INVESTIGATION OF THE CRUISE LINER INDUSTRY DRAFT STUDY

INVESTIGATION OF THE CRUISE LINER INDUSTRY DRAFT STUDY RESULTS | 7. 16. 08 MITCHELL DUPLESSIS PROJECTS (PTY) LTD | LANDDESIGN

CRITICAL TOPICS COVERED § The modern cruise industry and the overall prospects for continued growth at a global and regional level § Infrastructure and services required by homeports and ports-of-call § Insights on other cruise regions business success—notably, Australia / New Zealand South America § Recommendations as to how Cape Town should consider moving forward and to become a greater participant within the industry

SEC 1 GLOBAL CRUISE CHARTERISTICS

GLOBAL CRUISE INDUSTRY: MODERN ROOTS § 1970 s transatlantic voyages for travel and leisure, not transportation § North America’s love affair with the “Love Boat” § Caribbean entrepreneurs and development of the Fun Ships § The cruise ship as the destination

CRUISE INDUSTRY: GROWTH IN PASSENGERS GLOBAL PASSENGER LEVELS HAVE DOUBLED EVERY DECADE SOURCES: CLIA, 2006 AND CIN, 2008

CRUISE INDUSTRY: FEATURES OF GROWTH § Phenomenal success in developing new products and sustained interest in cruising § Adept at converting land-based resort guests into cruise passengers § Deliver a high level of passenger satisfaction, leading to repeat clientele § Model adaptable to changing market conditions § Lines have limited competition, reduced operational costs, and diversified revenues

LEADING CRUISE CONGLOMERATES SOURCE: CIN, 2008

LEADING CRUISE CONGLOMERATES NCL / STAR CRUISES ROYAL CARIBBEAN 5 brands, 38 Vessels, 79, 446 total berths NCL America Star Cruises Celebrity Royal Caribbean International Pullmantur CDF Azamara MSC Cruises CARNIVAL CORPORATION 11 brands, 89 Vessels, 169, 584 total berths Carnival Cruise Lines Princess Cruises Cunard Seabourn Cruise Lines Holland America Costa Cruise SOURCE: CIN, 2008 3 brands, 16 Vessels, 36, 484 total berths Iberocruceros AIDA P&O Cruises - UK P&O Cruises - Australia Ocean Village 1 brand, 10 Vessels, 19, 530 total berths MSC

PRIMARY CRUSING REGIONS SOURCE: CIN, 2008

PRIMARY CRUSING REGIONS SOURCE: CIN, 2008; Others below 2% include: Transatlantic, Canary Islands, Bermuda, New England / Canada, Hawaii, Panama Canal, Indian Ocean / Red Sea, Domestic Waterways, Antarctica, World, Africa.

PRIMARY CRUSING REGIONS S E A S Y E A R S SOURCE: CIN, 2008 E A O N A L R O U N D S O N A L

CURRENT GLOBAL INDUSTRY CHALLENGES § Dollar weakness § Fuel costs – Cruise lines operations – Impact to key destination delivery components – airlines, shore excursions, ground transportation § Security and terrorism § Inability to raise ticket prices § Weakness of the Caribbean cruising region

CURRENT GLOBAL INDUSTRY OPPORTUNITIES § Key industry growth fundamentals still in place § Greatly improved reach into new consumer markets – British, French, Italians, Germans, Australians, South Americans, Asians § Highly sophisticated operations – Global sources for passengers, employees, and supplies – Yield management for ticket pricing and onboard revenue § Continued consumer demand – CLIA’s indicates 33. 7 million Americans intend to cruise next three years § Dollar weakness

GROWTH OF INDUSTRY SUPPLY First Post Panamax Today’s Post-Panamax Tomorrow’s Longest and Largest Grand Princess Queen Mary 2 Oasis of the Seas Princess Cruises Cunard RCI Carnival RCCL Built 1998 2004 2009 (Anticipated) Pax (LBs) 2, 592 2, 620 5, 400 Pax (Max) 3, 000 2, 800 7, 300 108, 808 150, 000 220, 000 289. 5 345 360 Beam (m) 36 45 47 Draft (m) 8. 29 10 9 60. 8 62 n/a Type Name Operator Group GT LOA (m) Air Draft (m) RCCL’S OAISIS OF THE SEAS

GROWTH OF INDUSTRY SUPPLY, 2000 -2008 SOURCES: CIN, 2008 AND WWW. CRUISECOMMUNITY. COM, JULY 2008

GROWTH OF INDUSTRY SUPPLY, 2000 -2012 38 VESSELS ON ORDER; $22. 3 BILLION IN NEW INVESTMENT SOURCES: CIN, 2008 AND WWW. CRUISECOMMUNITY. COM, JULY 2008

FORECAST GROWTH OF INDUSTRY SUPPLY 798, 700 612, 700 372, 100

FORECAST GROWTH OF INDUSTRY PASSENGERS 31. 2 MIL 24. 0 MIL 15. 2 MIL

FORECAST GROWTH IMPLICATIONS § Projection scenarios anticipate ports and destinations will rise to meet this opportunity – Create demand for a number of present homeport and port-of-call facilities to expand over the mid- to long-term, encourage expansion into new market regions § Seasonal capacity placement challenges § As a trend, expansion of supply and the subsequent need of cruise lines to expand their overall regional coverage is a favorable trend for Cape Town

SEC 2 SOUTHERN AFRICA CRUISE CHARTERISTICS

SOUTHERN AFRICA CRUSING REGION

SOUTHERN AFRICA CRUSING REGION § Southern Africa, which includes pan. Southern Africa offerings and often island destinations § Seychelles and related cruises to the islands of Reunion, Mauritius and others § Specialty cruises to St. Helena § Repositioning cruises § World cruises

ESTIMATES OF SOUTHERN AFRICA MARKET SHARE 2006 Passenger Capacity Africa 2006 Adjusted Passenger Capacity (% of Total) 14, 453 0. 10% Indian Ocean 86, 715 28, 905 0. 20% World 14, 453 2, 891 0. 02% 46, 249 0. 32% 14, 452, 501 100. 00% Est. Southern Africa Market Share Total CIN Reported Capacity 14, 452, 501 2008 Passenger Capacity Africa Indian Ocean World Adjusted Passenger Capacity (% of Total) 16, 286 0. 10% 97, 719 32, 573 0. 20% 16, 286 3, 257 0. 02% 52, 116 0. 32% 16, 286, 475 100. 00% Est. Southern Africa Market Share Total CIN Reported Capacity 2008 Adjusted Passenger Capacity 16, 286, 475 SOURCES: CIN, 2008 AND MDA / LDI, 2008; Notes: *Assumes Southern Africa welcomes one third of Indian Ocean capacity and one-fifth of world capacity.

VESSELS OPERATING IN THE REGION, 2008/09 SOURCES: INDUSTRY WEBSITES, 2008, WWW. CRUISECOMMUNITY. COM, 2008, MDA / LDI 2008

VESSELS OPERATING IN THE REGION, 2008/09 § An estimated 83 cruises are planned for the 2008/09 season; market capacity of 31, 657 passengers § An estimated 16 different vessels in the region § Vessels in the market on a variety of different segments and predominately directed toward a European cruise audience § Average cruise duration is a lengthy 18 days § The cruise season is generally from October to April; most cruises offered December and January SOURCES: INDUSTRY WEBSITES, 2008, WWW. CRUISECOMMUNITY. COM, 2008, MDA / LDI 2008

VESSELS OPERATING IN THE REGION, 2008/09 § Itineraries contribute 102 vessels calls to South African ports, with an estimated 45 of these arriving to Cape Town (44%) § Of the leading four cruise industry conglomerates, Royal Caribbean is absent from the list of lines offering cruises in the region § Primary regional homeports identified include Cape Town, Durban, Mombasa, and Mahe SOURCES: INDUSTRY WEBSITES, 2008, WWW. CRUISECOMMUNITY. COM, 2008, MDA / LDI 2008

VESSELS OPERATING IN THE REGION, 2008/09 Vessel Cruise Line Royal Star African Safari Club Silver Wind Silversea Cruises Ltd RMS St. Helena MS Hanseatic Hapag Lloyd Owner / Operator Star Line Cruises Ltd Silversea Cruises Ltd Andrew Weir Cruises Hapag Lloyd Built (Refurb) 1956 (1994) 1995 (2008) Pax GRT Length Beam Draft (m) (m) 200 5, 067 112. 0 15. 6 296 16, 927 155. 8 21. 4 5. 2 1989 128 6, 767 n/a n/a 1993 184 8, 378 123. 0 17. 0 4. 8 Hapag Lloyd 1999 408 9, 069 198. 6 Peter Deilman MS Deutschland 1998 520 8, 264 175. 3 Cruises Costa Europa Costa Crociere Sp. A Carnival Corporation 1986 1, 773 27, 624 243. 2 Compagnie des Iles Le Ponant 1991 67 956 88. 0 du Ponant P&O Princess Aurora Carnival Corporation 2000 1, 870 40, 037 270. 0 Cruises Saga Cruise 1973 Saga Ruby 668 9, 356 191. 1 Holidays (1999) Hebridean Int. MS Hebridean Spirit 1991 98 4, 280 90. 5 Cruises Travel Dynamics 1992 Corinthian II 114 4, 200 90. 9 International (2005) Seven Seas Regent Seven Seas 1999 490 33, 000 172. 2 Navigator Cruises Alexander von Phoenix Reisen 1990 510 15, 400 150. 0 Humbodlt II Gmb. H (2008) SOURCES: INDUSTRY WEBSITES, 2008, WWW. CRUISECOMMUNITY. COM, 2008, MDA / LDI 2008 1997 24. 0 6. 0 23. 0 5. 8 29. 0 6. 5 12. 0 4. 0 32. 2 7. 9 25. 1 8. 2 15. 3 3. 7 15. 2 3. 7 24. 7 7. 0 20. 0 6. 0 MS Europa

VESSELS OPERATING IN CAPE TOWN, 2007/08 Name of Vessel Date Length Passengers Crew Spirit of Adventure 14 -Mar-07 169. 8 m The World 22 -Dec-07 155. 80 m 266 218 11 -12 Feb 2008 195 m 766 Hebridean Spirit 11 -13 March 2006 90. 6 m 63 77 Van Gogh 17 -18 March 2007 402 221 Silver Cloud 18 -19 Jan 2008 160 m 209 Seven Seas 2 -4 Feb 2007 204 m 613 442 Black Watch 24 -26 Jan 2007 205 m 710 358 Saga Ruby 25 -26 Jan 2007 169. 8 m 363 405 MV Explorer 2 -8 March 2007 180. 4 m 813 196 C. Columbus 28 -30 Jan 2008 144 m 322 173 The World 29 Jan-3 Feb 2008 196. 35 m 238 Royal Star 31 Jan-4 Feb 2008 112 m Silver Cloud 4 -5 Jan 2008 155. 80 m 286 218 Orient Queen 7 -10 Jan 2007 160. 13 m 328 390 Topaz SOURCES: V&A WATERFRONT, 2008

SOUTHERN AFRICA CRUSING REGION § Southern Africa / Africa, which includes pan. Southern Africa offerings and often island destinations § Seychelles and related cruises to the islands of Reunion, Mauritius and others § Specialty cruises to St. Helena § Repositioning cruises

FIT OF CAPE TOWN WITHIN MARKETS Cape Town as a Homeport Cape Town as a Port -of-Call Strong Fair Weak St. Helena Strong Weak / Not Applicable Repositioning Strong World Strong Southern Africa / Africa Seychelles and related island cruises

CAPE TOWN COMPETITION WITHIN MARKETS § Cape Town has limited competition for cruise activities in the region § Durban the only facility with a similar arrangement of port infrastructure, upland / shore excursion activities and strategic position § Other South African destinations—Richard’s Bay, Port Elizabeth, East London, Mossel Bay— all present a reasonable port-of-call option – Unlikely to be selected over Cape Town by a cruise line § A more important point is the opportunity and need for increased collaboration among destinations

CURRENT REGIONAL CHALLENGES § Region is one of the smallest amongst other global deployment areas § Generally not on the radar of primary cruise operators other than an occasional call / operation as part of a repositioning or world cruise § Flight and vessel repositioning costs also limit some lines in their thinking about deployment to the region § Concerns on regional safety and stability § Uncertain size of regional consumer base

CURRENT REGIONAL OPPORTUNITIES § Key industry growth fundamentals § Diverse region with similar characteristics and itinerary diversity as other successful areas § Marquee ports-of-call and homeports § The region has shown consistency in preserving its share of the growing global industry § 2010 FIFA World Cup event – Successfully delivered by South Africa, this event could serve as an important catalyst—much like Olympics in Barcelona and Australia—to move the regional cruise market forward

CLIA 2008 MARKET PROFILE

FORECAST GROWTH OF REGIONAL SUPPLY 417, 711 87, 644 52, 117

REGIONAL FORECAST GROWTH IMPLICATIONS § Business as usual will likely yield limited results; low to medium trend line § Activity in marketing and organizational components key to regional viability § Assuming Cape Town continues to see 44% of capacity, passenger throughput could be 126, 000 by 2020 under the high scenario – With cruise homeporting primary element of Cape Town’s business, revenue passengers could approach 250, 000

SEC 3 CRUISE INDUSTRY NEEDS FOR OPERATIONS

CRUISE LINE DESTINATION SELECTION CRITERIA § Appeal as a travel and leisure destination § Type and quality of cruise tourism infrastructure needed to support vessel operations and movement of passengers § A market basis and strategic fit within a greater cruise ship deployment scheme

CRUISE LINE DESTINATION SELECTION CRITERIA Consumers Venues Hotels Airport Leadership Cruise Line Satisfaction nity u m Com ness e Awar Marine Attributes Econo mic Value Pric ing l Rea Sec u rity ate t s E g in Market Reg iona Pro duc t l

CRUISE LINE DESTINATION SELECTION CRITERIA Marketing and Sales Marine Operations Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law Logistics, Air-Sea and Shore Excursions Finance and Legal

CRUISE LINE DESTINATION SELECTION CRITERIA Marketing and Sales Marine Operations Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law Logistics, Air-Sea and Shore Excursions Finance and Legal

CRUISE LINE DESTINATION SELECTION CRITERIA Marketing and Sales Marine Operations Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law Logistics, Air-Sea and Shore Excursions Finance and Legal

CRUISE LINE DESTINATION SELECTION CRITERIA Marketing and Sales Marine Operations Consumer awareness and marketability of a cruise destination Access to consumers Fit with cruise brand philosophy Fit with consumer vacation patterns Marine navigation and access Berth, apron and terminal features GTA and parking Provisioning and Security History of operations from the port / destination Landside access Airlift Lodging Shore excursions and destination venues Terminal charges Labor, fuel and other operating costs Regulatory issues Maritime law Logistics, Air-Sea and Shore Excursions Finance and Legal

PRIMARY VESSEL INFRASTRUCTURE § Channel, navigation and access features § Secure vessel berth – Berth and related infrastructure – Apron area and gangway – Water and other services to ships § Passenger reception area – Security, customs and immigration (inbound / outbound) – Basic passenger services § Ground transportation area (GTA) – Tour buses parking, – Taxi and shuttle areas for crew – Parking § Access features

CRUISE FACILITY PLANNING MODULE Category 1, 800 Pax 2, 600 Pax 3, 600 Pax Channel Depth Berth Depth / Length Recommende d 9 m + overdraft / support 295 m vessel with 236 m to 242 m for provisioning access’ Apron 20 m wide / allowances for truck turning Individual Terminal Baggage 2, 400 m 2 3, 900 m 2 5, 400 m 2 3, 000 m 2 BCBP Offices 300 m 2 BCBP Processing 800 m 2 1, 200 m 2 Check-In 900 m 2 1, 400 m 2 1, 800 m 2 1, 400 m 2 Lounge 700 m 2 1, 100 m 2 1, 600 m 2 1, 200 m 2 Support 1, 000 m 2 500 m 2 Totals for Individual Terminal 5, 700 m 2 8, 500 m 2 10, 900 m 2 7, 600 m 2 GTA 6 – 10 buses per vessel plus POV/taxi drop-off areas Parking Source: B&A, 2005. 570 825 1, 150 600 to 800 per operation

CHALLENGE FACED IN FACILITY DEVELOPMENT § In their most simplistic development application, cruise terminals have highly constrained revenue generating capabilities – Port charges generally cannot cover terminal developments § Majority of benefit is experienced at the community level – In their role as facilitators of trade and commerce, ports sustain large capital investments in docks, harbors, and terminals

MOVEMENT TOWARD MULTI -USE FACILITIES Mixed-Use Type Retail Entertainment Most Desirable Somewhat Desirable Less Desirable Mid-to upper level shopping (geared to locals and cruise passengers); luxury goods; duty free; high-end prepared foods; some kiosk and specialty retailers; others Marketplace / bazaar; crafts market Big box retail; low-end discount shopping Live theatre; specialty / Theme entertainment; Nightclub Standard cinemaplex; Sports facilities; Gaming - All; White tablecloth; Food court; Mid-Range Establishments - Office* Class A and B+; Maritime office Class B and below Hotel* Four to Five Star, Greater than 120 rooms Three star and lower Restaurants Residential* Conference / Convention* Multimodal Transport* Marina* Public recreation* - - All - - Water Taxi; Mass Transit and Light Rail systems; Local charter and tour offerings Ferry (inter and/or intraregional); Public bus Industrial rail - All - -

MOVEMENT TOWARD MULTI -USE FACILITIES Challenges Opportunities § Create revenue opportunities § Reduce project risk § Higher utilization of infrastructure § Enhanced destination experience § Portrayal of community image § Urban renewal / redevelopment § Public access to the waterfront § § § § § Increased capital outlay Transportation and parking Conflicts among land uses Conflicts among water uses Regulatory environment Future expansion Management skill Safety and security Public access to the waterfront

BELL STREET PIER, SEATTLE

Bell Harbor International Conference Center § Conference Center – 4, 366 m 2 facility that can accommodate groups from 10 to 1, 000 guests – One 300 person auditorium – 14 banquet and meeting rooms § Shared use of cruise terminal areas for events and exhibits, especially off-season

SEC 4 CASE STUDY

CASE STUDY: AUSTRALIA + SOUTH AMERICA

CASE STUDY: AUSTRALIA + SOUTH AMERICA § Australia / New Zealand South America are emerging cruise regions § Operations in Australia / New Zealand South America are generally seasonal § Both regions offer a mix of itinerary offerings and varied ports-of-call § Australia / New Zealand South America showcase different approaches to growing their businesses

AUSTRALIA / NEW ZEALAND CRUISE REGION PRIMARY OPERATIONS AREA SOURCE: CIN, 2008 GROWTH IN ASIA CRUISE PASSENGER CAPACITY

AUSTRALIA / NEW ZEALAND CRUISE REGION § Area hosts regional operators marketing their products to predominately Asian and Australian consumers as well as North American and European lines § Star Cruises and P&O Cruises Australia comprise the primary regional operators, offering itineraries on 8 different vessels supporting 79. 3% of passenger capacity in the region during 2008 § Primary non-regional operators in 2008 included Princess, Royal Caribbean, Celebrity, Costa and Holland America

AUSTRALIA / NEW ZEALAND CRUISE REGION § Strong organizational agencies: Cruise Down Under and Cruise New Zealand § Diversity of itinerary offer § Continued success in building a home grown consumer base of consumers – 160, 947 Australians—or 61% percent of total passenger numbers of 263, 435 in 2007—choose to sail in the region § § Homogenous, familiar market Access to growing Asian travel and leisure areas Challenged to keep up with port improvements High airlift costs for North American passengers

SOUTH AMERICA CRUISE REGION PRIMARY OPERATIONS AREA GROWTH IN SOUTH AMERICA CRUISE PASSENGER CAPACITY SOURCE: CIN, 2008

SOUTH AMERICA CRUISE REGION § The South America cruising region includes the southern cone, Brazil, the continent’s northwestern Pacific region, and the Western Caribbean § Costa Cruises, MSC Cruises, and Royal Caribbean comprise the primary operators, offering itineraries on 9 different vessels supporting 52. 1% of passenger capacity in the region during 2008

SOUTH AMERICA CRUISE REGION § Proximity to the Caribbean; low repositioning and airfare costs – Caribbean “oversupply” has made pursuit of a strong South America option a useful § Strong primary and adjacent sub-regions – Antarctica, Amazon River, Galapagos Islands § Market supported by a diverse base of international visitors and a home grown consumer base § Improving facilities § Historically challenged by cabatoge laws

CASE STUDY IMPLICATIONS § Buildup of both cruise regions has been a patient, long-term endeavor – Long been welcoming small levels of cruise operations and traffic, slowly building on the success of the industry overall § The presence of a well-organized, regional entity marketing to the cruise lines is felt to have had a positive impact in the Australia / New Zealand buildup of cruise levels § Both regions have growing local consumer base § Multiple, marketable itinerary options § Generally stable regions and markets

SEC 5 OVERALL CAPE TOWN POSITION ASSESSMENT

OVERALL POSITION ASSESSMENT Internal Factors List Internal Strengths (S): 1. … 2. … 3. … List Internal Weaknesses (W): 1. … 2. … 3. … SO Cell: Most salient or strategically important interactions of external opportunities and the strengths of the destination. Often the destination’s competitive advantage. WO Cell: Outlines the destination’s weakness versus the opportunities available and provides indication of where investment/disinvestment strategies should be placed. ST Cell: Interaction between the destination’s strengths and the external threats in the marketplace and environment overall. Suggests where mobilization and improvement may need to occur to address threats. WT Cell: The mix weaknesses and threats suggest the most vulnerable area of the destination, and often, where a program of “damage control” should be implemented. External Factors List External Opportunities (O): 1. … 2. … 3. … List External Threats (T): 1. … 2. … 3. …

EXTERNAL OPPORTUNITIES § Positive global cruise market growth fundamentals § Desire of cruise lines and their clientele to explore new regions and destinations § Configuration of the Southern Africa region § High travel and leisure enthusiast aspiration for an accessible African travel experience § Increased global brand identification with South Africa and Cape Town as a destination § Favorable government policies toward tourism and related businesses and investment

EXTERNAL THREATS § Mobility of the cruise industry § Regional safety and security issues, both real and perceived by potential cruising guests § Significant repositioning distances and costs associated with the entire itinerary offer § Limited / unknown, complex consumer base within the region § Unclear vision and direction for the region § Lukewarm reception by cruise lines for Southern Africa at present § Eastern position of the Cape Town in the region

INTERNAL STRENGTHS § Diversity of venues and the destination offer overall; total quality guest experience § Immediate engagement of primary waterfront amenities § Basic port capability to welcome the industry’s largest vessels § Quantity and quality of airlift and hotel capacity § Established maritime components § Availably of options for improvement to cruise related / supporting facilities

INTERNAL WEAKNESSES § Multiple parties involved in the primary delivery of cruise facilities / operations § Varied local enthusiasm for the cruise enterprise overall § Conflict / priority of cargo operations within the Port area / basin § Lack of dedicated cruise facilities for homeport operations

OVERALL POSITION ASSESSMENT Internal Factors List Internal Strengths (S): 1. … 2. … 3. … List Internal Weaknesses (W): 1. … 2. … 3. … External Factors List External Opportunities (O): 1. … 2. … 3. … SO Cell: WO Cell: Investment/Disinvestment Comparative Advantage With the positive market opportunities available, the initial investment of Cape Town’s offer is highly congruent resources required to leverage the with positive global cruise market positive macro and micro opportunities trends and the demand for new and exciting cruise destinations. The basic are market and organizational based over the short term, with capital and parameters are in place for Cape operational improvements needed Town to emerge as a successful over the mid- to long-term. participant in the role of homeport and port-of-call. List External Threats (T): 1. … 2. … 3. … ST Cell: WT Cell: Mobilization Damage Control In many aspects, Cape Town’s The changing and mobile nature of the successes is reliant on others within cruise industry, lack of substantial the external environment; showing interest by cruise lines and regional leadership in the region is one of the security/perception issues paired with few ways the City can chart a positive disorganization at home and a need course. While the global market is for some facility improvements highly favorable, the region has a suggests a marathon, not a sprint, is number of initial and ongoing required. Key outlier issues may be obstacles to overcome. The key starts too great to overcome. with marketing and organization.

SEC 6 RECOMMENDATIONS MOVING FORWARD

RECOMMENDATIONS MOVING FORWARD § Software. Programs and marketing efforts developed to ensure product quality, brand recognition, communication efforts and others. § Operations. Functional enhancements that allow for improved cruise operations. § Hardware. Strategies and action items to ensure that appropriate capital improvements are planned and developed to meet anticipated cruise industry throughput and facilities needs.

SOFTWARE: OVERARCHING OBJECTIVES § A large portion of the ultimate success to be achieved by Cape Town and South Africa is reliant on moving forward with marketing efforts – Establish a strong case for Southern Africa cruising with cruise lines – Work to build a foundation of seasonal business with international consumers; and, – Foster a local consumer base for cruise products. § Emphasis should be placed on organizing the messages and messengers first § Resources beyond those presently committed by Cape Town and elsewhere are going to be

SOFTWARE: RECOMMENDATIONS § Cruise marketing plan – It is critical that Cape Town refine and implement a specific cruise marketing plan for the City and region. – Hold a marketing goals workshop – Identify the marketing audience – Message development and refinement – Messenger identification § Formulation of a Cruise Cape Town Committee (CCTC) § In-house education program § Incentives packaging for cruise lines

SOFTWARE: RECOMMENDATIONS § Market to the Cape Town community § Development a cruise passenger visitor's kit § Lead in development of Southern Africa Cruise Association § Establish a methodology for port costs benchmarking § Hold cruise tourism provider education sessions § Establish strategic relationships with key ports in the region

SOFTWARE: RECOMMENDATIONS § Conduction travel agent education sessions § International Cruise Trade Show Participation § Hold North American and European cruise operator visits § Hold North American and European cruise operator familiarization trips – Possibly linked with FIFA 2010 § Work with tour providers to design new offerings suitable for cruise passengers § Establish targeted provider program offerings – Luxury, adventure, destination

OPERATIONS: OVERARCHING OBJECTIVES § The smoothness of operations is as important as the quality of the facilities; think destination delivery – – Operational planning and coordination Benchmarking Guest security and safety assessments and programs Organization and communication

OPERATIONS: RECOMMENDATIONS § Become deeply involved with the FIFA 2010 floating hotel destination delivery – Sportscom (communication and sports marketing) § Meet with Port / V&A regularly on threat assessment and security issues – Conduct assessments for cruise passengers and generate a specific plan to share with the lines – Hold public safety education sessions § Become involved in homeport and port-of-call operations planning, especially for peak days

OPERATIONS: RECOMMENDATIONS § Develop and implement a cruise benchmarking strategy § Develop a scheduling plan for the committee § Establish an operations audit and enhancements program based on benchmarking feedback § Establish Cape Town primary and secondary venues and tour provider assessments § Establish a smart-pass program

HARDWARE: OVERARCHING OBJECTIVES § Additional cruise berthing and related terminal spaces are needed over the medium- to longterm § Options need to be explored associated with the future role of V&A Waterfront, the Port of Cape Town (NPA) and City to create a win-win scenario that will be conducive to meeting future cruise industry opportunities § To reduce risk as well as meet other needs observed in the maritime and commercial environment, multi- and mixed-use cruise development approaches should be pursued.

HARDWARE: RECOMMENDATIONS § Establish a cruise facilities improvement plan – Engage the cruise lines for assistance – Financial component § Prepare a MOU between V&A Waterfront, the Port and City on plan implementation § Ensure a working, interim capital improvements plan for delivery of homeport and port-of-call needs § Prepare a detailed plan, with emphasis on development of a mixed-use facility with supporting revenue inputs § Implement the detailed plan timed to market

INVESTIGATION OF THE CRUISE LINER INDUSTRY DRAFT STUDY RESULTS | 7. 16. 08 MITCHELL DUPLESSIS PROJECTS (PTY) LTD | LANDDESIGN