On August 31, Voyager of the Seas, a cruise ship operated by Royal Caribbean International and the largest ever to set sail in Asia, docked in northern Taiwan’s Keelung Port for the first time, with more than 1,600 visitors from mainland China on board. The mega ship’s maiden trip to the island represents a strong vote of confidence in the country’s bid for a slice of the growing cruise pie in the Asia-Pacific region.
Cruise tourism first attracted local media attention in early 2009 when Amway China Co. Ltd. arranged nine incentive cruises to Taiwan for 12,000 distributors and their family members. Since then, the business has been growing at an exponential rate, creating over NT$300 million (US$10.2 million) in revenues for local merchants in 2011, according to the Tourism Bureau under the Ministry of Transportation and Communications.
“The Amway events were seen as a major boost to Taiwan’s tourism, as this type of travel arrangement brings in additional business without requiring major investment in airline transportation or hotel rooms,” said Wayne Liu, deputy director-general of the bureau. To encourage more arrivals, the bureau is offering subsidies between US$10 and US$25 for each cruise vacationer, among other incentives, he added.
The central government is fully aware of the sector’s potential, and on Sept. 19 Premier Sean C. Chen gave the green light to an NT$10.9 billion development project aimed at preparing Keelung and Kaohsiung ports for expanded passenger transportation. Under MOTC planning, the three-year program will add a world-class passenger terminal and other supporting facilities to both harbors. By 2015, Kaohsiung will be able to accommodate mega cruise liners weighing up to 225,000 tons.
“Partly due to the perception of cruises as a lavish indulgence, cruise tourism has been more popular in wealthier western countries,” according to Lu Chiang-chuan, assistant professor in the Department of Leisure Management, National Pingtung Institute of Commerce, and a veteran in the business. He is also a consultant to Princess Cruise Lines Ltd.
Citing industry statistics, Liu said the Caribbean is a distinct market leader, accounting for half of the global share in terms of both cruise and passenger numbers, followed by the Mediterranean Sea at 18 percent, Alaska at 15 percent and the continental U.S. at 5 percent.
Although a latecomer, the Asia-Pacific region has been growing at an exponential pace since 2008, with its market share tripling to 9 percent as of 2011, Lu pointed out. “As I rightly predicted in the early 2000s, mainland China is a major driver behind this boom after the 2008 financial tsunami took a toll on Europe and the U.S.”
Given its pivotal location in the region, Taiwan is a direct beneficiary of this favorable development, Lu said. “Just a little over five years ago, an average of 12 cruises called at Keelung annually, but that figure surged to 72 in 2011.” The number of visitor arrivals grew in parallel.
But this would not have been possible without the opening of direct transportation links across the Taiwan Strait and follow-up regulatory easing on visits by mainland Chinese vacationers after President Ma Ying-jeou took office in 2008, according to Lu.
Warming Taipei-Beijing relations created a favorable environment for cross-strait tourism, a positive development that did not escape the attention of international cruise operators, he pointed out. Authorities on both sides further agreed to open the routes to regular service by foreign firms in 2011.
Lu noted that Taiwan is ideally located in the center of a route linking some of the strongest economies in the region. “Starting from Keelung, a cruise can go north to Japan’s Kyushu Island, cross the Sea of Japan to South Korea’s Jeju Island, head northwest to mainland China’s Tianjin and Qingdao, and continue its voyage south to Shanghai, Xiamen and Hong Kong before ending the trip in Kaohsiung.”
Liu estimates the potential client base in the region to top 500 million visitors. “If we can attract just 1 percent of that number, the market will be much bigger than Europe and the U.S.”
A cruise ship often docks in a port in the morning and leaves for its next destination in the evening, allowing passengers to make shore excursions during the time in between. “As a result, most of these vacationers are rather generous spenders,” Lu explained. According to the Tourism Bureau, mainland Chinese cruise tourists spend an average of US$300 during their brief stay in Taiwan, all of which goes directly to local merchants like restaurants and stores instead of tourism operators.
But for the business to really take off, the country’s outdated harbor facilities badly need an overhaul, Lu said. “In my opinion, none of Taiwan’s ports qualifies as a truly international seaport in terms of service quality or accommodation capacity. For starters, there should be a passenger terminal in each port that offers seamless transportation arrangements,” Lu pointed out. “First impressions are very important.”
But the biggest hurdle for cruise tourism is Taiwan’s rigid immigration rules, he said. “Under current regulations, it can take two to three months for mainland Chinese visitors to obtain an entry permit for Taiwan, while most other countries grant landing visas or similar treatment to people traveling on a cruise.”
Too many agencies are involved in the issue, including the Mainland Affairs Council and Ministry of the Interior, Lu said. “While they all know the potential of the business, no one is willing to take the initiative and make the necessary moves,” he said.
Local governments and the private sector also need to step up efforts by designing more packages and services to capture the hearts of vacationers during their stays, Lu added. For years the government has been keen on developing Taiwan into an Asia-Pacific operations center. “If we cannot become a transshipment hub for cargo, we may be able to achieve this goal in terms of cruise tourism.” (THN)
Write to Meg Chang at sfchang@mofa.gov.tw