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Asia's cruise market faces hurdles

CRUISE leaders believe the Asian cruise industry is primed for further growth, but pointed out that there was still a slew of obstacles to overcome, including distribution and operating cost.

  17/11/2011 11:02
 

“Projections made for the Asian cruise industry several years ago were actually somewhat over-enthusiastic. Growth has been in double digits, but that’s because the market is small. There are still a number of barriers to overcome,” Gianni Onorato, president, Costa Crociere told TTG Asia e-Daily.

“The biggest issue to date is definitely distribution…The trade’s knowledge and experience in selling cruises is lacking, and this has a strong impact on how fast the (cruise) market in Asia develops.”

Michael Bayley, executive vice president, Royal Caribbean Cruises (RCC) agreed there was “a lot of work to do” in the area of distribution, as cruising was still seen as a niche vacation option. 

“There’s a lack of knowledge in emerging markets. People believe it’s for old people or that it requires a lot of money,” he said.

Bayley told TTG Asia e-Daily that RCC had invested a disproportionate amount of money in the region, for instance, by setting up five sales and marketing offices in China, Australia and Singapore over the last three to four years.

Operating cost was another issue singled out. Roberto Giorgi, president, V.Ships said Asian currencies were strong, while the region’s newer terminals were charging relatively higher prices.

Bayley added there needed to be a competitive cost structure among ports in the region, explaining that the “multiplier effect of a cruise docking at a port” had to be considered by a destination.

Onorato, too, highlighted that financial performance might not correspond to demand, explaining that Costa Cruises’ experience of operating in the region since 2006 had been what he described as an “investment period”, or “not making money”.

Other factors affecting growth were infrastructure and regulatory constraints, said cruise stakeholders. Source: TTG Asia

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