His role is as large as a ship: making Asia’s first luxury cruise line a dream come true. Thatcher Brown, president of Genting Hong Kong’s Dream Cruises, tells Raini Hamdi about it as the first ship, Genting Dream, gets set to sail this November
Is Guangzhou the right place to base the first ship of the first Asian luxury cruise line?
You could argue the same thing if you were launching a ship a long time ago. There’s always a conversation about who’s going to be the first. ‘You’re launching in Fort Lauderdale, that’s crazy!’, etc.
Guangzhou and the Pearl River Delta are extremely well-developed in terms of infrastructure, and the demographics indicate to us there is a lot of interest in cruising. We feel confident that the area is ready for us. Part of that confidence stems from us having the benefit of a pathfinder ship there in the SuperStar Virgo. Southern China is as much a home turf for us as South-east Asia. This is where people recognise us and understand Genting, where our partners have worked with us over the years with Star Cruises.
And if you look at the cruise distribution in China, so much of it has been focused on the east, in Shanghai and Tianjin. I’d say 70 per cent of the homeporting is out of those two cities. So in fact, there is a natural evolution in the market where people are asking, ‘Where do we go next?’.
But the Guangzhou base may cause people to misconstrue Dream Cruises as being China-centric rather than Asian-centric. What is the ideal market mix for the first ship, Genting Dream?
It will vary based on seasonality. Often, the vacation patterns of our source markets don’t overlap.
The perfect mix is having affluent Asian travellers onboard the ship, who want to have a quick two-night getaway or a five-night extended vacation. In summer and peak holiday periods, that mix is going to look 65-75 per cent Chinese and the rest pan-Asian. So part of our offering is to be able to manage that mix carefully.
You aren’t worried it will become mainly Chinese at any one time, that too much of any nationality has its disadvantages?
I don’t have a worry about that. We are targeting affluent Asian travellers who tend to be more sophisticated, more educated, more knowledgeable about standards – I am more sensitive about being successful in catering to their different luxury needs. Some affluent people want to be discreet, others want to be seen. There is always going to be differences in interests as well. Imagine if you are in Latin America and catering to Brazilians and Argentinians; one parties all night, the other likes going to the spa. So how can we cater to the diverse needs of wealthy multi-Asians?
For us to be able to manage that is critically important. So we need to be able to offer different products to manage a different Asian mix. Our Dream Mansion product (a ship-within-a-ship concept with two floors of exclusive suites, villas and private facilities) on Genting Dream, for instance, allows us to cater to different levels of luxury. And as we get more capacity (a second ship, Genting World, will debut in November 2017), we can probably offer different products that have different appeal (to different Asians).
What’s important is, it’s not us who define the brand but the guests, that as the brand builds its personality, the management listens to its target audience, then modifies and organically evolves the brand to suit the needs of the target audience. We have to be adaptable and respond quickly to guests’ needs. If you look at the excess of information today, your brand will be left behind if you are not in a constant dialogue with the guest and respond quickly to trends.
What are the challenges of being the first Asian luxury cruise line?
The challenge of recruitment is one. I see supply coming into the market grabbing for resources and, for us, the software is the most important aspect. We want to be the best in the industry and in order to do that, we have to create a process and a culture that embrace development, recognition, reward, etc. And that takes time.
Another challenge is infrastructure related. Port development needs to catch up with capacity development, although many destinations are investing a lot and accelerating their build-up plans, which is terrific. We encourage that, and we’re happy to work with the destinations to do that.
Dream Cruises is debuting at at time when there are at least nine new-builds coming into the market.
Yes, a lot of capacity is coming in and another of our challenges is how quickly can we educate consumers – for us in the affluent market – on this wonderful cruise alternative.
So we’ve spoken about the challenges of getting the right people, about port infrastructure development, about the need for us to manage and evolve our brand. One other challenge is how we control our sales distribution, because one of the things I see happening is brands losing control of their identity and integrity through distribution mechanisms like charters, which result in price dumping – and that’s not going to help the market to evolve. Of course getting a charter from a large corporate company to fill a ship is important and we do appreciate large group business, but in general there is this tension between taking the risk and controlling your destiny. We want to keep a healthy, balanced approach.
So we are careful about our partnerships in terms of sales distribution. We want partners who are committed to us for the long term and who respect the price integrity and the positioning of our brand.
What is the difference in price positioning between Dream Cruises and Crystal Cruises which Genting had bought?
I consider Crystal to be uber luxury, a lifestyle brand with international clientele and a higher price point. The revenue model is different – the fare is much higher, the cruise length is longer, the onboard spending is different, there are probably more shore excursion opportunities and pre-/post-cruising is important for these guests.
For us, we’re kind of entering the luxury market from an Asian perspective if you like. The seasonality of the Asian market makes it a rollercoaster in some ways on pricing – there’s a lot of price volatility. So we hope to come into the market, establish ourselves above the contemporary pack and create stability in our pricing.
Which brings me back to your first question on homeporting in Guangzhou. A lot of the capacity you’ve just mentioned are homeporting in Shanghai and Tianjin, whereas we see an opportunity and a pioneering advantage in the Pearl River Delta. We also see a luxury positioning as strategic, because it gives us some key advantages.
How sort of ROI is Genting expecting from this investment and how soon?
Well, going by industry standards, the expected ROI is 10 per cent at least, and within six to eight years. Our goal is to accelerate that for our company.