Mediterranean Cruise Market Mediterranean Cruise Market Dynamics and ValueDynamics and Value

ObjectivesObjectives

Provide a brief overview of the cruise marketProvide a brief overview of the cruise market Establish the role of the Mediterranean within Establish the role of the Mediterranean within

the cruise marketthe cruise market Consider the changing dynamics of cruising Consider the changing dynamics of cruising

in the Mediterraneanin the Mediterranean Examine the value of cruise tourismExamine the value of cruise tourism Consider the future outlookConsider the future outlook

Market Overview

Growth in Main Cruising Growth in Main Cruising DestinationsDestinations

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pax

-nig

hts

(m

ill.)

Europe Caribbean West Coast

Europe v CaribbeanEurope v Caribbean

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Pax

-nig

hts

(m

ill.)

Europe Caribbean Linear (Europe) Linear (Caribbean)

Main Source MarketsMain Source Markets

Comment on Main Source Comment on Main Source MarketsMarkets

World cruise tourists – 18.8 (17.5) million in World cruise tourists – 18.8 (17.5) million in 20102010

North America – North America – 11.011.0 (10.4) million (10.4) million European cruise tourists – 5.5 (5) million of European cruise tourists – 5.5 (5) million of

which:which:– UK – 1,621,000UK – 1,621,000– Germany – 1,219,000Germany – 1,219,000– Italy – 889,000Italy – 889,000– Spain – 645,000Spain – 645,000– France – 387,000France – 387,000

Europe to 2017Europe to 2017

0

2,000,000

4,000,000

6,000,000

8,000,000

2005 2007 2009 2011 2013 2015 2017

Eur

opea

n C

ruis

e To

uris

ts

Europe

6.8 million

Growth of Cruise Capacity in the Growth of Cruise Capacity in the MediterraneanMediterranean

0

8,000,000

16,000,000

24,000,000

32,000,000

40,000,000

2001 2003 2005 2007 2009 2011

Pax

-nig

hts

Med_N Am Med Total Linear (Med_N Am) Linear (Med Total)

Key Regions for Cruising in the Mediterranean

Western Mediterranean, mainly the area bounded by Eastern Spain, the French Riviera, Western Italy and the North African coastline (49.44% potential passenger throughput);

Eastern Mediterranean, the remainder of the Mediterranean, except the Adriatic and Ionian Seas (34.90%);

Adriatic, the lands bounded by the Adriatic Sea, together with Western Greece (14.36%);

Black Sea (1.29%). Mediterranean growth 2010-11 – +17.6%

Growth of Cruise Capacity in the Growth of Cruise Capacity in the Mediterranean by RegionMediterranean by Region

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total West East Adriatic Black

Dynamic Changes to the Fleet Dynamic Changes to the Fleet Structure in the MediterraneanStructure in the Mediterranean

0 20,000 40,000 60,000 80,000 100,000

Post-panamax

Panamax

Large (1,000+)

Medium (500+)

Small (250+)

Very small (<250)

L. Berths, 2011 80129 67180 37224 26731 7590 3,501

L. Berths, 2006 22,340 37,298 33,028 28,284 7,345 3,415

Post-panamax

PanamaxLarge

(1,000+)Medium (500+)

Small (250+)

Very small (<250)

Key changes in regional deployment

In 2006 panamax and post panamax ships were more commonly found in the West

By 2011, while still behind the West, Eastern Mediterranean is now seeing more panamax (30%) and post-panamax (30%) ships while large (20%) and medium (15%) ships have fallen back

This trend towards the larger ships will continue in the eastern Mediterranean in future

Ports that wish to play a full part in the market need to adapt their facilities to receive such ships if they are to gain the full benefits of future market growth

Value of Cruise Industry Activity

EuropeEurope

Cruise industry activity in Europe generates Cruise industry activity in Europe generates significant expenditures in 4 main areas. significant expenditures in 4 main areas. These are:These are:– Shipbuilding and ship repairShipbuilding and ship repair– Cruise line purchasesCruise line purchases– Passenger and crew expendituresPassenger and crew expenditures– Compensation of cruise line employeesCompensation of cruise line employees

EuropeEuropeDirect Expenditures 2005 to 2010

1.6 1.97 2.54 2.73 2.87 3.13.1

4.154.83 5.23 4.56 4.20.8

0.971.09 1.15 1.18 1.24

2.9

3.49

4.465.11 5.44 6

0

4

8

12

16

2005 2006 2007 2008 2009 2010

€ B

illi

ons

Pax expenditure Shipbuilding Compensation Cruise Line purchases

Total Economic ImpactsTotal Economic Impacts

€€35.2 (€34.1) billion in total output in 201035.2 (€34.1) billion in total output in 2010 €€14.5 (€14.1) billion in direct spending14.5 (€14.1) billion in direct spending €€9.3 (€9.0) billion in employee compensation9.3 (€9.0) billion in employee compensation 307,526 (296,288) jobs307,526 (296,288) jobs Each €1 million in direct expenditure generatedEach €1 million in direct expenditure generated

– €€2.42 million in business output, and2.42 million in business output, and– 21 jobs paying on average over €30,10021 jobs paying on average over €30,100

Total Cruise Industry Output Total Cruise Industry Output Generated in Europe 2005-10Generated in Europe 2005-10

19.123.9

2932.2 34.1 35.2

0

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009 2010

€ B

illi

ons

Total Cruise Industry Output

Total European Employment Total European Employment Generated by Cruise Industry 2005-Generated by Cruise Industry 2005-

1010307.5296.3

311.5282.1

225.6198.1

0

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010

Th

ousa

nd

s

Jobs Generated

Direct Expenditures by Country Direct Expenditures by Country 20102010

Cruise Industry Direct Expenditures by Country € Millions

787205309496528580

9721,186

2,3062,569

4,538

0

1,000

2,000

3,000

4,000

5,000

Italy UK

Ger

man

y

Spain

France

Gre

ece

Finla

nd

Norway

Nether

lands

Denm

ark

Rest o

f Euro

pe

€ B

illi

ons

Expenidutures in 2010

The Value of a Cruise Tourist in The Value of a Cruise Tourist in 20102010

On average a typical cruise On average a typical cruise tourist is worth around €100 if tourist is worth around €100 if all direct impacts are taken into all direct impacts are taken into accountaccount

Impact and Value of Cruise Industry Impact and Value of Cruise Industry Activity in Greece - 2010Activity in Greece - 2010

Direct Expenditure - €579.6mDirect Expenditure - €579.6m Of which:Of which:

– Passengers - €360.3mPassengers - €360.3m– Shipbuilding (repair) - €22.7mShipbuilding (repair) - €22.7m– Employee compensation - €0.2mEmployee compensation - €0.2m– Cruise line purchases - €196.4mCruise line purchases - €196.4m

Jobs – 11,612Jobs – 11,612

Prospective Value of Cruise Industry Prospective Value of Cruise Industry Activity in Istanbul - 2011Activity in Istanbul - 2011

At least 465,700 cruise tourists are expected to At least 465,700 cruise tourists are expected to visit Istanbul in 2011visit Istanbul in 2011

Assuming European average value of a cruise Assuming European average value of a cruise tourist of €98 the direct value of this business is tourist of €98 the direct value of this business is €45.64 million€45.64 million

€€1 million in cruise industry expenditure generates 1 million in cruise industry expenditure generates €2.42 m in business output and 21 jobs paying €2.42 m in business output and 21 jobs paying €30,100, thus:€30,100, thus:– Business output at Istanbul - €110.45 millionBusiness output at Istanbul - €110.45 million– Jobs – 959Jobs – 959– Compensation - €28.85 millionCompensation - €28.85 million

ConclusionsConclusions

Signs are good - cruise industry looks set to Signs are good - cruise industry looks set to grow significantly in the Mediterranean in grow significantly in the Mediterranean in 20112011

Outlook overall is excellent but there are Outlook overall is excellent but there are some clouds on the horizonsome clouds on the horizon

Eastern Mediterranean looks well placed to Eastern Mediterranean looks well placed to continue to benefit from cruise industry continue to benefit from cruise industry activity in 2011 and beyondactivity in 2011 and beyond

Additional investment in facilities is needed Additional investment in facilities is needed to support the continuing dynamic changes to support the continuing dynamic changes in the structure of the cruise fleetin the structure of the cruise fleet