Global cruise lines set sail for China, Asia

China Daily (Canada) - - BUSINESS - By XIN­HUA and AP

Royal Caribbean’s new­est cruise ship, Quan­tum of the Seas, will have its home port in China.

The $935 mil­lion ship floated out of aGer­man ship­yard last­weekand­will spend the win­ter sail­ing between New York and the Caribbean be­fore mov­ing to its new base next sum­mer in Shang­hai.

It is a brave move for the world’s sec­ond-largest cruise com­pany. Cruise op­er­a­tors have tra­di­tion­ally sent older ves­sels to de­vel­op­ing coun­tries while sav­ing their most ad­vanced ships for US and Euro­pean cus­tomers. But surg­ing growth in China means it is a mar­ket op­er­a­tors can no longer ig­nore.

Car­ni­val Corp, the lead­ing cruise com­pany, will be­come the first global op­er­a­tor to have four ships based in China when it de­ploys its Costa Ser­ena to Shang­hai in April.

The race for China un­der­scores the grow­ing strength of the leisure and travel in­dus­tries in the world’s sec­ond-largest econ­omy, as au­thor­i­ties try to spur do­mes­tic spend­ing rather than trade and in­vest­ment as an en­gine of growth.

Ex­ec­u­tives are con­fi­dent about China’s prospects even as it­sec­on­omy strug­gles with a pro­longed slow­down from dou­ble-digit rates of ex­pan­sion, say­ing that growth is still strong when com­pared with de­vel­oped mar­kets.

Mi­ami-based Car­ni­val ex­pects to carry 500,000 Chi­nes­e­cruisep­a­s­sen­gersin2015, up­from 350,000 this year.

“We­knowthat’s jus­tadrop in the bucket to what lies ahead in terms of the mar­ket in China, which we be­lieve is go­ing to some­day rep­re­sent more than half of all the cruise guests,’’ Car­ni­val CEO Arnold Don­ald said in a phone in­ter­view.

The Asian Cruise As­so­ci­a­tion­es­ti­mat­ed­lastyearthatthe over­all Asian mar­ket, which to­taled 1.3 mil­lion pas­sen­gers in 2012, could nearly triple to 3.8 mil­lion in 2020, in­clud­ing 1.6 mil­lion­fromChina.

Car­ni­val is even more op­ti­mistic, pre­dict­ing the num­ber will grow to 7 mil­lion, or about a fifth of the global mar­ket, by 2020.

“For the next five to 10 years, greater China, in­clud­ing Hong Kong, will play a crit­i­cal role in the global cruise in­dus­try’s devel­op­ment,’’ said Zi­nan Liu, Royal CaribbeanCruis­esLtd’sman­ag­ing direc­tor for China.

While the US and Europe are show­ing signs of re­vival, “there’s no re­gion that will grow as rapidly as China and Asia,” he said.

Liu said Royal Caribbean ex­pects to carry 400,000Chi­nese cruise pas­sen­gers in 2015, dou­ble the num­ber from last year, from four main ports — Shang­hai, Hong Kong, Xi­a­men and Tian­jin.

The com­pany’s 18-deck Quan­tum of the Seas, which can carry 4,180 pas­sen­gers, ar­rives in Shang­hai in­May of next year, join­ing two other Royal Caribbean ships based in China.

It is also ex­pand­ing op­er­a­tions in Hong Kong to bet­ter mar­ket to cus­tomers in neigh­bor­ing Guang­dong, the rich­est prov­ince in the main­land, Liu said.

For Car­ni­val, the ad­di­tion of the Costa Ser­ena will raise its China ca­pac­ity by 3,780 pas­sen­gers. The com­pany has two other Costa brand ves­sels sta­tioned in Shang­hai.

One fac­tor com­pli­cat­ing ef­forts to pitch cruises to the Chi­nese main­land is that “the vast ma­jor­ity of the pop­u­la­tion have no con­cept of a cruise”, said Don­ald, of Car­ni­val.

Un­like Amer­i­can or Euro­pean cruise pas­sen­gers, who tend to be older and have the time to take two-week jour­neys, Chi­nese cruise trav­el­ers are younger and have less va­ca­tion time. That lim­its the pos­si­ble itin­er­ar­ies and presents a chal­lenge.

Shang­hai soft­ware en­gi­neer Cao Ying took a five-day cruise to Ja­pan and South Korea with her hus­band on Princess Cruises’ Sap­phire Princess af­ter he took one with other staff at his In­ter­net com­pany to en­ter­tain clients.

The 30-year-old loved the din­ing, the shows, the spaand the help­ful staff. But she com­plained that there wasn’t enough­time dur­ing port calls.

“I think trav­el­ing by cruise is a good ex­pe­ri­ence, but the down­side is that you couldn’t re­ally seealot. Icouldn’tgoto visit the places I would like to go in a for­eign coun­try,’’ said Cao. “So un­less it’s a free trip, I wouldn’t take a sec­ond cruise, even to go to an­other coun­try.’’

An­other big com­plaint is in­suf­fi­cient cruise ports and re­lated fa­cil­i­ties. China’s fo­cus in the past few decades on ex­port­ing man­u­fac­tured goods means ports are geared to ship­ping con­tain­ers rather than leisure trav­el­ers.

Un­co­or­di­nated in­fra­struc­ture devel­op­ment was high­lighted when Shang­hai opened a new $260 mil­lion cruise ter­mi­nal on the city’s his­toric river­side Bund in 2008, only to dis­cover that many big ships could not ac­cess it be­cause of a low bridge down­stream. An­other $140 mil­lion ter­mi­nal with two berths opened at the river’s mouth in 2011 to ac­com­mo­date those ves­sels. Re­searcher Fu Ting Shang­hai con­trib­uted this story. in to

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