In a vast shipbuilding facility on the River Ems in the small German town of Papenburg, the local band strikes up with tubas and trombones to welcome visitors who have travelled 11,000 kilometres to mark the keel-laying of a new superliner. Superstructures of partially-built vessels rise -- incongruously -- above green fields belonging to local dairy farmers.
Shipbuilder Meyer-Luft, under the precise guidance of managing-owner Bernard Meyer, has welcomed some of the world's most influential shipping magnates to its yard. On this occasion the visiting party is headed by one of the international cruise industry's newest but by no means least significant players: Eddy Lee.
He is chief executive of Singapore-based Star Cruises, which operates six passenger cruise ships in Asian waters and is fast acquiring a fleet of new superliners to rival the best in the world.
The ceremony in Papenburg -- Star Cruises executives are accompanied by their wives and children -- marks the beginnings of the company's second 75,000 gross tonne vessel, Superstar Virgo. It will be ready for delivery in 1999. Sister ship Superstar Leo, which Meyer-Luft has already half built, will be delivered next year.
Lee uses the occasion to announce that Star Cruises, owned by Malaysia's Genting International plc, is planning to build two bigger, faster, 85,000 gross tonne vessels for delivery in 2000 and 2001. From next year, the company will be taking delivery of one new superliner every year for four years.
The 2,800-passenger, 25-knot Superstar Virgo will be a fantasy-theme vessel with interiors modelled after leading Asian hotels. The seven-deck high lobby and atrium will be modelled in the style of an Italian courtyard, with three glass-fronted elevators and black-marbled pillars apparently inspired by the Grand Hyatt Hotel, Hong Kong. Each of the 1,000 cabins will be Internet-linked, allowing passengers access to voice, data and digital communications.
'We want to change the popular misconception of cruise holidays as being suitable only for the middle-aged or retirees,' says Lee. Like the other vessels in the Star fleet, the new ships will include public and private gaming facilities. But the company is keen to distance itself from an image that its boats are merely floating casinos -- so much so that the Star Cruises company will be floated off from Genting International, in which casino operator Genting Bhd has a 65% stake.
'Star Cruises is a serious player in the cruise business,' says Star chairman K T Lim. 'The perception that Star Cruises is somehow part of a gaming business is doing more harm than good to our efforts to develop the cruise industry in Asia.'
In September, Star Cruises announced that it intends to pay US$30 million for an 800-berth passenger cruise ship from Royal Caribbean Cruises, and will introduce the vessel -- to be renamed Superstar Sagittarius -- into its cruising schedules next January.
Star Cruises has also invested 100 million Malaysian dollar (about US$34 million) in a cruise passenger hub at Port Klang, Malaysia. From there it will promote fly-cruise holidays to the markets of Europe, Australia and the US using the new Kuala Lumpur International Airport at Sepang, due to open early next year. 'The purpose of building our new megaships is to keep up with the modern era of cruising. More importantly, large ships will offer us economies of scale. We can make cruising more affordable to the general public,' says Lee.
'Because of the infancy of the cruise industry, we have adopted a push-pull strategy: the push factor of the new ships is to generate public interest while the pull factor lies in offering our passengers value-for-money cruise packages.'
Star Cruises has developed the regional cruising market but it is now being challenged by others who believe a traditional Asian reluctance for cruising can be overcome by more aggressive marketing of the product, and the introduction of the new luxury ships, purpose built for Asia.
'The growth of the cruise market in Southeast Asia has been hampered by the lack of regional-based luxury cruise liners that could run on regular fixed schedules throughout the year -- with resort facilities and services catering to the increasingly sophisticated tastes and affluence of travellers in the region,' says Lee. The international cruise industry is dominated by the US. Worldwide, about 6.8 million passengers took a cruise last year, 80% of them Americans cruising around the US coast and the Caribbean. Three cruise lines -- Carnival, Royal Caribbean and P&O -- carry nearly half the world's cruise passengers.
Jack Daniels, general manager of Bali-based Spice Island Cruises, says Asia's culture and cuisine will be key factors in building the cruise market. 'We have some of the best cruise destinations in the world -- and some of the best cruising conditions,' he says.
Spice Island Cruises is one of the region's niche operators, along with Empress Cruise Lines in Malaysia, the Modern Group's Awani Cruise Line in Indonesia and New Century, which offers short cruises to Malacca and Batam from Singapore.
In a recent report by the London-based Travel and Tourism Intelligence, The World Cruise Ship Industry to 2000, the 1995 Asia-Pacific market of around 250,000 is forecast to rise to 600,000 by 2000.
The report acknowledges that the growth of the cruise sector in Asia during the 1980s and early 1990s failed to meet expectations. Notably, Japan has been slow to step aboard. The bulk of the Japanese market of around 10,000 cruise passengers a year opts for short trips. Often passengers are corporate customers on incentive travel trips.
Including the two vessels under construction in Germany, the three-year-old Star Cruises will have nine ships offering 12,000 berths, a market capitalisation of US$2 billion and 4,000 staff, with offices throughout Asia and Australia. It currently has the eighth largest passenger fleet in the world.
'Our immediate sights are set on Asia but in the years after 2000 we may do a world cruise once a year as a flag-flying exercise,' says Lee.
The two megaships Superstar Leo and Superstar Virgo being introduced by Star Cruises will be deployed on year-round, seven-night cruises. Having begun in a modest way with short weekend trips extending into six-day cruises from Singapore to Kuala Lumpur, Langkawi, Penang and Phuket, and from Hong Kong to neighbouring countries, Star Cruises is easing the regional market towards longer cruises, taking in Myanmar and India's Andaman Islands.
But as the Travel and Tourism Intelligence report points out, 'Star Cruises is galvanising its competitors into action as well. Paradoxically, its intention to become the dominant operator in the region's cruise market through its development activities may be challenged by its very success in awakening the market to the attractions of the cruise sector. Big competitors such as Royal Caribbean Cruise Lines have the experience and backing to take a substantial market share as demand grows.'
One potential competitor has been temporarily becalmed. A proposed joint venture between the Miami-based Carnival Corporation and South Korea's manufacturing giant Hyundai has unravelled. 'We each had different ideas on what strategies we wished to pursue,' says Ray Lutz, president and chief executive of Carnival Cruises Asia.
Carnival-Hyundai was hoping to develop cruises out of the Korean port of Inchon to China, a first step for Carnival to launch itself into the region as a major cruise player.
Before the split, Micky Arison, Carnival's chairman and chief executive, questioned the cost of doing cruise business in Asia. 'My concern is that even if we fill the ships, will we be able to get the kind of yields to cover the operating costs? It could potentially make the difference between a tremendous cruise industry, similar to that in the Caribbean, and an insignificant cruise industry.'
Operators worry about costs
Arison complained that the costs associated with getting a person on a ship in Asia are sometimes two or three times higher than they are in North America and the Caribbean.
Star's Lee is reluctant to be specific about the yields. 'Compared to yields being achieved by other cruise companies, I guess we are somewhere in the middle of the table,' he says. He agrees with Arison, however, that costs are too high in some areas. 'There is a tight profit margin,' he says. 'Charges for the use of berthing and [fuelling] facilities should be lowered to encourage industry growth.'
Education of travel agents in the region is a priority for cruise operators, who are aware that many people with the time and the money have yet to be converted to cruising.
A more immediate threat to Star Cruises comes from Metro Holdings Ltd, the Singapore company associated with the acquisitive Singapore businessman Ong Beng Seng, whose interests in the hospitality and entertainment sector span several countries.
Metro has launched Sun Cruises with its first cruise ship, the 30,440-tonne Sun Vista, purchased for a total of US$62.1 million from the five-star US-based Celebrity Cruise Line Company. Sun Cruises will base its operations in Singapore, offering itineraries similar to those of Star Cruises -- focusing on the ports of Penang, Phuket and Kuala Lumpur (Port Klang).
In order to accommodate more international cruise liners, as well as the bigger cruise ships that are being brought to the region, the Port of Singapore Authority is extending existing berths and expanding passenger terminal facilities at Singapore Cruise Centre.
But Star's Lee believes more could be done to give the Lion City a seaport passenger facility to equal its internationally-acclaimed airport at Changi.
He has warned that unless Singapore Cruise Centre -- where passenger numbers approached one million in 1995 -- keeps pace with the new generation of cruise ships, it is likely to become just another port of call, rather than a cruise centre.