Marine-based tourism means opportunities
Travel industry, public sector step up moves to boost marine-based tourism
If a friend from abroad were to materialize suddenly in China as a tourist, the question “Gee, when did you land” will likely pop up from the presumption that he or she flew into the country. But, if some tourism firms’ plans fructify, there might soon be an alternative question: “Hey, when did you make landfall?”
More and more tourists are expected to reach China by cruise liners from now on. And, as wanderlust grips experience-hunting Chinese middle-class travelers flush with rising disposable incomes and bitten by the consumption upgrade bug, the domestic tourism industry is expected to see a rapid growth of cruises, market insiders said.
According to the Cruise Lines International Association, by 2025, the number of Chinese travelers who will have experienced cruise trips is expected to grow to 8 to 10 million.
That would mark a surge from about 2.5 million Chinese travelers, or less than 2 percent of China’s outbound global travelers, who took cruise trips last year.
An estimated 300 million Chinese consumers would be able to afford cruise trips in the near future.
“In the next 10 to 20 years, the number of Chinese who take cruise trips annually is expected to surpass that of the United States. Growth in the world’s cruise market is expected to come from China,” said Zheng Weihang, executive vice-president and secretary-general of the China Cruise & Yacht Industry Association.
“As the industry continues to grow and develop in the region, China is widely expected to eventually become the largest cruise market in the world.”
Small wonder, moves are afoot at both governmental and corporate levels to harness all that potential.
Spanning modernization and upgrades of ports to home-built ships, purchase of ocean liners, multimodal transport mechanisms and longer duration visa-free visits to certain Chinese mainland areas in the neighborhood of ports, the bigticket measures will seek to monetize multibillion-dollar opportunities.
Michael Thamm, CEO of Costa Group and Carnival Asia, spoke after parent Carnival Corp, the world’s largest leisure travel company, announced a 40:60 joint venture with China State Shipbuilding Corp or CSSC in November. “We are here in China not only to operate ships, but to build the whole ecosystem, including shipbuilding, supply chain, port development, distribution, and destinations. We would like to contribute to building a cruise economy in China, putting into full play the multiplier economic effect.”
Meanwhile, Shanghai plans to build the Wusongkou International Cruise Terminal, an integrated complex complete with duty-free shops comparable to those at its international airport.
And the products sold at the port’s boutiques and in nearby areas will be upgraded. The idea is to boost coordinated growth of leisure cruises and city tourism, according to the local government.
The planned terminal will in itself be a potential tourist attraction, much better than the current port in Shanghai, where a solitary duty-free shop covers less than 500 square meters, and sells mainly cigarettes and liquor. For today’s outbound and inbound cruise tourists, that wouldn’t simply suffice.
Shanghai’s local government therefore said in a statement issued in October that the planned terminal will house large-size duty-free stores that would stock top-end goods.
A campaign to spread awareness about China’s various visa-free visit policies is also on the anvil. Unlike airline passengers, many foreign cruise travelers are not aware of China’s 144-hour visa-free transit policy.
International travelers from 53 countries can enter the Chinese mainland through the ports in Shanghai, Jiangsu province and Zhejiang province.
Publicity for visa-free policies can attract more inbound foreign tourists to enter China by cruises, the Shanghai government said in its statement.
South China’s island province Hainan has also started a pilot run of its 15-day visa-free policy for tourist groups who take cruises and enter the country from ports in Hainan.
The plans for upscale cruise liner terminals are shaped by the commercial success of duty-free shops at key airports like the Shanghai Pudong International Airport, fueled by a constantly growing number of international travelers with strong spending power.
The airport said in its earnings report that income growth of nonaviation sector mainly comes from the growth of duty-free retail. Tourists spend not just on hotels, local travel, food and shopping at malls and other areas, but also at airports.
China is the world’s top outbound tourism market. According to the United Nations World Tourism Organization, the country’s 142 million outbound travelers spent an estimated $258 billion traveling abroad last year.
If they are encouraged to spend at home as well, and if more Chinese people are to travel, then new attractions like cruise trips and modern terminals at ports could prove a big draw.
So, Shanghai will encourage cruise operators and third-party agencies to further develop the domestic cruise tourism markets. Efforts are underway to introduce linkages between cruises, airlines, trains and buses, to enable multimodal transport for travelers.
In addition, the city will promote cruise tours at airports, train stations and other places with large passenger flows.
At the corporate level, CSSC Carnival Cruise Shipping Ltd, the China-based joint-venture cruise liner, will operate its own fleet to serve Chinese guests by the end of 2019.
It announced an agreement to purchase two existing ships from Carnival Corp’s Costa Group, a major cruise operator in Europe and Asia.
The first of these ships, the Costa Atlantica, is scheduled to be transferred to the new Chinese cruise line by the end of 2019.
Currently, the Costa Atlantica mainly sails from southern China seaports like Shenzhen to Southeast Asian countries like Vietnam and the Philippines. The Costa
3,500 yuan per trip, ordered about 16 percent of tailored trips this year. Keywords most frequently mentioned in tailored trips included “five-star airlines”, “comfortable” and “special food”, the report said.
Chen said part of the reason is that the newly retired group has greater consumption ability and has more experience in adapting to unfamiliar outside world.
He said the trend is also largely influenced by the preferences of their children or grandchildren, since a cross-generation family trip is very common.
“Marketing and travel products should be designed to target their offspring instead, since they are more likely to be the decision-makers.”
According to the report, average consumption of the post-1950s reached 3,115 yuan for each overseas package tour, the highest among all age-groups.
Popular products at Ctrip have elements like no shopping, small group, pick-up services and sufficient time for free activities, the company said.
David Gosset, founder of the Europe-China Forum, said: “For older people, culture is more attractive than entertainment. And what young people would consider fun could be simply noise for them.
“A destination like Hainan whose climate is agreeable could play a major part in tourism choices. The scope of health tourism would enlarge if resorts or companies specially target older people. Adapting the concept of wellness to older people could also have enormous potential.”