On the opening panel at the inaugural CruiseWorld Asia last week, a panel of four industry leaders were unanimously bullish about the growth of cruises in Asia.
William Harber, President, China & Asia Pacific, Hurtigruten, said that percentages of growth are rapidly increasing, predicting at least 40% growth in the region next year, while China alone could see over 100% growth.
Michael Goh (Senior Vice President Sales, Genting Cruise Lines) and Michael Ungerer (Chief Operations Officer, Carnival Asia), echoed the same optimism, with Ungerer remarking, “any number I give you will be wrong because our forecasts have always been under [the annual growth rate].”
Sean Treacy, Managing Director APAC, Royal Caribbean Cruises agreed that there are huge opportunities in the realms of consumer demand – in fact, it has hardly chipped the tip of the iceberg.
The challenge, however, is a wall of infrastructure issues that will hinder the industry’s ability to meet the rapidly rising tide of demand – particularly with regard to port facilities.
For example, Treacy said that very few ports are able to accommodate a Quantum or Oasis class ship, restraining Royal Caribbean’s ability to offer the full breadth of its cruise experiences.
“Governments are recognising this so we’re encouraged but the infrastructure isn’t there and it will slow down growth”.
“In the past, Asia was the destination for old tonnage but… now you’re seeing newer ships come into Asia so I think the industry sees the potential of the market but in South-east Asia, we’re going to run out of space to bring ships unless more ports are built soon,” said Treacy.
Taking that into account, it was also acknowledged that given the cruising market is very young in Asia, cruise companies will need to make an active effort to attract new customers. It forces them to recognise and develop new distribution channels beyond traditional travel agents and direct bookings – particularly in mobile.
In Treacy’s view, many cruise companies don’t have the capacity to tell that story on their own. Bob Guy (Managing Director of Singapore & Malaysia, Destination Asia) also stressed in a later panel that the cruise industry is “still an alien product to many”. Travel agents are therefore still a critical driving force in giving customers the “substance of what a cruise is.”
It comes as no surprise then that a very small percentage of bookings are direct. Goh said that even if the company observes a higher number of direct online enquiries, bookings are still done via a traditional travel agent. In his view, cruise liners “can’t change consumer behaviours” in that respect.
However, they still have a responsibility to develop their own platforms to offer consumers their preferred methods. Ungerer concurred saying, “we have to make sure that we have all the platforms and technology to facilitate [booking]… but to force consumers to interact with products in a certain way is wrong.”
When it comes to regional competition, general consensus on the panel seemed to suggest that it didn’t rest between different cruise companies but with other travel experiences on offer (like land experiences etc.). It echoed the crucial need for companies to educate people about the value proposition of cruises if the potential for growth in Asia is to be fulfilled.
Thus, cruising is still very much in its infancy in Asia both from an infrastructure and consumer knowledge standpoint. But as Ungerer concluded, “it’s a great place for stakeholders to build an ecosystem to make it successful… I believe that this region has the potential to become another Caribbean.”