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Michael Crye

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  • 1. 2011 State of the Cruise Industry Michael Crye Executive Vice President Cruise Line International Association October 12, 2011
  • 2. 26 CLIA Member Lines Executive Partners: Cruise Newfoundland; Labrador and Corner Brook Port Corporations; The St. John's Port Authority; Cruise the St. Lawrence Association; Halifax Port Authority; Port of Sydney; Saguenay Port Authority; he Port of Saint John-New Brunswick Canada; and Tourism Quebec.
  • 3. Celebrating a History of Passenger Growth Over the Years Average Passenger Growth Rate 1980-2010: +7.5%
  • 4.
    • 16.0 million passengers (+ 6.6%)
    • • 11.68 million passengers – North America, 73%
    • • 4.32 million passengers – International, 27%
    CLIA 2011 Passenger Forecast
  • 5. New CLIA Ships: 2008–2011
  • 6. 2011 New Ships = $4.6 billion Investment
  • 7. Canada/New England Cruise Market
  • 8. Canada/New England Market
    • Over the past decade the bed day capacity and passenger arrivals in the CNE market has almost doubled.
    • The CNE share of global capacity has been fairly stable between 1.5 and 2%.
    • Its growth has come in spurts with increases in excess of 30% in 2000, 2004 and 2007.
    • Since 2008 capacity has remained fairly stable but passenger arrivals have increased by more than 10%.
    Cruise Capacity in the Canada/New England Market Source: CLIA
  • 9. Canada/New England Market
    • Since 2002 passenger embarks in CNE have more than doubled.
    • The CNE share of embarks in North America has increased from 6.4% in 2002 to10.2% in 2010.
    • Its growth has also come in spurts with increases in excess of 20% in 2003, 2004 and 2010.
    • Growth leaders have been New York and Baltimore, especially over the past two years .
    Embarkations in the Canada/New England Market Source: Port Authorities and BREA
  • 10. Passenger Expenditures
    • Atlantic Canada Passengers
      • More than 95% of passengers report going ashore for an average of 4.7 hours.
      • 85% of these passengers reported purchasing a shore excursion at an average cost of $53 per passenger.
        • 84% of shore excursions were purchased from the cruise lines.
      • Passengers that went ashore spent an average of $93 per passenger.
        • Tours, clothing and souvenirs account for 80% of the onshore expenditures
    • New York Passengers
      • Almost half (46%) of embarking passengers have a pre- or post-cruise stay of 2 nights.
      • Passengers with an overnight stay spend an average of $437 per passenger during their visit.
        • Lodging ($274) and food and beverages ($65) account for 75% of their expenditures.
      • The average expenditure across all passengers is $213.
    • 7-Day Itinerary (4 calls) - $585 of onshore expenditures per pax
      • 3,000 passenger ship will generate $1.75 million in total passenger expenditures
    Source: BREA
  • 11. CNE Passenger Source Markets
    • Passengers cruising in the CNE market are sourced from around the globe….but more than half reside in the northeast quadrant of the U.S.
    • Survey data from 2007 for Atlantic Canada ports showed:
      • 60% of passengers lived in the northeast quadrant of the U.S.
      • 30% lived elsewhere in the U.S.
      • 10% resided outside of the U.S.
    • Survey data from 2010 for New York showed:
      • 50% of passengers lived in the northeast quadrant of the U.S.
      • 35% lived elsewhere in the U.S.
      • 15% resided outside of the U.S
    Source: BREA
  • 12. ECA UPDATE
  • 13. North American Emission Control Area
  • 14. ECA Requirements
  • 15. Range of Options for ECA
    • Compliance via distillate fuel consumption
    • After treatment devices
    • Alternative fuels (Biofuels; LNG; Shorepower)
    • Equivalencies
    • Review operations
    “ Cruise lines are the environmental leaders in the marine industry. They’ve invested millions in state-of-the-art wastewater treatment systems, recycling equipment and training programs. The ships carry a dedicated environmental officer whose main duty is to ensure compliance with applicable environmental regulations.” Peter Lehmann, James Bay Neighbourhood Association April 24, 2011 (Times Colonist)
  • 16. Alternatives & Equivalencies
      • MARPOL Annex VI, Regulation 4 provides for broad equivalencies:
        • “ any fitting, material, appliance, or apparatus to be fitted in a ship or other procedures, alternative fuel oils, or compliance methods used as an alternative” if they are “at least as effective in terms of emission reductions.”
    • Potential alternatives or equivalencies include:
            • Mechanical removal (scrubbers)
            • Alternative fuels or non conventional propulsion
            • Emissions Averaging
            • Other means not yet identified.
  • 17. Goal Regarding Operational Equivalencies
    • Work within the existing MARPOL Annex VI framework to provide equal or greater public health and welfare benefit in a more economically efficient manner by:
    • 1. Focusing sulfur emission reductions where they provide the greatest benefit
    • 2. Ensuring that air quality is not degraded for any persons affected by cruise ship sulfur emissions
  • 18. Potential Averaging Programs
    • Vessel Averaging
          • Single vessel or within and between vessel fleets
    • Weighted Averaging
          • Account for dispersion of emissions, secondary PM formation and population exposure
          • Achieve lower emissions close to shore where impact is most significant
          • Achieve lower emissions closest to major population centers
          • Allow higher sulfur levels far from shore and far from population centers
          • Total population impact at or below levels achieved by spatially uniform ECA
  • 19. Population/Distance Weighted Averaging Significant emission reduction benefits: ship close to shore and population centers Limited emission reduction benefits: ship far from shore and major population centers High Emissions Weighting Factor Low Emissions Weighting Factor Voyage Segment A Voyage Segment B
  • 20.
    • Ongoing engagement with US EPA, US Coast Guard, & Transport Canada
    • Discussions with flag States initiated & ongoing
    • Engagement with other shipowners
    • Briefing of selected US Congressional staff
    • Discussions/Briefings with Transport Canada
    ECA ACTIVITIES
  • 21. [email_address] DISCUSSION AND QUESTIONS?

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