1. “Growth of Cruise Tourism in Asia”
SMART New Ocean Industries
“Growth of Cruise Tourism in Asia”
Kelvin Tan
Regional Director, Asia Pacific
Royal Caribbean Cruises Ltd.

2. Global Cruise Industry
“ The modern cruise industry was established in North America in the late 1960’s. The cruise industry operates across two sectors of commerce, transportation and hospitality.
The cruise lines sell and operate ships which transport guests to scheduled ports of call, primarily for pleasure. An inherent part of the experience is the variety of hospitality services offered onboard such as well appointed accommodations, upscale dining, bars, casinos, spa treatments, shopping and land tours. ”
Small but Growing Segment of Vacation Market
Approx. 20 Million Passengers
More than 360,000 Berths
260 Ships
All Regions Remain Under-Penetrated
Measured Growth in North America
Accelerating Growth in Rest of the World

3. Global Industry Growth 7% CAGR
Source: G.P. Wild (international Ltd) from PSA, CLIA, ECC and other sources 3

4. Array of Brands in the Marketplace4

5. Evolution of the Industry
2009
2006
2003
Brands
Celebirty Conde’ Nast top premium cruise 5 consecutive years
Royal Travel Weekly best overall cruise line 4 consecutive years
Growth
North America flat to declining slightly. 06 – (1%), 07 – 1%, 08 - (5%)
Europe growing 25% or more. 06 – 30%, 07 – 74%, %
New Destinations rapid growth from small base. 08 – 150%
Revenues/Yields
Record yields in 2007 and 2008 guidance
Resilience through many challenges – Gulf War I, 9/11, SARS & Norwalk, Iraq War, Today’s Consumer Slowdown
Costs
Keep net fuel net cruise costs per APCD below inflation. 06 – 1.5%, 07 – 0.9%, 08 – around 1%
1990
1980
1970

6. Growth pf New Cruise Regions
Historically, the focus on the cruise lines has been to develop the North American cruise market and much of the total growth in the 1970’s, 1980’s and 1990’s originated from this market.
The global appeal of cruising and the compelling holiday value proposition it offers was beginning to be recognized by a wider audience in the late 1990’s particularly in European markets and cruise companies started to invest heavily in the European arena.
In the past decade, Asia is a fast emerging market that many cruise lines are very keen to expand into the region. China and India, in particular are immensely promising, given the rise in income levels and overall population size. 6

7. Cruise Market Size
In 2010, the estimate cruise market size in Asia is close to that of Europe in It is expect that Asia cruise tourism will experience a similar growth pattern in the next decades.
Cruise Market Growth By Region
North America
Europe
Asia
Latin America 7

8. Cruise Hubs & Deployment
Due to the worldwide nature of the cruising industry and the mobility of the assets, the deployment of the ships is highly variable.
Year-round cruise destination mainstays include the Caribbean, Bahamas and Mexico. Seasonal markets include the Mediterranean, Alaska, Baltic and South America.
In the recent years, more cruise lines are starting to deploy ships in Asia on a year round or seasonal deployment.
The three regional cruise hubs are Shanghai, Hong Kong and Singapore.
There are also secondary homeports emerging in Asia such as Tianjin, Xiamen, Yokohama and Busan. 8

9. Cruise Industry in Asia
As the cruise tourism starts to take shape in Asia, there are many factors and development that stakeholders such as Government bodies, port authorities, tourism bureau, travel agents, airlines, etc are paying more attention and directing resources towards the emerging industry.
Below are some of the key topics highlighted in this presentation : 9

10. Cruise Industry in Asia
Economic benefits of a cruise industry and homeports in Asia :
Significant economic impacts to a country associated with the cruise industry. When a cruise ship visits a port, each ship requires a variety of services such as :
Tours for guests, bunkering, supplies & provisions, and port agency service.
Hotel accommodation for pre/post-cruise, flights for fly-cruise guests,
land transportations,
Merchandise shopping, and various retail business patronized both by cruise
guests & also the ship crews.
Homeports with reputable shipyards can also benefit from ship repair and
vessel refurbishment business.
Large number of Asian crews working onboard cruise ships all around the globe

11. Cruise Infrastructure
The infra-structure development and investments in the port cities :
Infra-structure investment by the Governments or the local port cities is needed to
accommodate the needs of the cruise ships of today and tomorrow.
It is important for cruise lines and all the local stakeholders to work together to
layout the blueprint for cruise lines’ growth in Asia.
Deployment decisions are often done years in advance before the ships are
actually deployed. Thus, there will be sufficient time for ports to enhance its
facilities and even construct new terminal buildings to handle large cruise ships.

12. Cruise Terminal Development
New cruise terminals in key turn ports in the region:
- Tianjin Cruise Terminal (2010)
- Shanghai Wusongkou/Baoshan Cruise Terminal (2011)
- Singapore International Cruise Terminal (2012)
- Hong Kong Kai Tak Cruise Terminal (2013)
New / expanding cruise terminals in key ports of call in the region:
- Nagasaki (2010)
- Jeju (2011)
- Busan (2013)
- Incheon (2014)

13. Partnership Considerations
The role of Government, ports, travel trade and suppliers in the success of
building sustainable cruise tourism.
In order for the cruise tourism to grow in Asia, it is important how the government
& authorities will treat the cruise industry. The cruise concept is a hybrid &
combination of marine transportation, lodging & accommodation, and tourism all
roll into one.
Passenger shipping legislation and taxation is a key factor for cruise company,
planning to achieve a successful and profitable entrance to the Asian cruise market.
Other important issues and concessions include the maritime law & policy,
relaxed visa requirements, reasonable head tax and port charges, expedited
clearance procedures in ports.

14. Desirable Operational Conditions
Clean, safe and secure port facilities
Ports that can handle today's larger ships
Operational capabilities to handle volume
Reasonable cost structure
Great shore excursions at reasonable prices
Professional port services

15. Outstanding Destination
Outstanding Destinations
Source: UNWTO World Tourism Barometer June 2008 15 15

16. Royal Caribbean Cruises Ltd.

17. Royal Caribbean Cruises Ltd.
Second Largest Cruise Company
Six Brands
Ships / Berths
In 2012: 43, 102,000
Over 4 Million Guests Annually
55,000 Employees
Visit Over 430 Destinations Worldwide
Let’s start off by telling you about “Who we are”.
We are the world’s second largest company with 27 ships, with a total of 58, 268 berths. We operate our cruise ships through two cruise brands. RCI (which operates in the contemporary/premium segment) and Celebrity Cruises (which operates in the premium segment). Our combined market share in 2002 is 30%. We have a modern tour company and we are a global operator, and we call upon approximately 200 destinations worldwide.
We are currently in our third fleet expansion program, our combined fleet has an average age of approximately five years.
We believe we have been leaders in developing technology in the cruise industry. This technology has improved our; sales management, booking capabilities and yield management, which enables us to better maximize revenues while achieving better cost efficiencies.
Our Technology development includes:
Our sophisticated pricing and yield management programs.
Our on-line travel agent booking tools; and
Our extensive web sites for both brands.
Just to name a few.

18. Worldwide Distribution Network
2008
Frankfurt, Germany
Genoa, Italy
Oslo, Norway
Singapore, Singapore
Shanghai, China
Stockholm, Sweden
Barcelona, Spain
Madrid, Spain
London, U.K.
2009
Gosford, Australia
Sydney, Australia
Beijing, China
Guangzhou, China
Sao Paulo, Brazil
Manchester, U.K.
+ France for CDF
Blue – 16 Global Corporate Offices
Green – 48 International Representatives (GSAs)

19. Summary Cruise industry is a sun-rise industry
Asia holds incredible potential as a cruise destination
Under penetrated cruise market
Partner with government to improve infrastructure
Stable and consistant operating conditions
Partner with travel industry to create cruise awareness
Profitability