Mediterranean Cruise Market Dynamics and Value By Peter Wild G. P. Wild (International) Limited

Objectives Provide a brief overview of the cruise market Establish the role of the Mediterranean within the cruise market Consider the changing dynamics of cruising in the Mediterranean Examine the value of cruise tourism Consider the future outlook

Market Overview

Growth in Main Cruising Destinations

Europe v Caribbean

Main Source Markets

Comment on Main Source Markets World cruise tourists – 18.8 (17.5) million in 2010 North America – 11.0 (10.4) million European cruise tourists – 5.5 (5) million of which: UK – 1,621,000 Germany – 1,219,000 Italy – 889,000 Spain – 645,000 France – 387,000

Europe to 2017 6.8 million

Growth of Cruise Capacity in the Mediterranean

Dynamics of the Market

Key Regions for Cruising in the Mediterranean Western Mediterranean, mainly the area bounded by Eastern Spain, the French Riviera, Western Italy and the North African coastline (49.44% potential passenger throughput); Eastern Mediterranean, the remainder of the Mediterranean, except the Adriatic and Ionian Seas (34.90%); Adriatic, the lands bounded by the Adriatic Sea, together with Western Greece (14.36%); Black Sea (1.29%). Mediterranean growth 2010-11 – +17.6%

Growth of Cruise Capacity in the Mediterranean by Region

Dynamic Changes to the Fleet Structure in the Mediterranean

Key changes in regional deployment In 2006 panamax and post panamax ships were more commonly found in the West By 2011, while still behind the West, Eastern Mediterranean is now seeing more panamax (30%) and post-panamax (30%) ships while large (20%) and medium (15%) ships have fallen back This trend towards the larger ships will continue in the eastern Mediterranean in future Ports that wish to play a full part in the market need to adapt their facilities to receive such ships if they are to gain the full benefits of future market growth

Value of Cruise Industry Activity

Europe Cruise industry activity in Europe generates significant expenditures in 4 main areas. These are: Shipbuilding and ship repair Cruise line purchases Passenger and crew expenditures Compensation of cruise line employees

Europe

Total Economic Impacts €35.2 (€34.1) billion in total output in 2010 €14.5 (€14.1) billion in direct spending €9.3 (€9.0) billion in employee compensation 307,526 (296,288) jobs Each €1 million in direct expenditure generated €2.42 million in business output, and 21 jobs paying on average over €30,100

Total Cruise Industry Output Generated in Europe 2005-10

Total European Employment Generated by Cruise Industry 2005-10

Direct Expenditures by Country 2010

The Value of a Cruise Tourist in 2010 On average a typical cruise tourist is worth around €100 if all direct impacts are taken into account

Impact and Value of Cruise Industry Activity in Greece - 2010 Direct Expenditure - €579.6m Of which: Passengers - €360.3m Shipbuilding (repair) - €22.7m Employee compensation - €0.2m Cruise line purchases - €196.4m Jobs – 11,612

Prospective Value of Cruise Industry Activity in Istanbul - 2011 At least 465,700 cruise tourists are expected to visit Istanbul in 2011 Assuming European average value of a cruise tourist of €98 the direct value of this business is €45.64 million €1 million in cruise industry expenditure generates €2.42 m in business output and 21 jobs paying €30,100, thus: Business output at Istanbul - €110.45 million Jobs – 959 Compensation - €28.85 million

Conclusions Signs are good - cruise industry looks set to grow significantly in the Mediterranean in 2011 Outlook overall is excellent but there are some clouds on the horizon Eastern Mediterranean looks well placed to continue to benefit from cruise industry activity in 2011 and beyond Additional investment in facilities is needed to support the continuing dynamic changes in the structure of the cruise fleet

Thank you www.gpwild.com