Cruise passengers down 20% as rising costs make NZ ‘most expensive destination’

Thursday, 6 February 2025

New Zealand’s cruise industry has passed its peak, with a 20% drop in passenger numbers this season and a further 20% drop expected next summer.

Tourism and industry leaders say the decline is largely due to rising maritime fees and operational costs, which have made New Zealand a more expensive destination for cruise lines.

Canterbury’s Lyttelton Port welcomed 26 cruise ships this season, one fewer than scheduled due to a weather-related cancellation, bringing in 36,982 passengers — a drop from 45,379 last season.

Akaroa however, experienced modest growth, hosting six ships and 1933 passengers, up from three ships and 1222 passengers last year, but a fraction of the 92 ships in 2018.

“There are fewer ships overall. The size of ships into Lyttelton remains about the same, but with fewer visiting,” said Kath Low, head of visitor economy at ChristchurchNZ.

“Akaroa has a small increase in ship numbers, but they are smaller. This is a national issue that we have very little influence over,” Low said.

“Our role isn’t to attract cruise ships, but to make sure the passengers who do come to Christchurch enjoy their visit.”

Low said the drop in cruise visits challenged regional tourism recovery.

Overseas visitor arrivals hit 321,200 in November last year, up 17,800 from the previous year, reaching 86% of pre-Covid levels. Australia accounted for 39% of arrivals, followed by the US and China.

New Zealand Cruise Association chief executive Jacqui Lloyd said increased maritime fees and operational costs were driving the downturn.

The number of cruise passengers was down 20% across the country compared to the previous season, with a further 20% drop expected next season, Lloyd said.

Cruise lines typically planned their routes 18 to 24 months in advance, and with rising costs and regulatory changes, the outlook for the next cruise season remained uncertain, she said.

“Border clearance agencies raised their levy - Border Processing Levies - by $11 per person on December 1 last year, cruise lines were given just four months’ notice.”

The increase would cost cruise lines around $3.2m, based on the expected 271,000 passengers visiting New Zealand this year, Lloyd said.

“One cruise line mentioned that New Zealand is the most expensive destination they visit.”

Despite the decline, Canterbury remains New Zealand’s third-largest cruise destination, generating $135.2m in economic output and supporting 939 jobs. Auckland leads with $604.7m , followed by Otago with $156m.

In December, Ovation of the Seas carrying up to 4180 passengers was cancelled due to poor weather.

Cruise ship tourists spend between $146 and $221 per day when they leave the ship, with about a third of passengers staying on board, according to ChristchurchNZ.

Local businesses felt the impact. Juliet Mountfort and Nigel Davies, silversmiths who have run their jewellery stall in Cathedral Square since 2004, said cruise ship passengers typically boosted sales by about 20%.

“Some days they make no difference, and other days it’s fantastic. Some ships are better than others, but we don’t know why,” Mountfort said.

Jackie Qiu, owner of a souvenir shop in Cathedral Junction, said cruise passengers helped business, but inconsistent foot traffic was a challenge.

“Our business is up compared to last year,” she said. “But the issue isn’t the size of the ships — it’s where passengers are dropped off.”

Cruise passengers disembarked near the Bridge of Remembrance.

“If they were dropped off in Cathedral Square, it would have a huge impact on this side of town, not just Cashel St,” Qiu said.

Many cruise tourists were older and often struggled with long walking distances, making them less likely to explore beyond their drop-off point unless they took the tram.

In Akaroa, businesses were suffering from the loss of cruise ships, said Jamie Stewart, former community board member and owner of Waffle Haus.

“You won’t find many businesses, especially in hospitality, that aren’t feeling it,” he said.

In 2018, Akaroa welcomed 92 cruise ships - the biggest year the town has ever had - compared to just six ships this season.

“About 30% of my sales on ship days came from passengers,” Stewart said.

The decline forced some businesses to close, including a large souvenir shop near the wharf — vacant for the first time in decades.

Efforts to offset the loss with bus tours from Lyttelton have fallen short. “We thought we’d be overwhelmed with buses when ships returned to Lyttelton. That never happened. On the biggest ships, we might get just one bus,” Stewart said.

“There was a massive vibrancy on ship days. We definitely miss those golden days.”

Cruise tourism injected $1.37 billion into the New Zealand economy in the 2023-24 financial year.

The direct cruise line expenditure totalled $317.6m, including $146.2m paid to ports and governments as fees and charges — 46% of cruise line spending.

This total economic output includes $637m in direct spending by passengers, crew, and cruise lines, with the remaining $729.2m stemming from indirect and induced economic activities.

Auckland received the largest share, benefiting from$604.7m and supporting 4184 jobs.

This season, about 50% of cruise passengers in New Zealand were Australian, she said .

“For many Australians, a cruise to New Zealand is their first time visiting the country. Many of these cruise passengers return for land-based holidays in the future.”