Untapped potential

The Asian market currently represents just 7% of global cruisers, but this figure is set to dramatically increase by the end of the decade, with Asian cruise markets anticipating 3.7 million passengers a year by 2017 and - nearly double that figure - seven million passengers by 2020, which would account for 20% of the global cruise market.

This predicted boom is being driven by improvements in the economic performance of the region, particularly China, and the resulting increase in affluent, middle-class consumers looking for new holiday experiences - cruise operators' target market. By 2022, China's middle class is expected to number 630 million, an increase from 230 million in 2012.

Couple this enormous growth in potential cruise passengers with Asia's natural suitability for cruise development (there are more than 25,000 islands in the ASEAN region, compared with about 7,000 in the Caribbean, which is currently the biggest cruise market in the world) and it's little wonder that international and Asian cruise operators are introducing more and more itineraries in the region, top-of-the-range cruise terminals are being developed and opened everywhere from Shanghai to Singapore, and Asian governments are increasingly keen to learn as much as they can about how to succeed in the cruise sector.

Cruise infrastructure: rapidly improving

The slow growth that Asia's cruise sector had, until recently, experienced has been largely down to the lack of terminals able to accommodate large cruise vessels, but, in the last two years, ports including Singapore, Hong Kong and Shanghai have gone a long way towards putting paid to this problem - and there's more development to come.

In 2012, Singapore opened the Marina Bay Cruise Centre, which can dock ships weighing up to 220,000t and measuring a maximum 360m long. With its deep waters, large turning basin and absence of any height restrictions, the $409-million facility, a joint venture between SATS and Creuers del Port de Barcelona, can accommodate the newest generation of ocean liners, including the Royal Caribbean Oasis-class ships.

In June 2013, Hong Kong followed suit, opening a $1.1-billion cruise terminal also able to handle the largest cruise ships in the world. Royal Caribbean's 1,020ft (310m) Mariner Of The Seas was the first 'mega' cruise liner to dock at the two-berth terminal, which was designed by Foster + Partners.

Shanghai, too, boasts a world-class cruise terminal, Wusongkou International Cruise Terminal in the northern Baoshan district. Opened in 2011, it is now in its second phase of development, and later this year will add two berths to the pair it already has.

These significant developments in port infrastructure have led to more and more cruise operators venturing into the Asian cruise market, as well as increases in the number of ships deployed by companies already cruising in the region. For example, Royal Caribbean and Costa Cruises have two ships in the region this year, compared with only one in previous years.

But it's not just the big developments that are resulting in more cruise activity in Asia. Smaller ports such as Malacca and Kota Kinabalu in Malaysia have also improved their infrastructure in recent years, while, in Indonesia, facilities at the port of Benoa, Bali, are being expanded and upgraded to accommodate more cruise lines. In fact, about 200 cruise ships are set to visit Indonesian ports this year, up from 100 ten years ago.

How to make the most of the Asian cruise boom

So how can cruise operators - Asian and international - capitalise on the region's fast-increasing enthusiasm for cruising?

For Kevin Leong, general manager of the Asian Cruise Association (ACA), who was appointed to this position in an effort by the ACA to propel the regional cruise industry ahead as fast as possible, it's all about getting in on the ground floor.

"Star Cruises' foray into a new home port in relatively unknown Kota Kinabalu is a good example of an opportunity taken," he says. "With the Malaysian Government keen to open up more ports of call, as evidenced by its cruise industry workshop in May in Penang, cruise operators will do well to engage with it for new itineraries as the support is very strong.

"Busan Port in [Republic of] Korea also recently ran a cruise seminar, and the Korean potential for a greater contribution to north Asian itineraries cannot be overestimated. Coupled with the desire by many ports in Japan to welcome more cruise lines, the affluent source markets in both countries are just waiting to be tapped."

Of course, that doesn't mean cruise operators should set sail to every destination that expresses a vague interest in the cruise sector. "We're always in search of new destinations, but we also have to consider safety, infrastructure and guest comfort," confirms Michael Goh, senior vice-president, sales, Star Cruises, the leading cruise line in Asia-Pacific, which has been operating in the region for almost 20 years.

"The government and port authorities as well as the tourism boards are key partners when we talk about new deployment. They need to be very supportive for us to deploy our ship there and add it to our itineraries. When you talk about new deployment, there are financial commitments and operational requirements, so this area is very important."

"Leong agrees that collaboration with all stakeholders involved will be key to the successful development of the cruise sector in Asia - and, on this front, the ACA is already active.

"For example, we conducted a cruise industry workshop in Malaysia where we organised a group of our members to meet with Malaysian industry members," he explains. "The ACA delegation included cruise lines, cruise terminals, shipping agents and shore excursion members, and we did a full day workshop to exchange views on what we needed to do together to develop the Malaysian cruise region. This is part of our association's port-development agenda to open up more ports of call and therefore more itineraries all over Asia."

Elsewhere, Hong Kong and Indonesia have also realised the benefits of teaming up: the governments of the two countries are set to strengthen their collaboration in the cruise tourism sector to bring more cruise liners to both countries through joint destination promotions, and the ACA also has plans to assist in opening up more Indonesian islands to cruise tourism.

"Indonesia represents a huge region of many potential ports of call to very exotic, undeveloped islands," Leong says. "A more open engagement with many cruise lines, especially through an umbrella body like the ACA, could accelerate the process of opening up all those islands."

Challenges ahead: what must operators consider?

Asian consumers are becoming more aware of the benefits of cruising but much more also needs to be done on this front if cruise operators and tourist boards are to really make the most of the region's potential.

"Travel agent knowledge in Asia about the cruise industry is not high," Leong acknowledges. "But, as the ACA embarks on more travel agent training with the CLIA training modules, awareness among Asian holidaymakers will be raised."

The ACA's training programme was first launched in Manila and then continued in Jakarta and Semarang in Indonesia, with seminars also set to be held this year in Mumbai and Delhi. "These are full day programmes involving introductory lectures on cruise tourism, cruise destination presentations, current important cruise topics and cruise line updates," Leong explains.

It's also key for operators to make sure their passengers are aware of the potential pitfalls of cruising in Asia, as, in comparison with the polished, always-on-time excursions they might be used to in North America or Europe, Asia could appear lacking.

"The traffic conditions are really uncontrollable at times," Goh notes, "so it's important for us to advise the passengers on what to expect. We definitely don't want them to arrive and be disappointed."

According to Leong, cruise operators also need to take into account the region's geopolitical issues when putting together new itineraries. "Geopolitical problems will persist but it will not hamper interest in cruise tourism," he believes. "A flexible approach by cruise operators to work around them with new itinerary combinations will be needed to continue tapping the demand from China to Japan and [Republic of] Korea."

Timing it right with the Asian cruise market

The distance from ports to attractions must be considered. "If it's an hour's journey, find out if there's an in-between point," Goh advises. "For example, when our ships call into Laem Chabang, we give our guests the choice of going to Bangkok city centre, which is an hour away, or visiting Pattaya, which you can get to in only 20 minutes."

The boom in Asia's cruise sector is only just beginning, and it will, doubtless, be a long road before the region matches the success of established cruise markets like the Mediterranean and the Caribbean. Indeed, while Hong Kong's recently opened cruise terminal is an important development, it's also useful to note that just 19 ships plan to stop at the new terminal over the 12 months following its opening.

However, the Hong Kong Government remains undeterred, stating just after the terminal's launch that any temporary hurdles will be worth it down the road. And they're probably right. With a fast-growing middle-class customer base, rapidly improving infrastructure, governments keen to learn and increasingly adventurous cruise operators, Asia's cruise industry can only go from strength to strength.