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Cruise Port Rotterdam

Economic impact of the cruise industry



Introduction In recent decades, the cruise industry has shown extremely dynamic growth worldwide, in Europe, and at Rotterdam. Globally, for example, passenger numbers increased from around 17.8 million to 29.7 million in the period from 2009 to 2019, and thus at annual cumulative growth rates of around 5.3% (CLIA 2021). Within the tourism industry, cruising has thus acquired a special position; and it is also increasingly at the center of public interest. The cruise industry has proven its resilience throughout its more than 50-year history. Covid 19 caused a massive cut. But when cruises returned to operations in July 2020 its recovery quickly picked up speed. In the rather cautious baseline forecast, passenger volume is expected to recover and surpass 2019 levels by the end of 2023. In the upside forecast, passenger volume is expected to recover to 101% of 2019 levels a year earlier, by the end of 2022. In all three scenarios, passenger volume is projected to recover in excess of 12% above 2019 levels by the end of 2026. 2

The study on the regional economic impact of cruise shipping in Rotterdam is conducted by the Cruise Port Rotterdam in collaboration with the independent industry consultant Oliver P. Mueller under supervision of Prof. Dr. Axel Schulz and Dr. Angelika Bucerius from the Faculty of Tourism Management at the University of Applied Science Kempten, Germany. All gures, calculations and estimates based on data and surveys taken among cruise lines, guests, crew and suppliers during the 2022 season supported by company gures and public statistics and have been veri ed with relevant parties and market gures. The most relevant factor in terms of scope, which is examined, comprises the expenses of the shipping companies at Cruise Port Rotterdam, which are required for the operation of such complex means of transport and for the implementation of the business model: Central areas are, for example, fees for the use of the port, the purchase of food, beverages and fuel as well as expenses for the repair and maintenance of the ships.

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Rotterdam, for which the port represents a central economic factor, the cruise offer is an additional channel that contributes to the attractiveness of the location and additional revenues and promotes innovations in various areas (such as the supply of ships with shore power or the use of alternative fuels).



Public perception often focuses on the expenditures of passengers visiting Rotterdam on the occasion of their cruise. Passengers who start or end their journey locally book a hotel room, for example, and travel within the city by cab or local public transport. Transit passengers whose ship stops in Rotterdam may use their stay to visit a museum or other cultural institution or shop at local retailers. The temporary demand of between 300.000 and 350.000 visitors per year represents a relevant economic factor even for Rotterdam and the region, especially for the most affected sectors of hospitality, retail and leisure. Furthermore the purchasing power of crew members also plays a role in the economy of the port city of call. Depending on the class of the cruise ship, its crew comprises between 500 and well over 1,000 people, who generate sales at least during their shore stays. On average, this turnover is systematically lower per crew member than for passengers: The context of the visit is different and, moreover, a much smaller proportion of the crew visits.

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PANDEMIC IMPACT AND RECOVERY

CRUISE TOURISTS ADD VALUE BEFORE, Cruise Tourists Add Value Before, During, DURING AND AFTER SAILING

and After Sailing

Every 24 cruisers worldwide supports one full-time equivalent job

Source: The Global Economic Contribution of Cruise Tourism in 2019, BREA

Cruisers spend an average of

$750 USD per passenger in port cities over the course of a typical seven-day cruise Source: The Global Economic Contribution of Cruise Tourism in 2019, BREA

6 in 10 people who have taken a cruise say that they have returned to a destination that they first visited via cruise ship Source: CLIA SPI Survey, November 2021

C A AT CR RU U II S SE E L L II N NE ES S II N NT TE ER RN N AT AT II O ON NA AL L Source: AS SS SO OC C IICLIA AT I O ON N

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Indirect Impact Impacts created from purchase of goods and services used as inputs (e.g. food wholesalers, utilities, business services) into production by the directly affected tourism-related sectors (i.e. economic effects stemming from business-to-business purchases in the supply chain. Induced Impact Impacts created from spending in the local economy by employees whose wages are generated either directly or indirectly by visitor spending. Additional impacts of the cruise industry affects: Employment Jobs directly and indirectly supported by visitor activity (includes part-time and seasonal work). Personal Income Income (wages, salaries, proprietor income and bene ts) supported by visitor spending.

Impact overview To quantify the economic signi cance of the cruise sector, the following model is detailing the impacts arising from the spending of these cruise visitors. This study show the scope of economic impacts in terms of direct, indirect and induced effects in regards of cruise ship calls in Rotterdam.

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Direct Impact Impacts (business sales, jobs, income, and taxes) created directly from spending by visitors to a destination within a discreet group of tourism-related sectors (e.g. recreation, transportation, lodging).

Value Added (GDP) Revenue minus intermediate consumption. Local Taxes City Taxes generated by visitor spending. This will include local sales, bed and other revenues streams of local governmental authorities. State Taxes Tax revenues generated by visitor spending. This will include sales, income, corporate and other assessments of state government.

In this study examines the regional value added contribution of the cruise industry to the Rotterdam economy in 2022. Based on data from of cial statistics and company data, cruise lines and surveys, we nd the economic impact per call between 1.1 and 1.7 Million euro depending on the vessels size and passenger volume. Two sources of value added attributable to the cruise industry are considered in the analysis: 1) regional spending by shipping companies operating at the location; 2) spending by visitors and crew members on site. Comparisons with other studies show that the results of the present study are plausible in their magnitude and that the procedure for analyzing the regional effects is robust. All together cruising contributes to the preservation and expansion of Rotterdam’s infrastructure and promotes economic growth and employment. Cruise ship passengers strengthen demand in the local retail trade, public transport, and cultural offers. Rotterdam’s attractiveness and prominence is enhanced worldwide.

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Executive summary



Main categories of cruise ships calling Rotterdam This index divides the calls in three main categories of vessels by passenger in double occupancy (pax), ship length in meters (m) and gross tonnage (gt) of the unit.

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A

1.500 to 1.750 pax, 600 to 750 crew with up to 270 m length and under 75.000 gt

B

2.500 to 3.000 pax, 800 to 950 crew with up to 295 m length and 100.000 gt

C

4.000 to 4.500 pax, 1.000 to 1.300 crew with up to 320 m length and over 125.000 gt



Dues & Services When calling the port cruise ships are charged with certain daily fees for the usage of quay and port facilities. Dues are determined by the number of linear meters (quay) and per tonne of the gross tonnage/water surface (port). In addition a cruise line pays the terminal fee for associated services like passenger handling and International Ship and Port Facility Security Code (ISPS) while the ship is moored.

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A

Quay, Port & Terminal

B

Quay, Port & Terminal

C

Quay, Port & Terminal

€ 30.025,-

€ 47.500,-

€ 62.000,-

Stevedores, maintenance, technicians, parts, etc. have not been speci cally approached in this respect.

Pilot Mooring VTS tax Waste handling Unforeseen

€ € € € €

8.000,2.500,2.500,2.500,2.500,€ 17.750,-

For the supply and delivery of fresh water on average, a rounded € 6.00 per ton of water is paid. The delivery amount will differ per ship, an estimate can be calculated of this expenditure. The average delivery is around 1,000 tons and goes up to 2,000 tons in a few cases.

Fresh water

Bunkering ships take Marine Gas Oil (MGO) with 0.1% sulfur emissions. It is measured in metric tons (Mts). For a small ship (200 meters and 12 decks) an intake of 550 Mts can be estimated ( gures 2022). For a ship of 4,500 passengers this is at least 1.5 times higher, for this calculation the aforementioned 550 Mts for all categories is calculated to € 750,000. An average rate of approx. € 1,350 is applied per Mts. In addition, a xed amount of approximately € 7,500 is calculated for the delivery barge.

Bunkering Barge

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Port call costs that are universal and not determined by size or pax numbers include the following estimates per visit:

€

6.000,-

€ 742.500,€ 7.500,€ 750.000,-

The calculation (pax x night x per diem) is based on a cruise length of 7 nights with a modest average percentage of 25% for local purchase, while on heavy loading one easily nds two trucks with meat, one with sh and one with vegetables from local suppliers.

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Provisioning a cruise ship covers a wide range of food and beverage for the included passenger and crew facilities as well as revenue outlets and shops. Furthermore the restocking of daily use housekeeping items and general maintenance is summed up to an estimate of € 40,- per passenger per diem.

A

Total 1.750 x 7 x € 40,= € 490.000,Local revenue (25%) € 122.500,-

B

Total 3.000 x 7 x € 40,= € 840.000,Local revenue (25%) € 210.000,-

C

Total 4.500 x 7 x € 40,= € 1.260.000,Local revenue (25%) € 315.000,-



Tours & City visits Approximately 50% of the passengers go on tour organized by the cruise line and fully sourced locally. This involves trips to Rotterdam, Delft, The Hague, Schoonhoven and Amsterdam. The average duration is 4 to 6 hours. An average net of € 45,- per pax local purchasing (bus, guide, tickets) is used. In addition tour passengers spend an estimate of € 65,- (€ 25,souvenirs, € 25,- food & beverage, € 10,- on additional transport and € 5,- miscellaneous). A total of € 110,45% of passengers do not go on a pre-booked tour and explore the city of Rotterdam on their own. Expenditure estimate € 30,- spent on museums/attractions and an estimate an additional € 85,- (€ 35,- shopping, € 30,food & beverage, € 15,- on transport and € 5,miscellaneous). A total of € 115,A small percentage of about 5% remains on board consequently no estimate in this calculation.

A

Tours € 96.250,Individual € 90.620,On Board € 0,€ 186.870,-

B

Tours € 165.000,Individual € 155.250,On Board € 0,€ 320.250,-

C

Tours € 247.500,Individual € 232.875,On Board € 0,€ 480.375,-

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Turnaround Calls In contrast to the above at turnaround calls all passengers leave the ship and new passengers board the vessel on the same day for cruises to and from Rotterdam. As most cruise lines source their guests internationally at least 50% of the guests spend time prior or post their cruise in town utilizing their own car or public transport for the way to and from the port and spending at least one night at a local hotel. The estimate spend on parking/transportation € 100, hotel € 75,-, food and beverage € 50,- and € 25,miscellaneous sum up to a total of € 250,-

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A

Total 875 pax x € 250,Local revenue € 218.750,-

B

Total 1.500 pax x € 250,Local revenue € 375.000,-

C

Total 2.250 pax x € 250,Local revenue € 562.500,-



Ships Crew Crewmembers off duty also have the opportunity to go ashore for recreation and grocery shopping. Recent studies (Vaya for Barelona, 2018) calculate the amount spend in an average port of call per crew member at € 25,In turnaround ports this number doubles as additional shopping for clothing and consumer goods is more common with a spending of € 50,At average 50% of crew members spend time ashore.

A B C

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Port of call 300 crew x € 25,Turnaround 300 crew x € 50,Port of call 400 crew x € 25,Turnaround 400 crew x € 50,Port of call 500 crew x € 25,Turnaround 500 crew x € 50,-

€ 7.500,€ 15.000,€ 10.000,€ 20.000,-

€ 12.500,€ 25.000,-



Total Impact of cruise ships calling Rotterdam The grand total of the data from all segments consolidated for either a turnaround operation or a port of call visit.

A

Port of call

€ 1.120.645,-

Turnaround

€ 1.160.025,-

B

Port of call

€ 1.361.750,-

Turnaround

€ 1.426.500,-

Port of call

€ 1.643.625,-

Turnaround

€ 1.738.250,-

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Source Cruise Port of Rotterdam

Dipl. Pol. Oliver P. Mueller MY7 Beratung und Beteiligungs UG, Hamburg Prof. Dr. Axel Schulz and Dr. Angelika Bucerius Faculty of Tourism Management University of Applied Science Kempten Underlying studies Contribution of Cruise Tourism to the Economies of Europe 2017. CLIA, 2018. Economic impact of cruise activity: The case of Barcelona. Vayá, E., Garcia, J. R., Murillo, J., Romaní, J., & Suriñach, J., 2018 Economic impact of international cruise visitors to the US. Tourism Economics, 2019 Economic impact of the port of Hamburg. Fraunhofer CML, 2021 Global Economic Contribution of Cruise Tourism. BREA, 2019 Global Market Report. CLIA, 2020 SPI Survey. CLIA, November 2021 State of the Cruise Industry Outlook. CLIA, 2021 State of the Cruise Industry Outlook. CLIA, 2022. Tourism Economics. CLIA, 2022

Pictures Aida Cruises, Holland America Line, Rotterdam Partners 2022 (Hannah Anthonysz, Jan Bijl, Iris van den Broek, Vincent van Dordrecht, Claire Droppert, Ossip van Duivenbode, Guido Pijper, Robin Utrecht, Miranda Vijfvinkel, Kunst Vliegwerk, 500 Watt), Royal Caribbean International

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Extract from Cruise Lines International Association (CLIA) annual reports on the global cruise community 2022. CLIA represents more than 90% of the world’s ocean-going cruise capacity, as well as nearly 60,000 travel agents and agencies from around the world. The travel agent and agency members represent the largest network of travel professionals specializing in cruise travel. The organization’s global headquarters are in Washington, DC, with regional of ces located in North and South America, Europe, and Australasia.

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Appendix



FACTS AND TRENDS FACTS AND TRENDS

A Popular Vacation Choice at Every Age

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Millennials are the most enthusiastic cruisers of the future

Average age of cruise tourist

Cruise from 2018-2020 2018-2020 Cruise Tourist Tourist Age Age Averages Averages from

% of Cruise Passengers Plan to Who Cruise Again % of CruiseWho Passengers Plan to Cruise Again 85%

85%

60+

14%

82%

80%

79%

33%

40-59

20%

77%

75%

20-39

73% 70%

32% 0-19

65% Source: CLIA Global Market Report, 2020 Source: CLIA Global Market Report, 2020

TRADITIONALISTS

BABY BOOMERS

GEN-X

MILLENIALS

GEN-Z

Source: CLIA Global Market Report, 2020

Source: CLIA Global Market Report, 2020 C S II O CR RU U II S SE E L L II N NE ES S II N NT TE ER RN N AT AT II O ON NA AL L A ASource: SS SO OC C II AT AT ON N CLIA

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PRE-PANDEMIC OVERVIEW

7.92I N REV I EW 2019M YEAR

%7.6 OT PU 8102 MORF

OVERALL VOLUME OF PASSENGERS

29.7M

UP 4.1% FROM 2018 The average cruiser is

NORTH AMERICA Passenger Volume

Passenger Volume

15,408,000

7,707,000

51.9%

+8.2%

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EUROPE

26%

years old

& cruises for an average of

7 DAYS

+7.5%

ASIA

Passenger Volume

3,738,000 12.6%

-11.8%

SOUTH/CENTRAL AMERICA Passenger Volume

980,000 3.3%

AUSTRALIA/NZ/PACIFIC Passenger Volume

+5.9%

1,351,000 4.6%

Number of Passengers Percentage of total passenger volume Growth rate since previous year

-7.5%

OTHER

Passenger Volume

484,000 1.6%

+1.8%

Source: CLIA

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THE CRUISE INDUSTRY PRE-PANDEMIC GLOBAL IMPACT

AN IMPORTANT CONTRIBUTOR TO THE GLOBAL ECONOMY

TOTAL ECONOMIC IMPACT

$154.46B

#1 Services and Government

2019 ECONOMIC IMPACT

1,166,213

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THE CRUISE INDUSTRY’S ECONOMIC IMPACT IS FAR-REACHING

#2 Transportation

JOBS

#3 Wholesale & Retail Sales

$50.53B

WAGES & SALARIES

#4 Manufacturing

$72.02B

DIRECT PURCHASES

29.7M

PASSENGER EMBARKATIONS

$385

AVERAGE SPENDING IN PORT BEFORE BOARDING A CRUISE

$100

AVERAGE SPENDING WHILE VISITING DURING A CRUISE

#5 Finance, Insurance & Real Estate (FIRE)

#6 Agriculture, Utilities & Construction

The Cruise Lines International Association (CLIA) is the world’s largest cruise industry trade association. CLIA represents the interests of cruise lines, travel agents, port authorities and destinations, and various industry business partners before regulatory and legislative policy makers.

Source: CLIA



PANDEMIC IMPACT AND RECOVERY 2022 FLEET

2022 CLIA Ocean-Going Member Fleet 2022 Projected Member Fleet (% of ships) 35%

272 ships projected in operation in 2022

30%

31.6%

30.9%

25% 20%

2,126 average passenger capacity

15%

15.1% 10%

11.4%

11%

5% 0% 0−1,000

1,001−2,000

2,001−3,000

3,001−4,000

4,001+

PASSENGER CAPACITY

C S II O CR RU U II S SE E L L II N NE ES S II N NT TE ER RN N AT AT II O ON NA AL L A A SS SO OC C II AT AT ON N Source: CLIA

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CT AND RECOVERY

a Pivotal Transition Year for the Cruise ECOVERY with Full Recovery 2022 is a Pivotal Projected Transition Yearinfor2023 the Cruise PANDEMIC IMPACT AND RECOVERY PANDEMIC IMPACT AND RECOVERY

tal Transition Year for the Cruise Industry, with Full Recovery Projected in 2023 ry Projected globalin cruise passenger volume Full Recovery Projected 2023 Index (2019=100)

Projected global cruise passenger volume s proven its A Resilient Industry Index (2019=100) industry has proven its ts more than The cruise 128 Projected global cruise passenger volume 125 resilience throughout its more than 125 119 120 evident in the 50-year history—as is evidentIndex (2019=100) 120 119 in the 113 112 113 109 109 108 108 operations thatresponsible return to operations that 104 104101 100

e In the baseline forecast, passenger at st, passenger volume is expected to recover and 100

recover and y the end

101

100

began in July 2020.

101

surpass 2019 levels by the end 95 of 2023. In the upside forecast, 78 passenger volume is expected to recover to 101% of 2019 levels a year earlier, by the end of 2022. In all three scenarios, passenger volume is

108

113

125

95 119 12094

109

78 104

78



2019

2020

2021

2022

94

112

94

2023

2024

Numbers represent an index of volume relative to 2019 (2019=100).

22

DOWNSIDE Source: CLIA; Tourism Economics

112

128

95

forecast, 19 15 17 18 expected to 019 levels a 19 15 17 18 2019 2020 2021 2022 2023 2024 2025 projected to recover in excess of 12% d of 2022. In allabove 2019 levels by the end of 2026. DOWNSIDE BASELINE UPSIDE 19 enger volume is Numbers represent an index of volume relative to 2019 (2019=100). 15 17 18 Source: CLIA; Tourism Economics allexcess of 12% 2019 2020 2021 2022 2023 2024 2025 2026 n is the end of 2026. DOWNSIDE BASELINE UPSIDE

2% 26.

128

BASELINE

UPSIDE

2025

2026

2026 C R U I S E L I N E S I N T E R N AT I O N A L A S S O C I AT I O N

C R U I S E L I N E S I N T E R N AT I O N A L A S S O C I AT I O N

Source: CLIA

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