The economy of Brunei Darussalam has relied heavily upon the sea, from its traditional roots as seafaring traders to offshore oil and gas fields, which now account for the lion’s share of the country’s GDP. These same waters could now also provide a substantial boost for the Sultanate’s fledgling tourism sector by delivering tens or even hundreds of thousands of tourists to Brunei Darussalam’s shores each year.
The country hosted 45,560 cruise ship tourists from 24 port calls in 2013, up an impressive 40%, over the 2012 total according to Brunei Tourism, a division within the Ministry of Industry and Primary Resources (MIPR). In 2012 visitor arrivals also expanded by 40% with 19 vessels carrying 32,318 passengers and crew. This growth trend continued into 2014 with 12 cruise ships docking at Muara Port in just the first two months of 2014 – nearly half the total for all of 2013. In all, Brunei Tourism is expecting a record 77,029 cruise ship visitors from 37 port calls in 2014 which would represent a 70% spike from 2013. The most successful year previously for the cruising segment was in 2010 when a total of 48,200 cruisers disembarked from 34 vessels in Brunei Darussalam, according to MIPR figures.
This represents a significant increase from 17,490 cruise arrivals to the Sultanate in 2008, the first year after the completion of a BN$1.4m ($1.1m) Cruise Ship Centre at Muara Port. Facilities at the port have since been improved to include a bus terminal to take passengers to the city and other sites of interest, as well as refurbished arrival and departure terminals and upgrades to tourist information counters.
Much of this recent surge can be attributed to increased traffic from Borneo-based vessels such as Star Cruises’ SuperStar Aquarius which homeports in the nearby port of Kota Kinabalu in the neighbouring Malaysian province of Sabah. The 756-cabin ship began running a weekly four-day/three-night cruise from Malaysia’s Kota Kinabalu to Brunei Darussalam’s Bandar Seri Begawan (BSB) and Sarawak’s Bintulu, starting in November 2013. Although the 51, 309-tonne SuperStar Aquarius is dwarfed by many new mega cruise ships christened in recent years, the vessel is capable of accommodating 1511 passengers. Other modestly sized vessels such as the 180-metre MV Adonia, which visited Muara Port for the first time in early 2014 with 663 passengers and 384 crew, and the 265-metre Legend of the Seas, which delivered around 1800 tourists in March 2013, will further pad these numbers. Given Brunei Darussalam’s total tourism arrivals of 86,599 in 2013, these trips will represent a significant portion of the market going forward. In addition to traditional cruise ship activities, which include seeing the major cultural sites in the nearby city of BSB, tour operators are also being encouraged to further tap into the market by offering a wider offering of shore excursion packages.
In spite of this impressive growth tallied in recent years, these arrivals represent just the tip of the iceberg when looking at the industry’s growth as a whole. Originating in the early 1970s in the US state of Florida, cruising is a relatively new phenomenon within the tourism sector as a whole and as such continues to expand in line with the construction of new ships. The cruise ship industry has been the fastest-growing segment in the travel industry around the world in recent decades, expanding at an average rate of around 8% since the early 1980s.
As a result of this growth an estimated 21.7m people will take cruise vacations in 2014, 400,000 more than the 21.3m passengers totalled the previous year, according to the Cruise Lines International Association (CLIA). This represents a substantial increase from the 15.9m passengers recorded in 2007 in spite of mitigating factors such as the global economic slowdown and negative publicity the industry has incurred from widely publicised incidents in recent years such as major onboard virus outbreaks, mechanical and utility failures and the capsizing and sinking of the Costa Concordia in Italy which resulted in the loss of 32 lives. Demand for these cruises is still heavily weighted towards its original birthplace in Florida, with Americans currently accounting from more than half of all passengers in 2013 at 51.7%, according to CLIA statistics. Europeans make up the next largest block of participants, led by the UK and Ireland representing 8.1% of all cruise ship customers, followed by Germany with 7.7%, Italy with 4%, Spain with 2.8%, France with 2.4% and Scandinavia and Finland accounting for a combined 1.6%. Other countries with significant interest in cruise vacations are Australia and New Zealand, which made up 3.6% of the market, and Brazil and Canada, which each made up 3.4% of the total.
Unsurprisingly, Caribbean cruises remain the most popular destination for vacationers, representing 37.3% of global capacity market share as measured by itinerary and ship deployment. Fuelled by close geographical approximation to its primary consumers (61.3% of passengers indicated that the home port location was a major motivator in deciding to take a cruise), the Caribbean market share increased its lead compared to 2013 portion of 34.4%. Cruises to Alaska, however, decreased in popularity from 4.8% of the market in 2013 to 4.5% in 2014. The second most popular destination also reflected the geographic distribution of its customer base, with Mediterranean trips accounting for 18.9% of all voyages in 2014, down from 21.7% the previous year, while European trips represented 11.1% of the total compared with 10.9% in 2013. The Asian market in which Brunei Darussalam resides remains decidedly underserved and accounted for only 4.4% of holiday cruises in 2014, although this was better than the 3.4% in 2013.
Room For Growth
In spite of the region’s relatively paltry draw in the global cruising market, it also represents perhaps the most significant potential for growth. Economic recovery in traditional customer base countries in North America and Europe is lagging far behind that of the rapidly expanding economies in Asia. This proliferation of wealth within the region is fuelling the rise of a middle class, which translates into more leisure time and tourism spend. East Asia, for instance, is expected to maintain GDP growth of 6.7% through 2015 according to the Asian Development Bank. This is followed by south Asia’s growth of 5.3% and 5.8% in 2014 and 2015 as well as 5.0% and 5.4% for South-east Asia. Brunei Darussalam is well-placed to take advantage of these trends and is located within convenient sailing distance from a number of popular tourism destinations and ports of embarkation in Malaysia, Indonesia, the Philippines, Singapore and Vietnam. Tourist arrivals in the Asia Pacific are expected to experience the highest growth of any region in the world over the next two decades, according to a 2014 report issued by UK-based Ocean Shipping Consultants. This follows similar high-growth trends exhibited in the Asia Pacific over the previous decade in which cruise capacity allocated by international cruise lines increased a whopping 543% from 1.5m to 9.8m berth-days, according to the report. Major lines operating in the region include Costa Cruises, Princess Cruises, RCI, CCL, HAL, and Star Cruises, while 11 major cruise lines have ships home-ported in Asia Pacific. Large operators such as Silversea and Seabourn have also entered this market recently by offering expedition services which are increasingly gaining popularity, especially in South-east Asia, and are a niche in which Brunei Darussalam could compete with larger, better-known destinations. Specialised services like these are also likely to increase in the future, with motorised sailing yacht operator Windstar Cruises announcing the launch of cruises in South-east Asia starting in 2016.
In order to meet this demand, cruise lines around the world are racing to commission newer and ever-more luxurious cruise ships. A total of 29 new cruise ships were delivered in 2013 and 2014, bringing an additional 34,000 beds to the market according to CLIA. This $7.2bn in combined investments brings the global total to 467,629 beds on 410 ships, which will be further augmented by another 20 ships and more than 52,000 beds from 2015-18. While all these new additions will bring thousands of beds of new capacity online, actually capturing a larger share of this potential is by no means guaranteed for Brunei Darussalam. Enhanced marketing and awareness campaigns will need to be carried out in order to differentiate the country from other regional competitors. Of equal concern is the ability of the country’s infrastructure to accommodate greater numbers of tourists travelling on these ships as well as the port’s ability to handle newer, larger ships.