Norwegian sees smooth sail ahead as competition heats up

Chan: cruising not a zero-sum game in Asia

Norwegian Cruise Line (NCL) Holdings says it is seeing double-digit growths from the Asian market for all its three brands and expects performance to remain buoyant despite stronger competition in the cruise sector.

The global cruise company returned to Asia nearly a year ago, after an absence of some 15 years, and now has regional offices in Hong Kong, Singapore, Tokyo and Mumbai.

Chan: not a zero sum game in Asia

Felix Chan, NCL Holdings’ vice president of sales – Asia (excluding China and Australia), said overall the three brands were doing well, although one brand might do better than others in some countries, while in other markets all three might be on equal footing in their growth.

The company operates NCL, which it pitches as “contemporary”; Oceania Cruises, “upper premium” and Regent Seven Seas Cruises, “ultra-luxury”. The nett per diem is around US$150, US$300 and US$600 respectively.

Chan, interviewed in Singapore, was not worried about intensifying competition for Asian cruise passengers, pointing out that the overall industry was growing.

“It’s not a situation where I take more share and the others get less, i.e. it’s not a zero sum game. If you look at the Asian travel industry as a whole, outbound is expanding, cruise vacation is a part of outbound travel, and its penetration is still small,” he said.

What’s more, the cruise sector has many segments it can attract, including MICE, multi-generational groups and couples, he added.

“What we have to do is to get more people to recognise the value of cruising as a vacation alternative, then the penetration will grow even more,” said Chan.

According to Chan, the value of a cruise vacation is particularly evident in places where hotel prices and transportation are expensive. Said Chan: “For example, we had received a lot of enquiries for Cuba, because it’s difficult to find very good hotels while transportation is expensive. And even when you pay high prices, you don’t get good service. But if you go on a cruise, you can go to many destinations apart from Havana, and at a lower cost. Same with places such as Hawaii and northern Europe, where land costs are expensive.

“Asians are very destination-driven, but also value-driven. If a cruise can offer better value for the budget they have, they will choose to cruise. That’s why places such as the Baltics are popular. Imagine on a land vacation, they have to book flights going to the different places.”

Travel agents are crucial in educating the value proposition to the different segments. “That’s why we have set up offices (throughout Asia); we want to reach out to agency partners,” he said.

The biggest Asian markets for NCL Holdings excluding China and Australia are Japan and India, but “Hong Kong, Taiwan and South-east Asia are growing very fast”, said Chan.

Luxury cruising is also promising. Chan said he had already seen “a number of Asian couples” booking the Regent Suite, which costs US$10,000 per day per person.

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