SINGAPORE -- It's become Arnie Weissmann's and my annual go-to place for dinner in this city, a coffee shop in the Katong neighborhood that serves one of the best black pepper crabs in town.
In addition to delicious drunken shrimp, coffee spareribs and clams with chilies and spring onions, it serves good local beer, which Arnie and I felt we deserved, having just completed moderating panels at the second CruiseWorld Asia conference here.
Arnie is, as far as I am concerned, the maestro when it comes to cruises. We in Asia haven't quite found our sea legs yet because cruising in the region isn't as mature or extensive as it is elsewhere, but at this second annual conference, organized by Travel Weekly Asia, it was clear that cruising is poised to explode in the region.
According to CLIA, Asians are discovering cruising in a big way. For the first time, the number of cruisers in Asia passed 4 million, a growth of 20.6% since 2016.
Capacity is arriving in a big way, too. According to CLIA, the number of cruise ships in Asia grew from 43 in 2013 to 78 in 2018. The number of sailings grew from 861 to 2,041, and passenger capacity ballooned from 1.5 million to 4.3 million.
The biggest cruise company in Asia, Genting Cruise Lines, has been operating for 25 years. Its daily capacity out of Singapore is 16,000, and by 2020-2021, it expects to grow daily capacity to 18,000, said Michael Goh, senior vice president of sales.
Royal Caribbean Cruises Ltd. is injecting more capacity into the region, as well. Angie Stephen, managing director for the Asia-Pacific region, called Asia the last frontier in cruising, with Europe, the U.S. and the Caribbean pretty much saturated. She urged the audience of 400 travel agents to become "dream makers, not order takers" and "convert land tours to cruise tours."
The interesting thing about cruising in Asia is that customers are much younger -- four in 10 are under 40 -- and cruises are shorter, typically four to six nights. Penetration is still very low. In Indonesia, only 1% of the population has cruised, according to Pauline Suharno, secretary general of the national board for Astindo, the Indonesian travel agents association.
With younger cruisers, shorter duration trips and a vast pool of first-timers from emerging markets, customers might be more inclined to do their searching and booking on digital channels, I suspect.
With the audience comprising traditional travel agents, cruise lines were understandably coy about sharing their digital strategies, but clearly, they have to be where their customers are, at least in the inspiration stage, and then drive them to omnibooking channels.
"There's no ignoring the social digital channel," Stephen said.
Arnie said that in North America and Europe, direct sales and sales through OTAs pushed down travel agent market share to an average of 70%. With Asia more digitally fluent than Western societies, he said, a shift toward digital channels is inevitable.
However, he later told me, "While I do think digital tools will move the cruise industry forward, I also think it will be tough for the lines to crack the industry average of about 30% direct in any market (about where they are in the U.S.) because of the complexity of the product and the cost for a family of four.
"Even a 'cheap' cruise -- say, $800 per person for six days -- is over $3,000, and people get overwhelmed looking at 40 cabin categories on one ship," he said. "The people booking direct are doing it because it's easy for them to find their cabin. Their prime motivator is 'cheap,' and they'll book the smallest inside cabin they can find and stay in public spaces as much as they can. Cruise lines might love to sell 100% direct, but it's still agents who bring in the high-margin bookings."
I am curious, though, about how the market will evolve in Asia. Will it follow similar patterns as the U.S. or will it, like it did in the online travel world, blaze its own path in terms of mobile adoption and consumer behaviors?
RCCL's Stephen urged the audience to focus on creating first-time cruisers so as to grow the market.
"Repeats are about switching brands," she said. "We collectively have to grow the market and go after the first-timers."
That means inspiring people to cruise, rather than to take land tours. Cruise companies are good at creating videos to inspire travel agents to sell, but it's a different ballgame when it comes to consumers.
Meghan Joseph, client partner for travel at Facebook, pointed to the rise of mobile videos, which will form 70% of internet traffic by 2021, according to Cisco Systems.
"The recommended duration is 15 seconds, but you have to catch their attention in three seconds," Joseph said.
So, clearly, cruising has to compete for consumers' time and attention span. The positive about cruise is that ships are destinations unto themselves. There's nothing you can do on land that you can't do on cruises, and cruise companies are into creating experiences: go-kart races, underwater submersible trips, theme cruises with celebrity chefs and celebrities of all kinds.
Genting's acquisition of the Singapore entertainment brand Zouk means wild parties on the open sea.
You get 20% to 30% more vacation time, the cruise lines say. Check-in is simpler, especially the fly-cruise services offered in Singapore, where the cruise terminal and the airport work hand-in-hand to remove baggage worries, and you don't have to unpack and repack on the journey.
One bone of contention raised by travel agents at panel discussions was charging for WiFi onboard ships, and it reminded me of similar arguments made about hotels a few years ago. For big ocean cruise ships, WiFi is expensive, and it provides good ancillary revenue. But the argument is that if more people were allowed to share their experiences in real time, you'd be able to inspire more first-timers.
"I promise you that whatever you give away in WiFi you will more than get back in new customers," Joseph said.
Even onboard entertainment is changing. Colin Kerr, senior vice president for entertainment at Genting, said the shift is from passive to engaged.
"In the past, audiences watched," he said. "Today, they want to participate."
When Dream Cruises hosted the first "China's Got Talent" competition on its inaugural ship, the Genting Dream, it encouraged audience members to download the app so they could participate as commentators in real time.
"We try and gather as much data as we can on customers beforehand so we can look after their personal needs and tastes onboard," Kerr said.
For traditional travel agents, cruising is the last bastion. With rail and buses beginning to be disrupted digitally, the sector delivers healthy commissions (15% to 20%) and higher ticket prices.
Dynasty Travel in Singapore is going one better, offering chartered and theme cruises and creating a new market of cruisers in Singapore, said Alicia Seah, director of public relations and communications.
Steven Ler, president of the National Association of Travel Agents Singapore, said agents and cruise lines have to work together to create packages that give people more reasons to cruise. The slow pace of cruising and family bonding time is an attractive incentive for Singaporeans, who are well-traveled and now want to explore a different way of vacationing.
RCCL's Stephen, who recently arrived in Singapore to take on her Asia-Pacific role, urged travel agents not to sell "cheap."
"It is the ugliest word," she said. That assertion, however, fell like a drop in the open ocean. When I asked the audience what would inspire them to sell more cruises, they shouted, "Commissions and price."
I asked Arnie what the answer would have been had he asked that question in the U.S. He replied, "Among the differences between the U.S. and Asia agents at this point is that in Asia, you can still make it as an order taker. In the U.S., all the order takers are gone, and those who are successful are the dream makers. You might have gotten a "more commission" response from parts of a U.S. audience, but I don't think you would have gotten "cheaper prices."
It's clear that the way the tide is turning in consumer behavior in Asia, agents who insist on selling on price and commissions, and do not think creatively and adapt, will drown eventually.