Growing numbers of cruise ships are plying the Southern Ocean during the months of December and January (the Southern Hemisphere summer) to the only continent without shopping malls. Recognising the need to protect the fragile Antarctic landscape, in 1991 tour operators set up the International Association of Antarctic Tour Operators (IAATO). From around 5,000 tourists annually then, visitor numbers have grown to close to 30,000 today.
Ports in the south are obviously the best equipped to launch cruises, and new travel retail avenues are multiplying, mainly in Argentina. Last year was a record for cruise ship activity in the country, and 2007 promises much of the same.
The major player in duty free sales to cruise ship passengers is Buenos Aires-based London Supply, although other travel retail operators are eyeing up opportunities. London Supply manages the airport and a duty free department store in Ushuaia – the main port of departure for cruise ships visiting
Antarctica. Technically a special customs area, Ushuaia functions like a duty free zone, enabling price parity for London Supply stores in the airport and downtown.
Cruise ships make as many as 400 visits to Ushuaia during the summer season, with many ships basing themselves out of the Tierra del Fuego port and then returning to their home ports at the end of the season. London Supply commercial director Francisco ‘Paco’ Heredia notes that Ushuaia is a point of departure for many passengers, who fly into the town to pick up their ships, thus providing a boost to spending at the airport.
Segmentation of the passengers for cruise ships in Ushuaia is usefully done into Argentinean, South American (mainly Brazilian) and international passengers. “The customers buy the same way they do at airports, so the Argentinean and South American passengers are good customers for fragrances, cigarettes and beverages,” says Heredia. “The Europeans and North Americans are looking for Argentine and South American products, especially good Argentinean wines and delicatessen items, leather goods and souvenirs. These were not the most common goods in the past in duty free shops, so we have worked to source quality goods in these categories.”
The souvenir preference is for products that are linked to Antarctic icons like penguins and seals, and for locally sourced handicrafts. London Supply builds on the trademark of Ushuaia as ‘The End of the World’, but is careful to work only with top-level segments like wines, chocolate and delicatessen items, and fashion goods.
London Supply can supplement its sales to passengers with supplies directly to ships, through its ship-handling business, and it also distributes imported goods throughout Tierra del Fuego shops. More investment is planned in the region, confirms Heredia: “We are in the early stages of planning to construct a new cruise ship port in Ushuaia, which will be the key to developing a bigger business.” Plans are also in place to enlarge and redevelop the retail area at Ushuaia International Airport.
Another area for cruise ship-related business is Puerto Madryn, approximately halfway between Tierra del Fuego and Buenos Aires, a noted spot for whale watching. London Supply operates the Trelew airport south of the port, and has what Heredia describes as a growing business supplying passengers travelling to cruises in the area. Finally, London Supply is developing its plans to construct a new cruise ship terminal in Buenos Aires, in the major project named Megaport.
Argentinean airport store operator Interbaires is also open to the possibilities of supplying cruise passengers. “We don’t have anything at present, but we would look at the possibility of opening a shop in a port,” says Interbaires ceo Enrique Urioste.
Cruise ships travelling to Antarctica do have onboard shopping, but they also have limited space compared to big cruisers, and the items on sale are different. “We explored this particular avenue last year,” says Charles Pelegrin, vice president of Miami-based supplier Bijoux Terner, present with shops on all the main major liners. “The Antarctic routes tend to be more adventure-type cruises rather than leisure cruises, and are not exactly our market.”
Typical of these ‘adventure cruises’ is Australian-based Orion Expedition Cruises. Built with particular consideration of the unique conditions of the Antarctic waters, the 5-star Orion features onboard luxury like a sauna, health spa and gym, library and a small boutique. “The boutique offers a range of fashion items, essential needs such as hats, sun cream and personal items, as well as a range of Paspaley pearls from the Australian Kimberley region – regarded as the world’s finest,” says Orion Expedition Cruises PR manager Michael Corbett. “There are no brands exclusive to Orion, although there are some Orion branded items for purchase.”
Corbett explains that on Orion there are no Antarctic materials other than the photographs taken, but duty free shopping is available at all major ports where the ship commences or terminates voyages, namely Sydney, Darwin, Cairns and Hobart. Items need to be purchased prior to departure and declared upon return, and it is not possible to purchase duty free items after disembarking. Tourist associations for the southern New Zealand cities of Bluff and Invercargill, also departure points for Orion Antarctica expeditions, observe that cruise ship business is still too light to support dedicated duty free shops in the areas, although growth is expected.
Orion has just commenced her third season in Australia and as such the predominant passenger nationality remains Australian, “although we are seeing a growing number of North Americans and Europeans as well as New Zealand interest,” notes Corbett. “We anticipate that further to additional focus on New Zealand by Orion in forthcoming years there will be a higher awareness of the brand and a growth in New Zealand-based passengers.”
Passenger demographics on the southern cruises are middle to upper-income earners, with ages varying from mid-forties to sixties, with some older guests as well. “We have a number of guests in their eighties,” says Corbett. “They are active, mobile people who still love adventure but enjoy their creature comforts.”
Could it be that in the near future they will enjoy more duty free shopping as well?