Private management - Posidonia Sea Tourism

1st Posidonia Sea Tourism Forum
Panel 2 – The Economics of Sea Tourism
Athens, June 21st – 22nd 2011
Giovanni Spadoni
President of MedCruise
Port of Livorno 2000 srl Technical & Commercial Director
MedCruise keeps the Med together
Adriatic
Black Sea
West Med/
Atlantic
East Med
MedCruise Ports (2010)
ATLANTIC /
WEST MED
ADRIATIC
EAST MED
BLACK SEA
less than
between
between
100.000
100.000 - 500.000
500.000 - 1.000.000
ALICANTE
AZORES
ALMERIA
LA SPEZIA
PORTIMAO
PALAMOS
PORTOFERRAIO
SETE
CEUTA
TARRAGONA
MOTRIL
CASTELLON
KOPER
ZADAR
TRIESTE
RIJEKA
SIBENIK
RAVENNA
KEFALONIA
KOS
ALANYA
VOLOS
THESSALONIKI
LATTAKIA
KAVALA
SOUDA
PATRAS
IGOUMENITSA
ODESSA
YALTA
SOCHI
CONSTANTZA
SEVASTOPOL
BURGAS
SINOP
BATUMI
RIZE
between
1.000.000 1.500.000
NAPLES
between
1.500.000 2.000.000
VALLETTA
MADEIRA ISL.
LISBON
PALERMO
MONACO
TOULON
GIBRALTAR
VALENCIA
MESSINA
NORTH SARDINIAN P.
CAGLIARI
CARTAGENA
SPLIT
TUNISIAN P.
GENOA
LIVORNO
MARSEILLE
FRENCH RIVIERA
MALAGA
CIVITAVECCHIA
BALEARIC ISL.
DUBROVNIK
BARI
VENICE
ISTANBUL
CYPRIOT P.
HERAKLION
EGYPTIAN P.
KUSADASI / BODRUM
/ ANTALYA
PIRAEUS
over
2.000.000
BARCELONA
Industry trends – growth!
• Construction of megaships – and the need to expand port
infrastructure
• More ships, bigger ships – multiple ships at one port
• Opportunities to expand marketing to new niches
• New itineraries needed – growth in new regions
• New ports needed – marketing opportunities
• Increased fuel costs – itinerary modifications, new
opportunities
Cruise: a good investment choice
• Average annual traffic growth of more than 10% in Europe
and the Mediterranean over the last 10 years.
•
High levels of optimism in the industry
•
High levels of passenger satisfaction
– Product considered superior & better value than other
tourism products
– Repeat customers
•
Immense potential for growth (latent demand)
Cruise Industry Model : the Players
TOURS &
VENUES
RECEPTIVE AGENTS
HOTELS/RETAIL
DESTINATION
AIRPORTS
TRAVEL AGENTS
PASSENGERS
PORTS
PORT AGENTS
SHIPS
CRUISE LINES
SHIPYARDS
Why would a port want cruises?
• Requires a separation of uses at the port
• Requires expensive new port infrastructure
• Requires qualified personnel
• Requires state-of-the-art security systems
• Requires building new relationships with local tourism,
city officials and the cruise industry community
The benefits
• Prestige
The benefits
• The development of a passenger port
… the main benefit
• Tourism – local industry with local profit
• Cruise tourism doesn’t compete with other landbased tourist products
• Cruise ship passengers aren’t always the same
tourists that would visit your destination on their own
• Cruise passengers can experience your destination
and decide to return to spend more time, and money
… the main benefit
• Cruise for local economic development
– Example: Expenditures at Destination
• Excluding airfares, cruise passengers spent an
average of nearly €70 at embarkation port
cities.
• On average, cruise passengers then spent
another €61 at each port visit on their cruise
itinerary.
– Source – GP Wild Intl, Ltd and BREA
Cruise Industry Model : Port Finance
Indirect/Induced Impacts
Private and/or Public
Investors
PORT PRODUCTS
€
Financing
Port Infrastructure
COMPETITION
€
MARKET
Goal: Increase Foreign Revenue
National Debt ▼
▲Accounts Balance
DIRECT
TOURISM
FOREIGN TRADE
International
Payments
Foreign Investments
Cruise-related
Businesses
Greek Services
Greek Supplies
Privatisation
Passenger and
Public Entities
Crew Purchases
Port Infrastructure
Provisions sold to
Cruise Lines
Governance of Cruise Terminals
• Partnerships between Port Authorities, Cruise
Terminals and Cruise Companies play a
significant role in investment and management
decisions of every shipping player;
• Cruise lines are faced with decisions to directly
control some specific operations and to obtain
preferential port spaces in order to gain
competitive advantage over cruise competitors.
Governance of the Cruise terminals
Italy and Europe:
• Different forms of terminal governance with
combined public and private sector involvement:
– Barcelona Palacruceros = public-private partnership
– Marseille MPCT approved by European Commission
operated by Costa, MSC and Louis Cruises.
• Partnerships between the public and private sector
are increasingly being preferred as a tool to attract
capital for infrastructure investment and as a way to
distribute the cruise management risks between the
public and private sectors.
Governance of the Cruise terminals
The Italian Model:
• Port Authority = Landlord.
• Concession = Long term Instrument to commit the
management of the Passenger Port and the Cruise Terminal
to a Private/Public Company.
• The P.A.:
– Fixes the objectives to be reached;
– Approves the Business Plan;
– Controls its achievement.
GOVERNANCE AND EFFICIENCY OF
ITALIAN CRUISE TERMINALS
Research presented at 2010 Annual Conference of the
International Association of Maritime Economists,
Lisbon 7-9 July 2010
Professor Assunta Di Vaio
Business Administration Department, University of Naples
“Parthenope”
Via Medina, 40 – 80132 – Naples, Italy
Email: [email protected]
Telephone: +39.0815474766
Fax: +39. 0815522313
Governance of the Cruise terminals
Port
Name
Type
Property
Shares
1
Savona
Palacrociere Savona
S.P.A.
Private
100% Costa Crociere
2
Genoa
Stazioni Marittime spa
S.P.A.
Private/Public
10,22% P.A.
23,85% Finporto (P.A.)
5% Genoa Municipality
32,01% G.N.V.
5,91% Costa Crociere
13,24% Marinvest (MSC)
7,33% Moby Lines
2,44% Tirrenia
3
Livorno
Porto di Livorno 2000 srl
S.R.L.
Public/Private
72% P.A.
28% Chamber of Commerce
4
Cagliari
Cagliari Port Authority
Institution
Public
N.A.
5
Portoferraio
Piombino&Portoferraio Port Authority
Institution
Public
N.A.
6
Civitavecchia
Roma Cruise Terminal
S.R.L.
Private
33,33% Costa Crociere s.p.a.
33,33% Royal Caribbean Cruises Ltd.
33,33% Marinvest s.r.l.(MSC)
Governance of the Cruise terminals
Port
7Napoli
Name
Type
Property
Shares
Terminal Napoli spa
S.p.A.
Private/Public
5% A.P.
20% Royal Caribbean
20% Costa Crociere
20% Marinvest(MSC)
20% Terminal Trade
10% Intership srl
5% MSC crociere
8Messina
ATI Comet SRL-Messina Sea Terminal
Consortium
Private
N.A.
9Palermo
Palermo Port Authority
Institution
Public
N.A.
Private-Public
5% Banca Popolare Bari
10Bari
Bari Porto Mediterraneo
S.R.L.
In 2010 the concession expired
and Port Authority assumed the
commercial and marketing
management of the cruise terminal.
The Terminal services were assigned by
an international bid to a private
Company.
30% Consorzio del Porto di Bari
5% Venezia Terminal Passeggeri
10% Fin.Mil. Bari
10% M.P.M.S.R.L. Bari
15% Iniziative Portuali & Partecip. S.R.L.BA
15% Impresa Logistica Portuale SRL BA
5% Servizi Integrati di Logistica SRL BA
5% Camera di Commercio BA
Governance of the Cruise terminals
11
Port
Name
Type
Property
Shares
Venezia
Venezia Terminal Passeggeri
S.p.A.
Public-Private
35,5% APV INVESTIMENTI SPA.
22,18% Finpax srl
22,18% Aeroporto di Venezia SAVE spa
17,5% VENETO SVILUPPO S.P.A.
2,5% Camera di Commercio Venezia
12
Trieste
Trieste Terminal Passeggeri
Fully privatized in 2010
S.p.A.
Public
100% P.A.
Governance of the Cruise terminals
Port
Regimen
Covered
Pier Length
Future
1
Savona
Concession 2003-2023
4800 sq.mt
450 m.
2
Genoa
Concession 1987-2040
5 Terminals
3000 m.
3
Livorno
Concession 1997-2029
2 Terminals
1800 m.+commercial
Privatization-P.A.minority 2011
4
Cagliari
P.A. Direct Management
1 Terminal
350 m.+commercial
Privatization 2011
5
Portoferraio
P.A. Direct Management
Transit
150 m + roads
6
Civitavecchia
Concession 2004-2044
3 Terminals
2622 m.
7
Napoli
Concession 2005-2035
8
Messina
Concession only for the
services 2006-2011
550 sq.m.
800 m.
9
Palermo
P.A. Direct Management
3000 sq.m
700 m.
300 m.
1100 m.+commercial
10
Bari
Concession Expired 2009
2370 Sq.m.+
Ferry
terminal
11
Venezia
Concession 1999-2025
47.267 sq.m.
2.809 m.
12
Trieste
Concession 2008-2023
8.000 sq.m.
480 m.
New Terminal-Privatization 2012
P.A.Direct P.A.Management
since 2010-security-safetycleaning services committed by
bid to in 2010
Privatization 60%
Governance of Cruise Terminals
• Direct management: when the cruise terminal is managed by port
authorities (Cagliari,Messina, Palermo, Portoferraio)
• Full public management: when a public company manages the terminal
(Bari Porto Mediterraneo Srl, Trieste Terminal Passeggeri S.p.A.,
Venezia Terminal Passeggeri S.p.A., Porto di Livorno 2000 Srl)
• Mixed management: when the cruise terminal management is over 50%
private (Terminal Napoli S.p.A., Stazioni Marittime S.p.A.)
• Private management: when the management is entirely privately operated
(ATI Comet Srl – Messina Sea Terminal, Palacrociere of Savona, Roma
Cruise Terminal Srl).
Governance of Cruise Terminals
a)
Technical efficiency (TE) of cruise terminals improves
when the terminals are operated by private companies
under a regulatory regimen;
b)
TE decreases when the terminal management type is
public;
c)
TE increases when the cruise terminals are owned by a
combination of public and private actors but predominantly
by the private sector.
Conclusions
• Important development: participation of the private sector in
the ownership, operations and management of the cruise
terminals;
• The dataset shows how the intervention of the private sector
in the ownership and operation of the terminals increases the
efficiency levels;
•
The duration of the concession contract, on average 20/30
years, does not allow competitive behavior from the various
management operators.
Thanks!
1st Posidonia Sea Tourism Forum
Panel 2 – The Economics of Sea Tourism
Athens, June 21st – 22nd 2011
Giovanni Spadoni
President of MedCruise
Port of Livorno 2000 srl, Technical & Commercial Director