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18 Oct, 2012

Cruising, Senior Citizens Offer Huge Niche-Market Potential for Travel Agents

imtiaz muqbil at the itb asia 2012 in Singapore

The National Association of Travel Agents of Singapore has identified cruising and Asia’s ageing population as two key niche-markets that offer considerable business future potential for travel agents. Nearly 400 agents turned up for a session on the “Future of Tourism in Asia” organised by NATAS alongside the ITB Asia to hear representatives of both sectors outline the way forward.

Kevin Leong, General Manager of the Asian Cruise Association (ACA), began by asking how many of the agents actually sell cruises. Only about five hands went up. Mr. Leong said he was not surprised but encouraged by the fact that it did show the potential. Both the ACA and ITB Asia want to generate more interest in the cruise market, especially with an increased presence by cruise company exhibitors at the ITB Asia and the Singapore Cruise Terminal due to open on Oct 22.

Mr. Leong said that over 25 years, there had been a huge growth in cruises and more capacity is in the pipeline — 38 cruise ships are on order with a book value of US$ 22.6 billion. This new capacity will remain in place for many years. Over the last 10 years, the a number of annual cruise passengers has grown from 6.26 million to 15.15 million. Cruise still has a very low penetration rates, but customer satisfaction with cruising is much higher than comparable land-based hotel and resort vacations.

Mr. Leong said that Asian cruises had huge potential. The Asian cruise clientele prefer short cruises with multiple port stops. They want value for time and are inclined to take their cruises as part of family groups. Popular cruises are the 3 to 5 night trips between Singapore, Malaysia and Thailand as well as China to Japan. Further growth will come from future cruise-ship deployments to Australia and New Zealand. New routes are being planned along the China coastline to interest Asian passengers.

He said that the Asian cruise market penetration is only 0.05% but if that is doubled to 1%, that alone will equate to 40 million passengers, making it four times larger than the entire U.S. cruise market. Leading future sources of business are seen to be China, India, Indonesia, Japan, Australia and New Zealand.

The ACA was also formed to talk to regional governments to open up new ports and make them cruise-friendly, especially in China. In addition to the Singapore Cruise Terminal due to open on Monday, the Hong Kong Cruise Terminal will also open next year in what was previously the site of the former Kai Tak airport. Singapore is anticipating that during the winter months, the cruise ships using Hong Kong as a base will relocate to Singapore.

Mr. Leong said travel agents were a natural for selling more cruises because cruises are far more complex to book online than airline tickets. At this ITB Asia, agents are being provided with “clinics” to provide education and training to help them better understand how to do it. Further info: www.asiacruiseassociation.com

Silver tsunami

The second part of the session featured Mr. Goh Chin Kwee, lecturer, School of Humanities & Social Sciences, Temasek Polytechnic, who discussed what he called the “silver tsunami.” He presented details of a pilot survey of Singapore’s ageing population and the opportunities this presents in line with a number of government policies being formulated to prepare for it. A full-fledged Centre for Ageing Studies was also opened at the Polytechnic on Oct 2012 to conduct further research.

Noting that the pilot survey had been based on the same format used to conduct similar surveys of Baby Boomers in the U.S., Mr. Goh noted that the definition of “old” usually included a 30-year period from 50 to 80, although in terms of market segmentation, “old” begins at 65 in Singapore. He noted that retirement from work usually takes place around 62, illnesses usually set in between 70-74 and there is a life expectancy of 80. If they are in good health, most seniors think themselves to be younger than they are.

He said this age breakdown will give agents a better idea of how to approach this market and open up opportunities to sell health friendly products, including travel. Today, Mr. Goh noted, most senior citizens are also well-educated, internet literate and favour independent travel. The numbers will also increase, he said, including many of them sitting in the audience itself.