
Genting HK set for Asian reawakening
Ex-boss Au back to help steer outfit’s push to be leading light in Asia again
A familiar face has popped up again at cruise giant Genting Hong Kong (Genting HK).
Colin Au, who headed the company until late 2000 and who snapped up Norwegian Cruise Line (NCL) from under the nose of Carnival Corp, has returned to spearhead the reawakening of its Asian cruise ambitions.
Genting HK’s public-relations machine has given Au a rather vague title of founding president and chief executive, and advisor to current chairman and chief executive Lim Kok Thay. Those in the know say Au is responsible for the strategic development of the company and “has the chairman’s ear”.
Au, who usually likes to keep a low profile, says he was asked by Genting HK’s chairman to return to Asia in 2013 to assist the company before it lost its position as market leader in the Asian market.
When Star Cruises — Genting HK’s cruise wing — was launched in 1993, it revolutionised the Asian cruise industry by bringing in large, modern ships that offered standards on a par with the vessels being operated out of Miami by the industry majors. Growth was rapid at first but, from 2000 onwards, its attention was shifted to rebuilding newly required NCL, which at the time was generally regarded as an industry basket case. This left few resources available for further development at Star Cruises.
“We got distracted,” Au said. “But I am proud to say that we made a success out of NCL.”
Au has wasted no time playing catch-up with competitors Royal Caribbean and Carnival Corp, which over the past five years have moved into Asia — especially China — with a vengeance.
First up was an order for two 150,000-gt cruiseships at Meyer Werft, which were originally slated for Star Cruises but ultimately wereused to start up a new Asian premium-category brand called Dream Cruises.
Then Genting HK went upscale with the purchase of Crystal Cruises from Japan’s NYK Group. And, as with NCL in the past, it moved swiftly to give Crystal Cruises the investment it needed to maintain its position as one of the top-end brands of the cruise industry.
Crystal Cruises chief executive Edie Rodriguez says Genting HK has brought “so many fabulous things” since taking over nearly two years ago.
NYK was also an excellent owner but she said the Japanese shipping giant no longer wanted to invest in growth in cruise.
“I firmly believe that brands either grow or they die,” Rodriguez said.
Crystal has expanded into new segments of the cruise business, with an expedition brand, a river cruises offering and even cruises by air in a Boeing 777.
“They have been phenomenal owners, on so many levels,” she said. “This 15 May will be two years that they owned us, and all of this growth is possible thanks to their investment.”
But more importantly than this diversification, Genting HK has made a long-term investment in Crystal Cruises’ newbuilding pipeline by buying up five shipyards, giving the two companies’ other brands access to berths in a competitive industry with only a handful of yards capable of doing the work.
By owning the yards, adding capacity to the fleet is more economical.
“You really are in a long-term play,” Rodriguez said. “You are better able to and empowered to control your company’s destiny.”
Au concurs, saying one of the biggest problems facing growth is finding slots to build new cruiseships — and the issue will only get worse in the future.
“Every 10 years, cruiseships double in size,” Au said. “Lines are now building 180,000-gt to 200,000-gt ships. In future decades, how many shipyards will be able to build cruiseships? Maybe two — Fincantieri and Meyer Weft.”
Genting HK’s German shipyards will build ships for Crystal Cruises and construct two 200,000-gt cruiseships for Star Cruises.
The pair will be the first newbuildings that Star Cruises has received since the 75,300-gt Superstar Virgo (built 1999) was delivered.Since then, the company, which operates five medium-size cruiseships and a luxury charter yacht, has made do with secondhand tonnage received from NCL.
Star Cruises president Ang Moo Lim dismisses any suggestion that this has put the company at a competitive disadvantage.
“More often it’s not just about having the largest and newest cruiseships,” he said. “It’s about having a solid grasp and understanding of Asian cruisers. At Star Cruises, we pride ourselves on our deep-rooted Asian history and experience, enabling us to apply this know-how across our existing fleet and upcoming new ships.”
Going forward, Genting HK is positioning Star Cruises as an Asian mid-level, mass-market cruise operator — or, as the cruise industry likes to refer to it, the contemporary market sector.
“In Asia, we are optimistic that both the contemporary Star Cruises and high-end Dream Cruises brands will complement each other, targeting different market segments across the region,” Ang said. “Star Cruises will continue to focus its offerings with attractive and affordable cruise packages to cater to the ongoing expanding contemporary market segment wide across Asia.
Star Cruises’ growth plans are more pan-Asian than China-specific.
Its Chinese stronghold traditionally has been the Pearl River Delta but Ang reveals that the Superstar Virgo will operate between Shanghai and ports in Japan from July to November, with passengers sourced from both China and Japan.
The rest of Star Cruises’ ships are deployed out of Taiwan, Hong Kong, Malaysia and Singapore, and it will soon be using the Superstar Virgo in the Philippines. According to Ang, the company continues to see a year-on-year increase in the number of passengers in these key bases, with strong contributions from the fly-cruise market from neighbouring countries such as India, Indonesia, Australia and the Philippines.
“With the addition of the new and modern “Global Class” ships to the fleet, it is our goal to widen Star Cruises’ footprint in as many key Asian cities, further reinforcing the Star Cruises brand as the leading cruise line in Asia,” Ang said.
The company has yet to reveal what its deployment plans are for its two newbuildings and Ang says the plans will be unveiled closer to their delivery dates in 2020 and 2021.
Genting HK remains extremely confident about the future prospects for the cruise industry in Southeast Asia.
“The region is going to eclipse the Caribbean as a year-round cruise destination,” Au said.
Genting HK is listed on the Hong Kong Stock Exchange and traded on the Quotation and Execution System for Trading of the Singapore Exchange Securities Trading.