Voyager of the Seas may be confirmed for another season in Sydney in 2013-14 but will she return in 2014-15 with Sydney port charges on the increase?

The announcement that the NSW Government will be implementing a new per passenger tax on cruise ships has resulted in a backlash from both the cruise industry and the Tourism and Transport Forum who describe the move as a “tax on success”.

Cruise ships currently pay a flat hourly rate of $250 to berth at either the Overseas Passenger Terminal or Barangaroo, costing an average of $3,000 per stay.

The new berthing charge is set to change to a rate of $18 per passenger in 2013, which will increase to $25 per passenger in 2014-2015 and $30 in 2015-16, making Sydney the most expensive port in the world.  

Cruise ships will be charged a minimum rate based on 1,200 passengers regardless of how many passengers their ship is carrying.

Royal Caribbean Australia managing director Gavin Smith says that the move will result in halting the local success of the cruise industry in the same way as it did in Alaska when a similar fee was imposed.

“The NSW Government appears to be taking a short-term position for which the cruise industry will suffer longer-term consequences,” Mr Smith told e-Travel Blackboard.

“The effect of this cash grab will be felt in two or three years’ time when cruise ships will potentially stop coming to Sydney in the same volume as today.”

Carnival Australia CEO Ann Sherry agrees with Mr Smith and confirms that the company is already looking into ways to offset the increased fee by redirecting ships to other ports for longer periods of time and making fewer visits to Sydney.

“As we look at the total costs of turning a ship around in Sydney, we are asking should we be doing it as often as we are doing it in Sydney,” Ms Sherry told the Sydney Morning Herald.

“It won’t happen year one, but year two or three, growth will plateau and then fall.”

Ms Sherry also shared her belief that the industry is “being penalised for being the only growth sector in tourism.”

The Tourism and Transport Forum (TTF) says that the industry had initially proposed a per passenger charge of $5 per head, which they believe is indicative of the actual cost of cruise ships berthing in Sydney Harbour.
“TTF is particularly concerned that other states may consider following New South Wales’ lead and a $30 head tax in Sydney will rapidly escalate into one costing hundreds for passengers on ships visiting multiple ports,”  TTF chief executive John Lee said in a statement earlier this week.

The Forum has called for the NSW government to genuinely consult the industry before the tax commences to devise a fair system for all involved.

Minister for Roads and Ports Duncan Gay says that the hourly fee as it stands is economically unsustainable and believes the new charge will offset an $18 million loss in 2013-14 by Sydney Ports on the cruise industry.

The move is classified as “only fair” by Mr Gay with the NSW Government believing the “state’s booming cruise industry” should assist in some of the costs associated with the $87 million port infrastructure program including improvements to the Overseas Passenger Terminal and the $57 million development at White Bay.

As the operator of some of the largest Australian-based cruise ships across their Royal Caribbean and Celebrity brands, Mr Smith also raised the concern that Sydney now competes with Asian ports including Hong Kong and Singapore, whose governments openly support the industry through incentivising visits, low port charges and building innovative new cruise terminals.

“Given the parlour state of Sydney’s facilities the proposed cost increase is even harder to justify,” Mr Smith said.

“Royal Caribbean is feeling this challenge at both ends; poor facilities and soon to be much higher charges – even though we continue to bring tens of thousands of inbound tourists to Sydney who spend pre- and post-cruise vacations in Sydney and NSW.”