Singapore's Bid to Become Asia's Cruise Hub Sails Ahead

Adeline Chan|News Assistant, CNBC Asia-Pacific

The global slowdown and its possible impact on Singapore's economy may be dampening investor sentiment, but it’s unlikely to dent the city state’s plans to become the cruise hub of Asia. A record one million cruise passengers passed through the island nation last year, and the numbers are poised to grow 30 percent over the next two years.

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"The number of cruise passengers handled by us has increased more than 60 percent in the last five years. And in 2013 Singapore will have approximately 1.3 million cruise passengers," the Singapore Cruise Centre CEO Christina Siaw told CNBC. She added that in 2010 Singapore received calls from 34 cruise lines.

Singapore's plans to attract cruise companies to dock here, got a boost this month when international cruise operator Royal Caribbean Cruises announced it would homeport one of its largest ship - the Voyager of the Seas - in Singapore. The 138,000-ton, 15-deck ship that can carry 5,000 people will be making its first trip to Asia in May 2012.

The captain of the Voyager, Charles Teige, told CNBC, "We want to explore the area here and we believe in Singapore."

The tides have been changing in the global cruise market, with operators turning their attention from the traditional playgrounds of the Caribbean, North America and Europe to Asia. Even though Asia is still a nascent market, cruise operators see a huge potential. The Singapore Cruise Centre estimates the potential market from India and China alone to be 74 million passengers.

Singapore, strategically located at the crossroads of these potential markets, provides a huge draw for operators, given its premium infrastructure and established reputation as a tourist destination for regional travelers.

"Singapore is an iconic and attractive destination and popular with tourists coming from India and Southeast Asia," Michael Bayley, Royal Caribbean Cruises' Executive Vice President, International, said.

Besides attracting overseas cruise passengers, Singapore itself is a good source market. Melvyn Yap, Regional Director Asia at Silversea Cruises, said, "In Singapore specifically, passenger numbers increased by 45 percent in 2010. Regionally we have seen an increase of over 30 percent and we expect this trend to continue."

To cement its position in the Asian cruise market, Singapore plans to complete a new International Cruise Terminal by the end of the year, which once fully operational will allow a new generation of large liners to dock here. Ong Huey Hong, Director of Cruises at the Singapore Tourism Board, told CNBC that the new terminal would be able to accommodate large liners of up to 360 meters long, which can carry more than 5,000 passengers.

In November this year, Singapore will also be hosting the first ever Cruise Shipping Asia show, a Miami-based industry event that is making its debut in Asia. Choosing Singapore as the host country further strengthens its claim as a cruising hub for the fast growing Asian market, industry players said.

In the last couple of years, new operators have been offering more deals out of Singapore to destinations in India, Southeast Asia, Japan and China. Malaysia-based Star Cruises, which has been in the Asian market for the past 14 years used to be the mainstay until five years ago, but now there is much more to choose from.

Deploying ships that have not yet called on Singapore are Washington-based Seabourn, with its ship Seabourn Quest, French cruise line Compagnie du Ponant, Germany-based AIDA Cruises and Italy's Costa Cruises, according to the Singapore Tourism Board.

As competition heats up, these cruise companies are trying to woo passengers by increasing their "wow" factor. Royal Caribbean's Voyager of the Seas, for example, has onboard an ice-skating rink and a rock-climbing wall.

But efforts to turn Singapore into a cruise hub need to be complemented by similar pushes in the region as well. As Melvyn Yap points out, "Cruising is not a one-port operation; Singapore cannot boast of being a standalone island with gleaming port facilities when the surrounding ASEAN ports have yet to catch up."

Regional partnerships like the Asia Cruise Terminal Association that Singapore has co-founded aims to work towards marketing destinations within member countries and strengthening infrastructure.

Such alliances are critical to the growth of the cruise market in Asia. Says Singapore Cruise Centre's Siaw, "It is essential to market Asia collectively as a cruise playground."