New Hong Kong cruise terminal gushes from taxpayer spigot

Jun 13, 2013, 3:40AM EST
If the cruise business has such a bright future, why don’t the cruise ship operators build their own passenger terminals?

Speak to any executive in the world’s cruise liner industry and you will hear how business is booming. Unsurprisingly in Asia, China is driving up the numbers with Royal Caribbean’s Chinese passengers growing from 25,000 in 2010 to 200,000 this year.

Globally, the world’s biggest cruise outfit, Carnival, expects passenger numbers to reach 3.7 million by 2017 and seven million by 2020.

The World Tourism Organization says China has become both the biggest source of foreign tourists in the world and the biggest spender in global tourism.

With these numbers, one can understand why the Hong Kong government felt it needed a new cruise terminal capable of handling vessels that are growing in size to cope with the rising demand. So the first berth of this US$1.1 billion terminal was duly opened at the old Kai Tak airport site yesterday with the arrival of the 310-metre Mariner of the Seas.

More difficult to understand, however, is why the Hong Kong taxpayer had to pay for the terminal. The Hong Kong government decided it would cover the terminal construction after  tenders it received from developers were not regarded as adequate. Apparently the developers were too focused on making the thing commercially viable.

In a hurry to get the terminal ready for business, the government reached deep into its tax coffers, slapped $1.1 billion down on the craps table and threw the dice. Time will tell if it was a wise move.

But if the cruise industry is such a good business and will grow so rapidly over the next few years, why didn’t the cruise ship companies pay for the terminal themselves? Either the industry doesn’t face such a bright future or, more likely, the cruise operators know how to spin a wonderful tale of limitless riches that will only come true if someone else pays for their terminals. They are no doubt high-fiving each other over mojitos on the pool deck.

With ports across the region falling over themselves to splash out on terminal facilities the cruise operators can pick and choose the cities they include on Asia itineraries. Build the damn thing or we won’t come, has long been the message to the Hong Kong government that can somehow manage to be inert and profligate at the same time.

But what benefits do these ships really bring to a city? The problem with Kai Tak is that it is miles from anywhere, so passengers have to be shuttled to shopping centres. When Mariner of the Seas docked, a gridlock of busses was provided to whisk passengers off to the malls to provide “shopping experiences”.

Interestingly, this places the malls in direct competition with cruise operators who prefer shopping experiences to remain on board their vessels where the captive market can be fleeced at its leisure.

Still, if ferrying passengers to shopping malls to buy overpriced rubbish is the best the Tourism Board can do for cruise passengers, you can only scratch your head. It means for all the hype, the cruise terminal is nothing more than a taxpayer-funded delivery system for international retailers.

 
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Comments
NEIL OSBORNE
Port authorities worldwide build terminals for a whole variety of commodities ... passengers included. Airport authorities too.
6/13/2013 9:15:32 PM
 
Greg Knowler
But how much does the taxpayer benefit from that investment? Governments typically present ROI that invariably turns out to be wildly inflated - standard operating procedure in Hong Kong. And just how long will it take to recover $1.1 billion from a cruise terminal when passengers are in port for a day or two and spend on expensive international brands where the money goes straight out of HK?
6/13/2013 11:59:50 PM
 
John Fahy
From the information supplied, it appears the new terminal is located at the old airport or nearby.
Which is quite away from Central, Tsim Sha Tsui, or Mong Kok, which is where most of the shopping centres are located.
Also the depth of water there is not sufficient for deep draft vessels.
Hence, one can only wonder why the present location was chosen?
6/20/2013 10:34:34 AM