Cruises look to cash in on China

Car­ni­val signs off on two new vis­ta­class lin­ers to serve the China mar­ket, brand to be based in Hong Kong

China Daily (USA) - - MIAMI SPECIAL - By AMY HE in New York amyhe@chi­nadai­lyusa.com

Cruise com­pa­nies are dou­bling down on their ef­forts in China, which is set to be the largest cruise mar­ket in the world.

Car­ni­val Corp, the largest cruise-ship op­er­a­tor in the world, an­nounced that its China joint ven­ture signed a mem­o­ran­dum of agree­ment (MOA) to or­der two new vis­ta­class cruise ships for the Chi­nese mar­ket.

This MOA will add Chinabuilt cruise ships to the com­pany’s busi­ness in the China mar­ket start­ing in 2022, fur­ther­ing its ini­tial goal to launch a do­mes­tic Chi­nese cruise brand us­ing the Mi­amibased Car­ni­val’s home fleet.

The agree­ment signed on Sept 23 will ac­cel­er­ate the com­pany’s growth in what is ex­pected to be the largest cruise mar­ket in the world, the com­pany said in a news re­lease.

A joint ven­ture be­tween Car­ni­val’s China arm and China State Ship­build­ing Corp and China In­vest­ment Cap­i­tal Corp was an­nounced last fall. It said that the Chi­nese gov­ern­ment has granted it ap­proval to in­cor­po­rate in Hong Kong.

“We are ex­cited about the po­ten­tial for the first new cruise ships to be built and de­ployed in China for the en­joy­ment of Chi­nese trav­el­ers, which will be an im­por­tant mile­stone in the de­vel­op­ment of the Chi­nese cruise mar­ket,” Alan Buck­elew, global chief of op­er­a­tions of­fi­cer for Car­ni­val Corp, said in a state­ment.

“As we work with our Chi­nese part­ners to launch the first do­mes­tic Chi­nese cruise brand in the next few years,

Roger Frizzell,

com­mu­ni­ca­tions of­fi­cer, Car­ni­val Corp be­ing able to of­fer cruises on China-built cruise ships rep­re­sents a new op­por­tu­nity for us to gen­er­ate ex­cite­ment and de­mand for cruis­ing amongst a broader seg­ment of the Chi­nese va­ca­tion mar­ket, which is al­ready the largest in the world and con­tin­ues to see strong growth ev­ery year,” he said.

Roger Frizzell, chief com­mu­ni­ca­tions of­fi­cer for Car­ni­val Corp, told China Daily that the com­pany is see­ing con­sis­tent growth each year as Chi­nese va­ca­tion­ers be­gin ex­pe­ri­enc­ing cruises for the first time.

Only about a mil­lion of the 130 mil­lion in­ter­na­tional trav­el­ers from China took a cruise in 2015, so “the op­por­tu­nity is sig­nif­i­cant”, he said.

This year Car­ni­val Corp has 45 per­cent of the mar­ket share in China, with six ships based in China across its Costa Cruises and Princess Cruises brands.

“Cruis­ing to­day has less than 1 per­cent pen­e­tra­tion in China, and we have an amaz­ing prod­uct and ex­pe­ri­ence to of­fer our Chi­nese guests, so this is an ex­cit­ing op­por­tu­nity not just for our Car­ni­val Cor­po­ra­tion brands but for the whole in­dus­try,” Frizzell said.

The com­pany plans to bring the Ma­jes­tic Princess to China, a lux­ury cruise ship specif­i­cally built for the coun­try, Frizzell said.

Out­side of the US, MSC Cruises, the largest pri­vately owned cruise line based in Switzer­land, an­nounced on Sept 21 that it will de­ploy its sec­ond China-ded­i­cated ship by May 2018 in or­der to bet­ter serve the Chi­nese mar­ket.

The MSC Splen­dida, built in 2009 with more than 1,600 rooms that can ac­com­mo­date 4,363 guests, joins the MSC Lir­ica, which has been serv­ing the China mar­ket since May this year. It moved to Tian­jin to serve the North China mar­ket dur­ing the win­ter sea­son, the com­pany said.

“De­ploy­ing MSC Splen­dida to the shores of China is a fur­ther tes­ti­mony of our com­mit­ment to this key growth mar­ket,” said Gianni Ono­rato, CEO of MSC Cruises, at a press con­fer­ence an­nounc­ing the MSC Splen­dida’s move to China.

“In fact, since it came into ser­vice, MSC Splen­dida has been the most pop­u­lar ship for Chi­nese and other Asian guests cruis­ing the Mediter­ranean with us,” he said.

The Chi­nese mar­ket has been the fo­cus of cruise com­pa­nies, with many ex­pect­ing Chi­nese cruise trav­el­ers to sur­pass the num­ber of Amer­i­can ones in the com­ing years.

By 2020, 4.5 mil­lion pas­sen­gers are ex­pected to travel on cruise ships ev­ery year, ac­cord­ing to the Shang­hai In­ter­na­tional Ship­ping In­sti­tute. That num­ber is still smaller than the 11 mil­lion peo­ple in the US who take cruises ev­ery year, but “when you think about the dif­fer­ent pop­u­la­tion, the size of the mid­dle class, at some point in the fu­ture, we think there will be as many Chi­nese tak­ing cruises”, said Michael Bay­ley, CEO of the in­ter­na­tional arm of Royal Caribbean In­ter­na­tional, an Amer­i­can cruise com­pany also based in Mi­ami.

Cruis­ing to­day has less than 1 per­cent pen­e­tra­tion in China, and we have an amaz­ing prod­uct and ex­pe­ri­ence to of­fer our Chi­nese guests.”

PRO­VIDED TO CHINA DAILY

A ship op­er­ated by Car­ni­val Corp leaves port in Mi­ami.

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