Skift Take

Countries like Singapore and Malaysia will soon become the top international destinations for Chinese cruisers.

For all the talk about the growing importance of China in the cruise industry, Southeast Asia is a quiet powerhouse that looks to grow as an international cruising destination.

Cruise ship capacity is set to grow intensely in Asia as major companies shift capacity to take advantage of demand for cruising from the Chinese middle-class.

Carnival Corp. will launch a Chinese-only brand in the next two years and bring over a half-dozen ships under other brands. Norwegian Cruise Line has also committed to bringing a new-build vessel to Shanghai year-round.

A look at the economic impact of cruising in Southeast Asia shows that Singapore is the lead country, but Malaysia and even Vietnam are growing rapidly. A report put together by Business Research & Economic Advisors shows that Malaysia hosted the most port calls in 2014, while Singapore generated the greatest number of turnaround calls.

“Cruise ports in Malaysia and Singapore generated over one million passenger and crew visit days [in 2014],” reads the report. “Singapore was the principal turnaround port generating 1.03 million turnaround passenger visit days, accounting for 68 percent of total turnaround passenger visit days in [Southeast Asia].”

The bulk of cruise spending in Southeast Asia comes from passengers, and not cruise lines.

“Cruise passengers spent a total of $1.47 billion, 89 percent of total direct expenditures, at Southeast Asia cruise ports,” reads the report.

Low operating expenditures from cruise lines show that the lines have yet to increase their investment in the region like they have recently in China and Australia.

“Cruise lines spent $166 million in operating and administrative expenses (excluding wages and salaries of resident cruise line employees), 10 percent of direct cruise tourism expenditures in Southeast Asia,” says the report.

It may be instructive, however, to compare these Southeast Asian ports to those in North America in terms of investment.

Cruise lines spent about $15.63 billion combined supporting their operations in the U.S. in 2014, while they spent just $1.66 billion in Southeast Asia.

But the number of Asian cruise passengers grew at a 36 percent annual growth rate from 2012 to 2014, so expect increased investment from cruise lines in Southeast Asia.


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Tags: china, singapore

Photo credit: The Queen Elizabeth docked in Penang, Malaysia. salehi hassan / Flickr

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