P&O Cruises Australia will shut down early next year after nearly a century of voyages as it eyes more lucrative waters further north.
The cruise ship liner’s parent company, Carnival Corporation & plc, made the announcement on Tuesday, confirming that P&O would be integrated into its sister line, Carnival Cruise Line, in March 2025 and cease to exist.
Carnival’s CEO, Josh Weinstein, said the decision was made due to the South Pacific’s “small population” as well as “significantly higher operating and regulatory costs”.
Once the integration is complete, the Pacific Encounter and Pacific Adventure ships will begin sailing under the Carnival Cruise Line brand while the Pacific Explorer will exit the fleet.
While the cruise line industry has enjoyed a remarkable revival since the early pandemic lockdowns, the Australian market is viewed in the sector as very competitive with a relatively small customer base to draw on.
Ross Dowling, an honorary professor at Edith Cowan University, said operators were enjoying greater profitability cruising around Asia, the Mediterranean and Caribbean, where they can access a larger and higher-paying customer base.
“There’s a larger population, with customers prepared to pay more, which means it’s just better economics,” Dowling, the foundation professor of tourism at ECU’s school of business and law, said.
“Australia is not at saturation point, but there is a lot of competition here.”
Cruise operators have also long complained about limited capacity and high berthing charges at Australian ports while plans for a third terminal in Sydney have failed to eventuate.
The Carnival changes will result in slimmed down operations in Australia for the US listed company, which is expected to include some local job losses.
A notice on the P&O website confirmed that any Pacific Explorer cruise scheduled to sail after 2 March next year will be cancelled.
“If you are booked on one of these itineraries you will be contacted by guest services in the coming days with refund details,” the website said. “We apologise that this change has been necessary.”
In a statement, Weinstein said P&O is a “storied brand with an amazing team” and “we are extremely proud of everything we have accomplished together in Australia and the broader region.”
“However, given the strategic reality of the South Pacific’s small population and significantly higher operating and regulatory costs, we’re adjusting our approach to give us the efficiencies we need to continue delivering an incredible cruise experience year-round to our guests in the region.”
