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The State of the Industry in the Asia Pacific

Conference speech presented at the Seatrade Asia Pacific Cruise Convention (Singapore, 4-7 December 1996)

By Stein Kruse, Radisson Seven Seas Cruises (29-07-97)

I am very pleased to be here at the 1996 Seatrade Asia Pacific Convention.
Four years ago I also had the opportunity of addressing the Seatrade Asia Pacific Convention and it is indeed a professional pleasure for me to be back here in Singapore and to see how this conference has grown in scope and importance.
It is also personally very rewarding to be here as I had the opportunity to live and work in Singapore from 1989 through 1991. I have followed Singapore's various economic and tourism related development with all her archievements.
Perhaps none is more impressive than the determined and successful approach Singapore has taken to become the leading cruise center in the Asia Pacific region.
Now that Singapore is embarking on her "Tourism 21" project; a grand design vision to turn Singapore into one of the world's leading tourism destinations, this will undoubtedly further enhance the stature of cruising in Singapore and the Asia Pacific region.

Less than 10 years ago, Singapore was a port of call for many cruise ships sailing with predominantly American and European passengers, cruises that rarely, if ever, actually began or terminated in Singapore.
There were a few exceptions.
The "Around the World" cruises which by the mid 1980's had become more segmented, thus allowing passegners to choose shorter portions of a World Cruise yet experience some of the glamour associated with an "Around the World" cruise - did turnarounds in Asia Pacific ports such as Singapore and Hong Kong.
There was the occasional cruise ship that sailed out from Singapore on a seasonal basis for cruises down to Indonesia and Australia, and cruised north to Thailand and China, but there were few ships, and not many passengers.

I personally remember from my days living and working here in Singapore in the late 1980's, meeting with representatives of PSA and the STPB and listening to their ambitions about growing Singapore as a destination for cruise ships, and to create a logical and desiderable AsiaPacific home port for cruise ships and thus increase the number of cruise passengers who visited Singapore, either as a port of call or as the turnaround port.
The vision and steadfastness maintained by the PSA and the STPB over the next few years has created what every expert now agrees is the leading cruise port in the Asia Pacific region.

As we approach the next decade, the beginning of the 21st Century, the third Millenium, the world-wide cruise industry is poised to grow at rates equal to, or even surpassing those of the past 10 years.
Considering that the base number from which the growth rate starts is substantially higher than the base number was 10 years ago, this incremental growth impliesa host of opportunities and economic benefits for the cruise lines, the ports, the ports agents, the tour operators and shore excursion agents, the airlines and the hotel industry.
These opportunities will further create positive effects at the local economic level - for the local merchant, restaurant and taxi-driver.

Certainly the growth in the cruise industry is going to be felt world-wide, and there is every reason to believe that the Asia Pacific region will receive more than its obligatory share of this growth.
While there is clearly two very distinct markets within the growing Asia Pacific cruise industry - the operators who are bringing passengers to this region from other countries - predominantly North America and Europe - and the operators who principally cater to the local Asian markets - both segments should look at the following statistics, and then look to the future with a great deal optimism.

As the new ships under construction or under contract come on-line, the deployment of these ships will become ever more important. The saturation of the Caribbean market has been talked about and predicated for years, and while forecasting the end of the Caribbean as a cruising area is analogous to Mark Twain's famous works that "the rumors of my death are greatly exaggerated", there is little doubt that all cruise lines, Radisson Seven Seas included, costatly look for new destinations and are ever more global in their thinking.
As a case in point, the growth and development in the Alaskan and the European/Mediterranean markets since 1984 clearly show this broadening of the markets.

In comparison, we wiew the growth in the Asia Pacific market in a similar vein, and by assessing the Port of Singapore's own data for Cruise Passenger Statistics we see the phenomenal growth that has taken place in this region.
Even by taking out numbers representing short cruises and cruises to nowhere, this trend is indeed impressive.

The local Asia Pacific Market represents considerable growth opportunities for the future - witness the rapid and successful development of Star Cruises here in this region, Carnival Corporation's newly announced joint venture with Hyunday Marine of South Korea to begin cruise market.
There is also an appearance of a border-less approach and close economic cooperation here in this region on matters relating to travel and tourism which gives a U.S. based industry observer such as me reason for optimism.
Although there is bound to be peaks and valleys over time as the various local markets grow, diversify and mature, I can't but believe that success for the Asia Pacific based cruise lines who principally cater to the local markets is all but assured.

Much in the same vein, there will be continued focus and development on the Asia Pacific region as a destination for their cruise passengers by North American and Europe based operators.
The limitations to growing this market are the same ones we always mention in this type of a forum - limited availability of trans-Pacific air lift and the high cost of air tickets, and the length of time it takes to reach the destinations in the Asia Pacific region - easily 24+ hours from the U.S. east-coast.
But as the demographic changes I alluded to earlier take place, companies such as my own, which at this very time is building a ship in France for year round cruising in the South Pacific, will pay more and more attention to this part of the world.
Furthermore, the consumers we cater to will want to have diversity and choice when they look at their vacation alternatives, and the Asia Pacific region is certain to attract.
In short - the state of the Cruise Industry in the Asia Pacific region is good, and the future looks bright indeed.

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