Royal Caribbean shows faith in Kai Tak Cruise Terminal with new sailings
Royal Caribbean to run four round-trip cruises from new HK$8.2b terminal this year - but facility remains empty more often than not
One year on from its "soft opening", one of the companies that runs the Kai Tak Cruise Terminal is showing its faith in the HK$8.2 billion development by doubling the number of cruises it operates from the facility.
The space-age terminal on the former airport site was hailed as a huge boost to tourism but has been little used, prompting concerns it will become a white elephant. Many operators continue to use the Ocean Terminal in Tsim Sha Tsui rather then deposit passengers at the remote Kowloon Bay site.
But Royal Caribbean International is showing its confidence by increasing the number of cruises that depart from and end at Kai Tak from two last year to four this year.
Its 3,840-passenger behemoth Mariner of the Seas became the first ship to offer round-trip cruises from Kai Tak last year, taking passengers to Taipei and Kaohsiung in Taiwan.
This year, Mariner's sister ship, Voyager of the Seas, will operate four, five and seven-night round-trip cruises from the city. As well as Taiwan, some of the cruises will reach Japan's southern island of Okinawa, Xiamen in mainland China and Jeju, South Korea.
The cruises are scheduled for September and October, covering the National Day "golden week" holiday in October, said Dr Liu Zinan, managing director of the company's China operations.
"We received almost 7,000 passengers in last year's homeport sailings. We expect 12,000 in the four sailings this year," Liu said.
Royal Caribbean's parent company, Royal Caribbean Cruises, joined Shun Tak Holdings and Worldwide Flight Services to set up Worldwide Cruise Terminals to manage Kai Tak.
On top of the extra Hong Kong sailings, the subsidiary will increase its regional presence by deploying four vessels to Asia next year, up from two this year.
While itineraries for next year have not been set, Liu said Voyager would definitely be back in Hong Kong early in the new year.
And Liu says mainland tourists are powering the growth of the cruise industry.
Royal Caribbean received half a million passengers in Shanghai last year, and is expecting to take 800,000 people this year. In Hong Kong, 86 per cent of passengers last year were from the mainland, with 12 per cent from Hong Kong.
The government funded Kai Tak in an attempt to establish the city as a hub for cruises, and it was built to accommodate the world's biggest vessels.
However, the terminal is quiet most days. Last year there were just nine dockings, with ships berthed for a total of 15 days. This year there will be 27 ship calls and 48 berthing days. Some 44 berthing days have been booked so far for next year.
Liu sees the potential for Kai Tak to grow rapidly.
"It will take Hong Kong three years to be on a par with Shanghai," he predicted.
He wants locals to make up 30 per cent of passengers and international guests 10 per cent.
BUSINESSES ON A LEARNING CURVE AS TOURISTS SAIL BY
The Kai Tak Cruise Terminal is yielding only meagre economic benefits a year after opening. But business leaders remain optimistic that the HK$8.2 billion investment will pay off, with the terminal helping drive the transformation of East Kowloon into a second central business district in years to come.
Just 118,401 passengers arrived at the terminal last year out of a total of 54.2 million visits to the city.
The small passenger flow meant it was a year of "discovery" rather than tangible benefits for local businesses, said Maureen Fung Sau-yim, general manager of Sun Hung Kai Properties' leasing department.
For example, SHKP's APM mall in Kwun Tong put on shuttle buses from the terminal and welcomed 5,000 passengers. While they were well-dressed and curious about local culture, the cruise passengers tended to spend about HK$2,000 to HK$3,000 per head -10 or 20 per cent less than the typical mainland visitor to the mall.
"Many don't have [Hong Kong] money on them," Fung said. "They like to buy souvenirs and clothes, but have more demand for catering."
Now the mall offers a currency exchange and souvenir vending machine.
Back at the terminal, shops are being fitted out on the second floor and Federal Restaurant Group said its Federal Cruise Banquet Centre would be ready to open next month. There will be 80 tables capable of seating a total of 1,000 diners. "We will start accepting bookings this month," a spokeswoman said.
Travel Industry Council chairman Michael Wu Siu-ieng believes it will take three or four years for more cruise operators to start using Kai Tak.
He believes the growth of the cruise industry in Asia will depend on the economic outlook in Europe and the United States; only if economies there remain weak will operators deploy ships to a new market.
Wu and Fung agree the terminal will play an essential role in the government's ambitions for Kowloon East. Six harbourside sites at Kai Tak will be released to the market from the end of next year for hotel development.