The Mediterranean has always been a popular destination for cruise passengers, lured by the azure seas, good weather and variety of local cultures on offer. Faced with the consequences of the recent economic crisis, attracting further tourism through cruise lines is an obvious growth opportunity. HFW’s ports and terminals team has been seeing increased activity in the market, be it port privatisation designed to attract the private capital required for the expansion of cruise terminals and other infrastructure, or investment by port authorities themselves designed to capture a greater share of the market.
Demand for berths on board Mediterranean cruises
Overall, passenger numbers across the Mediterranean region were static in 2014. Whilst figures are yet to be published, growth in 2015 is also predicted to remain flat. There are various reasons for this including the focus by cruise lines on growing the Asian market and socio-political and security concerns in the Mediterranean. However, the numbers cruising the Mediterranean remain strong and extensive construction work on new cruise terminals is taking place in some of the largest ports in the Mediterranean in an attempt to boost those numbers and harness the associated business benefits.
Cruise terminal construction
The Civitavecchia Port Authority in Italy, together with the ICEP, is investing in Civitavecchia’s expansion. Although there was a fall in passenger traffic at Civitavecchia in 2014, it is expected to rise by over 6% in 2015, with strong growth figures also predicted for 2016. Construction work on a new €20 million, 10,000m2 terminal at Civitavecchia is due to commence in January 2016; this terminal is designed to handle 4,500 passengers and up to 9,000 items of luggage at a time.
Elsewhere, Ports of Tenerife is developing a new 8,473m2 cruise passenger terminal and construction work on the new Lisbon Cruise Terminal is expected to be completed by the end of 2016 (at an estimated cost of €22.7 million). The Port of Istanbul plans to construct a new 19,000m2 terminal as part of an ambitious project to regenerate the waterfront into a hospitality and recreational district. A new €14.4 million passenger terminal at Limassol is part of the commercialisation process of the Port of Limassol, and the Cyprus Ministry of Transport, Communications and Works has received pre-qualification documents submitted by interested parties. A new 640m2 cruise terminal is also expected to be completed at the Port of Cagliari, Italy in early 2016.
However, it is not just the larger ports with the big ambitions. At Igoumenitsa Port in Greece (recipient of 3,096 cruise passengers in 2014), the second phase of development costing €66.2 million is nearing completion. The development will contain a 2,324m2 passenger terminal building that will serve Schengen Agreement controls exclusively for cruise ships. A new two-storey terminal at the Port of Šibenik in Croatia should be completed by 2017 and a new cruise terminal at Tarragona Port in Spain is expected to be operational in 2018. A new terminal should also be operational by 2019 at the Port of Sète in France.
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It is worth noting that not all development is as a result of investment by the ports themselves. Many cruise lines see the Mediterranean as a continuing and important part of their offering. For example, Carnival Corporation announced in July 2015 that it plans to invest over €30 million to develop and operate its second private cruise terminal at the Port of Barcelona. Construction is scheduled to begin some time in 2016, with the new terminal due to open in 2018.
Cruise terminal modernisation
A number of ports are also investing to improve the facilities within existing cruise terminals with the aim of improving the passenger experience and cutting boarding times. The passenger terminal at the Port of Palermo is undergoing interior modernisation at a cost of €28 million, with work scheduled to finish in 2017. Among the smaller ports, refurbishment of the cruise terminal at the Port of Portimão is taking place. The Port of Koper recently added free Wi-Fi and video surveillance, and improved connections to the city centre. The Port of Palamòs intends to expand its cruise terminal to contain all security and border facilities required to cater for non-EU passengers.
Future of cruises in the Mediterranean?
Will these shiny new terminals and extended facilities attract the business and profits that the ports hope for?
It remains to be seen whether these measures will make the Mediterranean attractive enough to increase, significantly, the number of cruise ship calls. Although the Mediterranean has always been a popular cruise destination, markets elsewhere may be less complicated and more profitable to operate in. Cruise ships operating in Europe have to contend with levels of bureaucracy and compliance not seen in a number of the other regions in which the cruise industry is active. The use of exhaust gas cleaning systems for example, is far from resolved in Europe, and in the meantime the rising middle class in China are keen to enjoy the fruits of their labours with short holidays on board China-oriented vessels. Improved terminals do not necessarily create the cruise business and associated jobs for which ports hope. The future of the Mediterranean cruising may be boosted by improvements to ports facilities but challenges remain.