Carnival Cruise Brands Pull Out Over Melbourne Port Taxes

Melbourne, once a bustling hub for cruising, is facing a significant shift as two cruise lines, Princess Cruises and Cunard, announce their withdrawal from the city’s ports starting in 2025. 

This decision, a response to Ports Victoria’s recent hike in port charges, is concerning for the local tourism industry as together, the two cruise lines have around 40 calls scheduled each year.

Rising Costs Lead to Strategic Withdrawal

Carnival Australia has announced it will be withdrawing at least two cruise lines from calling at Melbourne’s Station Pier in 2025, Princess Cruises and Cunard. 

The decision to withdraw Princess and Cunard from Melbourne is directly linked to the increase in port charges implemented by Ports Victoria. Effective January 1, the port charge was raised from $28.50 to $32 per passenger. The move has been criticized for its sudden nature and potential impact on the cruise sector.

The withdrawal is a major blow to the local tourism industry. In 2024, the two cruise lines are expected to account for approximately 40 port calls – 32 by Princess and eight by Cunard. Together, the two bring in 100,000 guests and annual revenues of A$379.5 million to the local economy. In 2025, this number will drop to zero.

Teresa Lloyd, Carnival Corporation’s Chief Strategy Officer, highlighted the significant economic contributions of the cruise industry to Victoria: “Our economic benefit to Victoria is immense and we appreciate the importance of maintaining our ports but to be expected to carry a 15 per cent increase with no notice is unreasonable.”

According to Lloyd, the decision is not based on the popularity of Melbourne as a cruise port, one that has been high on the must-visit list of many cruise aficionados. However, the sudden increase in fees is unacceptable to Carnival Australia. 

“We want to be in Melbourne and remain open to finding a long-term solution together with Ports Victoria and the Victorian Government. However, the decision to homeport these popular cruise lines in other markets is in no small part due to the recent decision made by Ports Victoria to significantly and unexpectedly increase fees and charges.” Lloyd continued.

Whether the decision to remove Cunard from Melbourne is fully down to the increase in port fees is debatable. Cunard announced on November 3, 2023, that it would remove all Australia sailings for all of its vessels after 2025.

Port Authorities & Local Government Unfased

According to the local government, the increase is only modest, and Carnival has merely made the decision out of a commercial perspective. 

Ports Minister Melissa Horne said the gaps that have opened up by the ships leaving the port have already been filled, with 105 ships already booked for 2025-26. The increased fees are intended for the maintenance of Station Pier, the cruise pier, which can accommodate four cruise ships at a time, has been in a state of disrepair, according to various reports.

“Let’s get a bit of perspective here, this is a highly profitable industry that has not had any (fee) increases in two-and-a-half years,” Ms. Horne said to the Canberra Times. “This is Carnival making a commercial decision and other operators have well and truly filled the market.”

For now, the fact remains that out of the nine Carnival cruise brands, only Princess and Cunard have decided to leave Melbourne. Seabourn, Costa, AIDA, P&O Australia, Holland America Line, and Carnival Cruise Line all have calls scheduled for 2025. 

If Carnival Corporation were to respond to the port fee increase by withdrawing all its vessels from Melbourne’s Station Pier, the move could have a serious financial impact. However, this burden would not fall on the cruise operators, but rather on the port itself, turning into a significant loss of business.