STATE OF THE CRUISE INDUSTRY Cruise Shipping Asia-Pacific Christine Duffy - President and CEO, Cruise Lines International Association 1 THE PROMISE OF ASIA 2 2 Gateway to Tomorrow’s Marketplace Asia-Pacific region is the future of the global cruise industry Millions of potential new passengers New Asian-Pacific routes open to visitors from around the world New ships, expanded ports and terminals and investment in infrastructure 3 Singapore’s Marina Bay Cruise Centre $350 million investment, opened in May 2012 Expected to double Singapore’s handling capacity Chosen as homeport for Royal Caribbean’s Voyager of the Seas Expected to welcome 1.3 million passengers in 2013 (up from 1 million in 2010) 4 China’s Investments In 2011, the number of home-port calls overtook transit calls Homeports capable of serving large, luxury liners established in: − Shanghai − Tianjin Number of international liners arriving in Shanghai’s specialty port for luxury ships − Xiamen − Qingdao Number of ships arriving at ports on China’s mainland 62 150+ 223 262 (2012) (2013) (2010) (2011) 5 GROWTH AND GLOBALIZATION OF CRUISING 6 Passenger and Ship Growth Since 2000, 143 new ships have been added to the CLIA fleet, nearly doubling the number of beds 2000 2011 9% 31% 69% 91% North America Rest of World Since 2000, the number of CLIA passengers from outside North America has tripled 13 new ships introduced by CLIA’s member lines in 2012 7 New Ship Deployments Ship deployments are evolving to meet expectations of new international travelers Deployments to Australia and New Zealand increased more than 100% over the past 5 years New routes being planned to appeal to Asian passengers 8 The Future is Bright “Mature Market” Penetration rate in the United States is about 3% Translates to 10 million passengers Market Opportunity Asian market’s penetration rate is only .01% Growth to 1% penetration rate equates to 40 million passengers 4 times larger than US market 9 SEIZING THE FUTURE 10 Economic Predictions Global spending by middle class predicted to grow from $21 trillion today, to $56 trillion by 2030 More than 80% of this growth expected to come from Asia China’s middle class spending expected to pass US by 2020 and the 27-country EU by 2027 300 million Chinese projected as potential cruise passengers – the equivalent of adding another North America or Western Europe to the cruise market 11 Education Needs Educating the market of potential passengers is a necessity To-Do: Redeploy cruise ships to Asian ports 12 Education Needs Educating the market of potential passengers is a necessity To-Do: Redeploy cruise ships to Asian ports Address lack of knowledge about life onboard a ship Understand different dining and entertainment preferences Anticipate and address language and cultural differences 13 Education Needs Educating the market of potential passengers is a necessity To-Do: Redeploy cruise ships to Asian ports Address lack of knowledge about life onboard a ship Understand different dining and entertainment preferences Anticipate and address language and cultural differences Industry must also educate itself to understand the basic needs and expectations of these potential passengers 14 Travel Agent Partners The crucial first connection between cruise lines and its passengers Agents are critical to growth and success of the cruise industry ‐ ICCA investing to educate, train, and equip agents ‐ Travel agent training sessions at Cruise Shipping Asia-Pacific 15 ONE INDUSTRY, ONE VOICE 16 Safety is our Highest Priority Launched Cruise Industry Operational Safety Review (OSR) Since January 2012 launch: Proactively identified and implemented best safety practices available 6 new policies announced Next Steps: Develop a shared communications platform to Engage key stakeholders Mobilize industry partners Educate broader audiences 17 State of the Industry Panel Robert Giorgi President, V.Ships Dr. Zinan Liu Managing Director for China and Asia, Royal Caribbean Gianni Onorato President, Costa Crociere Ann Sherry CEO, Carnival Australia Gavin Smith Managing Director, Royal Caribbean Jan Swartz EVP of Sales, Marketing and Consumer Services, Princess 18