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Taieri Gorge Railway Ltd chief executive Murray Bond said tourist numbers were expected to reach 80,000 for the year ending June, an increase of 3000 on last season's figures.
The rise has been attributed to the increase in the number of cruise ships visiting Port Chalmers.
‘‘The tourist market has been a little weak but the cruise ship market has been very strong,'' Mr Bond said.
Cruise ship passengers accounted for 12.5% of the tourist operator's customer base, and that was expected to increase to 15% next season, with more cruise ships scheduled to arrive.
This season, 42 cruise ships were scheduled at Port Chalmers, and this is likely to increase to 55 next season.
The cruise ship market had different characteristics to the daily tourist market, with cruise ship passengers expecting a certain type of service, including bus pick-up and drop-off, meals provided and staff available on each carriage, he said.
On Wednesday morning, 18 carriages were booked by passengers from the cruise ship Sapphire Princess.
Able to seat a maximum of 600 people, the sold-out train carried 460 passengers, because the cruise ship clientele ‘‘were spaced out for comfort because they pay a higher price'', Mr Bond said.
Despite the higher costs associated with running a ‘‘cruise ship day'', the company made the same profit as a full tourist day, ‘‘but you make money on a railway by having people sitting on seats''.
Each cruise ship company negotiated its own deal with the Taieri Gorge Railway, with prices higher than other passengers paid, he said.
To capitalise on the increasing cruise ship market, the railway purchased 12 carriages previously used on the Wellington-Wairarapa line, which are able to seat an average of 40 to 50 people, compared with the present 30.
Two of the refurbished carriages are expected to be available this October to replace existing stock, and are being fitted with viewing platforms and catering units.
The higher capacity meant independent travellers would be able to travel on cruise ship days, he said.
Mr Bond said investing close to $1 million on the carriages, a new locomotive and their refurbishment, was a major investment for the company to keep up with a growing market.
‘‘Dunedin has been criticised as not being able to keep up, but we are doing just that.''