SMART New Ocean Industries

“Growth of Cruise Tourism in Asia”

Kelvin Tan

Regional Director, Asia Pacific

Royal Caribbean Cruises Ltd.

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

Global Industry Growth 7% CAGR

Source: G.P. Wild (international Ltd) from PSA, CLIA, ECC and other sources

Global Annual Cruise Guests

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5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Year

Gue

sts

(Mill

ion'

s)

7% CAGR

3

Array of Brands in the Marketplace

Evolution of the Industry

1970

1980

1990

2003

2006

2009

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.

Cruise Market Size

In 2010, the estimate cruise market size in Asia is close to that of Europe in 1997. It is expect that Asia cruise tourism will experience a similar growth pattern in the next decades.

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2

4

6

8

10

12

1997 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year

Gu

est

s' M

illio

ns

Asia

Latin America

Europe

North America

Cruise Market Growth By Region

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.

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 :

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

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.

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)

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.

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

Source: UNWTO World Tourism Barometer June 2008

Outstanding Destinations

Royal Caribbean Cruises Ltd.

Royal Caribbean Cruises Ltd.

• Second Largest Cruise Company

• Six Brands

• Ships / BerthsIn 2012: 43, 102,000

• Over 4 Million Guests Annually

• 55,000 Employees

• Visit Over 430 Destinations Worldwide

Blue – 16 Global Corporate OfficesGreen – 48 International Representatives (GSAs)

Worldwide Distribution Network

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