Two major cruise lines, Princess Cruises and Cunard, have announced their plans to stop using Melbourne’s ports beginning in 2025, causing a dramatic change to the city’s reputation as a cruise hub.
Because the two cruise lines have a combined 40 annual stops, this decision—a consequence of Ports Victoria’s recent increase in port charges—concerns the local tourism sector.
At least two cruise lines, Princess Cruises and Cunard, will no longer dock at Melbourne’s Station Pier in 2025, according to an announcement made by Carnival Australia.
A rise in port fees imposed by Ports Victoria is directly linked to Princess and Cunard’s decision to withdraw from Melbourne Port. Passengers must now pay $32 instead of $28.50 as of January 1. Many are worried about the effect on the cruise industry and the suddenness of the decision.
The local tourism economy is hit hard by the pullout. With 32 port visits made by Princess and eight by Cunard, the two cruise lines are projected to make up around 40 in 2024. They bring in a whopping A$379.5 million each year for the community and attract 100,000 visitors. By 2025, this could all be lost.
According to Teresa Lloyd, the Chief Strategy Officer of Carnival Corporation, the cruise industry has a substantial economic impact on Victoria. Lloyd said, “Our economic benefit to Victoria is immense, and we appreciate the importance of maintaining our ports, but to be expected to carry a 15 per cent increase with no notice is unreasonable.”
Lloyd claims that the choice has nothing to do with how well-liked Melbourne is as a cruise port despite being on the bucket list of many cruise enthusiasts. Carnival Australia, however, finds the unexpected spike in fees unacceptable.
“We are committed to staying in Melbourne and are willing to work with the Victorian Government and Ports Victoria to find a permanent solution.” “Nevertheless, the decision to relocate these well-known cruise companies to other markets is partly influenced by the recent decision of Ports Victoria to impose a substantial and unexpected rise in fees and taxes”, Lloyd added.
Cunard announced in early November that after the 2025/26 season, it will no longer operate in Australia; therefore, their decision to pull out due to the tax increase is debatable.
According to Melissa Horne, the minister of ports, 105 ships have already been reserved for 2025 and 2026, filling the voids left by ships departing the port. Station Pier, a cruise pier that can hold four ships at once, has reportedly been in disrepair; hence, the prices have been raised to pay for its maintenance.
An estimated $379.5 million is contributed annually to Victoria’s economy by cruise tourism, as stated in the Value of Cruise Tourism study by the Cruise Lines International Association (CLIA).
This development indicates a rising conflict between policymakers and the cruise industry about operating expenses and Melbourne’s attractiveness as a cruise destination. The government’s reaction and the possible impact on the tourist sector are yet uncertain.
The cruise company has appealed to the Victorian government and Ports Victoria to seek a long-term solution to the issue, mirroring the decision of the Spirit of Tasmania ferry service, which shifted its Victorian base from Station Pier to Geelong more than a year ago.