Cruise ship cash sinking

17:00, May 20 2014

Environment Southland's cruise ship cash cow has hit rough waters, with falling ship numbers hurting the council's marine fund.

Results from the 2013-14 cruise ship season show income is down $250,000 on what was budgeted, meaning less money for coastline management.

Since 2001, Environment Southland has charged a fee to all visiting cruise vessels into Southland, primarily Fiordland and Stewart Island, for use in the Marine Fund, which finances coastline management projects around the region such as coastal hazard management and science programmes, normally funded by rates.

Organisations can also apply for grants and contributions for some projects. Among them was the Bluff Coastguard, which in 2012 received $5000 and had applied for a six-figure sum this year.

Environment Southland strategy and corporate planning manager Ken Swinney said the season's shortfall was because more visits were being cancelled.

A lot of cancellations were because of weather, however, the market trend was moving away from Southland's favour.


Southland's strongest market, Australians, were favouring the Pacific Islands over Fiordland and Stewart Island and the market was adjusting, he said.

The European and North American market was still relatively strong, he said.

Projections for the next few seasons show no sign of respite - Environment Southland had already been advised of 22 cancellations for the 2015-16 year, he said.

Swinney said the cancelled trips accounted for about $500,000.

The Marine Fund Reserve balance, which should retain at least one year's income from the previous season, was below where it should be, and the budgeted spend from the reserve for the 2014-15 year made the situation worse, he said.

"We're spending more than we're getting in."

A lot of the money went into council projects but if that money was no longer available council would have to put it out to a general rate, he said.

Southland harbourmaster Kevin O'Sullivan said the cruise market constantly fluctuated therefore income returns would reflect that.

At the moment, they had reached a plateau, with cruise ship numbers to Southland hovering around the 70-80 level for the past few years.

However, the ships that were coming tended to be larger so the passenger numbers may not be in decline, he said.

The council had come to rely on the cruise ship fund to deal with a wide range of coastal activities, he said.

As the fund's success was at the whim of the market it may not always be there. The question for budgeters was where to from here, he said.

The Southland Times