4.2.2 Hong Kong is one of the most expensive passenger ports in the World. 24-hour berthing charges at Ocean Terminal amounted to HK$280,000 compared to HK$180,000 for Singapore which is the main competitor for cruising in the region. Apart from that, a HK$85 fee is charged per passenger.
4.2.3 The land lease which grants Kowloon Wharf the right to operate the terminal does not include a clause for provision of good passenger facilities. There appears to be lack of government control and authority to ensure that good passenger facilities are provided at the passenger port.
4.3 Opportunities
4.3.1 The cruise market has been labelled by Cruise Lines International Association (CLIA) as the most exciting growth category in the entire leisure market. Over the next five years, the cumulative market potential for the cruise industry in North America is over US$50 billion (20% increase since 1992). Since 1970, the industry has had a compound annual growth rate of 10% per annum. For 1994, a total of 4.6 million passengers in North America took a cruise holiday. By the year 2000, CLIA projected that as many as 8 million passengers per year will cruise6.
4. Metroplan: The Selected Strategy - Executive Summary, Planning Department, 1991, p.17.
5. A Statistical Review of Tourism 1994, Hong Kong Tourist Association, 1995.
6. The Cruise Industry - An Overview, Cruise Lines International Association, New York, Jan. 1995, p.1.
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4.3.2 It is estimated that by 1998, as many as 29 cruise ships representing an additional 50,000 carrying capacity will be delivered. With the Miami cruise ground getting too busy, and cruise passengers asking for new experiences, cruise operators are looking for new cruising grounds to base their ships.
4.3.3 According to CLIA, the Far East is enjoying “dramatic growth in popularity”. In 1994, a total of 331 cruises visited the Far East, as compared to 19 in 1985 (an increase of 17.4 times in a decade). Cruise industry leaders are expecting Asia to become the next region for growth.
4.3.4 It was remarked in Cruise Industry News Quarterly 7, Fall 1995 issue that “the Orient is increasingly becoming a seasonal alternative to the Caribbean, particularly for small to mid-sized cruise ships, as well as an integral part of world cruises, which are seeing a number of new additions this coming season....”
4.3.5 There is an increasing awareness in Asia that cruising is a good way of taking a holiday. Star Pisces, operated by Star Cruise Ltd. was the first ship to be home based in Hong Kong. Star Cruise Ltd., now the fifth largest cruise line company in the world, owns the Star Aquarius, Star Pisces, Mega Star Aries, Mega Star Taurus and Super Star Gemini. Star Cruise Ltd. has also expressed an interest to develop ports in Hong Kong and other cities in Asia.
4.3.6 Apart from that, a mass market cruise line, Royal Caribbean Cruise Line is testing the Asian waters by deploying its 714-passenger ship “Sun Viking” in Asia for season 95/96/97. Hong Kong is one of the turnaround points for its programme and “Sun Viking” will be making 18 sailings in and out of Hong Kong.
4.3.7 With its strategic location at the centre of Asia Pacific Rim, Hong Kong can fulfill its “hub” function nicely as it allows for unlimited itinerary options within the area. Sailing north, Hong Kong can be combined with Taiwan, China, Japan, Korea and even Russia. Sailing south, Hong Kong can be combined with Vietnam, Thailand, Singapore, Malaysia, Philippines and Indonesia.
4.4 Threats and Competition in the Region
The most popular turnaround ports for Orient cruises include: Singapore, Hong Kong, Bangkok, Bali, Phuket, Tokyo and most recently Tianjin.
4.4.1 Singapore
Singapore is the leader in the region due to its strong infrastructure as well as its modern International Passenger Terminal. Cruise ship calls in Singapore increased from 426 to 941 (up 121%) for the first six months in 1995 as compared to same period in 1994. Passenger counts increased from 165,000 in 1993 to 703,000 in 1994.
According to the Port of Singapore Authority (PSA), notable increases are being recorded among Australian/New Zealand passengers, followed by European and American passengers. Passengers originating in Singapore are: 65% from ASEAN countries; 11% from the U.S.; 11% from Europe; 11% from Australia/New Zealand; 1% each from Taiwan and other regions.
7. “Orient and South Pacific”, Cruise Industry News Quarterly, Fall 1995, New York, pp.75-78.
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PSA continues to market itself jointly with the Singapore Tourist Promotion Board as “Singapore - Cruise Gateway to the Asia Pacific”.
4.4.2 Osaka, Japan
Japan’s Port of Osaka has been seeing strong growth over the last two years. While there were eight cruise ship calls in 1993, however, 37 were recorded by the end of 1995. Currently, the port is constructing a new International Ferry Terminal which will open in mid 1996.
Apart from that, the port is also planning to build a passenger terminal in proximity to the future Universal Studios Japan. The passenger terminal will have one berth; water depth will be 25 feet and the pier will be 722 feet long. The terminal is scheduled to open in the year 2000.
4.4.3 Sydney, Australia
Sydney, the hub port for Australia, New Zealand and the South Pacific islands, had 83 cruise ship calls in 1994 (101,000 passengers counted) compared to 73 in 1993.
5. Why does Hong Kong need a dedicated Cruise Terminal ?
5.1 Hong Kong as an international city
5.1.1 It was stated in the Territorial Development Strategy Review (TDSR) that its primary goal is “to establish a broad, long term land use-transport-environmental planning framework within which the necessary land and infrastructure can be provided,.... to enable Hong Kong to continue to grow as a regional and an international city and become a better place in which to live and work.”8
It was supplemented by six principal objectives of which two of them have spelled out the need to further develop tourism and infrastructure for Hong Kong, they are:
* “To enhance the role of Hong Kong as an international city and a regional centre for business, finance, information, tourism, entrepot activities and manufacturing”;
* “To ensure that adequate provision is made to satisfy the land use and infrastructure needs arising from sectoral policies on industry, housing, commercial, rural, recreation and other major socio-economic activities.”
In this connection, development of a purpose built, dedicated cruise terminal will serve the two objectives advocated by the Government in the TDSR as part of the effort “to enable Hong Kong to continue to grow as a regional and an international city and become a better place in which to live and work”.
5.1.2 Hong Kong, as one of the dragons in Asia, is a well-developed cosmopolitan city and serves perfectly well as the gateway to China as well as the hub of international air traffic in Asia.
8. Territorial Development Strategy Review - Development Options, Planning Department, Hong Kong Government, 1993, p. 3.
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Her importance is further enhanced by the provision of modern and an up-to-date infrastructure to promote and sustain growth. One of the key areas of this infrastructure is port facilities. Hong Kong should consider the development of a dedicated passenger terminal as part of the port and airport development as to complete her portfolio as an international city and not to miss out on any business opportunity created boom by the forthcoming in the cruise market. Currently, Hong Kong’s cruise berthing facilities lag behind other international cities like Singapore.
5.1.3 With the excellent geographical location in Asia, a dedicated cruise terminal will definitely enhance Hong Kong’s image as a free port, as an international city and will broaden the appeal and attraction of the Victoria Harbour. As remarked by Mr. Ian Dale, Director of Marine during a recent luncheon that it is important to create more “non-sensitive” activities for the inner harbour.
5.2 Importance to Tourism
5.2.1 The Hong Kong Tourist Association has identified the cruise market segment as a potential market segment, as cruise passengers are normally up-market visitors with a high per capita expenditure.
5.2.2 The Association has identified and started to promote Hong Kong as the “New Cruising Hub of Asia”. This positioning is in line with the recommendation of the Visitor and Tourism Study for Hong Kong - Strategy Report 9. To achieve this marketing positioning, the strategies adopted are:
* To encourage cruise lines to home port their ships in Hong Kong and Asia;
* To encourage cruise lines to increase their frequency of call to Hong Kong; and
9. This Study was commissioned by the HKTA and managed by the Planning Department, Hong Kong Government. The objective of this study is to formulate a visitor and tourism strategy suited to the future needs of Hong Kong and to recommend appropriate courses of action to implement a selected strategy.
* To focus on the promotion of fly/cruise holidays or cruise/fly holidays (i.e. with Hong Kong as the turnaround point), with pre or post extension stay in Hong Kong so as to maximise the economic benefits to Hong Kong.
6. Technical Requirements of a Dedicated Cruise Terminal
6.1 Key Components
As a dedicated cruise terminal, the key components are:
* A dedicated cruise terminal with all the port facilities, such as immigration, customs, baggage handling, etc.;
* Two berths (each of 240 - 300m in length) with a water depth of 10 - 11m;
* Provision for car and coach parking; and
* Infrastructure support to core urban area.
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6.2 Supporting Facilities
* Offices for cruise line operators, ground handlers, airlines and related businesses;
* Offices for related government departments;
* Space for retail, dining and entertainment; and
* Hotel accommodation.
7. Possible Locations
7.1 Short-listed Sites
In response to the HKTA’s proposal, the Planning Department has carried out a preliminary site-search for a dedicated cruise terminal. Three possible sites have been identified and the relative benefits of these short-listed sites are as follows:
Location Issues
Kowloon Bay 1. Could be integrated with future park developments
Reclamation in the area.
2. Its feasibility could be considered in the context of the South East Kowloon Development Feasibility Study.
3. Draft restrictions set by the cross harbour tunnel.
Kowloon Point 1. Cruise centre is compatible with the proposed
Reclamation Cruise centre is compatible with the proposed development in Kowloon Point.
2. Could be planned as part of the reprovisioning exercise for the China Ferry Terminal and Ocean Terminal.
3. Dredging will be required.
Hung Hom Bay 1. Waterfront site at existing reclamation.
Reclamation
2. Close to residential area.
3. Close to Comprehensive Development Area where a mixture of different land uses is possible.
4. Close to existing fairway; draft restriction imposed by cross harbour tunnel.
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7.2 Preferred Sites
In view of the need of infrastructure support for a dedicated cruise terminal, South East Kowloon Reclamation, Hung Hom Bay Reclamation and Kowloon Point Reclamation are all acceptable. The merits of these three sites are listed below:
7.2.1 South East Kowloon Reclamation
* There is land available after the relocation of the Kai Tak Airport (total site coverage with reclamation is in the region of 580 hectares) as well as a long coast line.
* The site will be well served by the proposed MTR extension, the Eastern Harbour Crossing as well as the Eastern Kowloon Corridor and Tate’s Cairn Tunnel to every part of the territory.
* Based on the South East Kowloon Development Statement, the waterfront will be reserved as promenade and open space, suitable sites will also be reserved for civic purposes, hotels and other land uses.
* The cruise terminal will blend in very well with the proposed urban design of the area, the proposed approach is to create a variety of local landmarks and open space within the overall built form, providing a “sense of place”. The cruise terminal will definitely be able to serve as the signature landmark for the area.
* The cruise terminal in this location will minimise cruise lines entering into the western harbour area by coming in and out of Lei Yue Mun and it is far away from the existing Eastern Fairway. According to the trade, the draught restriction of 11m imposed by the Eastern Harbour Crossing is acceptable and workable.
* In terms of urban planning, with the relocation of the Kai Tak Airport to Chek Lap Kok, the cruise terminal at this location will serve as an anchor point for Eastern Kowloon as well as to bring life into the inner harbour with minimal traffic volume.
7.2.2 Hung Hom Bay Reclamation
* There will be land readily available at the Hung Hom Bay reclamation (36 hectares) as well as a long coast line.
* It will also be well served by the proposed MTR extension, the Cross Harbour Tunnel as well as the proposed trunk road to West Kowloon Reclamation for linkages to the Chek Lap Kok Airport.
* The cruise terminal will blend in very well with the proposed urban design of the area, the proposed approach is to create more open space as well as waterfront promenade to link up Tsim Sha Tsui to the south and Kowloon Bay to the north.
* The cruise terminal in this location will minimise cruise lines entering into the western harbour area by coming in and out of Lei Yue Mun and it is far away from the existing Eastern Fairway. According to the trade, the draught restriction of 11m imposed by the Eastern Harbour Crossing is acceptable and workable.
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* The location is in close proximity to the core Kowloon area where there are opportunities for shopping, dining and entertainment.
* It is also close to the Kowloon station of the airport rail, hence very convenient for fly/cruise passengers.
* In terms of urban planning, with the relocation of the Kai Tak Airport to Chek Lap Kok, the cruise terminal at this location will serve as an anchor point for Central Kowloon.
7.2.3 Kowloon Point Reclamation
* A Cruise terminal is compatible with the proposed development in Kowloon Point.
* It is well served by the proposed MTR extension linking the new airport, the Western Harbour Crossing as well as the trunk road linking the core Tsim Sha Tsui area with West Kowloon Reclamation.
* It is located right next to Tsim Sha Tsui which is the core tourist area where opportunities exist for dining and entertainment.
* It is also closed to the Kowloon station of the airport rail, hence very convenient for fly/cruise passengers.
7.3 Implementation Strategy
Among the three preferred sites, based on the findings discussed above, the following is the recommended priority:
A) Hung Hom Bay Reclamation
B) South East Kowloon Reclamation
C) Kowloon Point Reclamation
It is recommended that the Hong Kong Tourist Association should lobby for the endorsement by the Economic Services Branch on the proposed cruise terminal and put forward to the Port Development Board for approval. It can then be included in the context of the relevant master layout plan for Hung Hom Bay Reclamation or relevant development study for a less preferred site should Hung Hom Bay Reclamation prove to be not viable.
8. Financial Viability
8.1 Viability
8.1.1 It is obvious that a dedicated cruise terminal cannot stand on its own financially. However, as a “collective consumption”, the government is responsible for providing the necessary social facilities, such as an airport, to fulfil the need of the people. Having said that, financial viability of a cruise terminal very much depends on its design, facilities and supporting features.
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8.1.2 The suggested approach will be, apart from a dedicated cruise terminal to serve its purpose, there will be ample space for retail, duty free shops, restaurants, business centre and offices, similar case is the China Hong Kong City.
8.1.3 The Government should operate it like the airport terminal, it is a revenue (profit) centre rather than a cost centre. A formula can be worked out to ensure that there will be sufficient revenue generated from the berthing fees, concession rights and rental to cover all the operational expenses.
8.2 Options
8.2.1 By Government
An organisation similar to the Airport Authority could be established to supervise the planning and construction as well as the future operation of the terminal. The operational expenses should be covered by the revenue generated from the berthing fees, rentals and concessions.
8.2.2 By Private Sector
It can be part of a Comprehensive Development Area (CDA) and there are a number of possible sub-options:
* The developer is required to build the cruise terminal and the supporting facilities for the Government as part of the lease;
* The developer develops and operates the cruise terminal and the supporting facilities by paying Government a fee.
8.2.3 Added Value
The cruise terminal will also add value to the land in the vicinity (commercial, hotel and other development). Hence, government will be able to generate additional revenue from the land sale at a better price.
9. Capability
Operation of a dedicated cruise terminal will not create any problems or pose any difficulties for Hong Kong as we have the experience of operating the Ocean Terminal, the China Ferry Terminal and the Macau Ferry Terminal. Furthermore, there is a wide range of supporting facilities available in Hong Kong, such as ship repair, onboard services, port services, navigation and pilotage as well as the professional and efficient administration of the Marine Department and the Port Development Board.
10. Conclusion
With all the findings and justifications discussed above, it is fully justifiable for Hong Kong to have her own dedicated cruise terminal and it is also technically and financially viable to do so.
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As discussed above, it is the Government’s intention to enable Hong Kong to grow as an international city and a better place in which to live and work. It will also complete the facilities for an international port like Hong Kong.
As one of the major industries in Hong Kong, tourism industry contributes significantly to the balance of payments, government revenue and employment. Cruise market as a high-yield sector will enhance the further development and growth of the tourism industry in Hong Kong.
However, this will not be possible unless the government, the tourism planners and developers and other investors all work in close collaboration to improve the tourism plants, tourist facilities and infrastructure such as the cruise terminal, to meet the expectations and demands of our population as well as overseas visitors.
oo0oo
References:
1. Stephen Craig-Smith and Michael Fagence (1995), Recreation and Tourism as a Catalyst for Urban Waterfront Redevelopment - An International Survey, Praeger, London.
2. Cruise Lines International Association (1995), The Cruise Industry - An Overview, New York.
3. Cruise Industry News Quarterly (Fall 1995), Orient and South Pacific, New York.
4. Hong Kong Tourist Association (1994), Tourism in Hong Kong - The Figures, Hong Kong.
5. Hong Kong Tourist Association (1994), Visitor and Tourism Study for Hong Kong, Hong Kong.
6. Hong Kong Tourist Association (1995), A Statistical Review of Tourism 1994, Hong Kong.
7. Hong Kong Government (1991), Metroplan: The Selected Strategy - Executive Summary, Hong Kong.
8. Hong Kong Government (1993), Territorial Development Strategy Review - Development Options, Hong Kong.
9. Hong Kong Government (1994) South East Kowloon Development Statement - Consultation Digest, Hong Kong.
10. Hong Kong Government (1994), Port of Hong Kong, Hong Kong.
11. Leonard Lickorish, Development Tourism Destinations - Policies and Perspectives, Longman Group, U.K.
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