Cruise and yacht tourism ready to set sail

Hong Kong has a Cruise Terminal at Kai Tak designed by Norman Foster that testifies to the challenges facing the development of a cruise and yacht industry in the GBA. But the upside potential is there, says Kara Yeung. It just needs better coordination among tour operators, retail partners, and the governments of the GBA cities. This fits into Hong Kong’s capabilities.

Caption: Kara Yeung, executive director of Hong Kong Cruise & Yacht Association

It should go without saying that the development of the Greater Bay Area is entirely dependent on its geography. The megalopolis that is being built among its 9 cities and two SARs is a complex network of local economies, all of which owe their existence to the mighty Pearl River Delta. The GBA’s masterplan, released in February, recognizes this. The Delta, which sits at the heart of the Bay, is the foundation of a “maritime economy” that few other areas in the country, let alone the Asia-Pacific, can match. 

A maritime economy is easy to identify, and easy to encourage in its development. Anything that moves on, or under, can be called part of it. The masterplan’s focus is, naturally, on shipping and logistics as key industries in this regard. Among its many ambitious development goals, one is to develop international cruise terminals in Hong Kong, Guangzhou and Shenzhen and promote cruise and yacht tourism in the Greater Bay Area. 

Industry participants see a bright future ahead. Cruise and yacht tourism is already getting significant resources invested into it, which is a natural response to the growth of higher-end consumption trends in China, according to Kara Yeung, executive director of the Hong Kong Cruise & Yacht Industry Association. But there is much ground – or rather, water – still to cover. She believes Hong Kong has a major role to play in its capacity as a “super connector” in the implementation of China’s maritime strategy. 

“The development of the cruise & yacht industry is not only about the development of infrastructure, technology and engineering,” Yeung says. “It’s also about hospitality and services, which Hong Kong is known for. In this sense, Hong Kong can be an integrated platform to channel management, finance, insurance, arbitration, talent and training.”

Yeung, who hails from a local shipping family, has been involved in the cruise and yacht industry since 2006. She acknowledges that ocean-going for leisure has not traditionally been a part of most Chinese people’s lifestyle, but Hong Kong is different. “The city’s history is entwined with shipping and, thanks to the British boating tradition, cruising and yachting has always been regarded as a lifestyle endeavor here,” she says. “And because Hong Kong is both western and Chinese, it is perfectly placed to act as an industry ‘super connector’.”

Yeung is excited by what she is working on. In June, the association, a non-profit organization that lobbies the government and fosters industry cooperation, signed up insurer Voyager to provide risk management and insurance consultation services in the opening and operation of the association’s upcoming Superyacht Management Services Center. The center, a partnership project with Shenzhen-based China Merchants’ wholly owned shipyard subsidiary, China Merchants Industry Holdings, will provide supporting services for superyachts of over 45-meters, including repair and maintenance, audit and survey, bunkering services, crew administration and logistics support. 

“Currently the majority of the maritime business in Hong Kong is taken up by commercial and cargo ships, with the repair and maintenance systems being mainly designed for these kind of ships. However, yacht management and maintenance is another service segment which the current system cannot cater to,” Yeung says.  

She sees the potential. The GBA’s plan is part of a national plan to develop the maritime economy, which is expected to be worth RMB10 trillion by next year. By the end of the GBA masterplan in 2035, it is expected to account for 15% of national GDP. “Fostering world-class maritime industrial clusters in the Greater Bay Area will be of special significance to Hong Kong,” Yeung says. 

Reality check

Evidence of the Hong Kong government’s commitment to the industry is evident by the place where we are meeting. The association’s office is tucked away in a corner of the rooftop garden of the Kai Tak Cruise Terminal, which opened in 2013 at the site of the former Kai Tak Airport runway. The HK$6.6 billion three-storey cruise terminal is meant to help Hong Kong become a regional transport hub for cruise ships. Its two berths can hold two mega cruise ships of up to 220,000 tonnes while its rooftop garden, the city’s largest, allows passengers to take in views of high-rises on both Hong Kong Island and the Kowloon peninsula. 

Almost six years after opening, however, the terminal remains largely deserted at times, drawing criticism for its poor public transport connections and a dismal retail and restaurant scene. “This is an example of how Hong Kong has not integrated infrastructure developments with the supporting services to create a meaningful supply chain,” Yeung says. 

“When a 5,000-passenger cruise makes the call at the port, it needs support from captain and engineers to crew and hospitality, from maintenance and repair to logistics and immigration. In other words, we need not only an architecturally striking terminal, but also industrial clusters here, as service operators can potentially create 20,000 to 30,000 job opportunities.” 

The Norman Foster-designed terminal, which resembles an open-mouthed whale shark, currently serves only as a port of call, meaning ships come in at 8 in the morning and set sail again at 8pm. “The economic benefits they bring are minimal,” Yeung explains. In the Greater Bay Area, both Guangzhou and Shenzhen are positioning themselves as a home port – a base for cruises operating round-trip voyages, where passengers typically spend three or four days before or after their trip. 

Hong Kong has a unique advantage if it can plug into the rest of the GBA’s attractions, however, positioning itself as a gateway. “A cruise itinerary to Asia without a stop by Hong Kong does not sell,” Yeung says. “The question is, when the cruise comes, what more we can offer the passengers other than the usual routine of the Peak or the harbour.” 

She suggests the city explore the potential of combining cruising and yachting to offer more onshore tourism options. “A lot of cruise passengers have been to Hong Kong before and they want to see something different. Some want to experience cashless payment in Shenzhen, visit Tencent or the innovation hubs, some want to see the islands, go hiking or diving. In such scenarios, yacht trips will be ideal for taking cruise passengers on a day trip to Macau, Shenzhen or Zhuhai.” 

In Yeung’s opinion, Hong Kong should adopt a maritime economy based on the integration of commercial and cargo ships, cruises and yachts. “Hong Kong as a free trade port is a perfect base to provide additional supplies to the cruises when they dock as well as repair and maintenance services while yachts offer new tourism options to the passengers onboard,” she says. “In Europe, for example, cruise passengers can spend up to US$3,000 per person at a destination; in Hong Kong, it’s only around HK$3,500 per person. There’re lots of potential for improvement on spending, not to mention the supporting service itself can contribute to the local economy.” 

There are challenges to overcome other than better coordination at a governmental level to bring the industry sectors together, Yeung adds. “Cruise and yacht is the combination of maritime economy and tourism, and we need talented people, with both hospitality and maritime training.” 

The association is doing something about it. It recently teamed up with the Maritime Services Training Institute to offer a new diploma course in Cruise Operations to meet the increasing demand for professionals in the cruise industry. The six-month course is designed to equip students with skills in cruise operations which fulfil the training requirements of the Hong Kong Marine Department and the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) to serve on board luxurious cruise ships. 

The course can potentially be extended to the mainland cities with the offering of career prospects for graduates working in different departments and positions on cruise ships. Hong Kong will be again utilizing its strength as a provider of services and training to lead China’s development of a maritime economy. 

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