Cruise Tourism Pt 1 : A National Development

Cruise Tourism in the Philippines

Cruise Tourism is big business. The latest figures reveal the industry is worth 18 Billion $ per year, and Cruise tourism in Asia continues to grow at an impressive rate.

In 2018, 28 Million passengers are expected to take a Cruise (1. 2018 Cruise Industry Outlook – CLIA), of which 4.26 Million are expected to Cruise within Asia during the year (2. 2018 Asia Cruise Trends – CLIA). Due, in particular, to a sharp increase in passenger volume from mainland China. In addition, between 2013 and 2017, Cruise Capacity has increased across all metrics; Port Visits, Vessels deployed, Vessel Size and Passenger Numbers.

In 2015 it was recognised that the Philippines was lagging behind their ASEAN counterparts when it came to Cruise Tourism. Following the release of the DOT’s National Cruise Tourism Development Strategy 2016-2022 (3) in March 2016, there has been a real push to increase the Philippine’s cruise capacity.

The Department of Tourism (DOT) has prepared the National Cruise Tourism Development Strategy to provide the framework for harnessing the potential of cruise tourism as an emerging tourism product and vital engine for tourism growth (3).

Cruise Asia Port Calls 2013-2015 — National Cruise Tourism Development Strategy and Action Plan, for 2016-2022

The DOT’s National Cruise Tourism Development Strategy aims to tap in to Cruise Tourism, especially the Asian Cruise Tourism Market, and attract people from China, South Korea, Japan, India, Taiwan, Malaysia, Australia, USA and Europe, to the Philippines. Nearly 3.1 Million Asians took a cruise in 2017, with 94% staying within the Asia Region (4. 2017 Asia Cruise Trends – CLIA).

Japan, China and South Korea continue to lead the way in terms of numbers of Port Calls and destinations. And, whilst Asian cruise passenger numbers have quadrupled since 2012, the main passenger growth has come from China, with 2.4 Million mainland Chinese passengers taking cruises in 2017, compared to 1.5 Million sourced from the rest of Asia (4).

Philippine Cruise Tourism in Figures

It has been difficult to source exact figures for the Philippines, as they vary across different reports and publications, however

Cruise Passenger Figures:

65,566 Passengers in 2015, with 64 Port Calls, across 11 Ports
47,098 Passengers in 2016, with 39 Port Calls, across 9 Ports
195,751 Passengers in 2017, with 140 Port Calls
329,000 Passengers are expected during 2018, with 190 Port Calls
2022 Goal: 456,164 Passengers, with 402 Port Calls

Cruise Destinations/Port Calls (There are potentially 15 Destinations/Port Calls but not all are visited each year):

Manila
Puerto Princesa
Busuanga (Coron)
Malcapuya Island
Culion
El Nido
Boracay
Bohol
Bantayan Island
Cebu
Kalanggaman Island
Aparri – Ilocos Norte
Currimao – Ilocos Norte
Hundred Islands
Lingayen Gulf.

* Source: National Cruise Tourism Development Strategy and Action Plan 2016-2022

Understanding and Meeting the Cruise Tourism Market Growth

The DOT’s National Cruise Tourism Development Strategy includes the intention to build additional, and larger ports, to accommodate larger Cruise Liners. As well as adding additional Port Calls/Destinations, Cruise Lines and longer stays.

Cruise Lines International Association (CLIA) have already advised that 2018 will see a greater number of cruises in Asia hosted by 6 Mega (3,500+ passengers) and 19 Large (2,500-3,500 passenger) Cruise Ships (2). Although, with the closure of Boracay in April, the predicted 36 visits to that Port will not be reached.

CLIA’s 2018 Asia Cruise Trends (2) also reports the Asian trend for shorter sailings, which is mostly due to the dominant Chinese market and their preference for shorter vacations of 2-3 nights (26%), 4-6 nights (66%) and 7-13 nights (8%). Something the Philippines intends to tap into, as it also matches their own countrymen’s preferences/holiday entitlements.

Philippine’s Cruise Tourism

With the DOT’s phased Cruise Tourism strategy, the Philippines is placing itself to be the new darling of Asia. Hoping to jump on board, and maximise on a continually rising tourism trend.

Back in 2016 Royal Caribbean Cruises (RCC), the World’s largest Cruise Company, was already looking to add the Philippines to their itinerary. Adam Goldstein, RCC’s President and Chief Operating Officer, visited the Philippines to discuss expansion and Pier Infrastructure with the Government, and potential investment groups (5. Cruise Company Eyes PH Expansion: ABS-CBN).

“The Philippines has this amazing adversity and richness of islands and that’s typically what we look for, I would say in theory there’s almost unlimited destinations. It will just take time to develop routes, and develop traffic, that will allow us to go to different parts of the Philippine profitably, but I foresee that it will happen.”

“In the medium to longer term is cruises from Hong Kong which is a new developing area, the ships can reach Manila and other parts of the Philippines without too much difficulty, they can be incorporated into attractive itineraries”. Adam Goldstein, Royal Caribbean Cruise’s President and Chief Operating Officer

Royal Caribbean Cruises has since entered in to an agreement with the Department Of Tourism for a Cruise Terminal in Caticlan (serving Boracay), and is also looking at another Terminal for Subic. But investment and infrastructure aren’t just coming from International Businesses.

Philippine’s Cruise Tourism Building Program

The Medium-Term Tourism Infrastructure Program shows an expected spend of approximately P6.11 Billion, from 2017 to 2022, specifically to develop and improve cruise ports in the Philippines.

“The National Cruise Tourism Strategy serves as a road map for the country and its players, in achieving our long-term goal of being not only as a destination or port of call, but as a Home Port that generates more jobs. [It also makes the Philippines] a preferred market source, as the economy improves and boosts the Filipinos’ capacity to spend for recreation.” Ma. Corazon Jorda Apo, Tourism Director for Marketing Development (Thailand, Indonesia and Vietnam) (6. Dedicated Cruise Terminal will bring more Tourism Receipts – Business Mirror)

In March 2017 Manila became a turnaround Port for Star Cruises flagship Superstar Virgo as part of the Company’s “Golden Triangle Cruise” of Kaohsiung (Thaichung) and Hong Kong. Star Cruises is the 3rd biggest cruise company in the World, and is owned by Genting Hong Kong. In March-May 2018 Superstar Virgo was Home Ported in Manila, and went on to operate a total of 18 round-trip ‘Jewels of the South China Sea’ cruises, calling in to Keelung Port, Taiwan and Ishigaki and Naha Ports, Japan. As neither Japan or Taiwan require Visas, the cruises offered Filipinos the perfect opportunity to enjoy a cruise from Manila, travelling outside of Philippine waters (7. Superstar Virgo – Cruise Mapper).

What this experience predicted was that, with Manila operating as a Home Port, additional economic revenues would be generated from pre-cruise, and post-cruise activities and services; including ‘provisioning’, ‘bunkering’, garbage disposal and sludge removal. The then DOT chief, Wanda Teo stated that the partnership with Star Cruises enabled the Philippines to “get closer to our vision as a Regional Cruise Center to serve as Home Port and, eventually, as center for Cruise Crew Training, Maintenance services and Shipbuilding in the long term.” Over one third of the crew on Superstar Virgo were Filipino (6.).

Fast forward to May 2018: Bloomberry Resorts & Hotels Inc. and Sureste Properties Inc. (SPI) have partnered up for the development of the Solaire Cruise Center. This will be a $308 Million Cruise Port in Parañaque City. The development will include: Marine and Terminal Facilities, Port-of-Call Operations, Home Port Operations and an expanded harbor, allowing for dining, shopping and entertainment facilities, as well as maritime recreation facilities. Part of the aim of the Solaire Cruise Center is to attract home Filipinos, who are working in cruise tourism, as well as accelerate the development of Seafarer and Cruise Crew Training in the Philippines.

The proposed development already has support from the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), Transportation Secretary Arthur Tugade, National Economic and Development Authority (NEDA) Secretary Ernesto Pernia and Philippine Ports Authority (PPA) General Manager Jay Santiago. President Duterte has also raised no objections to the proposal, but made it clear its progression will be subject to the compliance of all the usual government permits and Environmental Compliance Certificate. The development will be completed within the next 10 years, and will operate as a turn-around Port until complete and able to operate as a Home Port.
(8. Bloomsberry Unit to put up $308M – PhilStar Global).

Conclusion

All of this is great for a predicted growth in the Philippines Tourism market. It even allows a greater opportunity for Filipino’s themselves to join the Cruise Tourism ranks; travelling outside of the country to other Asian destinations, which don’t require Visa’s for visits.

With 11 International Airports, of which at least 7 are close to strategic Ports, the Philippines is perfectly placed to operate cruises, which start or end in the country; attracting guests who want to include a few days vacation time at a Philippine destination before taking their cruise, or flying home.

But, are cruises really a boon for local economies and communities?

We will look at that aspect of Cruise Tourism in our 2nd article: Cruise Tourism Pt 2: Impacts on Economy and Community

Further Reading:-