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Asia's bespoke luxury cruises stay buoyant in coronavirus pandemic

Smaller vessels appeal to passengers with idea of lower-risk voyages

The Aqua Blu offers cruises within the territorial waters of Indonesia, where it is also registered. (Photo courtesy of Aqua Expeditions)

JAKARTA -- After a week at sea, Leyla, a luxury wooden yacht that cruises around the remote islands and reefs of eastern Indonesia, has passed a handful of fishing villages -- but its passengers have not come into contact with another living soul.

For Leyla's owner, Raul Boscarino, that means his private charter vessel, licensed for up to 10 passengers, offers a low-risk option for cruising in the era of COVID-19, at a time when the mainstream cruise industry has almost collapsed.

This weekend the luxury yacht, which has been at anchor since March, is starting a six-day cruise with a group of Bali-based expats through World-Heritage listed Komodo National Marine Park. "As soon as tourists from overseas are allowed to travel again on Sept. 11, bookings will return," Boscarino says. "We know this from our ongoing calls with agents and guests."

Asia was the fastest-growing cruise market in the world before the pandemic. Between 2013 and 2019, passenger capacity in the region grew from 1.51 million to 4.02 million, according to the Cruise Lines International Association (CLIA).

But the industry has been on its knees since Feb. 4, when Carnival's Diamond Princess, a 290-meter cruise ship with five restaurants, four swimming pools and a mini-golf course, was quarantined in Yokohama, Japan, after more than 250 of 3,711 passengers and crew tested positive for COVID-19. Some 700 more people caught the novel coronavirus and 14 died before the outbreak was contained.

By the end of March, more than 40 cruise ships around the world were hosting contagions, and the entire fleet of more than 300 ships was kept in port after governments issued "no sail" edicts. Operators are now scrambling to survive. Analysts and industry veterans believe profound changes are needed for the industry to win back the public's confidence.

But the smaller premium end of the industry "wasn't compromised like the big cruise ships" and is already showing signs of recovery, says Boscarino.

Francesco Galli Zugaro, CEO of Aqua Expeditions, a Singaporean company that operates luxurious steel-hulled expedition-class vessels catering to a maximum of 30 passengers in Vietnam, Cambodia and Indonesia, is also forecasting a swift recovery for the top end of the market.

"We were able to maintain three quarters of all bookings made before the crisis. We didn't have to give many refunds, just had to shift them," he says. "This confirms that not only is our demographic resilient but the experience we offer is resilient, too."

Galli Zugaro attributes some of that resilience to the fact that all his ships are registered where they operate, whereas large cruise ships tend to be registered in jurisdictions such as Panama or Bermuda to minimize government charges. This became the industry's undoing during the pandemic, after passengers in Asia shared horror stories of being rejected by port after port as governments denied them permission to dock or subjected them to monthslong quarantines.

"The ongoing concern for international cruising is not the ship itself, or getting infected, it's what happens if you get infected in international waterways," Zugaro explains. "That's where the risk is now: transoceanic voyages. But all our ships are registered in the countries they operate in, so we never have to ask for permission to dock."

In Australia, Coral Expeditions runs three larger expedition-class vessels that normally spend this time of year exploring some of the most beautiful and remote corners of the South Pacific.

But with an Australian ban on foreign tourists that could stay in place for at least another year -- or much longer -- the company has introduced new domestic itineraries for 2020. Scheduled to depart Aug. 21, the company's first pandemic-era cruise will take in the Kimberley, a wilderness region in the continent's northwest with rugged ranges and Technicolor coral reefs.

Dining on board Aqua Blu. Companies offering cruises with small numbers of passengers say it is a safer experience during the coronavirus pandemic. (Photo courtesy of Aqua Expeditions)

"We feel the expedition cruise sector is a very good fit for the new normal," says Commercial Director Jeff Gillies. "And there are lots of indicators that Australians want to travel within their own country."

He adds: "Our ships are small, with a maximum 72 passengers. But the key difference between us and mainstream cruising is that with them, the main attraction is the ship and the amenities. Our main attraction is the destination itself. We visit far and remote places that generally have no population centers and are inherently low risk."

The company has introduced health and safety protocols for its ships. But mask-wearing is not among them because anyone who comes aboard must pass a COVID-19 test. "When passengers arrive at our hotel the night before departure, they meet a company doctor for a swab test and we do a fast six-hour turnaround for results," Gillies explains. "Our crew are also tested."

While these smaller ships present alternatives for keen cruisers who don't like the idea of finding themselves on another Diamond Princess, they come at a price. A six-day, Bali-to-Komodo cruise aboard Aqua Blu is $7,500, while a basic stateroom on Coral Expeditions' 10-day Kimberley cruise is $7,800 twin-share, or $780 per day. The average cost per passenger per day, including extra spending, on all cruise ships is $212.80, according to Cruise Market Watch.

Many cruise fans also love big ships and can't wait to get back on them despite COVID-19. A May survey by UBS research found more than half of all former cruise passengers intended to book again in the next 18 months.

"While it's too soon to speculate, we envisage cruising will return in a carefully phased, regional approach," says Joel Katz, CLIA's managing director for Australasia. "This might mean short domestic cruise itineraries or cruises restricted to residents of individual countries. With health measures in place, cruises might operate on restricted itineraries with limited port calls."

The Explorer Dream, a 268-meter vessel with 13 decks, 14 restaurants and a Broadway-style theater that can accommodate 1,856 passengers, has already adopted this strategy.

On July 26 it became the first large cruise ship to depart since March, with the first of a series of three- and four-day island-hopping tours that remain in Taiwanese waters. The restart comes after the Explorer Dream became the first cruise ship to receive a Certification in Infection Prevention for the Maritime industry, a standard that includes 21-day mandatory quarantine for the crew, fresh air supply for each passenger cabin, a medical center with isolation wards and no self-service buffets.

The ship's operator, Genting Cruise Line of Hong Kong, got a head start learning how to operate by chartering two of its ships to Singapore to house foreign workers in June and July. It also helps that Taiwan has had one of the world's most effective responses to the pandemic.

Genting President Kent Zhu acknowledged the ship's relaunch "was made possible by the Taiwan authorities' swift and effective handling of the COVID-19 crisis."

The situation outside Taiwan is less rosy. Carnival, the world's largest cruise operator, is scrapping 13 of its 104 ships, "a downsizing the likes of which have never been seen in the modern cruise business," according to The Maritime Executive magazine. And it has postponed the debut of its newest ship, Mardi Gras, an 340-meter, a 180,000-ton titan that cost $1 billion and can carry 6,630 passengers and 2,000 crew spread over 18 decks.

Mardi Gras will boast the world's first at-sea roller coaster, but Boscarino is happy that the calm blue waters of Komodo will be just as enticing for his cruise guests. "Because it's a private charter, once you're aboard, you are totally isolated and there is no risk of catching COVID-19," Boscarino says.

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