New Zealand's cruise industry falters as bookings drop 40%
'This is not a consumer demand issue, it is a supply problem - visitors still want to come here and passenger ratings for NZ are incredibly high, but the cost and complexity for cruise lines means they are shifting their focus to other more welcoming destinations.'
Smaller port towns are more likely to be affected by the slump, with Regional Tourism NZ's David Perks saying the potential negative impacts 'could be very significant to individual businesses and their ability to survive'.
What's behind the decline?
The cruise industry brought $648 million in direct expenditure and supported nearly 12,000 jobs across NZ in the 2023/24 season, which was the largest on record.
Yet cruise passenger numbers are expected to fall below 2017/18 levels this season, with only 663 port calls recorded for 2025/26 - down from 1123 in 2023/24.
'A decline in ship visits and passenger numbers means fewer tourism dollars for regional communities, less investment in NZ by global cruise operators, and the potential loss of our reputation as a world-class cruise destination,' Lloyd said.
While consumer demand remains strong, cruise operators are being put off by a perfect storm of rising costs, regulatory uncertainty and operational complexity.
Government fees, port charges and local levies combined with global fuel price and currency shift pressures have made NZ 'the most expensive cruise destination in the world'.
Uncertainty around regulations is also making it harder for cruise lines to plan schedules in advance and recover added costs, creating the perception that NZ is becoming too difficult to include in itineraries.
One example impacting long-term planning is the proposed ban on cruise ships entering Milford Sound's inner sound, proposed by the Government-funded Milford Opportunities Project (MOP) in a 2021 masterplan.
Biofouling requirements
Biofouling management regulations introduced in 2018 have inadvertently disrupted ship itineraries, with Lloyd saying it's become the number one concern for cruise operators.
Eight cruise ships turned themselves away and three required cleaning over the 2022/23 season.
Only one cruise ship required cleaning in 2024/25, but operators still worry they'll be denied entry and have adjusted their schedules accordingly.
'Even when cruise lines meet standards, the threat of being denied entry over minor issues creates unacceptable financial and brand risk,' Lloyd said.
'Cargo and shipping sectors also share these concerns, making this a broader supply chain issue.'
With about 90% of invasive marine species arriving in NZ on international ship hulls, the Ministry for Primary Industries' biofouling requirements - among the strictest in the world - are designed to protect Aotearoa's maritime industries and marine environment.
But while cruise lines aren't opposed to strong environmental protections, there is currently no way to clean ships within NZ waters if they're denied entry.
New Zealand port cleaning restrictions and the lack of a dry dock in Australasia (the closest is in Singapore) mean the only way to clean a ship here is through using a dive team at sea outside the 12-nautical-mile limit.
Biosecurity NZ's northern regional commissioner Mike Inglis said this method can be a 'difficult and complex task often dictated by the weather'.
'To help manage the risk, we've been asking cruise lines to submit all their documentation and risk management plans as early as possible so we can provide early notification of any cleaning requirements, helping avoid voyage delays.'
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Cruise operators have generally adapted well to the rules, Inglis said, which is 'evident in the number of cruise ships arriving in our waters fully compliant with our rules'.
Lloyd said work was under way to find a local solution for biofouling compliance, including in-port cleaning trials at Port of Auckland, so cruise lines had 'the confidence and certainty they need to plan deployments without fear of denial'.
Regional impact
The cruise downturn is expected to hit the regions harder, Perks said.
In smaller cities or towns like Napier, Akaroa and Picton, cruise traffic provides crucial support for the local economy.
'In each region there would be tourism businesses for which the cruise passengers would be their bedrock.'
While NZ's cruise industry operates seasonally from October to April, Perks said 'its reliability has provided businesses with an ability to invest and grow, in a way which is now being challenged'.
Lloyd said regional towns 'lack the economic diversity of larger cities', so the decline in cruise arrivals can disproportionately affect local jobs and incomes.
'Many of these towns are also off the main international touring route, so cruise plays a major role in bringing international visitors and spend to their communities.'
Larger cities will likely feel the drop differently. For Auckland, fewer cruise departures mean fewer visitor nights, while Wellington stands to lose foot traffic during the city's quieter January period.
Tracey Black, acting manager of tourism at the Ministry of Business, Innovation and Employment, said recent Government research published in April confirmed a decline in cruise activity across Australia, NZ and the Pacific.
The economic impact of this is unclear, but Black said the Government is steadfast in supporting tourism growth.
'We are working collaboratively with the cruise industry on what is needed to grow the value of international tourism.'
Lloyd said the Minister of Tourism and Hospitality, Louise Upston, has been 'really proactive and supportive' in trying to improve outcomes for the industry.
'The Minister and officials are engaging directly with cruise lines, listening to the concerns,' Lloyd said, turning to the April research as proof 'that the benefits of cruise to NZ continue to outweigh the direct costs'.
However, as cruise lines plan their voyages two to three years in advance, Lloyd said urgent action needs to be taken before NZ starts getting left off future itineraries.
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