Full steam ahead for Global Ports expansion

Industrial automation and artificial intelligence are the driving forces behind a new industrial revolution, but there is little consensus over the magnitude of the challenges they bring along. Executives across the board are placing their bets – and those in the tourism industry are no exception. “The world is changing quickly, and will keep changing for the next 50 years,” says Mehmet Kutman, chairman of Istanbul-based Global Ports Holding.

“If we have been used to having four to six weeks off, in the next 10 years our vacation time will double or triple, because robots will take our place. It’s a serious issue, and nobody seems to be taking much notice yet,” adds Mr Kutman, whose company manages 12 ports in Europe and one in south-east Asia.

Tourism boom

Despite some major challenges concerning security and sustainability, the global tourism industry is growing at a steady pace. It touched new heights in 2017, when international tourist arrivals (overnight visitors) worldwide increased by an annual 7%, the strongest results in seven years, according to estimates by the UN’s World Tourism Organization.

In terms of destination, Europe and Africa led the pack with an 8% year-on-year increase of visitors in 2017, followed by the Asia-Pacific region with 6% growth, the Middle East (5%) and the Americas (3%).

“Tourism is already a key area of focus, but moving forward in the next 10 to 20 years, we will not even have enough planes to cover air traffic because people want to travel, discover. This is just the early stage of a boom in the cruise industry around the globe,” says Mr Kutman.

Cruising onwards

Global Ports Holding has emerged as a major player in the European market, as it has branched out from its home market in Turkey to acquire interests in cruise ports all over the Mediterranean basin, from Italy to Spain and Portugal. The company projects annual passenger growth in the cruise industry at 4.8% annually through to 2026, which is why it is focusing on replicating its European growth in other key tourist hotspots such as the Caribbean, Asia-Pacific and Australia.

The company is “looking to expand especially in the Americas, including the Caribbean,” in all the regions it operates in, according to Mr Kutman, and also wants to diversify to reduce some of the risks currently facing the cruise industry. Tourism flows in the Mediterranean have been heavily disrupted by the security concerns experienced in traditional strongholds such as Turkey and France, for example, although things are now normalising.  

“Security problems in our ports in the Mediterranean [had an impact], but slowly we are seeing traffic pick up again in the region, and since we are active in both the western and eastern Mediterranean basin, our flow of passengers has been more or less balanced,” says Mr Kutman.

A little local difficulty

Additionally in the Mediterranean basin, the cruise ship industry is facing mounting discontent over the nature and magnitude of its operations, which locals increasingly consider invasive. This in turn is prompting authorities at different levels to ramp up their scrutiny and regulation of port and cruise operators.

“The more important thing for us is to have a harmonised regulatory environment across the region; more or less similar rules in different countries in the Mediterranean basin,” says Mr Kutman.

In 2017, the Mediterranean basin made up 15.8% of cruise line deployment worldwide, second only to the Caribbean region with 35.4%, according to figures from the Cruise Lines International Association (CLIA). In terms of passengers, US tourists account for the lion’s share of annual demand of cruise trips, with 11.5 million trips between 2011 and 2016. This is followed at some distance by those coming from China (2.1 million), Germany (2 million) and the UK (1.9 million), according to CLIA figures.