Carnival & Cunard cancel Melbourne port stops over tax hike

Melbourne, Australia - February 6th 2019. Carnival Legend, a Spirit class cruise ship operated by Carnival Cruise Line, docked at Station Pier in Port Melbourne.

Cunard and Carnival Australia have announced that they will both pull operations from Melbourne following a 15 per cent hike in port charges set to start on 1 January.

The axed port visits, originally planned for the 2025/26 season, come as a great disappointment to the Cruise Lines International Association’s (CLIA) managing director Joel Katz, who described it as a “major blow to Victorian businesses” and said it would undermine an industry worth almost $380 million to the Victorian economy.

“Australia already has some of the highest operating costs in the world for cruise lines and further increases directly impact the viability of operations,” Katz said.

“Cruise lines paid $227 million in fees and charges to Australian ports and governments during 2022-23, which is almost 20 per cent of their spending in this country. This ultimately impacts holidaymakers and makes Australia an expensive country for cruise operators.”

Princess Cruises, which is under the Carnival umbrella of cruise lines, and Cunard will instead visit other interstate docks from 2025. Carnival Australia’s chief strategy officer, Teresa Lloyd, said the decision was not made lightly.

Royal Princess at Sydney Harbour on her maiden season in Australia just last month (Princess Cruises)

“We love Melbourne and so do our local, interstate, and international guests,” Lloyd penned in a statement.

“The cultural capital of Australia is the gateway into southern Australia but also a much-loved destination for millions of tourists.

“However, the decision to homeport these popular cruise lines in other markets, is in no small part due to the recent decision made by Ports Victoria to significantly and unexpectedly increase fees and charges.

“We understand these fees will be ongoing and will largely go towards the ongoing costs of maintaining Station Pier.”

Driving the cruise lines’ decision is the Victorian Government’s port tax increase from $28.50 per passenger to $32 per passenger, which is to go towards ongoing maintenance to Station Pier, according to Victorian minister for ports and freight Melissa Horne.

“We have got a historic pier down at Station Pier, it’s beautiful and it’s much beloved by the community, it needs maintenance,” she said.

“That’s why Ports Victoria have increased their fees by a really modest 15 per cent, from $28.50 per passenger to $32 per passenger.

“Fees have not increased in two-and-a-half years and we need those fees to be able to maintain this beautiful and historic pier.”

Further outcry about Carnival’s decision came from the Tourism & Transport Forum’s chief executive Margy Osmond who described the move as “deeply disappointing” and said these cruise lines have been instrumental in attracting visitors and generating economic benefit for the state.

“We must address cruise ship operators concerns and ensure they have the support needed to prevent further erosion of the cruise industry,” Osmond said.

The move comes after cruise tourism generated a record $5.63 billion for communities around Australia in 2022-23 and supported more than 18,000 Australian jobs, according to CLIA.

“The benefits of cruise tourism reach every coastal state and territory, but without strong commitments from governments and careful planning for the long-term future, these benefits risk being lost to other destinations,” Katz said.

(Featured Image: Carnival Legend docked at Station Pier in Port Melbourne)

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