Genting Hong Kong Reports 2017; Outlines Future Strategy

Genting Hong Kong has reported a segment loss of $186 million on revenues of $1.1 billion for its cruise operations for the year ended Dec. 31, 2017, compared a loss of $106 million on revenues of $908 million for the previous year. Genting owns and operates Dream Cruises, Crystal Cruises and Star Cruises.

Overall Genting posted a loss of $244 million on revenues of $1.2 billion for 2017, compared a to a loss of $504 million on revenues of $1.0 billion for 2016. This includes profit or loss contributions from its shipyards and joint ventures.

For its cruise operations, Genting said in its year-end report that passenger ticket revenue and onboard revenue increased significantly in 2017 mainly to the full year’s service of the Genting Dream and the Crystal Mozart, as well as the launch of the World Dream. Crystal Bach and Crystal Mahler during the year.

Depreciation of the new Dream and Crystal vessels and start-up costs for the new Crystal river ships resulted in the segment loss, according to Genting.

Shipyard operations also posted a segment loss.

For 2017, passenger ticket revenue was $728.3 million or $197.26 per passenger cruise day. Onboard spending was $287.7 million or $77.92 per passenger day.

For 2016, the passenger ticket revenue was $625.4 million or $213.99 per passenger cruise day. Onboard spending was $96.73.

With Dream and Star operating in Asia, Genting stated that Asia generated approximately 68 percent of its cruise revenues in 2017, 30.4 percent came from Europe and 1.6 percent from “other.” In 2016, Asia generated 56.2 percent of the revenues, Europe 42.3 percent and 1.5 percent came from “other.”

While Dream Cruises improved its occupancies and yields in the Hong Kong/Guangzhou and Singapore markets, the arrival of new ships was said to have had a negative impact on Star, creating downward pressure on occupancies and yields. This situation is expected to improve, however, as other brands are reducing their capacity in the market.

Crystal is also seeing more competition with competing brands launching new ships, according to Genting.

Overall, the three brands had a 77.2 percent occupancy in 2017, compared to 81.7 percent in 2016.

The two-ship Dream Cruises fleet, which launched service with the first ship in 2016, will see two more global-class ships join in 2020 and 2021. Plans call for them to sail from Shanghai and Tianjin during the summer months and Australia, New Zealand, California and the ASEAN region during the winter months. The brand is being tagged as “Asia’s Global Cruise Line” by Genting, which also said it will have the youngest fleet in the world.

Star Cruises will continue to sail from China, Taiwan, Malaysia.

Crystal Cruises two ocean-going ships are being extensively renovated. The river fleet will grow to five vessels in 2018, and the yacht expedition segment will grow from one to two ships, with the introduction of Crystal Endeavor in 2020. Furthermore, Genting said that a new class of ocean ships are being designed for Crystal’s fleet to provide more itineraries and reach better economies of scale.