Hainan’s Sanya and now Jeju has big cruise ambitions.
South Korea’s southern resort island of Jeju aims to become the leading cruise ship stopover in Asia this year by attracting more than 500,000 cruise passengers, industry experts and local government officials said.
Local government officials and industry experts see the number topping 2 million per year by 2020, making the island the world’s leading port of call for international cruise ships.
“As a port of call in Asia, Jeju will emerge as the No. 1 this year and become one of the world’s top three ports by 2020 in terms of the number of cruise ship passengers visiting here,” said Kim Eui-keun, chairman of the organizing committee for the Cruising Asia 2013 Jeju forum.
“We are confident that cruise ship passengers visiting Jeju can easily top 500,000 this year, and it will grow to exceed 2 million by 2020,” he added.
The global cruise industry is growing at a fast clip with more people opting for large-scale and exotic cruise ships where they can enjoy lodging, restaurants, swimming pools and other diverse leisure-related facilities at one spot without having to make reservations or prior arrangements.
With the growing popularity, the industry is also emerging as a new cash cow for local economies since passengers can disembark and take a tour and spend money on locally produced goods and souvenirs at stopover ports.
According to government data, the number of cruise passengers in the world reached 20.14 million in 2012 and their per-capita spending on and off board averaged at around US$362.
Jeju is one of South Korea’s most attractive major ports where international cruise ships including those from Italy’s Costa Cruise stop over during their global trips.
“Last year, about 10 million people visited Jeju Island and 2.2 million were foreign travelers. Of them, about 400,000 people came here via cruise ships,” said Kang Tae-seog, director of Marine Development Division of Jeju Special Self-Governing Province.
“In 2012, cruise ship passengers spent an average of $490 here while they were touring this island, which translated into a total of 200 billion won in direct spending. Given that tangerine is a 700 billion won industry in Jeju, spending by cruise passengers could surpass this island’s major industry in the near future,” he added.
In a bid to capitalize on the fast-growing industry and nurture its homegrown cruise ship operators, the government is pushing to pass a bill through the National Assembly.
The bill, if passed, would provide diverse support measures including construction of more piers and berth facilities to better accommodate large-size cruise ships. It would also permit casinos aboard ships run by Korean companies.
The plan, however, hit a snag as some lawmakers opposed allowing casino operations on concerns of side effects such as gambling addiction.
Supporters say that the onboard casinos are only for foreigners with a betting limit in place and argue that it is “discrimination” not to permit casinos for homegrown cruise companies when people can go to casinos on international cruise ships.
Their argument is based on the short-lived operation of the country’s first flag-carrying cruise ship, which went into service in 2012 but came to a halt about a year later due to ballooning losses. The failure is blamed mostly on a law that prohibits onboard casinos, which account for about a third of total cruise sales.
Experts say that China faced a similar problem, but its government ended years-long impasse by making a compromise and allowing casino operations on board in the late 2000s.
They said that it eventually helped open the gate for its homegrown cruise ship companies to venture out into what is emerging as the “blue ocean.”
Kim, chairman of the organizing committee for the Cruising Asia 2013 Jeju forum, agrees.
“Without casinos, it would be much tougher for Korean operators to attract passengers from other countries especially in China during their slow seasons. This could become a heavy burden on their overall business down the road,” said Kim, who also teaches tourism management at Jeju International University.
He said that casinos are “critical” for the success of homegrown cruise ships but admitted that it will take some time to build a public consensus. He, instead, urged the government to step in with fiscal and administrative incentives aimed at nurturing homegrown cruise ship operators.
“It would be quite risky for local investors to plunge into the cruise business given that they are latecomers and might not have critical weapons that other foreign cruise ships have such as casinos,” he said. “This is where the government should come in. It needs to provide diverse administrative and fiscal support and incentives for homegrown cruise ship operators such as an exemption from dockage fees.”