Ship to shore: The cruise industry's perception of economic risk
This thesis considers a variety of economic risks which could potentially threaten New Zealand’s position as a competitive and sustainable cruise destination. The risks are those articulated by stakeholders from the cruise, broader tourism (including port and shipping agent representatives) and government sectors. More specifically, these stakeholders include cruise industry representatives; cruise ship officers and staff; representatives from RTOs, local and regional councils; and port officials. In addition, the views of two New Zealand government representatives were also solicited. The views of these stakeholders are subsequently interpreted by the author of this thesis who is an avid cruise passenger and also involved in a commercial project to develop a website to promote New Zealand goods and experiences to cruise passengers visiting New Zealand. The economic risks considered in this thesis are those which are evaluated and factored into cruise lines’ decisions as to whether to send their ships and passengers to any given destination and the destination’s capacity to host these ships and their passengers. These risks are presented as falling into five distinct categories or phases of a cruise sector lifecycle, i.e. (a) product development; (b) infrastructure development; (c) distribution; (d) use and consumption; and (e) disposal. Each of the risks discussed is within the destination’s capacity to manage those risks if appropriate mechanisms and strategies are put into place. The cruise sector in New Zealand presents an interesting context in which to examine economic risks and a selection of countermeasures which can be implemented to manage them, thereby providing competitive opportunities and the potential for future sustainability for the sector. New Zealand is a remote cruise destination which represents only a very small proportion of the global cruise market. However, its cruise activity continues to experience rapid growth despite the recent economic downturn. According to many of the stakeholders interviewed for this thesis, this growth remains largely unmanaged because there is no apparent structured framework for the ongoing management and future development of “cruise” in New Zealand. Furthermore, they argue that a failure to provide an appropriately managed cruise sector means that the risks which currently face New Zealand will continue to grow and may ultimately threaten New Zealand’s goal of becoming an increasingly competitive and sustainable cruise destination. Five mechanisms or strategies for managing the current and potential risks to the New Zealand cruise sector are suggested by the author. Each of these strategies was signalled during the author’s research and further developed by her based on her own cruise experience in New Zealand waters and drawing from her previous work as a lawyer and IT professional developing best practice and risk management strategies and systems. The five strategies are the formation of a properly funded over-arching coordinating committee; the cultivation of a discernible cruise culture; implementation of appropriate education and training; the creation of a national cruise manual; and the design, development and implementation of a New Zealand cruise brand. Each of these strategies is based on an approach to risk management which calls for a positive view of risk and how it can be transformed into opportunity for competitive success. The traditional notion of risk as something to be avoided or which can be insured against or eliminated is rejected in part because it is counter-productive to treat risk in that way and also because such treatment leads to a silo approach where risks are considered individually and not how their collective influence can impact upon the whole. The silo approach precludes adopting a strategic approach to the identification and optimisation of risk. In other words, a tactical approach to risk indentification and risk management will very likely result in an underperforming and unsuccessful cruise sector. Therefore, the author concludes that a well-considered strategy needs to be adopted and appropriately funded to ensure New Zealand’s continued existence as a competitive and sustainable cruise destination.
Advisor: Shelton, Eric
Degree Name: Master of Tourism
Degree Discipline: Tourism
Publisher: University of Otago
Keywords: cruise tourism; economic risk; New Zealand tourism
Research Type: Thesis