INVESTIGATION OF THE CRUISE LINER INDUSTRY

1
INVESTIGATION OF THE CRUISE LINER INDUSTRY
DRAFT STUDY RESULTS 7.16.08 MITCHELL DUPLESSIS
PROJECTS (PTY) LTD LANDDESIGN
2
CRITICAL TOPICS COVERED

• The modern cruise industry and the overall
  prospects for continued growth at a global and
  regional level
• Infrastructure and services required by homeports
  and ports-of-call
• Insights on other cruise regions business
  successnotably, Australia / New Zealand and
  South America
• Recommendations as to how Cape Town should
  consider moving forward and to become a greater
  participant within the industry

3
SEC1 GLOBAL CRUISE CHARTERISTICS
4
GLOBAL CRUISE INDUSTRY MODERN ROOTS

• 1970s transatlantic voyages for travel and
  leisure, not transportation
• North Americas love affair with the Love Boat
• Caribbean entrepreneurs and development of the
  Fun Ships
• The cruise ship as the destination

5
CRUISE INDUSTRY GROWTH IN PASSENGERS
GLOBAL PASSENGER LEVELS HAVE DOUBLED EVERY DECADE
SOURCES CLIA, 2006 AND CIN, 2008
6
CRUISE INDUSTRY FEATURES OF GROWTH

• Phenomenal success in developing new products and
  sustained interest in cruising
• Adept at converting land-based resort guests into
  cruise passengers
• Deliver a high level of passenger satisfaction,
  leading to repeat clientele
• Model adaptable to changing market conditions
• Lines have limited competition, reduced
  operational costs, and diversified revenues

7
LEADING CRUISE CONGLOMERATES
SOURCE CIN, 2008
8
LEADING CRUISE CONGLOMERATES
ROYAL CARIBBEAN 5 brands, 38 Vessels, 79,446
total berths Celebrity Royal Caribbean
International Pullmantur CDF Azamara
NCL / STAR CRUISES 3 brands, 16 Vessels, 36,484
total berths NCL NCL America Star Cruises
MSC Cruises 1 brand, 10 Vessels, 19,530 total
berths MSC
CARNIVAL CORPORATION 11 brands, 89 Vessels,
169,584 total berths Carnival Cruise
Lines Iberocruceros Princess Cruises AIDA Cunard
PO Cruises - UK Seabourn Cruise Lines PO
Cruises - Australia Holland America Ocean
Village Costa Cruise
SOURCE CIN, 2008
9
PRIMARY CRUSING REGIONS
?
?
?
?
?
SOURCE CIN, 2008
10
PRIMARY CRUSING REGIONS
SOURCE CIN, 2008 Others below 2 include
Transatlantic, Canary Islands, Bermuda, New
England / Canada, Hawaii, Panama Canal, Indian
Ocean / Red Sea, Domestic Waterways, Antarctica,
World, Africa.
11
PRIMARY CRUSING REGIONS
S E A S O N A L
Y E A R R O U N D
S E A S O N A L
SOURCE CIN, 2008
12
CURRENT GLOBAL INDUSTRY CHALLENGES

• Dollar weakness
• Fuel costs
• Cruise lines operations
• Impact to key destination delivery components
  airlines, shore excursions, ground transportation
• Security and terrorism
• Inability to raise ticket prices
• Weakness of the Caribbean cruising region

13
CURRENT GLOBAL INDUSTRY OPPORTUNITIES

• Key industry growth fundamentals still in place
• Greatly improved reach into new consumer markets
• British, French, Italians, Germans, Australians,
  South Americans, Asians
• Highly sophisticated operations
• Global sources for passengers, employees, and
  supplies
• Yield management for ticket pricing and onboard
  revenue
• Continued consumer demand
• CLIAs indicates 33.7 million Americans intend to
  cruise next three years
• Dollar weakness

14
GROWTH OF INDUSTRY SUPPLY
Type First Post - Panamax Todays Post-Panamax Tomorrows Longest and Largest
Name Grand Princess Queen Mary 2 Oasis of the Seas
Operator Princess Cruises Cunard RCI
Group Carnival Carnival RCCL
Built 1998 2004 2009 (Anticipated)
Pax (LBs) 2,592 2,620 5,400
Pax (Max) 3,000 2,800 7,300
GT 108,808 150,000 220,000
LOA (m) 289.5 345 360
Beam (m) 36 45 47
Draft (m) 8.29 10 9
Air Draft (m) 60.8 62 n/a
RCCLS OAISIS OF THE SEAS
15
GROWTH OF INDUSTRY SUPPLY, 2000-2008
SOURCES CIN, 2008 AND WWW.CRUISECOMMUNITY.COM,
JULY 2008
16
GROWTH OF INDUSTRY SUPPLY, 2000-2012
38 VESSELS ON ORDER 22.3 BILLION IN NEW
INVESTMENT
SOURCES CIN, 2008 AND WWW.CRUISECOMMUNITY.COM,
JULY 2008
17
FORECAST GROWTH OF INDUSTRY SUPPLY
798,700
612,700
372,100
18
FORECAST GROWTH OF INDUSTRY PASSENGERS
31.2 MIL
24.0 MIL
15.2 MIL
19
FORECAST GROWTH IMPLICATIONS

• Projection scenarios anticipate ports and
  destinations will rise to meet this opportunity
• Create demand for a number of present homeport
  and port-of-call facilities to expand over the
  mid- to long-term, encourage expansion into new
  market regions
• Seasonal capacity placement challenges
• As a trend, expansion of supply and the
  subsequent need of cruise lines to expand their
  overall regional coverage is a favorable trend
  for Cape Town

20
SEC2 SOUTHERN AFRICA CRUISE CHARTERISTICS
21
SOUTHERN AFRICA CRUSING REGION
22
SOUTHERN AFRICA CRUSING REGION

• Southern Africa, which includes pan-Southern
  Africa offerings and often island destinations
• Seychelles and related cruises to the islands of
  Reunion, Mauritius and others
• Specialty cruises to St. Helena
• Repositioning cruises
• World cruises

23
ESTIMATES OF SOUTHERN AFRICA MARKET SHARE
2006 Passenger Capacity 2006 Adjusted Passenger Capacity Adjusted Passenger Capacity ( of Total)
Africa 14,453 14,453 0.10
Indian Ocean 86,715 28,905 0.20
World 14,453 2,891 0.02
Est. Southern Africa Market Share 46,249 0.32
Total CIN Reported Capacity 14,452,501 14,452,501 100.00
2008 Passenger Capacity 2008 Adjusted Passenger Capacity Adjusted Passenger Capacity ( of Total)
Africa 16,286 16,286 0.10
Indian Ocean 97,719 32,573 0.20
World 16,286 3,257 0.02
Est. Southern Africa Market Share 52,116 0.32
Total CIN Reported Capacity 16,286,475 16,286,475 100.00
SOURCES CIN, 2008 AND MDA / LDI, 2008 Notes
Assumes Southern Africa welcomes one third of
Indian Ocean capacity and one-fifth of world
capacity.
24
VESSELS OPERATING IN THE REGION, 2008/09
SOURCES INDUSTRY WEBSITES, 2008,
WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
25
VESSELS OPERATING IN THE REGION, 2008/09

• An estimated 83 cruises are planned for the
  2008/09 season market capacity of 31,657
  passengers
• An estimated 16 different vessels in the region
• Vessels in the market on a variety of different
  segments and predominately directed toward a
  European cruise audience
• Average cruise duration is a lengthy 18 days
• The cruise season is generally from October to
  April most cruises offered December and January

SOURCES INDUSTRY WEBSITES, 2008,
WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
26
VESSELS OPERATING IN THE REGION, 2008/09

• Itineraries contribute 102 vessels calls to South
  African ports, with an estimated 45 of these
  arriving to Cape Town (44)
• Of the leading four cruise industry
  conglomerates, Royal Caribbean is absent from the
  list of lines offering cruises in the region
• Primary regional homeports identified include
  Cape Town, Durban, Mombasa, and Mahe

SOURCES INDUSTRY WEBSITES, 2008,
WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
27
VESSELS OPERATING IN THE REGION, 2008/09
Vessel Cruise Line Owner / Operator Built (Refurb) Pax GRT Length (m) Beam (m) Draft (m)
Royal Star African Safari Club Star Line Cruises Ltd 1956 (1994) 200 5,067 112.0 15.6 5.6
Silver Wind Silversea Cruises Ltd Silversea Cruises Ltd 1995 (2008) 296 16,927 155.8 21.4 5.2
RMS St. Helena RMS St. Helena Andrew Weir Cruises 1989 128 6,767 n/a n/a n/a
MS Hanseatic Hapag Lloyd Hapag Lloyd 1993 184 8,378 123.0 17.0 4.8
MS Europa Hapag Lloyd Hapag Lloyd 1999 408 9,069 198.6 24.0 6.0
MS Deutschland Peter Deilman Cruises Peter Deilman Cruises 1998 520 8,264 175.3 23.0 5.8
Costa Europa Costa Crociere SpA Carnival Corporation 1986 1,773 27,624 243.2 29.0 6.5
Le Ponant Compagnie des Iles du Ponant Compagnie des Iles du Ponant 1991 67 956 88.0 12.0 4.0
Aurora PO Princess Cruises Carnival Corporation 2000 1,870 40,037 270.0 32.2 7.9
Saga Ruby Saga Cruise Holidays Saga Cruise Holidays 1973 (1999) 668 9,356 191.1 25.1 8.2
MS Hebridean Spirit Hebridean Int. Cruises Hebridean Int. Cruises 1991 98 4,280 90.5 15.3 3.7
Corinthian II Travel Dynamics International Travel Dynamics International 1992 (2005) 114 4,200 90.9 15.2 3.7
Seven Seas Navigator Regent Seven Seas Cruises Regent Seven Seas Cruises 1999 490 33,000 172.2 24.7 7.0
Alexander von Humbodlt II Phoenix Reisen GmbH Phoenix Reisen GmbH 1990 (2008) 510 15,400 150.0 20.0 6.0
Rhapsody MSC Cruises MSC Cruises 1997 (2004) 764 17,095 163.0 22.8 5.8
Rotterdam Holland America Carnival Corporation 1997 1,316 69,652 237.0 32.2 7.8
Averages     587 17,254 164.04 21.96 5.86
SOURCES INDUSTRY WEBSITES, 2008,
WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008
28
VESSELS OPERATING IN CAPE TOWN, 2007/08
Name of Vessel Date Length Passengers Crew
Spirit of Adventure 14-Mar-07 169.8m    
The World 22-Dec-07 155.80m 266 218
Topaz 11-12 Feb 2008 195m 766  
Hebridean Spirit 11-13 March 2006 90.6m 63 77
Van Gogh 17-18 March 2007   402 221
Silver Cloud 18-19 Jan 2008 160m 209  
Seven Seas 2-4 Feb 2007 204m 613 442
Black Watch 24-26 Jan 2007 205m 710 358
Saga Ruby 25-26 Jan 2007 169.8m 363 405
MV Explorer 2-8 March 2007 180.4m 813 196
C. Columbus 28-30 Jan 2008 144m 322 173
The World 29 Jan-3 Feb 2008 196.35m   238
Royal Star 31 Jan-4 Feb 2008 112m    
Silver Cloud 4-5 Jan 2008 155.80m 286 218
Orient Queen 7-10 Jan 2007 160.13m 328 390
SOURCES VA WATERFRONT, 2008
29
SOUTHERN AFRICA CRUSING REGION

• Southern Africa / Africa, which includes
  pan-Southern Africa offerings and often island
  destinations
• Seychelles and related cruises to the islands of
  Reunion, Mauritius and others
• Specialty cruises to St. Helena
• Repositioning cruises
• World cruises

30
FIT OF CAPE TOWN WITHIN MARKETS
Cape Town as a Homeport Cape Town as a Port-of-Call
Southern Africa / Africa Strong Strong
Seychelles and related island cruises Fair Weak
St. Helena Strong Weak / Not Applicable
Repositioning Strong Strong
World Strong Strong
31
CAPE TOWN COMPETITION WITHIN MARKETS

• Cape Town has limited competition for cruise
  activities in the region
• Durban the only facility with a similar
  arrangement of port infrastructure, upland /
  shore excursion activities and strategic position
  
• Other South African destinationsRichards Bay,
  Port Elizabeth, East London, Mossel Bayall
  present a reasonable port-of-call option
• Unlikely to be selected over Cape Town by a
  cruise line
• A more important point is the opportunity and
  need for increased collaboration among
  destinations

32
CURRENT REGIONAL CHALLENGES

• Region is one of the smallest amongst other
  global deployment areas
• Generally not on the radar of primary cruise
  operators other than an occasional call /
  operation as part of a repositioning or world
  cruise
• Flight and vessel repositioning costs also limit
  some lines in their thinking about deployment to
  the region
• Concerns on regional safety and stability
• Uncertain size of regional consumer base

33
CURRENT REGIONAL OPPORTUNITIES

• Key industry growth fundamentals
• Diverse region with similar characteristics and
  itinerary diversity as other successful areas
• Marquee ports-of-call and homeports
• The region has shown consistency in preserving
  its share of the growing global industry
• 2010 FIFA World Cup event
• Successfully delivered by South Africa, this
  event could serve as an important catalystmuch
  like Olympics in Barcelona and Australiato move
  the regional cruise market forward

34
CLIA 2008 MARKET PROFILE
35
FORECAST GROWTH OF REGIONAL SUPPLY
417,711
87,644
52,117
36
REGIONAL FORECAST GROWTH IMPLICATIONS

• Business as usual will likely yield limited
  results low to medium trend line
• Activity in marketing and organizational
  components key to regional viability
• Assuming Cape Town continues to see 44 of
  capacity, passenger throughput could be 126,000
  by 2020 under the high scenario
• With cruise homeporting primary element of Cape
  Towns business, revenue passengers could
  approach 250,000

37
SEC3 CRUISE INDUSTRY NEEDS FOR OPERATIONS
38
CRUISE LINE DESTINATION SELECTION CRITERIA

• Appeal as a travel and leisure destination
• Type and quality of cruise tourism infrastructure
  needed to support vessel operations and movement
  of passengers
• A market basis and strategic fit within a greater
  cruise ship deployment scheme

39
CRUISE LINE DESTINATION SELECTION CRITERIA
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CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales Marine Operations
Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination
Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law
Logistics, Air-Sea and Shore Excursions Finance and Legal
41
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales Marine Operations
Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination
Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law
Logistics, Air-Sea and Shore Excursions Finance and Legal
42
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales Marine Operations
Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination
Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law
Logistics, Air-Sea and Shore Excursions Finance and Legal
43
CRUISE LINE DESTINATION SELECTION CRITERIA
Marketing and Sales Marine Operations
Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination
Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law
Logistics, Air-Sea and Shore Excursions Finance and Legal
44
PRIMARY VESSEL INFRASTRUCTURE

• Channel, navigation and access features
• Secure vessel berth
• Berth and related infrastructure
• Apron area and gangway
• Water and other services to ships
• Passenger reception area
• Security, customs and immigration (inbound /
  outbound)
• Basic passenger services
• Ground transportation area (GTA)
• Tour buses parking,
• Taxi and shuttle areas for crew
• Parking
• Access features

45
CRUISE FACILITY PLANNING MODULE
Category 1,800 Pax 2,600 Pax 3,600 Pax Recommended
Channel Depth 9m overdraft 9m overdraft 9m overdraft 9m overdraft
Berth Depth / Length 9m overdraft / support 295m vessel with 236m to 242m for provisioning access 9m overdraft / support 295m vessel with 236m to 242m for provisioning access 9m overdraft / support 295m vessel with 236m to 242m for provisioning access 9m overdraft / support 295m vessel with 236m to 242m for provisioning access
Apron 20m wide / allowances for truck turning 20m wide / allowances for truck turning 20m wide / allowances for truck turning 20m wide / allowances for truck turning
Individual Terminal
Baggage 2,400 m2 3,900 m2 5,400 m2 3,000 m2
BCBP Offices 300 m2 300 m2 300 m2 300 m2
BCBP Processing 800 m2 800 m2 800 m2 1,200 m2
Check-In 900 m2 1,400 m2 1,800 m2 1,400 m2
Lounge 700 m2 1,100 m2 1,600 m2 1,200 m2
Support 1,000 m2 1,000 m2 1,000 m2 500 m2
Totals for Individual Terminal 5,700 m2 8,500 m2 10,900 m2 7,600 m2
GTA 6 10 buses per vessel plus POV/taxi drop-off areas 6 10 buses per vessel plus POV/taxi drop-off areas 6 10 buses per vessel plus POV/taxi drop-off areas 6 10 buses per vessel plus POV/taxi drop-off areas
Parking 570 825 1,150 600 to 800 per operation
Source BA, 2005.
46
CHALLENGE FACED IN FACILITY DEVELOPMENT

• In their most simplistic development application,
  cruise terminals have highly constrained revenue
  generating capabilities
• Port charges generally cannot cover terminal
  developments
• Majority of benefit is experienced at the
  community level
• In their role as facilitators of trade and
  commerce, ports sustain large capital investments
  in docks, harbors, and terminals

47
MOVEMENT TOWARD MULTI-USE FACILITIES
Mixed-Use Type Most Desirable Somewhat Desirable Less Desirable
Retail Mid-to upper level shopping (geared to locals and cruise passengers) luxury goods duty free high-end prepared foods some kiosk and specialty retailers others Marketplace / bazaar crafts market Big box retail low-end discount shopping
Entertainment Live theatre specialty / Theme entertainment Nightclub Standard cinemaplex Sports facilities Gaming -
Restaurants All White tablecloth Food court Mid-Range Establishments All White tablecloth Food court Mid-Range Establishments -
Office Class A and B Maritime office Class A and B Maritime office Class B and below
Hotel Four to Five Star, Greater than 120 rooms Four to Five Star, Greater than 120 rooms Three star and lower
Residential - - All
Conference / Convention All - -
Multimodal Transport Water Taxi Mass Transit and Light Rail systems Local charter and tour offerings Ferry (inter and/or intra-regional) Public bus Industrial rail
Marina - All -
Public recreation All - -
Industrial - - All
Note Significant consideration needs to be given to Port security planning with incorporation of these uses. Note Significant consideration needs to be given to Port security planning with incorporation of these uses. Note Significant consideration needs to be given to Port security planning with incorporation of these uses. Note Significant consideration needs to be given to Port security planning with incorporation of these uses.
48
MOVEMENT TOWARD MULTI-USE FACILITIES
Challenges
Opportunities

• Create revenue opportunities
• Reduce project risk
• Higher utilization of infrastructure
• Enhanced destination experience
• Portrayal of community image
• Urban renewal / redevelopment
• Public access to the waterfront

• Increased capital outlay
• Transportation and parking
• Conflicts among land uses
• Conflicts among water uses
• Regulatory environment
• Future expansion
• Management skill
• Safety and security
• Public access to the waterfront

49
BELL STREET PIER, SEATTLE
50
Bell Harbor International Conference Center

• Conference Center
• 4,366 m2 facility that can accommodate groups
  from 10 to 1,000 guests
• One 300 person auditorium
• 14 banquet and meeting rooms
• Shared use of cruise terminal areas for events
  and exhibits, especially off-season

51
SEC4 CASE STUDY
52
CASE STUDY AUSTRALIA SOUTH AMERICA
53
CASE STUDY AUSTRALIA SOUTH AMERICA

• Australia / New Zealand and South America are
  emerging cruise regions
• Operations in Australia / New Zealand and South
  America are generally seasonal
• Both regions offer a mix of itinerary offerings
  and varied ports-of-call
• Australia / New Zealand and South America
  showcase different approaches to growing their
  businesses

54
AUSTRALIA / NEW ZEALAND CRUISE REGION
GROWTH IN ASIA CRUISE PASSENGER CAPACITY
PRIMARY OPERATIONS AREA
SOURCE CIN, 2008
55
AUSTRALIA / NEW ZEALAND CRUISE REGION

• Area hosts regional operators marketing their
  products to predominately Asian and Australian
  consumers as well as North American and European
  lines
• Star Cruises and PO Cruises Australia comprise
  the primary regional operators, offering
  itineraries on 8 different vessels supporting
  79.3 of passenger capacity in the region during
  2008
• Primary non-regional operators in 2008 included
  Princess, Royal Caribbean, Celebrity, Costa and
  Holland America

56
AUSTRALIA / NEW ZEALAND CRUISE REGION

• Strong organizational agencies Cruise Down Under
  and Cruise New Zealand
• Diversity of itinerary offer
• Continued success in building a home grown
  consumer base of consumers
• 160,947 Australiansor 61 percent of total
  passenger numbers of 263,435 in 2007choose to
  sail in the region
• Homogenous, familiar market
• Access to growing Asian travel and leisure areas
• Challenged to keep up with port improvements
• High airlift costs for North American passengers

57
SOUTH AMERICA CRUISE REGION
PRIMARY OPERATIONS AREA
GROWTH IN SOUTH AMERICA CRUISE PASSENGER CAPACITY
SOURCE CIN, 2008
58
SOUTH AMERICA CRUISE REGION

• The South America cruising region includes the
  southern cone, Brazil, the continents
  northwestern Pacific region, and the Western
  Caribbean
• Costa Cruises, MSC Cruises, and Royal Caribbean
  comprise the primary operators, offering
  itineraries on 9 different vessels supporting
  52.1 of passenger capacity in the region during
  2008

59
SOUTH AMERICA CRUISE REGION

• Proximity to the Caribbean low repositioning and
  airfare costs
• Caribbean oversupply has made pursuit of a
  strong South America option a useful
• Strong primary and adjacent sub-regions
• Antarctica, Amazon River, Galapagos Islands
• Market supported by a diverse base of
  international visitors and a home grown consumer
  base
• Improving facilities
• Historically challenged by cabatoge laws
• Disorganized promotional / organizational entities

60
CASE STUDY IMPLICATIONS

• Buildup of both cruise regions has been a
  patient, long-term endeavor
• Long been welcoming small levels of cruise
  operations and traffic, slowly building on the
  success of the industry overall
• The presence of a well-organized, regional entity
  marketing to the cruise lines is felt to have had
  a positive impact in the Australia / New Zealand
  buildup of cruise levels
• Both regions have growing local consumer base
• Multiple, marketable itinerary options
• Generally stable regions and markets

61
SEC5 OVERALL CAPE TOWN POSITION ASSESSMENT
62
OVERALL POSITION ASSESSMENT
Internal Factors External Factors List Internal Strengths (S) 1. 2. 3. List Internal Weaknesses (W) 1. 2. 3.
List External Opportunities (O) 1. 2. 3. SO Cell Most salient or strategically important interactions of external opportunities and the strengths of the destination. Often the destinations competitive advantage. WO Cell Outlines the destinations weakness versus the opportunities available and provides indication of where investment/disinvestment strategies should be placed.
List External Threats (T) 1. 2. 3. ST Cell Interaction between the destinations strengths and the external threats in the marketplace and environment overall. Suggests where mobilization and improvement may need to occur to address threats. WT Cell The mix weaknesses and threats suggest the most vulnerable area of the destination, and often, where a program of damage control should be implemented.
63
EXTERNAL OPPORTUNITIES

• Positive global cruise market growth fundamentals
• Desire of cruise lines and their clientele to
  explore new regions and destinations
• Configuration of the Southern Africa region
• High travel and leisure enthusiast aspiration for
  an accessible African travel experience
• Increased global brand identification with South
  Africa and Cape Town as a destination
• Favorable government policies toward tourism and
  related businesses and investment
• FIFA 2010 opportunity as a showcase

64
EXTERNAL THREATS

• Mobility of the cruise industry
• Regional safety and security issues, both real
  and perceived by potential cruising guests
• Significant repositioning distances and costs
  associated with the entire itinerary offer
• Limited / unknown, complex consumer base within
  the region
• Unclear vision and direction for the region
• Lukewarm reception by cruise lines for Southern
  Africa at present
• Eastern position of the Cape Town in the region

65
INTERNAL STRENGTHS

• Diversity of venues and the destination offer
  overall total quality guest experience
• Immediate engagement of primary waterfront
  amenities
• Basic port capability to welcome the industrys
  largest vessels
• Quantity and quality of airlift and hotel
  capacity
• Established maritime components
• Availably of options for improvement to cruise
  related / supporting facilities

66
INTERNAL WEAKNESSES

• Multiple parties involved in the primary delivery
  of cruise facilities / operations
• Varied local enthusiasm for the cruise enterprise
  overall
• Conflict / priority of cargo operations within
  the Port area / basin
• Lack of dedicated cruise facilities for homeport
  operations

67
OVERALL POSITION ASSESSMENT
Internal Factors External Factors List Internal Strengths (S) 1. 2. 3. List Internal Weaknesses (W) 1. 2. 3.
List External Opportunities (O) 1. 2. 3. SO Cell Comparative Advantage Cape Towns offer is highly congruent with positive global cruise market trends and the demand for new and exciting cruise destinations. The basic parameters are in place for Cape Town to emerge as a successful participant in the role of homeport and port-of-call. WO Cell Investment/Disinvestment With the positive market opportunities available, the initial investment of resources required to leverage the positive macro and micro opportunities are market and organizational based over the short term, with capital and operational improvements needed over the mid- to long-term.
List External Threats (T) 1. 2. 3. ST Cell Mobilization In many aspects, Cape Towns successes is reliant on others within the external environment showing leadership in the region is one of the few ways the City can chart a positive course. While the global market is highly favorable, the region has a number of initial and ongoing obstacles to overcome. The key starts with marketing and organization. WT Cell Damage Control The changing and mobile nature of the cruise industry, lack of substantial interest by cruise lines and regional security/perception issues paired with disorganization at home and a need for some facility improvements suggests a marathon, not a sprint, is required. Key outlier issues may be too great to overcome.
68
SEC6 RECOMMENDATIONS MOVING FORWARD
69
RECOMMENDATIONS MOVING FORWARD

• Software. Programs and marketing efforts
  developed to ensure product quality, brand
  recognition, communication efforts and others.
• Operations. Functional enhancements that allow
  for improved cruise operations.
• Hardware. Strategies and action items to ensure
  that appropriate capital improvements are planned
  and developed to meet anticipated cruise industry
  throughput and facilities needs.

70
SOFTWARE OVERARCHING OBJECTIVES

• A large portion of the ultimate success to be
  achieved by Cape Town and South Africa is reliant
  on moving forward with marketing efforts
• Establish a strong case for Southern Africa
  cruising with cruise lines
• Work to build a foundation of seasonal business
  with international consumers and,
• Foster a local consumer base for cruise products.
  
• Emphasis should be placed on organizing the
  messages and messengers first
• Resources beyond those presently committed by
  Cape Town and elsewhere are going to be required

71
SOFTWARE RECOMMENDATIONS

• Cruise marketing plan
• It is critical that Cape Town refine and
  implement a specific cruise marketing plan for
  the City and region.
• Hold a marketing goals workshop
• Identify the marketing audience
• Message development and refinement
• Messenger identification
• Formulation of a Cruise Cape Town Committee
  (CCTC)
• In-house education program
• Incentives packaging for cruise lines

72
SOFTWARE RECOMMENDATIONS

• Market to the Cape Town community
• Development a cruise passenger visitor's kit
• Lead in development of Southern Africa Cruise
  Association
• Establish a methodology for port costs
  benchmarking
• Hold cruise tourism provider education sessions
• Establish strategic relationships with key ports
  in the region

73
SOFTWARE RECOMMENDATIONS

• Conduction travel agent education sessions
• International Cruise Trade Show Participation
• Hold North American and European cruise operator
  visits
• Hold North American and European cruise operator
  familiarization trips
• Possibly linked with FIFA 2010
• Work with tour providers to design new offerings
  suitable for cruise passengers
• Establish targeted provider program offerings
• Luxury, adventure, destination

74
OPERATIONS OVERARCHING OBJECTIVES

• The smoothness of operations is as important as
  the quality of the facilities think destination
  delivery
• Operational planning and coordination
• Benchmarking
• Guest security and safety assessments and
  programs
• Organization and communication

75
OPERATIONS RECOMMENDATIONS

• Become deeply involved with the FIFA 2010
  floating hotel destination delivery
• Sportscom (communication and sports marketing)
• Meet with Port / VA regularly on threat
  assessment and security issues
• Conduct assessments for cruise passengers and
  generate a specific plan to share with the lines
• Hold public safety education sessions
• Become involved in homeport and port-of-call
  operations planning, especially for peak days

76
OPERATIONS RECOMMENDATIONS

• Develop and implement a cruise benchmarking
  strategy
• Develop a scheduling plan for the committee
• Establish an operations audit and enhancements
  program based on benchmarking feedback
• Establish Cape Town primary and secondary venues
  and tour provider assessments
• Establish a smart-pass program

77
HARDWARE OVERARCHING OBJECTIVES

• Additional cruise berthing and related terminal
  spaces are needed over the medium- to long-term
• Options need to be explored associated with the
  future role of VA Waterfront, the Port of Cape
  Town (NPA) and City to create a win-win-win
  scenario that will be conducive to meeting future
  cruise industry 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.

78
HARDWARE RECOMMENDATIONS

• Establish a cruise facilities improvement plan
• Engage the cruise lines for assistance
• Financial component
• Prepare a MOU between VA Waterfront, the Port
  and City on plan implementation
• Ensure a working, interim capital improvements
  plan for delivery of homeport and port-of-call
  needs
• Prepare a detailed plan, with emphasis on
  development of a mixed-use facility with
  supporting revenue inputs
• Implement the detailed plan timed to market
  conductions (cruise or mixed-use components)

79
INVESTIGATION OF THE CRUISE LINER INDUSTRY
DRAFT STUDY RESULTS 7.16.08 MITCHELL DUPLESSIS
PROJECTS (PTY) LTD LANDDESIGN