Madrid International Cruise Summit focused on ports

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 13 November 2014 13 November 2014

The fourth Madrid international Cruise Summit took place on 12th and 13th of November. Alan Lam reports.

 

Representatives from most major cruise lines, European ports, travel agents, suppliers and the press were among the 260 or so delegates. The focus of this year’s discussion was firmly on the expectations for ports and destinations. With the coming of Asia cruise tourists in large numbers, the question was asked if the ports and destinations in Europe were ready for this influx.

 

Outside of Asia, Mediterranean ports are believed to be the ones that will draw the biggest number of Chinese cruise tourists in the coming years.

 

To benefit from this new source of income, during the summit, cruise lines and industry professionals were calling for ports to facilitate a “multiagency” approach to attracting cruise calls, by looking at the bigger economic benefits of cruise tourism and catering for the tastes and expectations of these newly minted visitors.

 

In this regard, a lot had been achieved and much more needed to be done, the delegates were told. 

 

One of our correspondents was again invited as speaker at the summit. A detailed report and analysis of the issues raised will be published in a full-length article in the next edition of Cruise Business Review.

One off costs and Russian woes eat into Tallink's key third quarter

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 13 November 2014 13 November 2014

One off costs arising of adjustments of tonnage and a sharp fall in business from Russia reduced both revenue and net profit of AS Tallink Grupp, the Estonian cruise ferry group, in the third quarter.

Net profit fell to €36.2 million from €44.0 million in the third quarter of 2013, while revenues declined to €262.7 million from €278.0 million. The third quarter is a key peak season in northern European ferry business.

The group's vessels carried nearly 2.6 million passengers in the third quarter of 2014, which is 5.8% less compared to the same period last year. The number of cargo units transported increased by 1.0% and the number of passenger vehicles transported decreased by 3.7% for the same period as last year, Tallink said in a statement.

The unstable macro-economic situation in Europe has had a negative impact to the Group’s operations. The decline in the passenger volume from the Russian market continuous to be visible, decreasing by 25% in the third quarter, compared to the same period last year.

The Group has been working for a smoother transition facing the sulphur regulations and one of the goals has been to reduce fuel consumption by optimising our current operations, therefore several re-routings were made: the cruise ferry Silja Europa was chartered out, the cruise ferry Baltic Queen changed to the Tallinn-Helsinki route and the cruise ferry Romantika changed to Tallinn-Stockholm route, leaving the Riga-Stockholm route with the cruise ferry Isabelle as the only vessel.

Majority of the decline of the third quarter results was a direct one-off effect related to the re-routing of the vessels, chartering out Silja Europa and the Silja Symphony docking. These changes in the operations are a good reference of the flexibility of our business and ensure that we are better prepared for the upcoming year.

In the third quarter the Estonia-Finland route showed a slight decline with passenger’s numbers decreasing by 3.3%, cargo units transported increased by 11.5% and the sales numbers remained on the last year’s level. The results were affected by a competitor bringing more capacity to the Tallinn-Helsinki route.

The Finland-Sweden route showed a decline with passenger’s numbers decreasing by 5.5%, cargo units transported decreased by 11.0%, the sales numbers decreased by 7.4%. The results were affected by Silja Symphony being out of operations in September.

The Latvia-Sweden route showed a decline with passenger’s numbers decreasing by 23.3%, cargo units transported decreased by 42.5%, the sales numbers decreased by 24.5%. The results were affected by Romantika changing to Tallinn-Stockholm route, leaving Isabelle as the only operating vessel on the route.

In the third quarter the charter revenue increased by 58.9% or €5.2 million, this is a result of more vessels being in charter and is expected to have a positive effect to the profitability in the forthcoming quarters. The total number of vessels currently chartered out is six, while last year at the same time four vessels were chartered out.

While pricing the cargo services for next year the upcoming rise in the fuel price related to the switch to the low sulphur fuel has been taken into account. Pricing of the passenger service will depend on market demand, competition and seasonality.