Full steama­head for cruise in­dus­try

Sec­tor gets ready to move up the value chain with flurry of ac­tiv­ity

China Daily (Canada) - - BUSINESS - By SHI JING in Shang­hai shi­jing@chi­nadaily.com.cn

With the gov­ern­ment keen on mak­ing China the largest cruise mar­ket in the Asia-Pa­cific re­gion by 2020, the cruis­ing in­dus­try seems to have got the much-needed im­pe­tus for rapid de­vel­op­ment, judg­ing by the frenzy of ac­tiv­ity within the sec­tor. Ev­i­dence that the sec­tor is rapidly un­furl­ing its sails can be gauged from the growth in the num­ber of cruises from China. Ac­cord­ing to the 2014 China Cruise In­dus­try De­vel­op­ment Re­port re­leased by the China Cruise and Yacht In­dus­try As­so­ci­a­tion on Wed­nes­day, the to­tal num­ber of cruises from China is ex­pected to be around 466 by the end of 2014, a 14.78 per­cent year-on-year growth.

Break­ing this­down­fur­ther, one can see that th­ese trips in­volved about 860,000 tourists, a 43.36 per­cent year-onyear growth. Of th­ese tourists, about 739,600 were Chi­nese trav­el­ers who boarded the cruises from Chi­nese ports.

The Shang­hai Port In­ter­na­tional Cruise Ter­mi­nal re­ceived 576,000 tourists in 2014, and also zoomed past Sin­ga­pore as the largest cruise ter­mi­nal in Asia this year. Un­like most of the other sec­tors, the cruise in­dus­try has seen steady growth dur­ing the past eight years. That mo­men­tum is set to con­tinue in 2015, said in­dus­try sources.

TheChina Cruise and Yacht In­dus­try As­so­ci­a­tion ex­pects the num­ber of cruises that will orig­i­nate from Chi­nese ports to reach 12 next year, com­pared with eight cruises now. The num­ber of Chi­nese main­land tourists tak­ing cruises will cross 1 mil­lion for the first time in 2015.

The mar­ket size of the cruise in­dus­try, es­pe­cially the num­ber of tourists tak­ing cruises, will con­tinue to grow by at least 30 per­cent in 2015.

“We will see more itin­er­ar­ies in­tro­duced into the Chi­nese mar­ket in the next few months. The Chi­nese cruise sec­tor will move up the in­dus­try chain with more com­pa­nies tak­ing part in ship­build­ing, which will re­ally in­ject more vi­tal­ity into the econ­omy,” said Cheng Jue­hao, deputy di­rec­tor of the Shang­hai In­ter­na­tional Shipping In­sti­tute’s Cruis­ing and Boat­ing Re­search Cen­ter.

Zheng Wei­hang, ex­ec­u­tive vice-pres­i­dent of the China Cruise and Yacht In­dus­try As­so­ci­a­tion, said the rapid de­vel­op­ment has also led to the flow of more cap­i­tal into the sec­tor, through­out the in­dus­try chain.

“Some com­pa­nies have shown in­ter­est in build­ing cruise lin­ers in Europe, which will be later handed over to

CRUISE DOCK­INGS AT MA­JOR PORTS do­mes­tic com­pa­nies for op­er­a­tion. Some­com­pa­nies would like to go to the down­stream of the in­dus­try chain to fo­cus on travel agen­cies,” said Zheng, adding that there is no need to be hasty, and it will take five years be­fore the in­dus­try be­comes more ra­tio­nal.

De­spite the progress made in the past fewyears, there are still some prob­lems that need to be ad­dressed.

For one thing, the itin­er­ar­ies avail­able now are quite limited, with most of the four- to five-day trips fo­cus­ing on vis­its to Ja­pan or South Korea. This will largely af­fect re­peat trips for tourists who are in­ter­ested in cruises, said Huang Ruil­ing, gen­eral man­ager of Costa Cruises Shipping Ser­vices (Shang­hai) Co Ltd.

“The cruise in­dus­try chain in China is quite in­com­plete. We are now still un­able to de­velop our own cruises, with Euro­pean com­pa­nies dom­i­nat­ing this part of the mar­ket. Most of the lead­ing com­pa­nies are re­puted global names, while the Chi­nese com­pa­nies are those that have just started op­er­a­tions,” said Xiao Bao­jia, di­rec­tor of the Cruis­ing and Boat­ing Re­search Cen­ter.

“Most of the Chi­nese ports fo­cus more on ap­pear­ance, rather than func­tion. There is also a se­vere short­age of pro­fes­sional ser­vices in the cruise in­dus­try. Raw ma­te­rial sup­plies and gov­ern­ment support are also not enough. But the real con­cern is ob­vi­ously the short­age of high­end cruise in­dus­try tal­ent,” said Xiao.

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