Hong Kong’s Bid To Become The Cruise Hub Of Asia

The last plane arrived at Hong Kong’s Kai Tak airport nearly 15 years ago, and by all accounts, the airport had one of the world’s most spectacular approaches, taking in mountain, sea and skyscraper. The iconic airport, which juts out into the sea, lay abandoned until this Wednesday when it once again welcomed international passengers as the Hong Kong’s new cruise terminal.

The terminal sits on the runway of the old airport and is able to accommodate the largest cruise ships in the world (and the thousands of passengers they bring with them). It was designed by architectural firm Norman Foster -- whose works include the very airport that made Kai Tak obsolete back in 1998 -- and includes a leafy rooftop garden with 360-degree views of the city skyline that will open to the public later this year. The waiting halls in the airy building have the flexibility to be converted into exhibition and meeting space during off-peak season.

“Kai Tak was the site of our legendary airport, and it is now turning a historic page by connecting Hong Kong with the rest of the world through the seven seas,” Hong Kong Commissioner for Tourism Philip Yung told a crowd gathered at the terminal Wednesday. “With the addition of this important tourism facility, Hong Kong is in full gear to receive mega cruise ships, and to offer homeport service to more cruise ships in the future.”

The terminal is part of the city’s $1.1 billion bet on Asia’s growing enthusiasm for cruise travel. And luck appears to be in its favor -- at least in the long-term. While there's no denying China’s emergence as one of the most lucrative markets for travel and tourism, the cruise industry has, thus far, been completely dominated by the North American and European market for trips to the Caribbean and Mediterranean.

The Asian market represents just 7 percent of global cruisers, according to Cruise Market Watch, but that number is on the rise, and places like Singapore and Hong Kong are vying to be the early movers in a burgeoning industry. With the addition of the Kai Tak Cruise Terminal, both hubs now have two terminals from which to lure more ships throughout the year, and both will likely feed off of each other’s success, since one of the biggest deterrents to cruise travel in Asia is a paucity of destination ports.

“Cruising is a regional business,” Kelvin Tan, Asia Pacific regional director for Royal Caribbean Cruises, explained in an email to International Business Times. “More adequate ports and infrastructures are needed in Asia to support the mega ships with up to 3,500 guests. This is extremely crucial in Asia where cruise lines are keen to offer diverse itineraries with new ports of call.

“With the opening of new cruise terminals in Singapore, Shanghai and Hong Kong, we are able to deploy larger ships to the region, such as the 138,000 GRT Voyager of the Seas and Mariner of the Seas,” Tan said.

Royal Caribbean International first entered the Asian market in 2007, and Tan said guest numbers have since increased by an average of 20 to 30 percent year-on-year. Indeed, total Asian cruise passengers could reach 7 million by 2020, according to projections from the Hong Kong Tourism Board, based on China cruise market growth. The tourism board also believes Asia could represent 20 percent of the global cruise market by 2020, though projections from Cruise Market Watch show an overwhelming dominance of European and North American cruise passengers through at least 2017.

“Cruising is growing but is still a relatively new vacation concept in Asia, hence the need for the industry to continue building consumer and trade awareness on the attractions of cruising, like its highly-inclusive packages, affordability and convenience of one-time unpacking vis-à-vis the land-based options generally preferred by Asians,” Tan said. “It can be achieved with more marketing campaigns, active participation in trade events and stimulating the distribution network.”

The Hong Kong Tourism Board has heeded the call, ramping up its cruise promotion in 2013, visiting an annual conference in Miami and introducing a new cruise section on its website that proudly proclaims the city as Asia’s cruise hub. “The magnificent Victoria Harbour, stunning skyline, cosmopolitan East meets West fusion and sophisticated terminal facilities make Hong Kong an exceptional cruise adventure,” it boasts.

However, the voyage ahead is not all smooth sailing. Royal Caribbean invested 20 percent in the consortium that operates the new cruise terminal and sent the first ship into port there on Wednesday for its soft opening, but other companies are holding off from including the terminal in their itineraries until it is fully complete (the second berth will not open until 2014). Once the 15-deck Mariner of the Seas leaves Thursday, the next ship won’t arrive until October. Moreover, just 19 ships plan to stop at the new terminal over the next 12 months.

And then there is the problem of its location. As the New York Times’ Bettina Wassener notes, the new terminal is not in the best part of town:

“For now, most of the old airport, including the area where the terminal building once stood, lies empty, the shiny new cruise terminal awkwardly isolated at the far end of the former runway. The nearest neighborhoods -- Kwun Tong and Kowloon Bay -- are somewhat rundown, and until planned public transportation connections are completed in the coming years, the terminal building’s rooftop gardens will be tough for ordinary visitors to reach.”

Yet, the government is well aware of the problems. “As in the case of other infrastructure projects, it will take some time for the business of the Kai Tak Cruise Terminal to mature,” Gregory So, the Secretary for Commerce and Economic Development, said last week. “The terminal will encounter some limitations in the first few years of operation. But it remains our hope that the cruise business and the leasing of the ancillary commercial area will develop in a steady manner.”

The secretary noted that it takes about 18 months for cruise lines to adjust their itineraries to include new destinations, which gives Hong Kong time to prepare. He also said he believes that the city is at the forefront of the cruise industry’s new frontier, and that any temporary hurdles will be worth it down the road.