1. www.gpwild.com World Cruise Tourism Market and the Baltic Vision By Peter Wild and John Dearing G. P. Wild (International) Limited

2. www.gpwild.com Background Cruise tourism is the fastest growing part on tourism in the world Cruise tourism is the fastest growing part on tourism in the world Cruise tourism has grown consistently since at least 1980 Cruise tourism has grown consistently since at least 1980 The industry has shown great resilience in the face of difficulties The industry has shown great resilience in the face of difficulties It made a rapid recovery from 9/11 and has enjoyed a boom since early 2004 It made a rapid recovery from 9/11 and has enjoyed a boom since early 2004 The fundamentals of the industry are strong The fundamentals of the industry are strong

3. www.gpwild.com Introduction The growth of the cruise industry has meant many changes in cruise port operations and the infrastructure needs of destinations The growth of the cruise industry has meant many changes in cruise port operations and the infrastructure needs of destinations Key drivers of this change include: Key drivers of this change include:  Increasing introduction of larger cruise ships  The requirement to handle higher concentrations of cruise tourists over a short time scale – a challenge for local resources, traffic management and supporting infrastructure  Need to develop new itineraries and destinations to handle market changes

4. www.gpwild.com The Next generation and Larger Cruise Ships

5. www.gpwild.com Current Ordering Position ItemQLBs GT (m) Cost US$ (m) Building42106,6334.23422,983 Pending812,0440.4962,147 Total50118,6774.73025,130

6. www.gpwild.com Annualised Ordering Position

7. www.gpwild.com Trends in Newbuildings to 2012

8. www.gpwild.com An Analysis of Current Order Book

9. www.gpwild.com Structure of current order book TypeQLBs GT (m) Cost US$ (m) Post- Panamax 2275,2962.97815,415 Panamax1429,2441.1286,584 Others62,0830.128984

10. www.gpwild.com Annualised Levels of Investment

11. www.gpwild.com Impact of Vessel Size on Itineraries and Ports

12. www.gpwild.com The Rise of the Mega Ship

13. www.gpwild.com Deployment of Mega Cruise Fleet

14. www.gpwild.com Comment Some smaller cruise ships will continue to be built Some smaller cruise ships will continue to be built The size of the average cruise ship will continue to increase in next decade The size of the average cruise ship will continue to increase in next decade Mega cruise ships will gradually replace lower capacity tonnage built prior to 1990 Mega cruise ships will gradually replace lower capacity tonnage built prior to 1990 Debatable whether cruise ships will get larger still and go beyond the Genesis Class Debatable whether cruise ships will get larger still and go beyond the Genesis Class Changing fleet structure has many implications for ports and itineraries Changing fleet structure has many implications for ports and itineraries

15. www.gpwild.com Comment cont… A survey by G. P. Wild (International) Ltd has established that an ever increasing number of pax will cruise on large ships by 2014 A survey by G. P. Wild (International) Ltd has established that an ever increasing number of pax will cruise on large ships by 2014 Over 50% will sail on ships >290m loa Over 50% will sail on ships >290m loa Almost 30% will use ships >300m loa Almost 30% will use ships >300m loa 20 of the 42 cruise ships on order exceed 300m in length 20 of the 42 cruise ships on order exceed 300m in length

16. www.gpwild.com Further comments Ports that are unable to accommodate the largest ships face the prospect of an ever decreasing market share Ports that are unable to accommodate the largest ships face the prospect of an ever decreasing market share For example a port which just 17 years ago was able to handle the largest ships under construction at that time (around 250m) faces a reduction of 54% in market share by 2014 For example a port which just 17 years ago was able to handle the largest ships under construction at that time (around 250m) faces a reduction of 54% in market share by 2014

17. www.gpwild.com Fleet structure in 2011 by length

18. www.gpwild.com More comments Almost 78% of cruise tourists will sail in vessels exceeding 250m in length by 2011 Almost 78% of cruise tourists will sail in vessels exceeding 250m in length by 2011 Over 57% of the fleets capacity will be accounted for by ships in excess of 275m Over 57% of the fleets capacity will be accounted for by ships in excess of 275m 21% of the fleets capacity will be offered on vessels over 300m in length 21% of the fleets capacity will be offered on vessels over 300m in length

19. www.gpwild.com Critical Scantlings Length – up to 360m Length – up to 360m Beam – in excess of 55m Beam – in excess of 55m Draft – maximum 10.3m Draft – maximum 10.3m Air draft – in excess of 65m Air draft – in excess of 65m

20. www.gpwild.com Implications for Ports To maintain or increase market share ports not able to meet future market requirements will have to invest in new facilities and infrastructure To maintain or increase market share ports not able to meet future market requirements will have to invest in new facilities and infrastructure Two berths of 350m plus are almost certainly going to be required if a port wishes to remain competitive and attractive to the cruise lines by 2014 Two berths of 350m plus are almost certainly going to be required if a port wishes to remain competitive and attractive to the cruise lines by 2014

21. www.gpwild.com Implications cont… Berths to accommodate 360m cruise ship may only be required to provide around 250m for flat of sides with dolphins or other similar arrangements being used to provide safe berthing overall Berths to accommodate 360m cruise ship may only be required to provide around 250m for flat of sides with dolphins or other similar arrangements being used to provide safe berthing overall Suitable infrastructure needs to be provided to accommodate traffic flows to and from the ship including coach marshalling Suitable infrastructure needs to be provided to accommodate traffic flows to and from the ship including coach marshalling Car parking will be needed for turnarounds Car parking will be needed for turnarounds Customs, immigration and security issues all need to be addressed Customs, immigration and security issues all need to be addressed

22. www.gpwild.com Possible Traffic Flow Needs Pax Coaches – 100% Coaches – 70% Coaches – 50% 5,4001087654 3,100624431 2,500503525

23. www.gpwild.com Funding Investment This can be complex and take various forms depending upon the particular position of a port and destination This can be complex and take various forms depending upon the particular position of a port and destination Port authorities, towns and cities, governments at various levels and banks and financiers can all play a role Port authorities, towns and cities, governments at various levels and banks and financiers can all play a role Also increasingly the cruise lines themselves are participating in port related investments – perhaps also agreeing to make a certain number of calls over a period of time Also increasingly the cruise lines themselves are participating in port related investments – perhaps also agreeing to make a certain number of calls over a period of time

24. www.gpwild.com Examples – Cruise Line/ Port RegionPortOperator(s) Caribbean Costa Maya Carnival ECNA New York Carnival, NCL WCNA Long Beach Carnival E Med KusadasiRCI W Med Naples Costa, RCI, MSC W Med MarseilleMSC Civitavecchia Costa, RCI, MSC SE Asia Laem Chabang Star Cruises

25. www.gpwild.com Thank You www.gpwild.com www.gpwild.com