‘It’s going to be very important to see how things progress next year,’ said Bert Hernandez, Royal Caribbean International's SVP international, who described his dream as having the necessary infrastructure in place to have Icon-class and Oasis-class ships ‘not only in China, but also in Japan and Korea.’
These aspirations were shared today during the ‘State of the Asia Pacific Cruise Industry’ panel moderated by Mary Bond, group portfolio director, Seatrade Cruise, on the first day of Seatrade Cruise Asia Pacific 2023 (October 24-26) at the JW Marriott Hotel Hong Kong. The event is returning after a four-year hiatus.
China and India
‘Asia is really an emerging market if you consider the cruise penetration rates relative to more established markets like the UK, Australia and the US,’ continued Hernandez. ‘I guess the big prize demographically would, obviously, be China and, in some ways, India.
‘China [cruising on Royal Caribbean] will be returning in April and we think that is looking very promising. We've spent a lot of time, resources and effort in developing that market, so it becomes a robust source market.’
He added, ‘But we also have a two-pronged strategy: we've looked at a few areas like Singapore and Hong Kong as inbound markets because of the flight connectivity… we see it as being very profitable for us to establish hubs in these areas, and bring guests in from all over the world. We're going to continue to pursue both of those approaches.’
Fellow panellist Hervé Gastinel, CEO of Ponant, shared similar optimism for cruising in the APAC region, where four of his 13 ships are operating, 'It's certainly an area where we want to grow,’ he said, describing ‘a lot of interest’ from Asian, European and American guests in exploring the region.
‘There's a lot of interest in Japan, a lot of interest in Taiwan, Hong Kong … We see also Southeast Asia as very promising: Thailand, Malaysia, Singapore. And obviously we have a strong base in Australia and New Zealand. So it's a whole region with very hot prospects. And again, we're investing in the region.’
Teething issues still to tackle
Both Gastinel and Hernandez nonetheless described some challenges. ‘The APAC market now represents 20% of our guests and revenues, so it's really becoming very important to us, and we are very happy to see the strong rebound,’ noted the former. ‘This being said, operations have become quite difficult. Sometimes a lack of cooperation, or lack of alignment among different countries, makes our lives pretty difficult.
‘We also see visa issues, especially for select Asian citizens wanting to travel abroad. So I wouldn't say it's back to isolationism, but to some extent, local regulations, and also international tensions, make our international business more complex.’
Hernandez recognised this as part of the restart process, as Royal Caribbean has observed ‘the same type of issues.’ He explained, ‘Maybe it's a fantasy… that we would have something akin to the Schengen visa that we have in Europe. I don't know if that's possible, but the friction that the guest has to encounter in terms of ensuring that they have the proper visa getting on and off the ship, going through immigration, really detracts from the beauty of the destination and the time that they have in the destination. So we really have to see very transparent, stable visa policies and immigration policies that everybody can understand and communicate.’
He asserted that reducing the friction of visa policies is ‘a win-win’ for everybody.
‘Exciting times ahead’
Resorts World Cruises has been sailing from Singapore and Port Klang, Malaysia since 2022, and from Hong Kong since March with the cruise line’s president Micheal Goh describing Asia’s cruise rebound as strong. The line is continuing to delve into consumer behaviour, which Goh said has shifted,
‘Consumers are moving in terms of comfort, they want space, they want luxuries, we also see that the demographic ... has become younger.’ He said there are ‘exciting times ahead’ for Asia and South East Asia, and that the line is ‘actively developing different destinations and homeports.’
Building a strong customer base
Shoichiro Yamashita, head of cruise business unit, Mitsui O.S.K Lines, whose new cruise brand Mitsui Ocean was reported by Seatrade Cruise earlier this month, said the line is growing from its one ship Nippon Maru, adding the former Seabourn Odyssey late next year and planning two newbuilds. He went on to say the priority is to develop a strong customer base in Asia, ‘We need to build up a strong customer base in Japan and internationally [within Asia] because we've been operating with one ship and now we are trying to bring multiple ships.
‘To make this operational we need to introduce a lot of transformation within our organisation, so we are working hard on that. But we believe our products … [will be] accepted not only by our existing customer bases, but also international customers, especially from Hong Kong, Singapore, Taiwan. So, we need to do a lot of work on marketing, internationally.’
