Hong Kong is developing its destination offerings for cruise passengers. // © 2013 Seabourn Cruise Line
As the sun came up over the Bay of Bengal, all I could see before me was the undulating waves rising above the horizon. I could have been anywhere in the world. However, when I reached my next port in the Andaman Islands, the fast-paced, frenzied nature of an Indian city would serve as a reminder of my exotic locale. Such is the charm, for me at least, when cruising in Asia. A hectic, unfamiliar environment can be exchanged for the quiet calm of a cruise ship. It is like experiencing two worlds at once.
“You can experience a destination as remote as Myanmar with all of the conveniences of normal life onboard,” said John Delaney, senior vice president of marketing and sales for Seabourn Cruise Line. “I think that is one reason why more luxury travelers are choosing to experience Asian destinations on a cruise.”
Cruising in the region has been emerging for quite some time and, now, interest is increasing as destinations become more accessible to ships.
“It would not be an exaggeration to say that the cruise market in Asia is at the top of our list of emerging markets. A major trend of the cruise industry in recent years has been the globalization of destinations and itineraries as cruise lines strive to open new geographic markets and to provide new experiences for first-time cruisers as well as loyal customers,” said Christine Duffy, president and CEO of Cruise Lines International Association (CLIA). “Asia itineraries and embarkations in the region are most definitely growing in popularity — for vacationers from around the world as well as from those in Asia.”
Duffy said that she is seeing CLIA member lines deploying more ships to the region, adding new ports and customizing onboard products to meet the needs of Asia cruise guests, as well as North American guests flying overseas to explore the region on a cruise vacation.
Duffy also noted that there are five key elements to developing a cruise economy and boosting tourism: market size, trade distribution structure, itineraries, infrastructure and collaboration with government and private enterprise. Currently, representatives from large cruise centers such as Singapore, Hong Kong and Korea are working to develop these elements.
“All the cruise destinations in Asia should work together,” said Anthony Lau, executive director of the Hong Kong Tourism Board. “If we work together, we can provide products that the consumer needs and likes so that they will come back again. We currently work very closely with destinations in China, Taiwan, Macau, Thailand and Singapore, and I believe that this spirit of working together should continue.”
Stats and Facts
Emerging markets are crucial to the future of the cruise industry, and new markets are developing quickly in Asia.
“The Caribbean continues to be the biggest cruise market in the world, followed by Europe,” said Duffy. “For a healthy cruise industry, we need existing markets to continue to attract guests and for new markets to be developed for the future.”
Asia cruise markets are anticipating 3.7 million passengers per year by 2017, according to Cruise Industry News 2012 Annual Report. The survey also predicted that Asia will receive 7 million passengers — nearly double — by 2020. These increases are not just attributable to North American and European source markets but to the rapid development of middle-class travelers in Asian countries such as China and India as well South American countries such as Brazil.
“Cruise lines clearly recognize that the enormous middle-class consumer market in Asia, led by China, is largely untapped and represents strong growth potential,” said Duffy.
Lau agrees that Asia’s emerging middle class will drive even more cruise business to the region.
“Cruising is a fast-growing business around the world, but penetration rates are still very small,” he said. “There is a lot of potential to grow in Asia, and Asia will likely be the largest cruise market by 2030. Also, by then, half of world’s middle class will be in Asia.”
Lau added that, once middle-class consumers in the region have the money to buy houses, cars, computers and appliances, travel will be the next purchase.
“There is huge potential in this market going forward,” he said. “Cruising is a product that is going to be welcomed by the wealthy middle class.”
While North American travelers still make up the majority of guests, cruise lines such as Azamara Club Cruises, are seeing the number of Asian passengers increase.
“We consider ourselves an international cruise line. Fifty percent of our guests are from the U.S. with the remaining portion coming from Canada, the U.K. and Australia,” said Edie Bornstein, vice president of sales and marketing at Azamara. “However, we are now seeing a smattering of passengers from Asia, particularly from Singapore.”
Cruise lines are also driving growth by developing infrastructure at a furious pace. Two of the major hubs for cruising in Asia are Hong Kong and Singapore due to their well-developed ports.
According to Duffy, notable developments in the region include completed, or nearly completed, passenger cruise terminals in Singapore, Hong Kong and Busan, Korea — to name a few.
“Nearly a year ago, the first cruise ship docked at the new International Cruise Terminal at Marina South in Singapore — a $350 million investment,” she said.
In 2013, Singapore expects to welcome 1.3 million cruise passengers — up from 1 million in 2010.
“Some of the infrastructure development we’ve seen in the past few years has been astonishing considering the size, quality and speed with which it has been done,” said Duffy. “Asia is a massive region, and the pace of activity is very high.”
Another reason for the fast-paced growth is demand for the destinations.
“Many cities are making ports the actual destination,” said Bornstein. “Singapore and Hong Kong are prime examples. They have great design and access for passengers with fine-dining and attractions close to the port facility.”
The expansion of this market aids both the cruise industry and the tourism market.
“A robust and growing cruise market in Asia offers North American guests a wide range of opportunities to explore this part of the world,” said Duffy. “Asia represents a fast-growing market, though it is still small and developing in comparison to the Caribbean.”
And this development is not limited to larger cruise ports. Many ports are working together to establish themselves in the cruise industry and establish cruising in their destinations.
“We are just beginning to build up our infrastructure for the cruise market,” said Lau. “There are a lot of things that we need to do with other countries. We need to work together as a region and make sure that we have enough countries onboard to build exciting itineraries for consumers.”
The convenience of cruising and the ease with which it allows travelers access to these remote, exotic locations further enhances its overall appeal.
“Because of the distance from North America, Asia cruises tend to attract experienced American travelers who have the time and financial resources necessary to enjoy a vacation that is typically longer in length,” said Duffy. “New terminals, such as those in Singapore and Hong Kong, certainly make the cruise experience easier and more enjoyable. It’s absolutely a positive step.”
Cruise lines are careful about choosing new ports, considering how sought-after a destination is as well as the safety of the location.
“We will only enter a new destination if the infrastructure matches our needs and our standards,” said Bornstein. “We are very focused on the delivery of the product both on and off the ship, and every port must be vetted. The safety of the destination as well as the political climate determine whether or not we will call in a port.”
While infrastructure in major ports is developing, so is infrastructure within the destinations in order to offer the best possible experience for cruise passengers.
“We are perpetually endeavoring to bring new destinations to our guests as many of them consider themselves port collectors,” said Bornstein.
Azamara will add 35 new ports in 2013 and 45 new ports in 2014. This year, in Asia, the cruise line will add two ports in Malaysia: Georgetown in Penang and Port Klang. The following year, the line will add Kota Kinabalu, Sabah (Borneo Island), Malaysia; Muara (Bandar Seri Begawan), Sultanate of Brunei; Kota Palopo, Indonesia; Langkawi, Malaysia; and Belawan, Indonesia.
“It helps to have great infrastructure in a destination, but passengers really want new ports,” said Delaney.
According to Delaney, Seabourn has received a lot of interest in Northern Asian destinations — Japan in particular as well as Shanghai and Beijing. Seabourn is also heading to Myanmar in January of next year.
“We have a high repeat rate and guests are asking for new destinations and tourism has really opened up in Myanmar,” said Delaney. “We try to add 20 to 30 new ports every year and this was a natural fit.”
Azamara sailed to Myanmar for the first time in December of 2012. The cruise line provided a variety of cruise-tours while in port, one of which was an overnight in Bagan, giving passengers a unique opportunity to get a more in-depth experience in the country due to the ship being docked there overnight.
“We are about delivering the destination and delivering it differently,” said Bornstein. “And with our overnight tours, we can give our guests a more in-depth destination experience.”
China is also an increasingly popular destination for cruise lines.
“A growing number of our member lines are operating in China at varying levels,” said Duffy. “Royal Caribbean International has the largest presence and now has three ships deployed in the region as well as a corporate office in Shanghai.”
Princess Cruises is the largest cruise line to deploy a ship to Japan — its Sun Princess ship arrived there this month — and next year, she’ll offer seven itineraries from Yokohama and Kobe. In addition, Princess’ Sapphire Princess will homeport in Singapore starting in November 2014. Costa Crociere is deploying a second ship to China this year, and Carnival Corporation has also made some executive appointments in the region and has announced office openings in Singapore and Hong Kong in recent months.
With the development of Asia’s middle class, growing infrastructure and the ability to offer new and exotic destinations, cruising is coming into its own in the region.
“Cruise lines want to work with all parties to create infrastructure that works for the cruise guest,” said Duffy. “It’s a crucial element to developing the cruise economy in the region and a healthy cruise market for the industry.”