In a significant move affecting Australia’s tourism sector, Carnival Australia announced the withdrawal of two of its largest brands from Melbourne.
The cruise line’s decision comes as a protest against what the company deems an “unreasonable” increase in port taxes. The two brands, Princess Cruises and Cunard Line represent substantial contributors to Victoria’s tourism economy, and their departure is expected to have a profound impact.
Princess and Cunard Pull Out Of Melbourne
Starting in 2025, Princess Cruises and Cunard will cease operations from Melbourne. The strategic shift directly responds to a 15% hike in port charges slated to begin on January 1, a move that Carnival Australia finds unjustifiable.
Ports Victoria implemented a port charge increase from $28.50 to $35 per passenger effective January 1.
Consequently, these Carnival Corporation subsidiaries will redirect their operations to other interstate docks, significantly redirecting their Australian operations.
Carnival Australia has expressed its discontent with the tax increase, labeling it as a substantial and sudden rise that necessitates a reassessment of its operational strategies in the region.
Teresa Lloyd, Carnival Corporation’s Chief Strategy Officer, expressed disappointment in the tax hike, stating, “Our economic benefit to Victoria is immense and we appreciate the importance of maintaining our ports but to be expected to carry a 15 percent increase with no notice is unreasonable.”
The company’s decision to pull out from Melbourne is a direct protest against this increase, emphasizing the need for more favorable conditions to sustain its operations in the area. Carnival emphasized that their decision was solely due to the sudden and steep increase in port fees for their decision to relocate their ships to other Australian homeports.
“We want to be in Melbourne and remain open to finding a long-term solution together with Ports Victoria and the Victorian Government. However, the decision to homeport these popular cruise lines in other markets is in no small part due to the recent decision made by Ports Victoria to significantly and unexpectedly increase fees and charges.” Lloyd continued.
Impact on The Tourism Sector
The exit of Princess Cruises and Cunard Line is poised to deal a heavy blow to Melbourne’s tourism economy. The presence of these cruise brands in Melbourne has been a key factor in attracting many tourists to the region.
The two cruise lines have around 40 scheduled calls annually in Melbourne. The cruise lines bring over 100,000 guests, contributing around A$379.5 million to the local economy.
With their departure, the local tourism industry faces a challenging future.
Ports Minister Melissa Horne doesn’t think the impact will be as noticeable.
“Let’s get a bit of perspective here, this is a highly profitable industry that has not had any (fee) increases in two-and-a-half years,” Melissa Horne told the Canberra Times. “This is Carnival making a commercial decision and other operators have well and truly filled the market.”
According to Ports Victoria, different ships have already filled the gaps in the schedule. The revenue generated by the port tax is intended for the maintenance of the cruise terminal.
Some of Carnival’s other cruise lines will continue to call in Melbourne. Carnival Cruise Line, Seabourn Cruises, AIDA Cruises, Costa Cruises, Holland America Line, and P&O Australia have calls scheduled in 2025.
We’ll be watching to see if other cruise lines withdraw from Melbourne.