THE PROSPECTS OF PESCARA TO BECOME A CRUISE CENTER IN THE ADRIATIC SEA A CHALLENGE FOR THE CITY AND THE REGION

1. THE PROSPECTS OF PESCARA TO BECOME A CRUISE CENTER IN THE ADRIATIC SEA A CHALLENGE FOR THE CITY AND THE REGION A PRESENTATION BY GEORGE MICHAELIDES TOURISM CONSULTANT PESCARA 28.02.2008

2. CRUISE MARKET OVERVIEW • 2008 800 mill world tourism 15 mill cruise tourists, 100 mill med tourists only 1% are cruise tourists • Cruise industry as a business sector, is booming annual growth of 8%. By 2015, 6.3 mill passengers. • 12 mill Americans 3 mill Europeans By 2015 15 mill Americans 6.3 mill Europeans Cruise every year

3. CRUISE MARKET OVERVIEW • 37 cruise ships valued at US$22 billion set for delivery by 2012. • In 2008 more than 270 ships will be offering all types of cruises. More than 100 in the Med.

4. CRUISE MARKET OVERVIEW • Cruise companies, shipbuilding yards and cruise passengers now account for €8.3 bill of direct expenditure in Europe. • In 2005 US$480mill was paid in commissions to European Travel Agents. • Within Europe cruise passengers spent an average of US$100 at their port of embarkation and an average of US$50 at each port of call on their cruise itinerary.

5. CRUISE MARKET OVERVIEW • Cruising is back to Europe where it was invented. 38 cruise companies are operating in Europe and Med. • By 2010 Europe could experience a million more cruise tourists. • Only one percent of the 300mill Europeans go on a cruise. • Since 1980, European yards have delivered more than 97% of all cruise ships worldwide.

6. CRUISE MARKET OVERVIEW • Travel Agents remain the biggest source of first time cruise customers. • Top Med ports host 60% of cruise vessel embarkation or 75% of potential pax throughput Venice, Barcelona, Palma, Piraeus, Savona, Genoa, Civitavechia, Limassol. • Rapidly expanding global cruise market is presenting challenges, but also opportunities for smaller ports and less visited coastal destinations.

7. TOP EUROPEAN COUNTRIES IN TERMS OF CRUISE PASSENGERS • UK 1,500,000 (2008) • Germany 800,000 • Italy 350,000 • France 274,000 • Spain 200,000 • Cyprus 60,000 • Russia 50,000

8. “IN EUROPE, SUMMERTIME CONGESTION AT MANY OF THE LARGER PORTS IS PROVIDING OPPORTUNITIES FOR SMALLER SEAPORTS TO BECOME PORTS OF CALL, AND, IN SOME CASES, NEW PORTS OF EMBARKATION” www.cruiseshipping.net

9. “OPENING UP LESS VISITOR PORTS TO CRUISE TRAFFIC SPREADS THE WEALTH AND PROVIDES PASSENGERS WITH ACCESS TO NEW INLAND AND COASTAL DESTINATIONS – AN IMPORTANT CONSIDERATION WITH AN INCREASINGLY SOPHISTICATED AND WELL-TRAVELED PASSENGER BASE. www.cruiseshipping.net

10. WHAT THEY SAID AT SEATRADE EUROPE ABOUT PORTS AND DESTINATIONS • Michael Thamm Hamburg: It is not about attractions [on offer] but the infrastructure is not here to attract cruiseships. As soon as we see more investment here there will be more cruiseships.

11. WHAT THEY SAID AT SEATRADE EUROPE ABOUT PORTS AND DESTINATIONS • Nigel Lingard – Marketing Director Fred Olsen Cruise Lines Let’s get it right for the passenger and focus less on fighting each other.

12. WHAT THEY SAID AT SEATRADE EUROPE ABOUT PORTS AND DESTINATIONS • Mai Elmar – Executive Manager, Cruise Europe Don’t fight each other but co-operate. Look at quality not quantity. Look at what is in it for us, not what is in it for me.

13. WHAT THEY SAID AT SEATRADE EUROPE ABOUT PORTS AND DESTINATIONS • John Tercek – Vice President commercial development, RCCL It is still a discussion of infrastructure, when we go to a port and there is hardly ever anyone there from tourism

14. WHAT THEY SAID AT SEATRADE EUROPE ABOUT PORTS AND DESTINATIONS • Philip Naylor – General Manager fleet, marine and shore operations, Carnival UK The people that take a tour, it can make their cruise. It is the thing they remember most.

15. WHAT THEY SAID AT SEATRADE EUROPE ABOUT PORTS AND DESTINATIONS • Mark Ittel – partner, Bermello, Ajamil & Partners Congestion is the biggest factor in an unsatisfying visitor experience.

16. MAJOR TRENDS • Price sensible market “Cruising for all” • Lifestyle/ Ready to pay • Niche Markets Matching the historical and natural fascination ashore with a good value for money product at sea. Special prices to entice first time cruisers.

17. FACTORS THAT ARE TAKEN INTO ACCOUNT FOR THE DEPLOYMENT OF CRUISE SHIPS • Most cruise operators are fundamentally dependent on destinations. We are in the business of selling dreams and we have to make sure that dreams come true. We really need your help in this matter. • Before a final decision is made to start cruising in a region, a certain decision process is followed: Research Analysis Discussions Between: Legal, Financial, Sales, Marketing, Technical Departments Port Agents General Sales Agents The ships Head Offices Decision

18. FACTORS THAT ARE TAKEN INTO ACCOUNT FOR THE DEPLOYMENT OF CRUISE SHIPS • MAIN OBJECTIVES: • Profit contribution • Value for money • Extension of the season • Deployment should match the interest of the cruise lines passengers.

19. FACTORS AFFECTING THE CHOICE OF A PORT • Location/ Downtown? • Season • Tourist attractions/ Amenities/ Unique tour options • Port facilities/ Cruise dedicated berths/ Handles ships of any size • Cruise terminal/ Full service port • Hotel infrastructure • Comfortable and efficient clearance customs and immigration procedures/ embarkation/ disembarkation

20. FACTORS AFFECTING THE CHOICE OF A PORT • Safety/ Political instability. Cruise lines commit themselves over a year in advance an cannot be exposed unduly to high risk areas. • Reasonable distances between ports of call. • Customer loyalty. Cruise lines are looking for new destinations for the highly valued repeat passenger. • Air connections/ airline capacities/ fly-cruise and stay • Rail and cruise/ Drive and cruise • Navigation

21. FACTORS AFFECTING THE CHOICE OF A PORT • Market appeal/ Will it sell?/ Passenger satisfaction • Regional costs: Port, infrastructure costs, ground handling costs, excursion prices, passenger transit costs i.e. Hotels, flights, short cruises combined with another holiday activity make the cost consideration even more important. • For short cruises big volume of tourist traffic in the region.

22. FACTORS AFFECTING THE CHOICE OF A PORT • Dynamic marketing drive by tourism authority cooperative marketing effort. • Legal aspects. • Cruise friendly business environment. • Courtesy shuttle bus service. • Local suppliers. • Cooperation with other local cruise oriented stakeholders.

23. SOME MORE FACTORS AFFECTING THE RELATIONSHIP BETWEEN PORTS AND CRUISE LINES • Economic impact of cruise passengers • How to increase revenue from passengers • Taxation • Sourcing of supplies for sale to cruise ships. • Vessel capacity (cater to a vessel size, which is manageable) • Improvement of port infrastructure • Port state control/ Environment protection • Safety standards • Increasing cruise passengers in order to return for a land based holiday.

24. QUESTIONS THAT NEED AN ANSWER BY PORTS • What do we offer now? • What can be done better? • What needs to be planned or invested and by whom? These questions need to be discussed openly with cruise lines in order to establish a long lasting relationship.

25. PESCARA A CRUISE CENTRE? • As a port of call • The fly-cruise and stay concept. The longer cruise for the local market. • The mini cruise concept (the development of a regional brand). • The ferry-cruise concept.

26. CAN WE DEVELOP A SHORT CRUISE BRAND FOR PESCARA? The model is different, in the sense that the product resembles a traditional cruise rather than a ferry crossing to visit a neighboring country, the round trip includes all the usual cruise arrangements, such as full meals and entertainment on board. The product is offered in a uniformed way to all passengers and the only factor affecting prices is cabin size and amenities. Although the ships are not of the highest luxury standards, services, cleanness and quality of food onboard are of very high standards, thus offering value for money. This, combined with the fascinating destinations, creates an ideal opportunity for first timers to enjoy cruising.

27. THE MAIN REASONS THAT MOTIVATE • The destination (Sightseeing) • New Dimension to the holiday • The price. It’s affordable for all ages and budgets. • The itinerary. • The duration of the cruise. • All inclusive experience from the pick up point of the Hotel. • The idea of cruising for first timers • Shopping • Enjoyable and Entertaining • The ship and its facilities

28. THE HALLMARKS OF A SHORT CRUISE • All inclusive • Comfortable Ships • Entertaining • Attentive Service • International Cuisine • Casual Elegance • Visits to places of historical significance • Good value for money

29. POSSIBLE TYPES OF CRUISES FOR PESCARA 1. PORT OF CALL • Adriatic Itinerary Italy Roma (Pescara) Venice Ravenna (Florence) Slovenia Koper

30. POSSIBLE TYPES OF CRUISES FOR PESCARA CroatiaAlbania Dubrovnik Saranta Split Korcula MontenegroGreece Kotor Corfu - Adriatic-Aegean-Istanbul

31. POSSIBLE TYPES OF CRUISES FOR PESCARA 2. Home Port • Mini Cruises • Ferry mini cruises • 7day cruises, 10day, 15day for the Italian Market

32. DETERMINANTS FOR THE DEVELOPMENT OF HOME PORT CRUISING. THE CASE OF PESCARA • Two major market segments A. The local market – Italians B. Foreign tourists Determinants The ability to convince Italians to go on a cruise from Pescara

33. DETERMINANTS FOR THE DEVELOPMENT OF HOME PORT CRUISING. THE CASE OF PESCARA • The volume of tourism of the country/ region from where the cruise originates. • The attractiveness of the destinations in Adriatic. • The type of tourist and their spending power. • The structure of the travel trade and tour operating industry both in the country itself and the countries from where tourism originates. • The role of representatives of the tour operators.

34. THE SHORT TERM PROSPECTS FOR DEVELOPMENT OF PESCARA AS A CRUISE CENTRE DEPENDS MAINLY ON: • Selling the idea that Rome is in the Adriatic Sea!!!!! • Promoting to the Italians the idea of shorter and longer cruises from Pescara. • Ability of niche marketing by local authorities.

35. THE SHORT TERM PROSPECTS FOR DEVELOPMENT OF PESCARA AS A CRUISE CENTRE DEPENDS MAINLY ON: • The ability to ensure product prepackaging and prepaying and continuous presence in the brochures of Tour Operators. • Better segmentation and more accurate pinpointing of the target groups. • Motivating the Travel Agents to sell the mini-cruise product.

36. THE SHORT TERM PROSPECTS FOR DEVELOPMENT OF PESCARA AS A CRUISE CENTRE DEPENDS MAINLY ON: • Convincing the National Tourist Offices that mini-cruises to nearby countries add a new dimension to the holidays in their own country an that the mini-cruise is a strong selling point in their promotional efforts. • Selling the idea of “A Holiday within a Holiday” to the tourists. • Marketing the cruises for American, Japanese and Chinese tourists.

37. THE BENEFITS FOR PESCARA • Enhance the image of the city and region in tourism. • Direct benefit to the port authority, city council and stakeholders. • Multiplier effect to the local and regional economy. • New dimension of the tourist product • Repeat tourism • Open-up new markets • Pescara should be motivated by the potential economic benefits of the cruise business of the future and develop the road map for an effective and productive approach to cruise tourism.

38. CRUISE SHIPS Large Resort Ships (over 1000 pax) Mid-size Ships (500-1200 pax) Small Ships (200-500 pax) Boutique Ships (50-200 pax) SHIPS FOR PESCARA 74

39. CRUISE COMPANIES IN NICHE MARKETS • Easy Cruise • Swan Hellenic Discovery Cruise • Iberocruceros • Silversea • Azamara Cruises (Royal Caribbean Celebrity) • Seabourn • Classic International Cruises

40. CRUISE COMPANIES IN NICHE MARKETS • Club Cruise Entertainment • Club Med • Costa • Crystal • Peter Deilmann • Dolphin Maritime • Elysian Cruises • Explorer Cruises • Fred Olsen

41. CRUISE COMPANIES IN NICHE MARKETS • Golden Star • Hansa Kreuzfahrten • Hapag Lloyd • Hebridean • Iberojet • Kristina Cruises • Louis Cruise Lines

42. CRUISE COMPANIES IN NICHE MARKETS • Majestic Intrn. • MSC • Oceania • Orient Lines • Page + Moy Holiday • Phoenix Seereisen • Pullman Tur

43. CRUISE COMPANIES IN NICHE MARKETS • Saga • Salamis • Seadream • Star Clippers • Star Cruises • Thomson • Transocean • Voyages of Discovery

44. PORTS IN THE REGION

45. DEVELOPMENT IN THE REGION • Trieste terminal passaggeri to be privatised. • KOPER: 2007, 80 calls compared to 35 in 2006 (turn arounds of classic international arion) €10 mill investment in terminal building. • Out of 35 top ports in the Med Venice banks 3rd, Dubrovnik 10th The other Italian top ports are Naples, Savona, Livorno, Genoa, Palermo, Messina. All on the west coast of Italy.

46. DEVELOPMENT IN THE REGION • Ports should not compete with each other but complement each other. • Split has started working on the lengthening of the pier. • Venice has plans to build a new two-storey terminal covering 13000 sq.m in order to be able to handle simultaneous berthing of two large ships. • By 2010 Ravenna will have a new terminal and two of its four berths will be able to accommodate cruise ships up to 300m. • Dubrovnik is also investing in new berthing facilities and a new cruise terminal

47. CLOSING REMARKS Dear colleagues, The purpose of my presentation was to share with you some thoughts related to the development of Pescara as a Cruise Centre. With its proximity to the fantastic Adriatic Ports, the readiness to develop the port facilities and nearness of Pescara to the main attraction of Rome, Pescara has a good chance to be established as one of the most vital and important Cruise Centres in the region.

48. CLOSING REMARKS At a time when cruising attracts more and more enthusiasts and the classic beach holiday turns increasingly into an experience-oriented journey on the sea, the Adriatic ports are asked to play a more dynamic role in the cruise business. The new travellers whether on a short or longer cruise hold out a wide variety of opportunities for cruise operators, ports but also for the destinations. It is up to us in the cruise business and the tourist industry to make the most of it. Pescara has a good potential to make Rome an Adriatic Destination. Therefore a destination oriented approach based on Rome is a must.