Largest cruise econ­omy tak­ing shape

China Daily (Latin America Weekly) - - 13 Business -

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


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