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Cruise ships are increasingly bypassing New Zealand due to escalating operational costs and regulatory challenges that make the region one of the most expensive for cruise lines to visit. This current trend poses significant risks to the local economy, which heavily relies on cruise tourism.
The cruise industry has been a substantial contributor to New Zealand’s economy. Last season, it injected over NZ$1.3 billion into the economy, supporting nearly 10,000 jobs and generating NZ$425 million in wages.
Passengers, crew, and cruise lines directly spent NZ$637 million, with an additional NZ$730 million in indirect spending across various sectors including hospitality and retail. However, recent reports indicate that this economic boon is at risk due to rising costs and new regulations.
Industry leaders have voiced concerns about a series of cost increases that are making New Zealand less attractive for cruise operators. Notably, there has been an 88% increase in customs processing fees specifically for cruise passengers, set to take effect on December 1, 2024. This comes on top of a tripling of the international visitor levy to NZ$100 per person, further straining the budgets of cruise operators.
Jacqui Lloyd, CEO of the New Zealand Cruise Association, highlighted that these costs are often introduced after cruise bookings have been made, meaning operators cannot pass these expenses onto customers who have already purchased their tickets. This situation has resulted in an estimated NZ$3.2 million in unbudgeted costs for cruise lines this season alone.
As a direct consequence of these financial pressures, the Cruise Lines International Association (CLIA) anticipates a 20% decline in cruise visits for the upcoming season, with projections indicating even larger reductions in subsequent years.
Joel Katz, CLIA’s Managing Director for Australasia, emphasised that this decline could lead to “hundreds of millions of dollars” in lost revenue and thousands of jobs at risk if cruise lines continue to opt for alternative destinations.
In addition to financial burdens, New Zealand’s stringent biosecurity regulations have also played a role in deterring cruise traffic. Ships arriving with biofouling—marine growth on their hulls—must undergo additional cleaning before they can dock in New Zealand waters. This requirement has led some vessels to skip ports altogether or incur further costs related to compliance.
The combination of high operational costs, regulatory hurdles, and biosecurity measures is prompting cruise lines to reconsider their itineraries. While New Zealand positions itself as a premier destination for international cruising, industry stakeholders are calling for a reevaluation of policies that currently hinder growth.
Without significant changes to reduce costs and enhance the overall experience for cruise operators and passengers, New Zealand risks losing its status as a favoured port of call in the global cruise market.