Royal Asian Cruises setting their compass towards Sri Lanka
New ships, global destinations and itineraries, pioneering shipboard amenities and activities have steered steady growth in cruise passengers. A major cruise industry trend has been the globalisation of destinations and itineraries as cruise lines open to new geographic markets like Asia and provide exciting new experiences for first-timers and loyal cruisers, industry analysts say.
Asia, for example, which leads the world in international tourism growth, is speeding up in exoticport offerings and itineraries, according to Bill Chambers, who will head international marketing at Royal Asian Cruises (RAC) which recently signed an agreement with the Board of Investment (BOI) to launch a luxury cruise line in Sri Lanka.
Bill Chambers
He told the Business Times that more and more homeports in Asia are now serving luxury liners and this cruise line will cater to the global leisure travel markets with special emphasis on the Indian and Sri Lankan Diaspora and the European and Southeast Asian markets.
Setting sail for pleasure cruise
Mr. Chambers has over 35 years managing the marketing of luxury cruise products and this is the third cruise line start-up he has initiated. Other members of the Executive Team include Paul Hardy as VP of Entertainment and Siegfried Schober as VP of Hotel Operation.
RAC which currently has offices in the US and in India, will invest US$200 million over the years in the Sri Lankan venture and is expected to create a significant number of employment opportunities for Sri Lankans. Mr. Chambers said that their 5-year plan is to expand to a fleet of five ships representing a total investment of $720 million. Dr. Lakshman Jayaweera, Chairman of the BOI signed the agreement on behalf of the BOI and Mano Sinnarajah, Chairman / Managing Director signed the agreement on behalf of RAC.
Mr. Chambers said that the cruise industry has been eyeing (expansion) to this part of the world for a few years. “When doing so the natural location (choice) is Mumbai, India for its natural harbour, big money (high spenders), etc. The biggest hurdle when we went there was to secure a dock space and getting through the traffic was unbelievable,” he said, adding that unfavourable logistics made RAC to look at Sri Lanka.
Mr. Chambers said that worldwide, the cruise industry has an annual passenger compound annual growth rate of 7 per cent from 1990 – 2018. “It is recession proof,” he said, adding that the order book for cruise ships is about 18 within the next three years. Growth strategies to date have been driven by larger capacity new builds and ship diversification, more local ports, more destinations and new on-board/on-shore activities that match demands of consumers. The industry is also expanding rapidly internationally.
He also said that this part of the world is now at where North America was 35 years ago. “It’s slated to grow.” But he highlighted that the success of RAC in Colombo isn’t dependant on the local clientele. “If we get 5 per cent of the Sri Lankans I’ll be amazed,” he added, noting that RAC will be targeting clients essentially North American, Chinese, Japanese and all of South American markets.
RAC will also acquire and operate two vessels over the course of 2016. The first, state-of-the-art, modern cruise ships to be based in Sri Lanka will be an 800-passenger vessel and is scheduled to set sail in late 2015 from the Port of Colombo. “This ship is now in Scotland and it’ll be relocated here for a full refurbishment,” Mr. Chambers said, adding that it’ll be done at the Colombo Dockyard. This is a $12 million project.
Hoisting the many sails
Royal Asian Cruises also plans to invest in a larger second vessel which will be able to comfortably accommodate 1500 – 2000 passengers, which should enter service in early 2016. “By March we’ll relocate the first ship to be refurbished.”
“As a Sri Lankan, I am really proud to be back in my homeland, and investing in a large-scale project of this nature. It gives me pleasure in knowing that Sri Lanka is now a safe country, conducive for investment and business opportunities,” Sinnarajah, Chairman/Managing Director, RAC said in a statement. RAC has assembled a team of the most experienced cruise executives in the business and has partnered with internationally renowned marine architecture and interior design company, Tillberg Design, to craft the interiors of its cruise ships.