In Hot Asia Market, Cruise Lines, Ports Jockey for Position

This is the first of a two-part series on the fast-growing Asia cruise market.

If you build it, they will come. But who will come? And where will they go?

Those are questions facing Singapore officials and cruise lines alike as the Lion City prepares to become the next big thing in the world of cruising.

The city-state has been strategically positioning itself, including investing more than a half-billion dollars in a new cruise terminal and in renovations to its existing cruise facility. (See sidebar.)

While Singapore now attracts somewhere between 900,000 and one million cruisers annually, the goal is 1.5 million by the 2015/2016 season, said Neeta Lachmandas, assistant chief executive of the Singapore Tourism Board.

The competition
Singapore faces competition for the North Asia cruise market from Hong Kong, which will open the first of two berths at its new $1 billion Kai Tuk Cruise Terminal in June. Shanghai is another competitor.

But Singapore sees itself as king of Southeast Asia, a region that local tourism officials say holds great interest for Chinese and other Asian travelers, as well as for American travelers.

From Singapore, cruise ships can do week-long and shorter roundtrips to Malaysia, Indonesia or Thailand – with longer trips adding the Philippines or Vietnam.

One-way trips can reach Shanghai or Hong Kong. Easily accessible destinations include such Bucket List places as Borneo and Bali.

“Cruising is still at a very young stage in Asia,” Lachmandas said. “We’re quite enthusiastic.”

Cruise lines in Asia
North American cruise lines are signing on.

Royal Caribbean is the market leader. Its 3,114-passenger Mariner of the Seas will stop by Singapore in June and then do a five-month season of three- to 10-day cruises out of Singapore beginning in November.

Princess is coming in big time in fall 2014. The cruise line has scheduled a four-month fall season of three- to 11-day cruises out of Singapore on the 2,670-passenger Sapphire Princess.

Costa and Asia-based Star Cruises have ships home-ported in Singapore.

Other lines, including Azamara, Seabourn, Silversea, Holland America and Crystal, stop by Singapore on their Asia or world cruise itineraries, during the October to April high season.

Expected to thrive
Travel sellers can expect to see an increasingly robust Asia-based cruise market with Western-run hardware, said Bob Guy, managing director of ground operator Destination Asia.

He predicted there could be eight to 12 ships home-ported in Singapore by the end of 2016.

“We’re going to have a boom here in cruising in the next four years. No question about it,” Guy said.

Hot market
To say that Royal Caribbean sees the Asia market as hot would be an understatement, said Kelvin Tan, regional director, Asia Pacific, for Royal Caribbean.

The cruise line sees China’s new middle class, along with travelers from South Korea, Japan, Singapore and other Asian countries, as potential cruisers. That’s hundreds of millions of people.

Americans, British and Australian cruisers are in the mix too, though they are expected to represent only about 25% of passengers on itineraries from Singapore, Tan said.

Cultural experience
To cater to its Asia customer base, Royal Caribbean has been tweaking its onboard offerings.

The line has advised U.S. agents selling cruises from Asia to alert clients that the cruises should be viewed as a cultural experience. U.S. cruises also should expect variations in food selections, language and entertainment. (See: Cruise Lines’ Global Focus Creates Sales Opportunities for Agents)

Announcing its new cruises from Singapore, Princess Cruises said its onboard product on Sapphire Princess would be adjusted to suit local needs. The adjustments include the addition of multilingual crew, expanded cuisine and changes to enrichment programs, shopping selection and spa treatments to accommodate local preferences.

But Tan said the onboard product is the easy part. Merging passengers from various cultures is a challenge.

American passengers may expect more of a Miami experience in Asia; Asian passengers, something more Asian.

“What’s good for us is that the Asia market is booming and the long-haul market is booming. The million dollar question is: do we need different ships to cater to each of them,” Tan said.

Itinerary challenges
While infrastructure investment in Singapore is beginning to bear fruit, one concern is the condition of facilities in neighboring countries.

“We live in a tough neighborhood,” said Guy. “Critical to the picture is where do the ships go.”

Island destinations with container ports built during World War II, or just after, won’t cut it, he said. “Cruise passengers don’t want to arrive at oil-soaked piers.”

Ports need work
Guy estimates 20 ports in the region need to be redone –including in popular destinations such as Bali.

“You don’t want to get in a position where Royal Caribbean’s larger ships come here and there’s nowhere to put them,” he said.

The good news is Singapore is looking at possibly assisting its neighbors, and cruise lines are also looking at investing in ports.

“The market potential is undisputed. The port infrastructure is a question,” said Tan. “The potential for port development is brewing, maybe even with the cruise lines helping with development.”

Next time: For cruise lines, the Asian marketplace has its own sales and distribution challenges.