Don’t give up on the Kai Tak cruise terminal yet

The optimistic outlook for the Asian cruise industry means that with time, it has every chance of reaching its potential

PUBLISHED : Sunday, 07 May, 2017, 11:11pm
UPDATED : Sunday, 07 May, 2017, 11:11pm

A sure-fire way to sell a project to lawmakers for funding is to offer a rosy outlook. Hong Kong authorities did that with the cruise terminal at the old Kai Tak airport runway and almost four years after it opened at a cost of HK$6.6 billion, the numbers do not seem good. An Audit Commission report shows port calls by cruise liners were lower than even the worst projections, spending by passengers when ashore was dramatically below estimates and commercial areas were only half occupied. We have grown used to optimistic forecasts for major infrastructure works, but in this case, we should not be overly worried: strong growth in the cruise industry in Asia may yet save the day.

Worst and best scenarios put the number of ships docking at the two berths last year at between 201 and 278, but the actual figure was 191. A total of 677,031 passengers arrived, 33 per cent fewer than the high-growth projection, although 25 per cent above that for the low. As of March, nearly half the commercial area of 5,601 square metres was vacant. The director of audit had other concerns, including underuse of facilities for non-cruise activities and poor maintenance.

These figures and observations would be alarming had the terminal been in operation for a long time and the cruise industry in the region was mature. The opposite is true, though; the facility opened only in June 2013 and Asia is a promising growth market. Research by the Cruise Lines International Association showed that between 2013 and last year, the number of cruises in Asia grew at an annual compound rate of 22 per cent with passenger capacity increasing by 29 per cent. Mainland travellers are largely fuelling the surge and Hong Kong has been a particular beneficiary, with a 69 per cent compound rise in passenger numbers over the three years.

Such a positive outlook does not mean the terminal operator, tourism officials and others in the government should rest easily. Competition, particularly from the mainland, ensures a need for heavy promotion of Hong Kong as a cruise ship destination. A constant watch has to be kept for new opportunities. Making the facility more vibrant would help; a rooftop garden and nearby park are attractions in themselves for foreign passengers and Hongkongers, but poor transport links and the relative remoteness of the site make drawing visitors and businesses a challenge. Better bus links and the gradual development of the Kai Tak area will help.

Officials have at times in the past been overzealous in pushing projects. But their estimates for the terminal could well be accurate. The optimistic outlook for the Asian cruise industry means that with time, it has every chance of reaching its potential.