City of Cape Town Presentation v 1 071508

Transcript City of Cape Town Presentation v 1 071508

INVESTIGATION OF THE CRUISE LINER INDUSTRY DRAFT STUDY RESULTS | 7.16.08

MITCHELL DUPLESSIS PROJECTS (PTY) LTD | LANDDESIGN

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 success— notably, 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

SEC1

GLOBAL CRUISE CHARTERISTICS

GLOBAL CRUISE INDUSTRY: MODERN ROOTS

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

CRUISE INDUSTRY: GROWTH IN PASSENGERS GLOBAL PASSENGER LEVELS HAVE DOUBLED EVERY DECADE

16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1980 1990 2000 2008 North America Europe Australasia SOURCES: CLIA, 2006 AND CIN, 2008

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

LEADING CRUISE CONGLOMERATES

21% 6% 5% 22% 46% Carnival Corporation NCL Others SOURCE: CIN, 2008 Royal Caribbean Cruises MSC Cruises

LEADING CRUISE CONGLOMERATES

ROYAL CARIBBEAN

5 brands, 38 Vessels, 79,446 total berths Celebrity Royal Caribbean International Pullmantur CDF Azamara 21% 6% 5%

NCL / STAR CRUISES

3 brands, 16 Vessels, 36,484 total berths NCL NCL America Star Cruises 46%

CARNIVAL CORPORATION

11 brands, 89 Vessels, 169,584 total berths Carnival Cruise Lines Princess Cruises Cunard Seabourn Cruise Lines Holland America Costa Cruise SOURCE: CIN, 2008 Iberocruceros AIDA P&O Cruises - UK P&O Cruises - Australia Ocean Village 22%

MSC Cruises

1 brand, 10 Vessels, 19,530 total berths MSC

PRIMARY CRUSING REGIONS

    SOURCE: CIN, 2008 

PRIMARY CRUSING REGIONS

22% 7% 7% 6% 6% 2% 40% 10% Caribbean / Bahamas West Coast Alaska South America Mediterranean Asia / Pacific Northern/Western Europe Others Below 2% (see note) 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.

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

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

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 – CLIA’s indicates 33.7 million Americans intend to cruise next three years Dollar weakness

GROWTH OF INDUSTRY SUPPLY

Type

Name Operator Group Built Pax (LBs) Pax (Max) GT LOA (m) Beam (m) Draft (m) Air Draft (m)

First Post Panamax

Grand Princess

Princess Cruises Carnival 1998 2,592 3,000 108,808 289.5

36 8.29

60.8

RCCL’S OAISIS OF THE SEAS

Today’s Post-Panamax

Queen Mary 2

Cunard Carnival 2004 2,620 2,800 150,000 345 45 10 62

Tomorrow’s Longest and Largest

Oasis of the Seas

RCI RCCL 2009 (Anticipated) 5,400 7,300 220,000 360 47 9 n/a

GROWTH OF INDUSTRY SUPPLY, 2000-2008

500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Berths New Berth Capacity SOURCES: CIN, 2008 AND WWW.CRUISECOMMUNITY.COM, JULY 2008

GROWTH OF INDUSTRY SUPPLY, 2000-2012 38 VESSELS ON ORDER; $22.3 BILLION IN NEW INVESTMENT

FORECAST GROWTH OF INDUSTRY SUPPLY

900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 372,100 Low 2008 2010 2015 Medium 2020 High 2025 798,700 612,700

FORECAST GROWTH OF INDUSTRY PASSENGERS

35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 15.2 MIL 2008 Low 2010 Medium 2015 2020 High 2025 31.2 MIL 24.0 MIL

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

SEC2

SOUTHERN AFRICA CRUISE CHARTERISTICS

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

ESTIMATES OF SOUTHERN AFRICA MARKET SHARE

Africa Indian Ocean World Est. Southern Africa Market Share Total CIN Reported Capacity Africa Indian Ocean World Est. Southern Africa Market Share Total CIN Reported Capacity

2006 Passenger Capacity

14,453 86,715 14,453 14,452,501

2008 Passenger Capacity

16,286 97,719 16,286 16,286,475

2006 Adjusted Passenger Capacity

14,453 28,905 2,891 46,249 14,452,501

2008 Adjusted Passenger Capacity

16,286 32,573 3,257 52,116 16,286,475

Adjusted Passenger Capacity (% of Total)

0.10% 0.20% 0.02% 0.32% 100.00%

Adjusted Passenger Capacity (% of Total)

0.10% 0.20% 0.02% 0.32% 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.

VESSELS OPERATING IN THE REGION, 2008/09

SOURCES: INDUSTRY WEBSITES, 2008, WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008

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

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

VESSELS OPERATING IN THE REGION, 2008/09

Vessel Royal Star Silver Wind RMS St. Helena MS Hanseatic MS Europa MS Deutschland Costa Europa Le Ponant Aurora Saga Ruby MS Hebridean Spirit Corinthian II Seven Seas Navigator Alexander von Humbodlt II Rhapsody Rotterdam Averages Cruise Line Owner / Operator African Safari Club Silversea Cruises Ltd Silversea Cruises Ltd Built (Refurb) Star Line Cruises Ltd 1956 (1994) 1995 (2008) RMS St. Helena Hapag Lloyd Hapag Lloyd Andrew Weir Cruises Hapag Lloyd Hapag Lloyd 1989 1993 1999 Peter Deilman Cruises Peter Deilman Cruises Costa Crociere SpA Carnival Corporation Compagnie des Iles du Ponant Compagnie des Iles du Ponant P&O Princess Cruises Carnival Corporation 1998 1986 1991 2000 Saga Cruise Holidays Saga Cruise Holidays 1973 (1999) 1991 Hebridean Int. Cruises Hebridean Int. Cruises Travel Dynamics International Regent Seven Seas Cruises Phoenix Reisen GmbH MSC Cruises Travel Dynamics International Regent Seven Seas Cruises Phoenix Reisen GmbH MSC Cruises Holland America Carnival Corporation 1992 (2005) 1999 1990 (2008) 1997 (2004) 1997 Pax 200 296 128 184 408 520 1,773 67 1,870 668 98 114 490 510 764 1,316 587 33,000 15,400 17,095 69,652 17,254 SOURCES: INDUSTRY WEBSITES, 2008, WWW.CRUISECOMMUNITY.COM, 2008, MDA / LDI 2008 GRT 5,067 16,927 Length (m) 112.0

155.8

6,767 8,378 9,069 8,264 27,624 n/a 123.0

198.6

175.3

243.2

956 88.0

40,037 9,356 4,280 4,200 270.0

191.1

90.5

90.9

172.2

150.0

163.0

237.0

164.04 Beam (m) 15.6

21.4

n/a 17.0

24.0

23.0

29.0

12.0

32.2

25.1

15.3

15.2

24.7

20.0

22.8

32.2

21.96 Draft (m) 5.6

5.2

n/a 4.8

6.0

5.8

6.5

4.0

7.9

8.2

3.7

7.0

6.0

5.8

7.8

5.86

VESSELS OPERATING IN CAPE TOWN, 2007/08

Name of Vessel

Spirit of Adventure The World Topaz Hebridean Spirit Van Gogh Silver Cloud Seven Seas Black Watch Saga Ruby MV Explorer C. Columbus The World Royal Star Silver Cloud Orient Queen

Date

14-Mar-07 22-Dec-07 11-12 Feb 2008 11-13 March 2006 17-18 March 2007 18-19 Jan 2008 2-4 Feb 2007 24-26 Jan 2007 25-26 Jan 2007 2-8 March 2007 28-30 Jan 2008 29 Jan-3 Feb 2008 31 Jan-4 Feb 2008 4-5 Jan 2008 7-10 Jan 2007

Length

169.8m

155.80m

195m 90.6m

160m 204m 205m 169.8m

180.4m

144m 196.35m

112m 155.80m

160.13m

Passengers

266 766 63 402 209 613 710 363 813 322 286 328

Crew

218 77 221 442 358 405 196 173 238 218 390 SOURCES: V&A WATERFRONT, 2008

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

FIT OF CAPE TOWN WITHIN MARKETS

Southern Africa / Africa Seychelles and related island cruises St. Helena Repositioning World

Cape Town as a Homeport

Strong Fair Strong Strong Strong

Cape Town as a Port of-Call

Strong Weak Weak / Not Applicable Strong Strong

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 destinations—Richard’s Bay, Port Elizabeth, East London, Mossel Bay—all 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

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

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 catalyst—much like Olympics in Barcelona and Australia—to move the regional cruise market forward

CLIA 2008 MARKET PROFILE

FORECAST GROWTH OF REGIONAL SUPPLY

450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 52,117 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 417,711 87,644 Low Medium High

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 Town’s business, revenue passengers could approach 250,000

SEC3

CRUISE INDUSTRY NEEDS FOR OPERATIONS

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

CRUISE LINE DESTINATION SELECTION CRITERIA

Venues Consumers Airport Hotels Leadership Cruise Line Satisfaction Marine Attributes

CRUISE LINE DESTINATION SELECTION CRITERIA

Marketing and Sales    a cruise destination  Consumer awareness and marketability of Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine Operations     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

CRUISE LINE DESTINATION SELECTION CRITERIA

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

CRUISE FACILITY PLANNING MODULE

Category Channel Depth Berth Depth / Length Apron Individual Terminal Baggage BCBP Offices BCBP Processing Check-In Lounge Support Totals for Individual Terminal GTA Parking Source: B&A, 2005.

1,800 Pax 2,600 Pax 3,600 Pax Recommended 9m + overdraft 9m + overdraft / support 295m vessel with 236m to 242m for provisioning access’ 20m wide / allowances for truck turning 2,400 m2 300 m2 800 m2 900 m2 3,900 m2 300 m2 800 m2 1,400 m2 5,400 m2 300 m2 800 m2 1,800 m2 3,000 m2 300 m2 1,200 m2 1,400 m2 700 m2 1,000 m2 1,100 m2 1,000 m2 1,600 m2 1,000 m2 1,200 m2 500 m2 5,700 m2 8,500 m2 10,900 m2 7,600 m2 6 – 10 buses per vessel plus POV/taxi drop-off areas 570 825 1,150 600 to 800 per operation

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

MOVEMENT TOWARD MULTI-USE FACILITIES

Mixed-Use Type Most Desirable Somewhat Desirable Less Desirable

Retail Entertainment Restaurants Office* Hotel* Residential* Conference / Convention* Multimodal Transport* 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 Live theatre; specialty / Theme entertainment; Nightclub Marketplace / bazaar; crafts market Standard cinemaplex; Sports facilities; Gaming All; White tablecloth; Food court; Mid-Range Establishments Class A and B+; Maritime office Four to Five Star, Greater than 120 rooms All Water Taxi; Mass Transit and Light Rail systems; Local charter and tour offerings Ferry (inter and/or intra regional); Public bus Big box retail; low-end discount shopping Class B and below Three star and lower All Industrial rail Marina* Public recreation* All All Industrial Note: *Significant consideration needs to be given to Port security planning with incorporation of these uses.

All

MOVEMENT TOWARD MULTI-USE FACILITIES

Opportunities Challenges

       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

BELL STREET PIER, SEATTLE

Bell Harbor International Conference Center

  Conference Center – 4,366 m 2 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

SEC4

CASE STUDY

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

AUSTRALIA / NEW ZEALAND CRUISE REGION

PRIMARY OPERATIONS AREA GROWTH IN ASIA CRUISE PASSENGER CAPACITY 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2004 2005 2006 Pax Capacity 2007 Ships 2008 50 45 40 35 30 25 20 5 0 15 10 SOURCE: CIN, 2008

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 P&O 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

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 Australians—or 61% percent of total passenger numbers of 263,435 in 2007—choose 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

SOUTH AMERICA CRUISE REGION

PRIMARY OPERATIONS AREA GROWTH IN SOUTH AMERICA CRUISE PASSENGER CAPACITY 1,200,000 50 1,000,000 40 800,000 30 600,000 20 400,000 10 200,000 0 2004 2005 2006 Pax Capacity 2007 Ships 2008 0 SOURCE: CIN, 2008

SOUTH AMERICA CRUISE REGION

  The South America cruising region includes the southern cone, Brazil, the continent’s 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

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

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

SEC5

OVERALL CAPE TOWN POSITION ASSESSMENT

OVERALL POSITION ASSESSMENT

External Factors List External

Opportunities (O): 1. … 2. … 3. …

Internal Factors List Internal

Strengths (S): 1. … 2. … 3. …

List Internal

Weaknesses (W): 1. … 2. … 3. … SO Cell: Most salient or strategically important interactions of external opportunities and the strengths of the destination. Often the destination’s competitive advantage.

WO Cell: Outlines the destination’s 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 destination’s 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.

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

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

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 industry’s largest vessels Quantity and quality of airlift and hotel capacity Established maritime components Availably of options for improvement to cruise related / supporting facilities

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

OVERALL POSITION ASSESSMENT

External Factors List External

Opportunities (O): 1. … 2. … 3. …

List External

Threats (T): 1. … 2. … 3. …

Internal Factors List Internal

Strengths (S): 1. … 2. … 3. …

List Internal

Weaknesses (W): 1. … 2. … 3. …

SO Cell: Comparative Advantage

Cape Town’s 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.

ST Cell: Mobilization

In many aspects, Cape Town’s 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.

SEC6

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.

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

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

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

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

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

OPERATIONS: RECOMMENDATIONS

   Become deeply involved with the FIFA 2010 floating hotel destination delivery – Sportscom (communication and sports marketing) Meet with Port / V&A 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

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

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 V&A 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.

HARDWARE: RECOMMENDATIONS

     Establish a cruise facilities improvement plan – Engage the cruise lines for assistance – Financial component Prepare a MOU between V&A 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)

INVESTIGATION OF THE CRUISE LINER INDUSTRY DRAFT STUDY RESULTS | 7.16.08

MITCHELL DUPLESSIS PROJECTS (PTY) LTD | LANDDESIGN