Sunday, May 22, 2022

Making waves in Asia's cruise market


The Asian Cruise Association (ACA) estimates the market will triple in size by the end of the decade and countries around Asia are changing their rules to capture a greater share of the traffic.

Cruises are expected to cater to around 3.8 million passengers, with 1.6 million coming from China alone and on-board casinos are a key part of the draw.

The predicted growth has seen international cruise operators such as Carnival Corporation and Royal Caribbean invest millions of dollars in new mega-vessels in order to cash in on the demand, featuring Las Vegas-style casinos.

The boom is being driven by a burgeoning middle class who see cruising as luxurious and exclusive. But, unlike other international cruise markets such as Europe and the USA, passengers are not predominantly retired or elderly. China’s rapid economic revolution has put a generation of 25-45 year-olds in the position of being able to afford cruise travel for the first time. In order to capitalize on this new wave of spending, the likes of South Korea, Vietnam and Western Australia have recently relaxed visa requirements to allow more cruise ships to enter their respective ports.

Last year, South Korea passed legislation to allow South Korean ships to offer casino cruises to foreign tourists, while Vietnam earlier this year said cruise ships would no longer need to close their casinos while docked in its ports.

On the face of it, the Asian cruise industry looks firmly on course to hit the ACA’s predictions by 2020, with gambling operators and onboard casinos set to benefit. But challenges still remain, particularly surrounding the logistical infrastructure at various ports and certain legal restrictions on importing gaming equipment. In reality, then, has the sector recorded sufficient growth for cruise and gambling operators to realize a material return on their investment? And, more importantly, is the industry’s current growth trajectory sustainable for the next three to five years?

Drop anchor in China

Mark Salvador, director of global business development at Carnival Corporation, says Asia is one of the fastest growing regions in the cruise industry and that is expected to be the case over the next decade and beyond. “Momentum is growing and the opportunity for future growth is strong as awareness for cruising as a vacation option grows across Asia. The industry is fairly new to Asia, so more and more travellers are discovering the convenience, quality and value of a cruise vacation. Some challenges exist, but the ongoing opportunity for cruise industry growth in Asia is significant,” he adds.

The region likely to offer the most opportunity in the near term is, of course, China, with many expecting it to become the largest cruise market in the world. Out of Shanghai, operators such as Carnival are able to visit Japan and South Korea, both of which are showing an increasing demand for cruising. Taiwan and Singapore also have potential, with the latter posting a 14 percent increase in cruise arrivals in 2015, far outstripping normal arrivals which increased less than one percent last year. “We will likely see most of our growth from China and Northern Asia in the next decade,” says Salvador. “But we see Southeast Asia as a whole as having enormous potential.”

Relaxation of visa requirements for tourists from mainland China are certainly playing a huge part. Chinese citizens have long faced hurdles to accessing foreign travel, with their passports among those facing the most discrimination, particularly when applying for visas to western countries. But in recent months the likes of the USA and Australia, plus Japan and South Korea, have eased visa restrictions on passengers coming from China as they look to capitalize on the growing number of citizens taking overseas holidays, including those who are attracted to cruising.

Roll the dice

To fully capitalize on that potential, gambling operators need to offer cruise passengers a first-class experience when playing in their casinos, with a particular focus on customer service. It must be remembered that onboard casino visitors are not necessarily hard-core gamblers, rather holidaymakers looking for a new and exciting entertainment option. While that in itself brings challenges – players are not familiar with the different types of games and how they are played – it also means operators have a clear player demographic for which to tailor their product to.

Peter Hoetzinger, co-CEO and president of Century Casinos, which operates 16 shipboard casinos, says it’s all about catering to the mass-market. “Whilst land-based casinos are struggling to find the right mix between VIP, junkets and the mass market, shipboard casinos have a very clear and dedicated focus with their product, customer service approach, and consumer experience. What’s more, as the Asian cruise industry continues to grow, casino gaming is becoming ever-more mainstream,” he adds.

In order to draw passengers into the onboard casinos, operators have to ensure a variety of games are on offer. While Baccarat is typically the most popular game, that demand is balanced by introducing new and different games such as slots with themes specific to the region. And while the casino experience is tailored predominantly to the casual player, those seeking a more serious gambling experience are able to play in VIP rooms and at high-roller tables. But regardless of the type of player, operators are having to polish-up their customer service skills in order to meet the high standards expected by cruise passengers.

Service, service, service

“Mass market players want personal attention and good service, that’s what makes the real difference,” says Hoetzinger. “Having the right product and a good player loyalty scheme are obviously important, but the rest is service, service, service.” Salvador agrees: “On the whole, our guests are drawn to our ships for our outstanding travel and leisure options. As a casino organization, we focus on making sure that no matter what [Carnival Corporation] brand our guests choose, should they choose gaming as a form of entertainment we have the games they want delivered with outstanding customer service.”

The proliferation of cruising and gambling is having little impact on the types of casino games players are attracted to. The focus is still very much on table games and in particular Baccarat and Sic Bo, but slots and electronic tables games are rapidly increasing in popularity. For cruise operators, the key to a successful onboard casino is ensuring their games are simple and easy to learn. Carnival, for example, has a variety of table game options that players can learn in a more casual environment, while dealers and casino staff are experienced at explaining the games and answering any questions guests may have.

The cruise and casino operators who can fit all the pieces of the puzzle together are certainly in the Captain’s seat to capitalize on the growing number of ship passengers. Those such as Century and Carnival who invested in the sector early on remain confident in the long-term potential of the market, and are best placed to cash in on its continued growth.

“As the industry continues to grow, many new ships and companies will enter the market over the coming years,” says Salvador. “Many of these are our own brands, and some competitors. Our focus is to provide distinctive brand experiences for our guests, while maintaining consistent and engaging casino products. We consider this to be a major opportunity,” he adds.

 

 

 

 

 

 

 

 

 

 

 

 

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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