PSA chairman interview – Lars Olsson

The Passenger Shipping Association is becoming more political in a bid to establish itself as a more effective lobbying body for the ferry and cruise industry.

The association is stepping up its lobbying efforts, particularly at government level, under chairman Lars Olsson.

Its broad remit means it represents all passenger shipping interests within the UK, including the promotion of ferry and cruise travel to the UK public.

The differences between the two sectors means more lobbying is focused on ferries in the UK, admits Olsson. “With ferries, most of what is happening in the UK is dictating a lot of what is happening [in the sector]. On the cruise side, they are global operations and that makes the whole picture much more complicated.”

Olsson says lobbying government on key issues and working more closely with like-minded organisations such as the Chamber of Shipping is an increasingly important role for the association. “The industry has been lacking a joint approach and we trying to pull it together. We are getting more political.”

Olsson, who started his two-year term last July, adds: “We realised very early on we needed to be more forceful in terms of lobbying. There are many issues affecting both the ferry and cruise side.

“We will cement our efforts and become more proactive between our members and other associations so our voice is being heard. The PSA is about the travel interests of its members and making it [sea travel] more attractive to the general public.”

Lobbying issues

Since Olsson started in the role, there have been meetings held with several government ministers, from transport minister Jim Fitzpatrick to borders and immigration minister Phil Woolas and shadow minister for transport Julian Brazier.

Issues raised include border controls, proposals to increase light dues (paid by ships for navigation aids), proposals to restrict greenhouse gas emissions, rises in business rates at UK ports, and the Common Travel Area – the passport-free zone between Great Britain, Ireland, the Isle of Man and the Channel Islands.

“We have met with the immigration minister lobbying against the Common Travel Area and we have talked about e-Borders, which we believe will make travel very difficult.

“One of our concerns is proposals for restrictions on sulphur dioxide in greenhouse gas emissions, which will increase costs for ferries and cruises. Clearly we all have to make sure we are operating in the most green fashion possible, but we believe there are different ways of attacking it.”

Increases in business rates have already put some companies out of business at UK ports, particularly as a result of the policy to backdate rate rises, says Olsson.

“This mostly affects ferries and companies located in ports; it’s unfair and we have had a bit of sympathy from the Conservatives on this. It’s not only a shipping issue; it’s more of a local business issue,” he adds.

Meanwhile, Department for Transport proposals for increases in light dues could increase costs for the ferry industry by £1.4 million and just over £1 million for the cruise sector. “We feel the shipping industry is under pressure at the moment both in terms of weakening demand for our services but also in terms of costs.”

Ferry travel

As well as lobbying, the issue of selling ferry travel through the trade is one close to Olsson’s heart, as Stena Line commercial manager. “Ferry operators would love to work with travel agents but there is still this belief that a ferry crossing costs a £1,” he says.

He argues travels agents are often not aware of the potential to make money from ferry crossings, which have average ticket values of £200, with the sale of insurance and add-ons.

With more than 40 million passengers taking ferry crossings each year in the UK, the numbers far outweigh the 1.5 million UK residents who take a cruise annually. Yet most ferries are booked by consumers direct, and the majority of cruises tend to be sold via the trade.

The number of ferry passengers has fallen dramatically since the introduction of the no-frills airlines and the loss of duty free, but Olsson argues there remains “huge potential” for the trade to tap into, particularly during the current recession.

He says: “The market is tough but there is huge potential for ferry travel in general. During the recession, people are revisiting their travel plans. There could be a lost generation who have not travelled by ferries.”

The PSA has just held its first Ferry Fortnight, a public relations exercise backed by national newspapers working with the PSA’s 15 ferry members, which it hopes to repeat next year. Similarly, the PSA’s travel agency offshoot, the Association of Cruise Experts, will be holding its second National Cruise Week in September.

“We are focusing much more on PR and taking a more active role to make sure we are getting the key messages across,” says Olsson.

Ferry Fortnight has been aimed at driving awareness of the sector. “It’s about putting ferries back on the map again. We want to bring forward the viable alternative. The ferry market has a very bright future. It’s about how the travel trade can be part of that,” he adds.

The market

Olsson remains confident about the fate of ferry and cruise operators in the current climate, mainly because they are able to offer sought-after “value” propositions to consumers.

“Both ferry and cruise are big on value: that’s why I think I believe this market is going to be in a very good position to capitalise on changes in customer perceptions in future,” he says.

“Prices are going down during the recession, which benefits the customer. There is a lot of spending power out there. I think there is tremendous pent-up demand.”

The challenge, particularly for the cruise companies, is to adapt to the late booking market. “It’s making sure we can take all the late bookings; it’s a learning curve. Itineraries for 2010 are selling a bit slower and it’s up to members how they deal with it, but you have to follow the [booking] trends.”

Recent figures, revealed in the Annual Cruise Review, back up Olsson’s optimism for the cruise sector. They show one in every 12 package holidays booked in the UK in 2008 was a cruise, compared to one in every 25 in 1999. Meanwhile, the popularity of ex-UK cruising means four out of every ten cruises booked started in a UK port last year.

More information:

* Numbers of Brits cruising will continue to grow, says PSA report (Travel Weekly, May 21, 2009)
* Lars Olsson takes over as PSA chairman (Travel Weekly, July 7, 2008)