Ten years ago, Adam Goldstein unlocked the Asian cruise market potential for Royal Caribbean Cruises (RCC) and made Singapore the regional homeport for the line. Raini Hamdi catches up with the president and COO of RCC, recalls his views from the first interview over a decade ago and asks, what’s next?
Welcome back to Singapore, Adam.
It’s good to be back…I remember I was speaking at the first or second Seatrade (conference) in Singapore and the question was, ‘how many people will cruise in Asia in year 2000?’. Of course you’d want to say a big number as if you say a small number, you might not get invited to speak again. The market was then may be 200,000 passengers or not even for all of Asia and when we thought it would grow to a million, we assumed it must come mostly from Japan. That’s what I was thinking. Then I realised there was a map on the projection and I looked at it and noticed that China was not marked. Whoever made that map literally could not imagine that China would be a source market for cruises. And now it’s the fastest-growing market and spurring the growth in the region.
Looking back, what’s the one thing you wish the company had done?
Like anything that turns out to be a good thing, you wish you could have done it faster, that’s the nature of life (laughs).
If you ask what we were doing before 2007 when we declared Singapore as our regional headquarters in Asia, we were spending a tremendous amount of time building our presence in Europe, while continuing to build our presence in North America and the Caribbean. In the years prior, we were introducing all of the Voyager, Radiance, Celebrity and Millennium class cruise ships, so we were very busy. The last 10 years were really our time to focus on the opportunity here and also, to be fair, the rise of income level and outbound travel that have propelled this region to the forefront of travel & tourism has really occurred in the last 10-15 years. We’ve been a leader and beneficiary of that and we hope someday Asia will move down a path to be either the largest cruise region in the world or right up there.
Yet in the 10 years, Asia has grown to around 2.2 million cruise passengers, a fraction of the 24 million worldwide. Shouldn’t it be bigger, considering the masses that travel by air?
We always think it should have grown faster, we’re impatient. We know what a great vacation a cruise is and what wonderful value it is, and we always think people should catch onto it faster. But life isn’t that easy and we have a lot of work to do to build up an appropriate level of consumer awareness and knowledgeable and supportive distribution.
If you think abut it, there’s something like 1.2 billion international person trips and 24 million cruise passengers, so that’s a two per cent share of international travel. There are a lot of options based on land around the world and we respect the fact people choose those options all the time. But we want to make sure people understand what the cruise proposition means and that they will choose it often.
I guess even in North America you are still developing the new-to-cruise market.
Yes, right now, even in North America, where there are about 12 million cruise passengers a year. We know there are millions of people in North America who have the wherewithal to cruise, would love it if they did and who almost certainly now have friends and family members telling them what a great thing it is – and still they haven’t cruised!
So obviously in Asia we have a long way ahead of us, but the sheer numbers that reflect the opportunity in this part of the world are so immense that it is well worth our effort to pursue that.
Is it a question of patience, or the industry doing a poor job at selling cruises?
One element is patience. We can’t expect that Asia will be this year everything it can be. Most people still don’t know what a cruise is. Most travel agents still aren’t comfortable to distribute them, recommend them. We’ve made progress and I’m sure we will make a lot of progress in 2017 as a company.
Here in Singapore for example Royal Caribbean (International) has its most extensive programme of cruises in a year, including a brand new ship, Ovation of the Seas. There’s going to be more capacity in Asia, more itinerary varieties, different types of ships, newer ships than ever before, so it’s going to be a year of progress in the region.
Can Asia be the biggest cruise market?
I know it’s exciting to talk about whether Asia can be the largest region of cruising or whether China as a country can be the largest source market. Right now with the US providing 12 million cruise passengers a year, and the rest of the world providing another 12 million a year, it’s clearly going to take a long time before any market displaces the US as the no. 1 cruising market. We don’t really obsess about that. We just know that the opportunity to increase the Asia cruise market by one to five million customers per year is real. Like everywhere else in the world our Asian customers love their cruises. We just need to do a better job of attracting them, of marketing and selling, of working with travel agents, to compete with all the other choices that they have.
But much of Asia does not have the ports to support the big ships you have.
It is absolutely clear that the continued development of cruise infrastructure is one of the most signficant challenges we face as an industry.
And because our industry isn’t so well understood yet, we have to be proactive in our outreach to governments and investors, to say what we believe the opportunity is, why the infrastructure is needed both in the homeports and in the ports of call, to discuss solutions to overcome these challenges. Because unless we have places we can take the customers to, where the right ships are capable of docking or anchoring, and the right tour products and destination experiences, we are not going to grow how we wish to.
Do you invest in port infrastructure and are you planning to in Asia?
Yes, we either are the most active cruise company in cruise-related commercial development, or we’re certainly right up there and we are constantly in a dialogue with governments and investor groups about finding solutions to infrastructure challenges.
Yes we are planning to invest in the region in commercial development without question and when the time is right to announce it, we aren’t shy to do so.
What’s your take on ASEAN specifically?
Singapore as a hub of the ASEAN region has an instrumental role to play in the overall development of the Asia-Pacific cruise sector. With Sydney in the south, Singapore more or less in the centre and China homeports in the north, these are the crucial centres of cruise activities. There will be other homeports and cruises over the course of time but these are the ones propelling the cruise industry today.
Singapore, like Sydney, needs to provide warm weather cruise options that complement the China cruise market. ASEAN too in itself has over 600 million people in it and is a growing region economically.
10 Need to Know’s about Adam Goldstein
Who’s in your family? My wife Cheryl, my son David and my daughter Julie.
What do you do for fun? Competitive running, table tennis, rowing and travelling
Your ideal vacation? Anywhere in the world with our ‘vacation gang’ of my law school friends and our families
How do you book your own leisure trips? My wife is a wizard at travel bookings, having once run the air/sea department at Royal Caribbean
What are you reading right now? The Economist, as always
How do you stay healthy? Constant training with my running coach
Favourite food? Pad Thai
A bad habit you cannot kick? Chocolate croissants
Your pet peeve, something that never fails to annoy you? When a colleague has no point of view on a way forward
Most people don’t know that you…have season tickets to the Philadelphia Eagles (American) football games despite living 900 miles from the stadium