourist expenditures and $63 million in contribution to regional GPD (Ports of Auckland, 2015).

The cruise ship tourism also contributes significantly toward the New Zealand`s total tourism industry. According to Marshall (2014), cruise ship tourism is the third largest source of international visitors coming to New Zealand. Similarly, the importance of cruise ship tourism is also seen in terms of the benefits received in the port destinations. Estimates indicate that Auckland`s regional economy receives an average $1 million for each cruise ship that stops over in Auckland (Kayes, 2009). As a result, it is evident that the destination port benefits significantly from the arrival of cruise ship tourists. There are numerous activities that directly benefit the destination. These include direct expenditure by ship crew and passengers, tour and marketing operations, incomes from cruise business, supply of goods and services, taxes and levies paid by the passengers and ship all benefit the local economy and people. Over the period 2006-2007, only cruise tourism recorded a positive growth in international visitor arrivals to New Zealand (Tourism New Zealand, 2009).

Investments of the Cruise Ports &Terminals

Investments of the cruise ports & terminals are very important because the victors` first impression of a port destination is often the port itself. A good cruise port and terminals has to offer an attractive environment (Marti, 1990) and sustain excellence in all service areas (Destination Victoria, 2002). Inadequacies can have adverse impacts on the visitors` perception of the port and terminals, and therefore reduce the willingness of cruise ships to return to the destination.   Two major concerns have been raised with regard to New Zealand`s ports and terminals and their ability to host the growing number and sizes of ships. The first issue is the port environment and the second issue us the available facilities at the port. There appears to be under investment in infrastructure in New Zealand’s cruise tourism. The country lacks adequate visitor facilities in most of its ports, and this has limited the country`s ability to host increasingly large tourist cruise ships. The following areas are characterized by under investment.

Terminal Buildings

According to Ajamil (2005) the demand for cruise ship terminals in New Zealand is projected to increase substantially up to 2017. However, the port industry has only responded with low cost investments because they do not have the financial capacity. Warehouse style terminal buildings cannot deliver operational efficiency unless they are improved to provide two level operations, elevators/escalators and two gangways (Ajamil, 2005). Cruise ships today expect better terminal buildings in good locations that are large, offer more comfort, and can host thousands of passengers. Evidently, this is lacking in nearly all New Zealand`s ports. Other than Auckland`s Princes Wharf, the remaining port tourist facilities in New Zealand fall below the standards of an acceptable terminal. As a result, the country potentially misses on cruise ship visitors and revenues brought by these tourists. Similarly, many ports in New Zealand are not cruise friendly, and the country lags behind in terms of understanding the accurate value of cruise ships to the country`s economy compared to destinations such as Alaska and the Caribbean that have well developed terminal buildings.

Tourist Check-in and Debarkation Facilities

A port`s ability to handle high volumes of visitors in an efficient manner is an important factor that cruise lines take into account when choosing a destination port (Destination Victoria, 2002). In New Zealand, the only port that requires such facilities is the Auckland port, the only turnaround port in the country. Nonetheless, the existing passenger terminal at Auckland port`s Princes Wharf poses numerous challenges for both passengers and cruise ships. This can make the destination less attractive, and therefore affect its ability to continue hosting cruise ships.  Similarly, whereas the debarkation process Princes Wharf is more efficient, there are several problems that should be addressed (McDonald, 2009). Firstly, while crew direct debarkation passengers to the luggage, meeting and transport points, all these areas are small and characterized by congestion, confusion and are inadequate to accommodate exchanges of passengers (Tourism New Zealand, 2008). Other than congestion, the infrastructure at Princes Wharf port needs more investment in order to be able to accommodate modern large cruise ships (Access Economics, 2008).

Berths, Wharf Areas and Berthing

Ports in New Zealand face significant logistical challenges, especially in terms of overcrowding at cruise berths. Therefore, the present investment in infrastructure is inadequate. According to Farquhar son (2006), transportation and communications infrastructure should be developed to allow proper monitoring of arrival of passengers and goods. The same sentiments are echoed by Atherley (2003) who notes that at the very minimum any port serving the cruise tourism industry should have no less than two mega-ship berths if operations are to run smoothly. However, even with expanded facilities, mismanagement can lead to reduced port calls to the destination (Atherley, 2003). Likewise, Vojvodić (2003) argues that port clashes lead to inefficiencies, which negatively affects the passengers. For New Zealand`s case, port clashes are expected to increase because of two major factors namely- the expanding growth I cruising around and to New Zealand and the country`s comparatively short cruise season. In both instances, the intention of having more ships and making more revenues must be counterbalanced against the need to prevent port clashes because of the problems that can result if port clashes occur. For instance, when port classes occurred in the port of Hobart in 2008/09 season, it affected not just the port, but also the community, problems such as overcrowding, harbor congestion, and traffic delays were witnessed. Already, New Zealand ports are facing crowding problems. While some ports can accommodate more than one ship, others are unable because of berthing constraints. As a result, some cruise ships may be forced to berth in destinations they had not originally intended. For instance, during the 2008/09 season, a clash at Lyttelton Port of Christchurch forced Diamond Princess to dock in another port- Akaroa- leading to revenue losses for both Christchurch and Lyttelton.

Number of passengers travelling on cruise ships (domestic and international) to and from New Zealand

Over the last 5 years ending 2014, New Zealand has witnessed more than 250% growth cruise ship tourism arrivals, making cruise tourism the third largest inbound market for New Zealand. The graph below indicates the growth in cruise ship tourist arrivals in New Zealand from 1996-2012.

Source (Marshall, 2014).

In the 2012-2013 cruise tourism seasons, a total of 37 cruise ships came to New Zealand making 129 Voyages.  The ships carried 211,430 tourists and 82,368 crew members. Total arrivals in the year are estimated at 293,798 people (Marshall, 2014). Similarly, in 2013/2014 season, a total of 119 voyages were made with a total of 33 unique vessels representing 699 port days across the country (Worley & Akehurst, 2014). The current forecast for the 2015-16 tourism season indicates that a total 119 voyages will be made, and tourists will spend a total of 652 port days in the country. It is also worth noting that average vessel passenger capacity for every voyage is projected to increase by nearly 400 passengers (from 1,600 s to 2000 passengers). Similarly, the number of cruise passengers forecast for the 2015/2016 cruise season stands at 246,800, representing a 21.7% increase from the 2013/14 cruise season (Worley & Akehurst, 2014). The table below indicates the number of passengers for the different seasons and the number of unique vessels.

Source: Worley & Akehurst (2014).

            There are two categories of cruise ship tourism passengers.  The first category is those exchanging in New Zealand. These are passengers who either disembark or embark their voyage. The second category is those transiting. These are passengers arriving into and departing from New Zealand on the same cruise. The two types of passengers exhibit different expenditure patterns, and therefore, their economic contribution differs. Whereas in port tourists have the ability to spend on a broad range of offerings including restaurants, retail stores, cafes, and entertainment, exchange passengers can spend on their arrival date or on the date of their departure. They also have the opportunity to stay within New Zealand for a particular period of time prior to or after the cruise. They therefore spend extra on accommodation, ground transport, hospitality, and on other services. As a result, passenger port days are directly and positively correlated with economic contribution (impact). The table below the number of domestic and international passengers embarking and disembarking from New Zealand ports for the three seasons 2013/14, 2014/15, and 2015/16.

Source: Worley & Akehurst (2014).

            From the table above, in 2013/14 tourism season, there were 32,500 international passengers embarking and a total of 31,600 international passengers disembarking. In total, New Zealand had more than 64,100 100 international passenger exchanges. If the numbers of domestic passengers are included, New Zealand had 45,700 embarking passengers and 37, 300 disembarking passengers.  As a result, the total passenger exchange figure stands at 83,000 (Worley & Akehurst, 2014). Similarly, in 2013/14 New Zealand received 202,700 passengers.  These tourists spent 1,084,000 port days on cruise in the country. In 2014/15, there is a marginal decline with approximately to 60,500 international passenger exchanges and an additional 19,200 New Zealand passenger exchanges, bringing the total to 79,700 exchanges for that season. In the 2014/15 season, port days and passenger numbers are projected to increase, with approximately 205,700 passengers in the season spending 1,133,900 port days on cruise in the country. The long-term outlook (2015/16 season) indicates that New Zealand will witness more international exchange operations compared to the last seasons. It is projected that the country`s ports will experience approximately 70,700 international passenger exchanges and 19,900 domestic passenger exchanges, bringing the total to more than 90,600 exchanges. In addition, it is projected that total port day and passenger numbers will reach the highest level in 2015/16 period, with 246,800 passengers spending more than 1,284,400 port days in the country(Worley & Akehurst, 2014).
Analysis of Passengers Based on their Countries of Origin

            Many voyages begin from Australia and end in New Zealand while others begin from New Zealand and end in Australia. Such voyages tend to have many North American passengers. On the other hand, round the globe cruises ordinarily carry people from different nationalities. The following graphs provide a breakdown of the diverse nationalities of passengers.

Source: Worley & Akehurst (2014).

Source: Worley & Akehurst (2014).

Source: Worley & Akehurst (2014).

From the above charts, it is evident that Australians form the bulk of cruise passengers that come to visit New Zealand. In 2014/15 season, the numbers of Australians represent 52% of the total market. This is consistent with the past seasons, and the trend is likely to continue in the future. U.S. citizens are the second largest market, representing about 17% of the total passengers. They are followed by domestic passengers (New Zealanders) at 10% of the market. UK citizens come fourth at 8% (Worley & Akehurst, 2014). U.S. citizens are the largest passenger exchange market, with more than 23,600 exchanges registered in the 2013/14 season (Worley & Akehurst, 2014).

Positive and Negative Impacts of Cruise Ship Tourism

            The huge number of tourists coming to New Zealand ports benefits the local economyin terms of expenditures by crew and passengers, employment of locals at the shore by cruise lines, expenditures by the cruise companies on goods and services required for cruise operations, and spending by the cruise companies on maintenance. The total economic contribution of cruise ship tourism to New Zealand in 2013/2014 was estimated at $365.3 million, with 6,818 jobs supported. The total economic impact to Auckland was estimated at $159.1 million with 2,680 jobs supported by cruise tourism (Worley & Akehurst, 2014). However, in some cases, cruise companies operate their own onshore operations in various destinations, which tend to reduce the economic benefits going to local communities, while putting pressure on local infrastructure. For New Zealand, the cruise market is not big enough yet, as a result, many of the onshore operations are operated by locals.

            On the negative side, cruise companies benefit most from cruise tourism. More than half of offshore activities are provided onboard by cruise lines. This leaves local businesses and tour operators with just a small fraction of the benefit. Even local service providers seeking to advertise their offerings on board the vessels have to pay the cruise lines. Similarly, considering the small sizes of many New Zealand port destinations and the inadequate infrastructure, frequent visits by large ships pose significant problems to these ports, particularly when their carrying capacity is exceeded (Atherley, 2003).

Impacts on the Culture or Indigenous People

Cruise ship tourism provides an opportunity for the locals to interact with cruise passengers, which allows the locals to learn about other parts of the world and discover new life perspectives. Nonetheless, increased cruise activities reduce the available space for locals and sometimes force them to adopt foreign moral behaviors. Similarly, as cruise tourism becomes popular, smaller ports in the destination country begin to compete with each other as each attempts to attract the cruise ships. Within the same ports, cargo and cruise ship have to compete for the limited space (Brida& Aguirre, 2008).

Impacts on the Environment and Society on the Destination

As many cruise ships visit a destination such as Auckland port, they create numerous waste streams, which may end up being discharged in the marine environment. These wastes include raw and treated sewage, ballast water, grey water, waste oil, hazardous chemicals, and solid waste. They equally generate water and air pollutants. The environment impact of the cruise industry is so huge but difficult to measure given that the industry is largely unregulated. The pollution and distraction of marine ecosystems as a result of cruise tourism poses significant threats to marine life. A number of cruise lines have been penalized in different countries for pollution related offenses. For example, in 2002, Carnival Corporaton was forced to pay US$18million in fines for dumping oil wastes from its ships into the sea(Brida & Aguirre, 2008).  Apart from discharge of wastes, the industry also affects the environment through maritime accidents and biosecurity threats. For New Zealand, the number of cruise ships is still small; therefore, environment impact is not significant. However, as the number of cruise ships increase, the environmental impacts will become more serious.


            Cruise tourism offers significant economic benefits to New Zealand and local port destinations in terms of job creation, taxes paid, and expenditures by crew and passengers. However, other than the port of Auckland, many ports in New Zealand have not invested enough in infrastructure. As a result, they are unable to host large cruise ships, which lead to lost revenues and business opportunities to other countries in the Caribbean and Alaska that have invested enough in their infrastructure. Notwithstanding the positive benefits, cruise tourism also affects the destinations negatively in terms of introducing foreign morals and pollution. In addition, the fact that many cruise lines offer numerous on shore services on board reduces the economic benefits that the local communities receive.


Access Economics. (2008). The economic contribution of the cruise shipping industry to
Australia. Retrieved on 29 May 2015 from

Ajamil, L. (2005). Business and public policy issues of cruise terminal development. Retrieved on 29 May 2015 from

Atherley, K. (2003). Cruise industry-related challenges facing Caribbean destinations. Retrieved on 29 May 2015 from

Brida, J.G. & Aguirre, S.Z. (2008).The impacts of the cruise industry on tourism destinations. Retrieved on 30 May 2015 from

Destination Victoria. (2002). Cruise ship strategy 2002-2005. Department of Transport, Melbourne. Retrieved on 29 May 2015 from

Farquharson, S. (2006). Caribbean regional cruise industry & links to the Republic of
Trinidad and Tobago, Cornell University, Ithaca.

Kayes, J. (2009). Aurora passengers cruise Auckland shops. Retrieved on 29 May 29, 2015 from

Marshall, G. (2014). Nelson Tasman tourismindustry forum1 May 2014. Retrieved on 29 May 29, 2015 from

Marti, B. (1990). Geography and the cruise ship port selection process. Maritime policy and management, 17(3), pp. 157-164.

McDonald, S. (2009). Ports of Auckland gets $40m for Queens Wharf. The national
business review. Retrieved on 29 May 2015 from 103755.

Ports of Auckland. (2015). Auckland’s cruise industry. Retrieved 29 May 2015, from

Tourism New Zealand. (2008). Cruising New Zealand – (1) 2007/2008 season
review; (2) current issues & recommendations, TourismNZ, Wellington.

Tourism New Zealand. (2009). Cruise market development.  Retrieved on 29 May 29, 2015 from

Vojvodić, K. (2003). Cruise port positioning – the case of Korčul.  journal
of marine sciences, 50(6), 204-108.

Worley, T. & Akehurst, G. (2014). Economic Impact of the New Zealand Cruise Sector 2014 Summary Report. Retrieved on 29 May 29, 2015 from