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Middle East Cruise Industry

Middle East investing in cruise tourism sector

Oct 25, 2011

The Middle East is seeing a rise in cruise passengers as governments in the region invest in new facilities to support the cruise tourism sector. However, while prospects for the industry are strong, it also faces a number of challenges that could hamper its growth.

The cruise tourism sector in the Middle East is seeing a steady increase in passengers as the sector gains traction in the region. Dubai expects cruise passenger numbers to reach 425,000 in 2011 (compared to 390,000 in 2010), and has forecasted that its annual passenger numbers will increase 50,000 year-on-year until 2015.

In Oman, the Mina Qaboos port posted a record 231,000 passengers for the 2010/2011 winter season, up 72% over the previous year, while Mina Zayed in Abu Dhabi is expecting to see about 145,000 cruise visitors this winter.

Plans are also in the works to boost cruise tourism facilities in these countries, with Qatar having announced plans to build a cruise ship terminal at Doha's new $5.5bn deepwater seaport with capacity for two to three cruise ships.

Elsewhere in the Gulf, Oman said it plans to shift the cargo and container operations from Port Sultan Qaboos (PSQ) to Sohar port and convert PSQ as an exclusive tourism port, while the Abu Dhabi Tourism Authority has erected a new tented cruise terminal at Mina Zayed which is capable of accommodating 1,300 passengers.

ADTA, which has prioritised cruise tourism as one of its five 2011/2012 strategy pillars, is also planning to construct a permanent, purpose-built cruise terminal at Mina Zayed as part of an effort to grow its cruise tourism sector to 300 calls and 600,000 passengers by 2030.

"Cruise shipping has enjoyed strong recession-proof growth for many years," said Mubarak Al Muhairi, Director General, ADTA. "The market obviously ranges between low cost volume cruise business and very high end exclusive cruises - Abu Dhabi is targeting the higher end segment."

More cruise ships enter the Gulf

The Middle East is also seeing a rise in cruise ships, with Costa Cruises, the first major line to introduce Gulf itineraries, upping capacity by 16% this winter season. Meanwhile, Royal Caribbean will upgrade its operation with the introduction of Serenade of the Seas from 2012, and MSC arrives in the region this autumn with a series of winter itineraries out of Abu Dhabi with MSC Lirica, including Khasab in the Musandam as a major port of call for the first time, according to the organisers of the Seatrade Middle East Cruise Convention, which took place in Dubai last week. This week Royal Caribbean also said that due to the high demand it is extending its third consecutive season in the region to six months - from November 2011 through to April 2012.

"Cruise tourism in the Middle East is a major success story," Chris Hayman, Seatrade's chairman told "One of the challenges for the cruise industry worldwide is the challenge of seasonality. In Northern Europe and Alaska there are opportunities for itineraries that are seasonally confined to the summer months in the northern hemisphere, so the search is always on for new deployment opportunities, and Dubai and the Gulf region present exactly that.

"So that is one of the drivers of this growth, but also there is a fascination in this area with land-based tourism, and if you look around the world, cruise tourism tends to follow land-based tourism. So those areas that are successful on land generally become successful on the sea as well."

UK-based cruise industry analyst Tony Peisley says another factor that is boosting the cruise industry in general is that fact that tourists are looking for the best value in these economic times, and cruise ships' all-inclusive business model is seen as a way to cut costs.

"There is a big surge in all-inclusive holidays generally because people want to know what to budget for, and all-inclusives, which you couldn't give away 20 years ago, are now becoming a much bigger thing, and that was copied by the cruise industry."

However, Peisley notes that the cruise tourism sector in the Gulf also faces several challenges, including the limited number of cruise ports in the region. "To a certain extent they have been victims of their own success. The cruise sector in the region has really taken off and they have done fantastically well, but they generally are repeating the same itineraries, so they are a little concerned in the short term that the excitement of the new region may taper off."

Piracy poses hurdle for the industry

Piracy is also an obstacle for growth in the region due to higher costs to maintain security and loss of revenue as some potential passengers opt not to travel to avoid the potential risks. Peisley maintains that piracy is largely a perception issue. "If you look at Tunisia, some of the cruise lines think that it's safe, but the ones who haven't gone back don't think the public accepts that it is, and that's as important as whether it is or it isn't," he said.

Still, he believes that Dubai's cruise tourism sector is in no worse shape than a lot of other parts of the world in terms of safety and security, noting that there have been relatively few attempts to attack cruise ships in the Gulf.

"You would be mad if you were a pirate to go on one [with a cruise ship] because there are too many people on board. They tend to go on yachts or container ships that only have 10 or 12 crew, so it's obviously much easier to overwhelm that, but you can't assume that some of these people understand that," he said.

On the plus side, the Gulf cruise tourism market stands to benefit from a general rise in cruise tourism worldwide. This year there are likely to be at about 19 million cruise passengers worldwide, but the number is expected to increase to 30 million by 2023, by which time Europe will overtake North America in terms of cruise passenger numbers, Peisley noted. "So everyone is going to get a share of that action, and you would assume that the Middle East would also."

Middle East investing in cruise tourism sector
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