Port Investment Financial Performance Using Differential Cash Flow Analysis 1

Cruises have become one of the most dynamic and fastest growing segments of the international tourist industry in terms of passenger demand and vessel supply. In addition, cruise tourism can benefit a destination by increasing foreign exchange earnings, profit, taxes, employment, positive externalities and economies of scale. Although tourism is considered the "heavy industry" of Greece, academic research on tourism and its sub-domains remains relatively limited and focused on various types of impacts (economic, environmental and social in most cases). In this paper we evaluate an investment project (cruise ship pier) on a Greek port of Call using Discounted Cash Flow (DCF) Analysis. Our calculations include estimated revenues, operational costs and capital investments on port infrastructures. Usually port investment decisions are made due to productivity improvement strategies or capacity expansion aiming to higher capacity utilization and financial performance. Α port investment evaluation model is proposed in order to explore the potential of better financial performance.