Rising affluence will drive demand for luxury cruises in Asia: experts

Rising affluence will drive demand for luxury cruises in Asia: experts
By Rachel Kelly | Posted: 08 April 2011 2259 hrs

SINGAPORE : The Asia Pacific accounts for around 7 percent of the world's cruise market.

And experts say with increasing affluence in the underpenetrated Asian markets, cruise players are keeping a weathered eye on the region and its growth potential.

As appetites pick up for more prestigious goods and services, the luxury cruise market is expected to gain the most.

Sailing the seas in luxury is becoming the holiday of choice for many in Asia.

Over the last three decades, global cruise arrivals have grown as fast as the world's overall tourist arrivals.

In Singapore, for example, cruise passenger throughput has grown steadily, registering a healthy annual growth rate of 10 percent between 2005 and 2010, and the number of ships calling on Singapore has doubled from 56 in 2005 to 100 in 2010.

Passenger throughput in Singapore last year was 1.01 million.

And as demand continues to increase, experts are forecasting the luxury cruise business to enjoy revenue growth of around 10 to15 percent in Asia Pacific this year.

Leon Perera, Group Managing Director, Spire Research and Consulting, said: "I think for the luxury segment you would expect to see much higher growth rates in the very strong double digit, and I think that is because there is a thirst for the novelty.

You see that in the number of upscale boutique resorts that are proliferating across the region not just in the core areas of Thailand and Indonesia - but even in up and coming countries such as Vietnam.

I think the high end cruise industry will benefit from that because it is one more luxury offering to the very affluent group of tourists that are growing in Asia."

Asia now accounts for 20 percent of luxury cruise provider Silversea's business and it expects the region to remain as its fastest growing customer segment.

Kenneth Watson, Chief Operating Officer, Silversea Cruises, said: "Well first of all let me give you a bit of perspective - today the cruise business worldwide is growing between 6 and 7 percent annually.

The cruise business is about a 30 billion dollar business - it represents a very important part of many other businesses that are involved in it - for example - shipyards - vendors that are providing provisions for us throughout the industry.

Where we are growing the most is here in Asia Pacific and that growth is about 25 percent and it doesn't really matter where it is in Asia Pacific but it appears that is going to be consistent for the near term - we just got some statistics from Australia and the growth in Australia was about 27 percent.

Here in Singapore the penetration for the cruise business is relatively low - small numbers - so we are anticipating much larger growth coming out of this area of the world - both as a source market for people as well as a destination."

Experts add that growth will also be underpinned by government support for the sector.

For example, Singapore will be opening up an International Cruise Terminal at the end of this year.

- CNA/ch

- wong chee tat :)