A burgeoning Australian cruise industry desperate to steer more passengers into Sydney Harbour is holding out hope the navy will vacate Garden Island, for its base there to be turned into a berthing space for luxury cruisers.
The industry reached a milestone in 2015, for the first time accommodating an annual million domestic passengers - a 15 per cent increase on the previous year, according to the peak cruising body's latest market source report released on Thursday.
Big cruise liners can't go under the Harbour Bridge and their operators and governments are looking into the prospect of Garden Island hosting additional berths.
Cruise Lines International Association (CLIA) Australasia chairman Steve Odell said there is "no question" it is needed.
"If we're going to grow the business further, then we need a solution east of the (Sydney Harbour) bridge," Mr Odell said at the report's launch on Thursday.
Currently, Sydney has an international terminal for smaller cruisers at White Bay in Rozelle in the inner west, as well as the larger Overseas Passenger Terminal at Circular Quay.
But it's believed not establishing the Garden Island terminal could cost Australia's tourism industry billions of dollars.
"We are, particularly in the summer, at saturation point," Mr Odell said.
"The cruise lines are not going to come. They're going to find other alternatives if we don't have places to go for ships.
"If we don't have Sydney in the itinerary, it actually begs the question if we come to Australia at all."
The NSW government recently invested $135 million into the White Bay terminal but is looking at further ways to boost berthing capacity as cruise liners get bigger.
"We'll continue to work with the federal government to increase cruising capacity inside Sydney Harbour where possible, including at Garden Island," a spokeswoman for state maritime minister Duncan Gay said.
Prime Minister Malcolm Turnbull on Monday announced a $50 million election sweetener to upgrade the wharf at the NSW south coast port of Eden and its airport to increase the town's capacity to service the largest cruise ships.
The industry, which puts its success down to "good value" for holiday-makers, is hoping to double domestic cruise passengers to two million by 2020.
It does not expect bad press around two recent gastro outbreaks in Sydney and a class action against a tour company to hurt its numbers in 2016.
Vocal community opposition to proposals to develop a terminal on Queensland's Gold Coast is also not expected to hurt the industry's image, with communities such as Eden and Bunbury, south of Perth, embracing cruising infrastructure.
"In these regional areas, 2500 passengers spending $250 dollars a day is a significant impact on their economies," CLIA Australasia's managing director Neil Linwood told AAP.
