1 st Posidonia Sea Tourism Forum Panel 2 The Economics of Sea - PowerPoint PPT Presentation

1 st Posidonia Sea Tourism Forum Panel 2 – The Economics of Sea Tourism Athens, June 21 st – 22 nd 2011 Giovanni Spadoni President of MedCruise Port of Livorno 2000 srl Technical & Commercial Director

MedCruise keeps the Med together Adriatic Black Sea West Med/ Atlantic East Med

MedCruise Ports (2010) less than between between between between over 1.000.000 - 1.500.000 - 100.000 100.000 - 500.000 500.000 - 1.000.000 2.000.000 1.500.000 2.000.000 ALICANTE VALLETTA TUNISIAN P. NAPLES CIVITAVECCHIA BARCELONA BALEARIC ISL. AZORES MADEIRA ISL. GENOA ALMERIA LISBON LIVORNO LA SPEZIA PALERMO MARSEILLE PORTIMAO MONACO FRENCH RIVIERA ATLANTIC / PALAMOS TOULON MALAGA WEST MED PORTOFERRAIO GIBRALTAR SETE VALENCIA CEUTA MESSINA TARRAGONA NORTH SARDINIAN P. MOTRIL CAGLIARI CASTELLON CARTAGENA KOPER SPLIT DUBROVNIK VENICE ZADAR BARI TRIESTE ADRIATIC RIJEKA SIBENIK RAVENNA KEFALONIA ISTANBUL KUSADASI / BODRUM PIRAEUS / ANTALYA KOS CYPRIOT P. ALANYA HERAKLION VOLOS EGYPTIAN P. THESSALONIKI EAST MED LATTAKIA KAVALA SOUDA PATRAS IGOUMENITSA ODESSA YALTA SOCHI CONSTANTZA BLACK SEA SEVASTOPOL BURGAS SINOP BATUMI RIZE

Industry trends – growth! • Construction of megaships – and the need to expand port infrastructure • More ships, bigger ships – multiple ships at one port • Opportunities to expand marketing to new niches • New itineraries needed – growth in new regions • New ports needed – marketing opportunities • Increased fuel costs – itinerary modifications, new opportunities

Cruise: a good investment choice • Average annual traffic growth of more than 10% in Europe and the Mediterranean over the last 10 years. • High levels of optimism in the industry • High levels of passenger satisfaction – Product considered superior & better value than other tourism products – Repeat customers • Immense potential for growth (latent demand)

Cruise Industry Model : the Players TOURS & VENUES HOTELS/RETAIL RECEPTIVE AGENTS DESTINATION AIRPORTS PORTS PORT AGENTS SHIPS TRAVEL AGENTS CRUISE LINES PASSENGERS SHIPYARDS

Why would a port want cruises? • Requires a separation of uses at the port • Requires expensive new port infrastructure • Requires qualified personnel • Requires state-of-the-art security systems • Requires building new relationships with local tourism, city officials and the cruise industry community

The benefits • Prestige

The benefits • The development of a passenger port

… the main benefit • Tourism – local industry with local profit • Cruise tourism doesn’t compete with other land- based tourist products • Cruise ship passengers aren’t always the same tourists that would visit your destination on their own • Cruise passengers can experience your destination and decide to return to spend more time, and money

… the main benefit • Cruise for local economic development – Example: Expenditures at Destination • Excluding airfares, cruise passengers spent an average of nearly € 70 at embarkation port cities. • On average, cruise passengers then spent another € 61 at each port visit on their cruise itinerary. – Source – GP Wild Intl, Ltd and BREA

Cruise Industry Model : Port Finance Indirect/Induced Impacts € Private and/or Public Investors € PORT PRODUCTS Financing Port Infrastructure COMPETITION MARKET

Goal: Increase Foreign Revenue National Debt Accounts Balance FOREIGN TRADE TOURISM DIRECT International Payments Foreign Investments Cruise-related Greek Services Greek Supplies Businesses Privatisation Provisions sold to Passenger and Public Entities Cruise Lines Crew Purchases Port Infrastructure

Governance of Cruise Terminals • Partnerships between Port Authorities, Cruise Terminals and Cruise Companies play a significant role in investment and management decisions of every shipping player; • Cruise lines are faced with decisions to directly control some specific operations and to obtain preferential port spaces in order to gain competitive advantage over cruise competitors.

Governance of the Cruise terminals Italy and Europe: • Different forms of terminal governance with combined public and private sector involvement: – Barcelona Palacruceros = public-private partnership – Marseille MPCT approved by European Commission operated by Costa, MSC and Louis Cruises. • Partnerships between the public and private sector are increasingly being preferred as a tool to attract capital for infrastructure investment and as a way to distribute the cruise management risks between the public and private sectors.

Governance of the Cruise terminals The Italian Model: • Port Authority = Landlord. • Concession = Long term Instrument to commit the management of the Passenger Port and the Cruise Terminal to a Private/Public Company. • The P.A.: – Fixes the objectives to be reached; – Approves the Business Plan; – Controls its achievement.

GOVERNANCE AND EFFICIENCY OF ITALIAN CRUISE TERMINALS Research presented at 2010 Annual Conference of the International Association of Maritime Economists, Lisbon 7-9 July 2010 Professor Assunta Di Vaio Business Administration Department, University of Naples “Parthenope” Via Medina, 40 – 80132 – Naples, Italy Email: susy.divaio@uniparthenope.it Telephone: +39.0815474766 Fax: +39 . 0815522313

Governance of the Cruise terminals Port Name Type Property Shares 1 Savona Palacrociere Savona S.P.A. Private 100% Costa Crociere 2 Genoa Stazioni Marittime spa S.P.A. Private/Public 10,22% P.A. 23,85% Finporto (P.A.) 5% Genoa Municipality 32,01% G.N.V. 5,91% Costa Crociere 13,24% Marinvest (MSC) 7,33% Moby Lines 2,44% Tirrenia 3 Livorno Porto di Livorno 2000 srl S.R.L. Public/Private 72% P.A. 28% Chamber of Commerce 4 Cagliari Cagliari Port Authority Institution Public N.A. 5 Portoferraio Piombino&Portoferraio Port Authority Institution Public N.A. 6 Civitavecchia Roma Cruise Terminal S.R.L. Private 33,33% Costa Crociere s.p.a. 33,33% Royal Caribbean Cruises Ltd. 33,33% Marinvest s.r.l.(MSC)

Governance of the Cruise terminals Port Name Type Property Shares 7Napoli Terminal Napoli spa S.p.A. Private/Public 5% A.P. 20% Royal Caribbean 20% Costa Crociere 20% Marinvest(MSC) 20% Terminal Trade 10% Intership srl 5% MSC crociere 8Messina ATI Comet SRL-Messina Sea Terminal Consortium Private N.A. 9Palermo Palermo Port Authority Institution Public N.A. 10Bari Bari Porto Mediterraneo S.R.L. Private-Public 5% Banca Popolare Bari In 2010 the concession expired and Port Authority assumed the commercial and marketing management of the cruise terminal. 30% Consorzio del Porto di Bari The Terminal services were assigned by an international bid to a private Company. 5% Venezia Terminal Passeggeri 10% Fin.Mil. Bari 10% M.P.M.S.R.L. Bari 15% Iniziative Portuali & Partecip. S.R.L.BA 15% Impresa Logistica Portuale SRL BA 5% Servizi Integrati di Logistica SRL BA 5% Camera di Commercio BA

Governance of the Cruise terminals Port Name Type Property Shares 11 Venezia Venezia Terminal Passeggeri S.p.A. Public-Private 35,5% APV INVESTIMENTI SPA. 22,18% Finpax srl 22,18% Aeroporto di Venezia SAVE spa 17,5% VENETO SVILUPPO S.P.A. 2,5% Camera di Commercio Venezia 12 Trieste Trieste Terminal Passeggeri S.p.A. Public 100% P.A. Fully privatized in 2010

Governance of the Cruise terminals Port Regimen Covered Pier Length Future 1 Savona Concession 2003-2023 4800 sq.mt 450 m. 2 Genoa Concession 1987-2040 5 Terminals 3000 m. 3 Livorno Concession 1997-2029 2 Terminals 1800 m.+commercial Privatization-P.A.minority 2011 4 Cagliari P.A. Direct Management 1 Terminal 350 m.+commercial Privatization 2011 5 Portoferraio P.A. Direct Management Transit 150 m + roads 6 Civitavecchia Concession 2004-2044 3 Terminals 2622 m. 7 Napoli Concession 2005-2035 1100 m.+commercial Concession only for the 8 Messina services 2006-2011 550 sq.m. 800 m. New Terminal-Privatization 2012 9 Palermo P.A. Direct Management 3000 sq.m 700 m. P.A.Direct P.A.Management 2370 Sq.m.+ since 2010-security-safety- Ferry cleaning services committed by 10 Bari Concession Expired 2009 terminal 300 m. bid to in 2010 11 Venezia Concession 1999-2025 47.267 sq.m. 2.809 m. 12 Trieste Concession 2008-2023 8.000 sq.m. 480 m. Privatization 60%

Governance of Cruise Terminals • Direct management: when the cruise terminal is managed by port authorities (Cagliari,Messina, Palermo, Portoferraio) • Full public management: when a public company manages the terminal (Bari Porto Mediterraneo Srl, Trieste Terminal Passeggeri S.p.A., Venezia Terminal Passeggeri S.p.A., Porto di Livorno 2000 Srl) • Mixed management: when the cruise terminal management is over 50% private (Terminal Napoli S.p.A., Stazioni Marittime S.p.A.) • Private management: when the management is entirely privately operated (ATI Comet Srl – Messina Sea Terminal, Palacrociere of Savona, Roma Cruise Terminal Srl).

Governance of Cruise Terminals a) Technical efficiency (TE) of cruise terminals improves when the terminals are operated by private companies under a regulatory regimen; b) TE decreases when the terminal management type is public; c) TE increases when the cruise terminals are owned by a combination of public and private actors but predominantly by the private sector.