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Lines and ports mull sustainable cruise growth in North Asia

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Majestic Princess - one of the 66 ships operating in Asia this year
Cruise growth figures in North Asia may seem spectacular but the industry now needs to focus on keeping growth sustainable, experts said at the Seatrade Cruise Asia Pacific forum.

Some 3.1m Asians cruised last year, a 55% jump over 2015. Of those, 2.1m passengers were from mainland China, a market that almost doubled as it grew by 99% last year and at a four-year compound annual growth rate of 76%.

The number of ships deployed in Asia has grown 53% since 2013 and the number of cruises and voyages within and through Asia has increased at a 25% compound annual growth rate, according to Cruise Lines International Association's recent 'Asia Cruise Trends' report, cited by Joel Katz, MD, CLIA Australasia. Operating days have expanded 137% since 2013 and passenger capacity almost tripled from 1.51m in 2013 to 4.24m in 2017.

Thirty-five cruise brands are active in Asia in 2017, deploying 66 ships. More than 2,086 cruises and voyages are scheduled, up from 1,628 in 2016.

Tony Kaufman, EVP international operations, Princess Cruises, put the region’s source market growth into perspective by pointing out that the numbers stem from a low base. 'We will not be able to continue the previous growth rates over an indefinite period of time,' he cautioned.

With regard to distribution, which will impact growth, Kaufman noted Chinese travel agents are willing to take more risk and be entrepreneurial by selling huge charters. Japanese travel agents, on the other hand, work on a commission basis and the distribution system is more developed.

Kaufman said his company’s experience is that when the Japanese come on board, future cruise sales are high. In this respect, Japan is their No. 1 sales market.

In terms of potential for cruise tourist visits, Japan, China and South Korea are expected to host the most passenger destination days with capacity for more than 4.3m passengers arriving in Japanese destinations, approximately 2.6m arriving in China and 1.8m in South Korea, according to Ted Blamey, principal, CHART Management Consultants.

Cruise destinations such as Okinawa in southern Japan are strategically located closer to Shanghai than Japan’s own capital city of Tokyo at almost twice the distance away.

Takao Kadekaru, director general, Department of Culture, Tourism and Sports, Okinawa Prefectural Government, said Okinawa’s Naha Port Cruise Terminal has received many ships, including the 110,000gt Costa Fortuna. Voyager of the Seas, Legend of the Seas and SuperStar Aquarius were all handled well on a single day.

Okinawa offers five ports. Hirara's port and cruise terminal are being developed by public-private partnerships. On completion the facilities will be able to accommodate ships up to 140,000gt.

Kadekaru is confident cruise growth will be sustainable, especially because China's middle class is growing.

Fukuoka’s Hakata port, Japan’s premier gateway with the most cruise calls, is working to make cruise tourism more sustainable there. Sam Takashima, chief executive, Economy, Tourism and Culture Bureau, Fukuoka Municipal Government, said the buzzword in Fukuoka is 'FIT' (free independent tourists).

Takashima said this independent way of experiencing of Fukuoka’s attractions and cuisine is directly related to customer satisfaction and is the key to Fukuoka’s sustainable success as a destination.

Currently, The 'tsunami' of Chinese cruise visitors to Fukuoka are mostly focused on shopping.