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Volume, Value and Characteristics of Maritime Tourism in the Eastern Mediterranean

Conference speech presented at the Cruise + Ferry 97 Exhibition (London, 13-14-15 May 1997)

By George Michaelides, The Louis Organization - Cyprus (16/9/97)

Coming from a very historic region perhaps I should begin with the early days of cruising in the Mediterranean region.
Some cruise historians claim that the idea of cruising in the Mediterranean started already on 08.06.1867 exactly 130 years ago when the 1,700 tons "Quaker City" offered a cruise from America to Europe and the Holy Land to 64 passengers including the famous Mark Twain.
Later on, in 1893, two Orient liners, the "Chimborazo" and "Garrone" were offering seasonal cruises to the Mediterranean countries.

During that same decade, in Germany, the Hamburg-America Line sent the "Augusta-Victoria" from Cuxhaven with 241 passengers on a Mediterranean cruise in January, 1891.
But probably the first vessel to be built exclusively for cruising was the "Victoria Luise" of the Hamburg-America Line which in 1911 started cruising around the world, and included the Mediterranean.

In modern times, the beginning of cruising in the eastern Mediterranean goes back to 1955 when in Greece, the Potamianos family (then Epirotiki and now ROC) introduced the "Semiramis" for sailing the Aegean Sea.
Later on, with the development of Greece as a tourist destination, all-inclusive short cruises to the islands became popular.
Further East in Cyprus in the 70's short cruising to Israel and Egypt found many enthusiasts and in 1986, with the introduction of "Princesa Marissa" of Luis Cruise Lines, the idea of a 2 - 3 day cruise to Israel and Egypt as a "holiday within a holiday" gave a new image to cruising in the area.

When talking about Maritime Tourism, I am referring only to cruising and for the purpose of this paper I leave our yachting, boating, marinas, etc.
Further, it should be noted that the figures I present also include regional operators and non-CLIA cruises.
And, because of the importance of short cruising in the eastern Mediterranean, 2 and 3 day cruises are among those considered.

Perhaps we should all agree on a definition of what is a cruise passengers in terms of statistics, in the same way that we do for tourists.
For me, a cruise participant should be someone who spends at least 24 hours on a cruise ship.

Looking at some of the excellent existing cruise reports of G. P. Wild (International Ltd.) and the Cruise Bible of Douglas Ward, I suggest that all of us involved in cruising should also establish a uniformity in cruising statistics.
I am very well aware of another important part of the tourist industry, Meetings and Incentives, which for the last 20 years has tried without much success to compare conference statistics from various sources. Perhaps the cruise industry will be more lucky.

While there has been considerable development in the eastern Mediterranean cruise market, we cannot forget that we are in a part of the world which usually receives maximum publicity not as a cruise destination bur as an area of conflict and political instability.
We all remember the Gulf crisis when all cruise ships left the area in a hurry. It took them two years to return.
Small increases in capacities are mainly in the western Mediterranean, where as in the East saturation limits the expansion.
The dramatic changes that took place in the West are non-existent in the East. However, the entry of Airtours and Thomson and the introduction of AIDA of DSR in the western region has changed the balance between the two areas of the Mediterranean Sea.

At present, the eastern sector is dominated by Royal Olympic Cruises with the traditional island cruising out of Piraeus and Louis Cruise Lines with short cruises to Israel and Egypt and 5, 7-day cruises to Greece and the Greek islands out of Cyprus.
And although in the East we had for many years a clearly defined cruise product, in the West it was only the entrance of the major UK tour operators that brought a more standardised fly-and-cruise product out of Mallorca on a regular basis during the summer season.

The fresh and dynamic approach of the British and the Germans who activated new target groups in the West is not to be found in the East.
Airtours and Thomson opened up the market in the U.K. in the same way that Neckermann created mass tourism out of Germany 30 years ago when he was advertising Neckermann Machts Moglich.
Today, Airtours and Thomson offer cruising for all, with the price for 14 days in the Mediterranean priced at £ 299.

The eastern part attracts nearly 29 million tourists every year and has a unique cruise product with calm seas, a long season, fascinating cultural attractions and unique islands. And yet there are less than 500,000 cruisers because it lacks the dynamism and innovation of the western part.

Looking closer at some figures for cruising in the eastern Mediterranean, we get the following picture:
Total number of cruises 1.178
Of which
Individual cruises 362
Regular cruises 816

Regular Cruises
(Cruises lines - Number of cruises - Berths)
Louis Cruise Lines (LCL) - 281 - 198.940
Royal Olympic (ROC) - 224 - 164.055

Of the 11 largest cruise companies in the Mediterranean only two, ROC and LCL, are based in the eastern Mediterranean.
Regular cruises in the eastern Mediterranean are offered by three types of cruise ships:
a) The traditional cruise ships of ROC, Louis Cruise Lines, Festival Cruises and Princess Danae of Arcalia.
b) The "Costa Classica" and "Costa Victoria" which are the youngest and biggest vessels serving the area.
c) The third category caters for a special segment of the market and includes the sailing vessels "Wind Spirit", the "Star Flyer", "Druzhba", "Galileo Sun" and "Lili Marleen".

Together with the other two Cypriot ships "Alternate" and "Salamis Glory", all these regular cruises are expected to attract approximately 490,000 passengers meaning an income of US $ 295 million.
The low average per head in expenditure is due to the fact that about 200,000 passengers are booking a short cruise out of Cyprus which is available at very low rates, and the on board expenditure does not exceed US $ 30 per person per day.

If we make an analysis of the passengers by nationality we arrive at this result:
1. U.K. 140,000
2. GERMANY 110,000
3. USA 70,000
4. RUSSIAN 50,000
5. NORDIC COUNTRIES 35,000
6. CYPRUS 30,000
7. ITALY 20,000
8. DUTCH 12,000
9. FRENCH 10,000
10. ISRAEL 10,000

Considering the tourism movement in the region which accounts for 28 million tourists the share of maritime tourism is no more than 1.7%.

For years now we have been talking about booming cruise industry and the fact that more and more people discover the beauty of cruising.
Thinking back to 1972 when I was a Tourism Management Student in this country I remember very well an article published in the German FAZ about cruising wich said it would never account for more than one per cent of International Tourism.
Well, today with 600 million International Tourists and six million cruise passengers, the market share of maritime tourism remains at one per cent. Just to remind you, 25 years ago there were 140 cruise ships with a capacity of 83,000 berths whereas today more than 240 ships are offering 166,000 berths.
If by the year 2000 we have 263 ships with 200,000 berths and 8 million passengers and 800 million International Tourists, we are still at one per cent.

One really wonders why - since tour operators such as Airtours, Thomson, Saga, Neckermann, Helvetic, etc. are helping to bring cruising to new clientele and to offer such a high level of customer satisfaction, the percentage of the cruise market compared to the overall tourism market remains so small.

Characteristics of maritime tourism in the eastern Mediterranean
- Cruising is only a small part of the tourism industry and governments in the region are not doing much to support the industry.

- The market is highly concentrated among a relatively small number of ports such as Piraeus, Limassol, Haifa and Port Said.

- The small ports of the Greek islands will certainly not handle Mega-Ships. If Bermuda will not accept Mega-Liners, as part of a new cruise policy, imagine what the island of Patmos or Mykonos need to do. Mega-Ships will stay for the Americas or perhaps for the western part of the Mediterranean. Older and smaller ships will remain popular in the eastern Mediterranean.

- Sailing cruise ships are now discovering the eastern part of the Mediterranean.

- Cruise operators in the area consider the region to be of long term interest.

- Eastern Mediterranean cruise operators can be described as the alternative nonmass market cruise lines. Their products are in the hands of travel agents who must focus their efforts to potential clients looking for traditional cruising. Perhaps the best potential clients would be those land-based vacationers who will find on a cruise a new dimension of their special interest, i.e. culture, nature, hobbies, etc. You can only convince these segments of the market if you can demonstrate that cruising is better value.

- The concept of "Fly and Cruise" in the eastern Mediterranean has not been developed in the same way as in the western part. Cyprus with a capacity of 100,000 beds and two million tourists could be easily developed into a fly-and-cruise destination. It is worth noting that an increasing number of tour operators are extending their Mediterranean season well into the winter months in the eastern part.

- The area remains a highly diversified market depending on Europe with a wide variety of customers, where culture, languages, standard of living and holiday patterns differ considerably.

- Discounting like elsewhere is very common in the eastern Mediterranean. Everybody expects some form of discounting. Cruise lines need to build a better appreciation of the real value of the brochure prices. Short cruises from Cyprus to Israel and Egypt are offered for virtually nothing. You pay for two and the third and fourth persons are travelling free in the same cabin.

- In addition to the cut-throat competition and the plundering of the market by “fly by-night” operators, cruise operators are not receiving any support from the governments. On the contrary, it is even worse in Cyprus which has perhaps the highest passenger head-tax (US $ 15) plus $ 2.50 for porterage. The government is even thinking of increasing it by 30%. This is a policy that acts as an obvious disincentive for operators to use Cyprus as a start port.

- Another characteristic which applies not only to the Mediterranean is the fact that the area depends on the European tour operators who are very powerfull and have their own travel agencies. In most of the cases these travel agencies lack cruise specialists. In Germany only 20% of travel agencies (500) are in a position to give advice and have product knowledge. For a region which is offering mainly traditional cruising and where shore excursions are very important, product knowledge is essential especially now when the basic short tour is fading out as people expect more.

The Outlook
If the countries in the region wish to benefit from cruising, they need to change the existing policy and offer to local operators much more support in the field of marketing but especially in improving the infrastructure and to offer a number of incentives.

In the case of Cyprus, the port of Limassol which together with Piraeus and Genoa are the busiest, needs a new terminal building for cruise ships and a dynamic campaign to turn Cyprus into a cruise centre.
From the port of Limassol every year more than 200,000, foreign tourists are cruising to Haifa, Port Said and the Greek islands.

For Greece, the most important development will come in 1999 when the end of the cabotage will open the Greek seas to the flags of the E.U.
The existing high operational costs of the Greek cruise ships might be reduced if the Greek ships owners will use other EU flags instead of the Greek one.

Greece ship owners are likely to stick to what they know best and try to do it better.
For the Greeks to face the new competition, there is a need for new ships.
Already Royal Olympic Cruises is negoriating with shipyards with a view to building two liners capable to carry almost a thousand passengers each.
For sure there is a need for sailing vessels with luxurious accomodation for cruising to the islands and for expansion in the lonian sea.

New alliances or even investment in existing cruise lines is also expected.
As shorter cruising and island hopping are becoming more and more popular and new markets are emerging from the former Soviet Bloc countries, Greece will attract the interest of many new cruise operators who will enter for the first time into the Aegean Sea.

Following the globalisation trend in Europe and considering that the Americans will change their “myopic” attitude, we should expect more activity by the North American giants who by moving into European markets will create a new situation.
Some evidence already exist should the deal of Carnival and Airtours with Costa become a reality.

As far as competition is concerned it is likely that cruising will follow the same pattern as land base packages.
The Asian region will certainly affect the situation in the eastern Mediterranean.
With recent development and expansion in Asia, especially with Star Cruises and also the increasing popularity of the Indian Ocean, the Mediterranean countries will certainly feel the competition.
It is not by chance that Singapore is very intelligently advertising "around Singapore are 50 ports of call".
I wish we had the same attitude in our part of the world.

Furthermore, economic reports show that growth in Asia will create a middle class of 500 million people by the year 2000.
Such development will certainly create a new market area and religious travel in the eastern Mediterranean will be developed furter to include cruising in the eastern Mediterranean for the new markets of Japan, Korea, Singapore, etc.
Short itineraries for cruise and stay in Cyprus, Holy Land and Egypt have started already with some success.

Another interesting development in the area is the expansion of the Russian market.
This year more than 100,000 Russians will spend their holidays in Cyprus.
Based on last year's experience, more than 30,000 will book a cruise to visit mainly the Holy Land.
After the British, the Russians are the nationality most attracted by cruising. The potential for fly-and-cruise itineraries for Russians from Greece and Cyprus is enormous.
It should be noted that Russia has one million cruisers.

Very good prospects for the region come from the German market.
The Germans, who are known as world champions in holiday travel are still not exceeding the 255,000 passengers on cruise ships.
Compared to the overall holiday travel out of Germany in 1996 which is 20.4 million people, the share of cruises is only 1.2 per cent.
However, the fact that cruising becomes more and more popular and the number of cruisers is increasing every year, plus the fact that the former East Germans show positive holiday intensity with preferences "getting to know people, countries, landscapes", cruising in the eastern Mediterranean will certainly get its fair share.

The Germans have always preferred traditional cruising and island romance and the fact that more and more book holidays on sailing cruise ships is a very positive sign.

According to a study made in Germany, the future of a maritime tourism lies in the field of URLAUB AUF SEE, "Holiday on the Sea".
This, of course, means much more than traditional cruising. Perhaps the concept of Club ship AIDA is the beginning of this new type of holiday.

Concerning the UK market which is the most important one, cruise operators will concentrate their efforts on attracting the business of the tour operators following the same pattern in the western region.

Piraeus and Limassol will be the base for ships offering budget cruising in the region.
In order to succeed, the Greeks and the Cypriots must ensure that the concept of tour operating in the Balearics combined with a cruise will be adopted in these two countries.
For sure climatic condition, culture and scenery are there, but what is needed for a successful operation is more than that.
The tour operators know best because they have the airline seats, the hotel beds and the ship comes as an extension.

As regards new cruise destinations in the area it is surprising that Turkey, for example, which is experiencing a tourist boom, still has a very limited share of cruising.
For certain, Syria and the Lebanon, once the situation in the Middle East comes to a peaceful agreement for all, will attract many cruise operators.

As we are approaching a new century, cruise lines wishing to operate in the eastern Mediterranean will have to be very competitive on price in order to attract the business of tour operators, especially the panEuropean giants such as Neckermann, Airturs, TUI, etc.
Prices must be similar to a land-based stay. This is why luxurios cruises remain the exception in the eastern Mediterranean.
In order to be competitive, you have to keep the price low.
This situation will enforce further the existing situation of cut-throat competition among cruise operators who are seeking to keep and possibly increase their market share.

Despite the limiting factors which exist at present, i.e. political uncertainty, the Greek cabotage, congestion in certain ports, lack of facilities to attract mega ships, tough competition, low per diem rate, etc. the eastern Mediterranean maritime tourism will certainly feel the impact of "cruising for all".
This influx of larger numbers will spoil the "magic" that has been traditionally associated with cruises.
People want the relaxing feeling and romance of being at sea. People want to stand on deck when the ship gets into the harbour and they will be certainly moved to hear the ship's band playing on deck "Never On a Sunday" when the ship leaves behind the island of Mykonos and the sun sets behind the windmills.

Perhaps what makes the eastern Mediterranean an ideal cruise destination is the excitement, the human dimension and the emotional fulfilment that is still available.

The words of the famous Greek author Nikos Kazantzakis in the book "Alexis Zorbas" are still very valid: "Happy is the man who has the good fortune to sail the Aegean Sea ...nowhere else can one pass so easily and serenely from reality to a dream".
Let us all not forget that we are in the business of selling dreams.


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