In 2010 Costa Crociere S.p.A. generated an impact of over 2.2 billion euros on the Italian economy. This is one of the findings of a study carried out by MIP, the Milan Polytechnic Business School, which assesses the incidence on the country’s wealth of the largest Italian travel group.
Costa Crociere S.p.A. is an Italian company headquartered in Genoa, which comprises 3 brands (the historic Costa Cruises brand, Aida Cruises, 1 for the German market, and Iberocruceros, which operates mainly for the Spanish- and Portuguese-speaking markets). It is one of Italy’s top 10 most profitable companies and ranks 49th in terms of turnover in Mediobanca’s 2010 survey of over 3,700 Italian enterprises that recorded revenue of at least 50 million euros the previous fiscal year.
According to the MIP study, the impact on the Italian economy of Costa Crociere S.p.A.’s business in 2010 was equivalent to the total gross annual income of approximately 120,600 full-time employees. The Group’s operations and allied activities also generated substantial internal revenue in 2010; the Milan Polytechnic survey estimates that these business activities yielded tax revenues amounting to the equivalent of 4.4% of Italy’s 2011 Budget.
“While the statistics are impressive, the significance of this study goes beyond the figures. Our aim was to use objective methodology to evaluate the extent to which Costa Crociere contributes positively to the domestic economy and is therefore one of the leading players in the economic life of the country. Our vocation for providing hospitality and floating accommodation for Guests from all over the world makes Costa an ambassador for the best in Italian style and culture. At the same time, the Italian roots of our Company are even more significant and nowhere is this more apparent than in the figures presented in the MIP report,” commented Costa Crociere S.p.A. Chairman & CEO Pier Luigi Foschi.
The total business output of 2.2 billion euros was generated from 3 main sources. The first is direct spending, comprising all of the Group’s direct expenditure. The second is represented by the payrolls for all its shoreside and shipboard personnel who are Italian citizens or resident in Italy, equivalent to over 3,600 full-time jobs (based on the FTE – full-time equivalent – calculation method). In addition to direct spending and payrolls, the economic impact is also generated through the supply chain and by indirect spending, namely the economic contribution of cruisers on vacation on ships in the Costa fleet deployed in Italy.
Direct spending includes all the Italian Group’s expenditure and payments to Italian suppliers and vendors (travel agencies), comprising expenses paid on behalf of Costa’s cruise passengers; in 2010 this expenditure amounted to more than 880 million euros. The items that belong to this list include: general expenses for supplies; new buildings and fleet maintenance; travel agency commissions; and port services.
This Group’s direct expenditure involves all parts of Italy. Liguria is in first place and accounts for almost 230 million euros of direct spending (over 25%), followed by Lombardy (almost 185 million), Veneto (135 million) and Latium (about 132 million); Costa Crociere has many local suppliers in these regions. Even landlocked regions like Umbria and the Aosta Valley benefit from this direct expenditure to a considerable extent (with 3.1 and 4.6 million euros, respectively).
In terms of direct spending benefiting ports, worth in excess of 28 million euros, the harbor topping the list is Venice (10.3 million euros), followed by Savona (5.5 million euros), Civitavecchia (4.3 million euros) and Naples (2.2 million euros).
Last year one of the main items of direct expenditure in Italy was fleet improvement and maintenance: almost 110 million euros was spent on dry-docking of ships in service and almost 320 million euros on the construction of new ships. This provided considerable stimulus to the nation’s shipbuilding and furniture industries (furnishings, textiles and design).
Meanwhile, indirect spending comprises all the expenses incurred and purchases made in Italy by (Italian and foreign) Guests vacationing on Costa Crociere’s ships; in 2010 this was estimated to be in the order of 70 million euros. Here, the items of expenditure include the costs of transport from home to the Italian port of embarkation, or airport in the case of departure from a foreign port (or from the airport of arrival in Italy to the departure port in the case of foreign passengers). Indirect spending also embraces purchases by cruisers of goods and products for use during the vacation: for example luggage, swimsuits, sunscreen and photographic equipment.
Direct spending, payrolls and indirect spending in turn generate business output for the product/service supply chain (additional employment, increased market demand, orders placed with the suppliers’ own suppliers, etc.), estimated by MIP to be worth around 1.2 billion euros.
The economic impact of the Costa Group also contributes very substantially to employment. The MIP investigation measures this contribution as follows: 12,300 jobs, of which 3,600 within the Group and 8,700 generated all the way along the supply chain and including job creation among tourism service providers (based on the FTE – full-time equivalent – calculation method), with total gross income from this employment exceeding 373 million euros. In other words, out of every 1,235 euros of gross pay generated by Italy’s domestic economy, one euro is attributable to Costa Crociere’s business.
The results for the fiscal year ended November 30, 2010 confirmed and strengthened Costa Crociere’s position of leadership in Italy and across Europe, which is presently the world’s most dynamic cruise industry area. According to figures published by the European Cruise Council, the association of the continent’s leading cruise companies, there were 5.5 million European cruisers in 2010, up about 10% on the previous year.
The Costa Crociere Group’s consolidated revenues rose 12.1% in FY 2010, reaching just under 3 billion euros, while the total number of Guests was 2.15 million, representing an increase of some 18% compared to the previous fiscal year. The increase in revenues reinforces Costa Crociere’s position as Italy’s largest travel group.
The Costa fleet currently has 26 ships in service (14 Costa Cruises, 8 Aida Cruises, 4 Iberocruceros) with another 4 on order (2 Costa Cruises and 2 Aida Cruises), making it Europe’s largest. The next addition, due for delivery this year on June 30, is the new flagship Costa Favolosa, the 15th member of the Costa Cruises fleet and number 27 for the Group. Worth around 510 million euros and weighing in at 114,500 gross tonnage with accommodation for up to 3,800 Guests, the Costa Favolosa will be the new flagship of the only cruise fleet flying the Italian tricolor. The Costa Favolosa will be named in Trieste on Saturday, July 2.
Throughout the 2011 summer season the Costa Favolosa will be offering 8-day Eastern Mediterranean cruises departing on Sundays from Venice and Mondays from Bari, and porting in Olympia (Greece), Izmir and Istanbul (Turkey), and Dubrovnik (Croatia). Then, during the next winter season she will be operating out of Dubai on 8-day cruise vacations in the United Arab Emirates.
The Costa Favolosa will be a state-of-the-art cruise ship also with regard to environmental compliance, which has always been a Costa hallmark. The new flagship will be equipped for “cold ironing”, namely a system whereby the ship is plugged into shoreside electrical power, enabling generators to be shut down during stopovers in port. On board the Costa Favolosa, like on all the members of the Costa Cruises fleet, 100% of solid waste will be collected separately for recycling and no special waste will ever be discharged overboard. Also, most of the water used on the ship will be produced directly on board using desalination plants.