Living up to the Malaysian dream
Updated: 2017-02-24 08:49
By Sophie He(HK Edition)
Genting Group scion Lim Kok Thay tells Sophie He the cruise business holds great promise for the future, with the Chinese mainland acting as the anchor.
Tan Sri Lim Kok Thay, who sits at the helm of one of Malaysia's biggest business conglomerates, is among those who believe in achieving the ultimate accolade.
The second-generation scion of the family which runs the country's only gaming empire Genting Group has staked his group's future on the Chinese mainland's vast emerging consumer market, seeing the cruise business which Genting also excels in, as a critical pillar of the mainland's new economy.
"What I see is that the cruise economy will become an important part of the new economy for China," says Lim, who doubles up as chairman and chief executive of Genting, steering the group since 2003 when his late father and group patriarch Lim Goh Tong passed the baton to his second son.
Genting Group, founded in 1965 by the elder Lim, has gained prominence nationally and globally, over the years and became a household name in Malaysia with extensive interests in the leisure-entertainment, casino and property sectors worldwide, including Hong Kong.
The junior Lim founded Genting Hong Kong Ltd (formerly Star Cruises Ltd) in September 1993, operating a fleet of 18 ships as the third-largest cruise line in the world and setting its sights on the Asia Pacific region as an international cruise destination. Genting Hong Kong was floated on the Hong Kong Stock Exchange in December 2007. Genting Group, via Resorts World Bhd, which operates Resorts World Genting in Malaysia and Resorts World Sentosa in Singapore, has an equity investment in Genting Hong Kong.
Genting Hong Kong owns Star Cruises, Dream Cruises and Crystal Cruises - cruise lines that target various classes of clientele, from the mass market to high-end and luxury travelers. It also owns German shipyard Lloyd Werft Group and has a substantial stake in Norwegian Cruise Line.
"I fully agree with the Chinese leadership's view that the cruise economy compensates the Chinese market, which is a very large market," says Lim.
The cruise industry itself, he believes, can generate plenty of travel and related businesses, such as airlines and hotel operations, especially for a cruise homeport, like Guangzhou.
Genting Hong Kong's newly built vessel Genting Dream, which made its debut late last year, is using Guangzhou Nansha Port as its homeport.
Before boarding and after disembarking, travelers will also spend a few days in homeports like Guangzhou for sightseeing and leisure, notes Lim.
"That's one of the reasons we had chosen Guangzhou (as a homeport) after having studied it for many years," he says, adding that Genting is very upbeat about the market, but closer cooperation is vital between cruise-ship operators and the local authorities in order to build up the infrastructure and offer consumers a nice experience.
Genting Dream is using Nansha as a temporary port, but the local government fully supports the construction of a new cruise terminal, which is much needed.
"I have had faith in the cruise business since the very beginning. I think that faith stems from the fact that we, as overseas Chinese, do understand Chinese behavior. Our entry into Hong Kong almost 23 years ago has allowed us to build up a better understanding, and that gives us the confidence."
Lim thinks the time to expand Genting's cruise operations is right, and the company has seriously positioned itself for the Chinese mainland market. Since Hong Kong has been its base, the logical thing to do is to tap into southern China.
He's convinced that the future looks bright for Genting Hong Kong, saying Chinese people enjoy very much their weekends and short vacations. The company, therefore, needs many more ships and that's why Genting Hong Kong has bought its own shipyards to ensure that the supply of vessels is secured instead of relying on independent shipyards to build its ships, which may then be competitive in terms of delivery time.
Currently, the delivery times by other shipyards are beyond 2025, so what it means is that if a company orders a ship today, it's not going to get a delivery slot earlier than 2025, and no business can survive on not having a product in the next seven or eight years, Lim explains.
Genting has thus addressed the supply side by coming up with a production schedule - it will deliver two river ships this year and another two similar vessels in 2018. The group can them expect 20,000-ton vessels to join its fleet, and has scheduled to deliver three of these vessels in 2018, 2019 and 2020.
"The last step is to produce two 200,000-ton cruise vessels that will be bigger than Genting Dream in 2020 and 2021."
All of them will be deployed for the Chinese mainland market to cope with the huge demand.
"I've no doubt that with more ships that we have on order, we'll be able to cater to more Chinese consumers," he says.
Compared to Western consumers, Lim says Genting has to start with Chinese consumers, which means it will have to convey the message that spending vacations on cruise ships is good value for money - it'll be very comfortable and you can do a lot of things in a short period of time.
"So, I would expect a lot of pressure from Chinese passengers - they want to do plenty of things and do them very quickly. So, we've been preparing our staff for that, and understanding the behavior of Chinese consumers is very important."
Genting Hong Kong's cruise tours, currently, cover no more than five days and four nights to make sure that Chinese consumers can try out the services. Lim has no doubt that as the company grows the market, it'll be able to move into more luxury products.
The group is also developing new cruise destinations to lure Chinese travelers, such as Vietnam, which will also allow it to operate longer into the season in southern China. There are also plans to launch cruises to northern Asia in summer when the weather is more suitable.
"If we go further north, the interesting destinations will be Japan and South Korea. Again, the demand is there but the supply of ships is not matching up, so we're looking forward to the delivery of our second ship, World Dream, the sister vessel of Genting Dream, and with that, we'll start looking to Japan and Korea as new destinations for our cruise ships."
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(HK Edition 02/24/2017 page1)