Cruises look to cash in on China

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

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 vista-class cruise ships for the Chinese market.

This MOA will add China-built 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 Miami-based 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, 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.

amyhe@chinadailyusa.com

(China Daily USA 10/14/2016 page12)