Success ingredientJoyce Tan

Cruise lines operator Genting Hong Kong is pinning its future on Mainland China’s emerging middle and upper classes and a new generation of passengers. Chief Financial Officer and Executive Vice President of Financial Services Joyce Tan tells Jemelyn Yadao how she helps to maintain full speed ahead

CRUISE CONTROL

Past extremely tight security checks, and through sliding glass doors on board an 18-deck ship berthed at Kai Tak Cruise Terminal, there’s a gradual sense for first-time passengers that the common

cruise myth – cruise ships are boring – is perhaps untrue. At the heart of Genting Dream, the first ship of cruise line Dream Cruises,

is a three-deck-high atrium where live shows take place at the bottom, and a large circular LED screen shows colourful graphics at the ceiling. The top deck is mostly a waterpark with five different waterslides. Then there’s the ship’s extravagant 999-seat Zodiac Theatre, which puts on a theatrical ver-sion of the television show China’s Got Talent.

“I think most people in Asia are not familiar with a cruise vacation,” says Joyce Tan, Chief Financial Officer and Executive Vice President of Fi-nancial Services of Genting Hong Kong, the entertainment and hospitality unit of Malaysian conglomerate Genting, and owner of Dream Cruises. The addressable market of Chinese vacationers are just beginning to understand the value and benefits of a cruise holiday experience, says Tan, a member of the Hong Kong Institute of CPAs.

The company wants to convey the message that cruise ships can be a great vacation option with a wide range of features. “The Chinese consumer today is new to the world of cruising. There’s the need to educate the distri-bution network and consumers in China because they lack the understand-ing of what a cruise product is all about, particularly as you go further

Photography by Juliet Shayne Lui

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Joyce Tan held positions in financial advisory, corporate finance, investment banking and asset management institutions in Hong Kong, London and Malaysia

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Success ingredientJoyce Tan

inland to secondary and third tier cities,” says Tan. “The second challenge is that there is very little brand awareness: the end consumer can’t differentiate between dif-ferent cruise brands beyond itinerary and price. Of course, if the ship is new, they’ll just go for it.”

Recent moves by American cruise liners – big players Royal Caribbean, Car-nival Cruise Line and Norwegian Cruise Line – to increase capacity in Asia give Tan hope. “It’s helped create more awareness in the region and cruising is now becoming a legitimate option among Chinese consum-ers,” she says. In March, Miami-based Carnival announced that its cruise’s joint

venture with the China State Shipbuild-ing Corporation will order two new cruise ships. It comes amid China’s efforts to become a leading cruise market as part of its five-year economic development plan.

Apart from Dream Cruises, Genting Hong Kong also owns Star Cruises, founded in 1993, and Crystal Cruises, which was acquired in 2015. The three cruise brands target different consumer segments from the contemporary market to Asian luxury travellers to international luxury travellers. Genting also owns Ger-man shipyards MV Werften in Mecklen-burg-Vorpommern and Lloyd Werft in Bremerhaven, Singapore nightlife brand

Zouk, and joint venture Resorts World Manila, the first integrated resort in the Philippines which opened in 2009.

Anchored in ChinaGenting has strongly positioned itself to tap into the rapidly developing Chinese cruise market given the country’s expanding middle and upper classes. Tan points to the Cruise Lines International Association’s 2016 Asia Cruise Trends study, which reveals the scale of the soaring demand – from 2012 to 2015, passenger volume from Asia grew from 775,000 to nearly 2.1 million passengers, a 39 percent compound annual growth rate,

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“ Many cruise lines have placed orders for new ships for China to backfill their ships, which were re-deployed from their existing markets in Europe and elsewhere into Asia and China.”

and almost half of the 2.1 million passengers from Asia were Chinese. Taiwan, Japan, Hong Kong and India also recorded double-digit three-year compound-growth.

Despite growing popularity, cruise travel in Asia still has a long way to go. China’s cruise penetration rate is just 0.2 percent, compared to North America’s 4 percent, the United Kingdom’s and Ireland’s 3 percent, and Germany’s 3 percent, according to the CLIA study. “That tells you that there’s a lot of room for growth in Asia and China’s cruise sector,” says Tan.

To cater to the growing demand, Genting Hong Kong last year acquired four shipyards in Germany to build their own ships,

including two Crystal river ships scheduled to be delivered this year, two river ships next year, and a polar exploration ship scheduled for 2019. “We’re also ordering two Global Class ships for Star Cruises of about 204,000 tonnes each, larger than the Dream Cruises vessels, for delivery in 2020 and 2021.”

Currently, orders at other shipyards are at a record-high level, according to Tan. If a company ordered a ship today, it wouldn’t be delivered until 2025. “Many cruise lines have placed orders for new ships for China to backfill their ships, which were re-deployed from their existing markets in Europe and elsewhere into Asia and China,” she says. “We want to focus on growing our fleet of ships in Asia and for our brands, hence the shipyard acquisitions.”

With the increasing awareness of cruis-ing in the region and development of a more knowledgeable and efficient distribution network in China involving traditional travel agents, meeting planners, digital partners and social media, Tan expects more Chinese consumers will see the value of cruising in the future.

Genting Hong Kong’s Genting Dream cruise’s offering currently covers five nights to Naha and Miyakojima in Okinawa and two-night weekend getaway cruises from Hong Kong. From December, it will offer itineraries to Southeast-Asia destinations such as North Bali, Surabaya, Phuket, Penang and Kuala Lumpur from Singapore. Tan is

hoping to see the cruise line further expand its horizons and add new ports of call. “Asian, in particular Chinese, consumers today tend to go on the three-night or five-night cruises be-cause they don’t get long breaks, so cruising itineraries are kept short. Hopefully, in years to come, they’ll be cruising beyond Asia.”

Steering towards efficiencyTo attract a younger and more lifestyle-driven clientele, Genting acquired iconic Singapore club brand Zouk in October 2015. On board Genting Dream is the first Zouk nightclub at sea. “It was to ensure we have a new generation of younger Asians to cruise with us into the future,” says Tan.

With the company’s numerous acquisitions over the last two years, Tan has been busy. “Procurement and fundraising have taken a lot of my time in terms of the new builds, in addition to post-acquisition integration activities – I visited Germany several times last year – but then there are the day-to-day corporate ongoings,” she says. The ship, she adds, is essentially a floating resort. “I have a team of finance people on board, and they will manage the finances, conduct cost and inventory control, and financial reporting, so I do go cruising from time to time to monitor quality and to ensure we are leveraging our purchasing power.”

One of Tan’s cost-saving initiatives is working on a finance shared-service function. “It’s ongoing. The next step is how you scale

Tan started her career with PwC in the United Kingdom as an auditor and later joined NM Rothschild & Sons in London and was relocated to Hong Kong as an utilities and natural resources banker

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Success ingredientJoyce Tan

it out and scale it the right way,” she says. “With all the acquisitions, work-ing in different timezones, different locations and different colleagues, you would need to centralize areas such as finance.”

Fuel and crew payroll are the key costs for a cruise ship, says Tan. “In terms of fuel, hedging is an important consideration. It’s very hard to predict where oil prices will go, which is why we take a very conservative approach to hedging.”

In terms of crew payroll, Tan notes that staff have become even more of a valuable asset, with other cruise brands entering the region. “Experienced crew is up for grabs and that drives the prices up, so to manage our crew payroll we look at our manning – Is it the right balance of manning? Could the crew multitask on board? Rebalancing our manning helps drive both operational and cost efficiency.”

Career journeyBefore cruising from port-to-port, Tan’s career moves had taken her from country-to-country. After graduating with a degree in accounting from the University of Hull in the U.K., she started her career at PwC’s Leeds office as a young auditor in the consumer, industrial and products group, receiving her chartered accountancy training. She then moved to the firm’s London office where she completed her training.

After four years in audit, she moved to financial advisory serving mainly European energy and utilities clients. “That was my first encounter of the utilities and renewable energy industries. I started understanding the idea of maximizing shareholder value,” she recalls. “We went to Slovakia to do restructuring work for a state-owned oil company. It was an interesting time.”

A year later, Tan joined NM Roths-child & Sons, the multinational invest-ment banking company in London. At the time, the company was setting up a utilities and natural resources group in Hong Kong, and Tan relocated. “I spent a lot of time in the Philippines as part of the team advising the Philippines government on the privatization of their electricity generation and transmission business, and renegotiation of its vari-ous power purchase agreements, and I also worked on a trade sale and IPO of the Indonesian state-owned gas trans-mission and distribution company.”

Something didn’t sit well with Tan after four years at Rothschild: “I thought, I’m Malaysian but I haven’t worked in Malaysia before. So I went to Malaysia and worked at a bou-tique corporate finance and advisory company for over two years.” She later joined Babcock and Brown, a formerly ASX-listed Australian investment and advisory group. “I joined in Kuala Lumpur as a director of infrastructure for Asia, and one of the assignments she

Building the dreamAt 335 metres long and a capacity for 3,348 passengers and 2,000 crew, Genting Dream, the first ship of the Asian luxury cruise company Dream Cruises, made its maiden voyage in November 2016. The construction of the 150,000-tonne ship began at the Meyer Werft shipyard in Papenburg, Germany in February 2015.

The second vessel of the Dream Cruises brand, World Dream, is currently being built at the same shipyard and is scheduled to be delivered to Hong Kong around November. “It's basically the sister ship of Genting Dream, purpose-built for Asia Pacific and China. It will accommodate about 3,400 guests and 1,674 state rooms,” says Joyce Tan, Chief Financial Officer and Executive Vice President of Financial Services of Genting Hong Kong, which owns Dream Cruises.

Such a substantial ship-building project relied heavily on effective leadership and teamwork, says Tan. “We had to recruit and re-organize teams. We had a team working with the shipyard on-site to deliver the ship on time, a team outside of Germany to organize and place orders, and ensure all the chairs, tables and other furnishing were up to standard and a team in Hong Kong to support us by defining the operating requirements and the desired Dream Cruises’ brand experience. Some orders were delivered to the yard, and some were delivered elsewhere as the ship came over to Asia,” she says. “We worked on a very tight timeline. Everyone had their hands full , but it was great teamwork and camaraderie.”

Tan is feeling more relaxed about the construction of the second ship. “But as we get closer to the deadline, everybody will be on their toes again.”

“ I thought, I’m Malaysian but I haven’t worked in Malaysia before. So I went to Malaysia and worked at a boutique corporate finance and advisory company for over two years.”

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China’s cruise market will grow

from 1 million passengers

in 2015 to 4.5 million by 2020,

according to China’s Ministry of

Transport.

worked on was a bid to develop a coal-fired plant in Thailand. I spent six months there with the team, having meetings with the vil-lage head man and participating in a townhall consultation process.” After that in 2007, she was asked to relocate to the firm’s Hong Kong office, where she became a HKICPA member.

From crisis to calm waters The global financial crisis of 2008 eventually caught up with the Australian advisory group, and it went into liquidation the year after. “It didn’t survive the crisis because it was a very heavily leveraged model,” says Tan. She moved on. “I got a phone call from the then president of Genting Hong Kong in 2009, and he said: ‘Babcock is going under, what are your plans?’ That’s how I joined Genting as senior vice president, corporate finance.”

Her first job in Genting was to get on the plane to the Philippines and work on the fundraising for Resorts World Manila. “It was big news at the time because we were the first private operator and owner of an integrated resort,” she recalls. “We managed to secure close to US$200 million from one single local bank for the project. We also conducted

industry studies on the country’s gaming sector because nobody knew the depth and breadth of the market.” Six months into the job, she assumed the role of CFO.

Tan looks back at her auditing days as an experience that’s helped her throughout her career, and in her current role. “Without realizing it, you see very early on the different perspectives of companies – I think that sharpens business acumen and gets you anticipating the risks that may come up if certain things are not in place.”

The CPA training, she stresses, was what helped her move nimbly from oil and gas to entertainment and hospitality. “It helps build one’s flexibility and adaptability to people, to situations and business environments,” she says.

However, it’s the expertise she doesn’t possess and the people around her that inspire her the most. “Despite all the challenges over the years, what I appreciate the most is the diverse skill sets of the people I work with that pull together to achieve a common goal. Watching hires succeed as they move up within the organization has been one of my most memorable moments.”

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