Melbourne's cruise economy sinks as ships steer clear after tax hike
A major cruise operator's decision to quit berthing two of its premier cruise lines in Melbourne this year is set to blow an estimated $37.6 million hole in Victoria's economy, as more than 100 ships bypass the city over the next four years.
New analysis reveals Victoria's cruise economy has gone into reverse after Carnival's Melbourne boycott, which was ostensibly triggered by the Allan government's November 2023 decision to hike berthing fees by 15 per cent.
Carnival's luxury cruise ship brands Cunard and Princess ceased home-porting in Melbourne at the beginning of this year, with Cunard exiting Australian ports entirely, while Princess now berths in Sydney and Brisbane.
Cunard and Princess were a major feature of Melbourne's cruise ship schedule before their exit, berthing at Port Melbourne's Station Pier a total of 25 times in 2024. Their exit will reduce the total number of cruise ship berths in Melbourne by about 113 visits between 2025 and 2028, according to new analysis by the Parliamentary Budget Office commissioned by the state opposition.
The levies, termed a 'site occupation charge', were raised on January 1, 2024, from $28.50 per passenger for the first 24 hours to $32.78, and from $1.19 to $1.37 for each hour beyond 24 hours.
The government has said the increased port fees will help pay the maintenance of Station Pier, which is almost 100 years old, but the PBO's analysis suggests the revenue-raising initiative has backfired.
The projected drop in visitation at Station Pier over the next four years will cut the state government's tax intake from cruise ships by about $9.8 million between 2025 and 2028.
The decline will deliver an even bigger hit to Melbourne's tourism sector, where about $27.8 million will be lost as about 138,200 fewer cruise passengers visit the city, the analysis says.
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