Sailing towards a billion-dollar ocean

Asia's growing middle and upper class have shaken up the travel industry in many ways.

With leisure travelers in the region maturing, they are looking beyond land-based travel to cruise travel, an industry that generated up to $39.4 billion in total output in Europe and some $44 billion in the US last year.

The growing demand for luxury cruise travel is fueled by Asia’s increasing middle class, a sector the Hong Kong Tourism Board estimates will reach 3 billion by 2030.

Its data also shows Hong Kong cruise arrivals recorded back-to-back growth of 8.3% in 2013, followed by a 13% year-on-year increase in the first half of 2014.

But while this kind of alternative travel is gaining popularity, it still has a long way to go.

The current cruise penetration rate in Asia is a tiny 0.05%, compared to North America’s 3.3% and Europe’s 1.6%, according to Cruise Lines International Association.

In Hong Kong, cruise travel has long been recognised as an engine of tourism growth. With a lofty dream to become Asia’s cruise hub, the HK$8 billion Kai Tak Cruise Terminal has put in place last June to pull in more cruise travellers together with the Ocean Terminal at Tsim Sha Tsui.

The big-spending project is now gearing up to welcome more international cruise companies with a shopping complex inside the building soon to be completed.

Given Hong Kong’s geographical advantage and worldwide reputation, the Terminal has recently been selected as the homeport for some of Royal Caribbean’s ocean cruises, such as Voyager and the Celebrity Millennium.

“Cruise travel has been a fast-growing industry in Asia over the past few years,” Joseph Lam, general manger at Celebrity Cruises and representative of Royal Caribbean, said.

“The cruise industry has been expanding in Hong Kong and across Southeast Asia, in tandem with increasing demand for travel, and the alternatives for travel.”

Royal Caribbean first set foot on Asia in 2007 with a Hong Kong office launched last year. Given the huge potential within the market, Royal Caribbean’s Celebrity Cruises is now detached from its mother company as a separated brand in the Greater China.

“We want to put more specific focus on the market and hence it’s a common move.”

So far, the cruise industry is most vivid in Japan, Singapore and Hong Kong, while China, certainly a lucrative market, remains stagnant. To gain entry into the mainland, cruise companies need to first put down a deep root in Hong Kong.

Under the new single brand strategy Celebrity Cruise is introducing its first round trip to South Asia stationed in Hong Kong. The next two years will see two more ocean cruises homeport in Hong Kong, including one of its most iconic ships Celebrity Century.

Luxury cruise vacation, which used to be considered as the option for honey moon and retirement trips in many locals eyes, is now a leisure entertainment for those who know how to enjoy life, who can be at any age, said Lam.

“Our business focus has moved into mass market, going for volume.” In that sense, the company has lowered its ticket price to attract a wider customer base.

“There’re too many land based travel in the market and so people are looking for alternative travel modes. But getting locals to know and to embrace cruise travel cannot be done in one day,” said Lam, adding a great deal of marketing efforts across both traditional and digital media is expecting in Hong Kong in the near future.