Rising in the east: the story behind cruise’s China boom

With a rapidly growing middle class and a population of 1.4billion, China has become the new battleground for cruise expansion. Carnival Corporation’s Roger Frizzell explains why

In 2013, more than 530,000 Chinese holidaymakers took a cruise — a staggering 165 per cent rise on the year before. Although still eclipsed by the cruise-loving lands of Italy, Australia, Germany, the UK and US (where 11 million passengers cruised that year), the increase got industry insiders nattering excitedly and began, in earnest, the scramble east.

The headline prediction was that China could — and in all likelihood, would — become the world’s second largest cruise market by just 2017. The country has been long earmarked as the potential future of cruising, but the rate of growth was remarkable. The question now is how long before Shanghai replaces Miami as the cruise capital of the world?

A study carried out by the Hong Kong tourism board estimated that China has the potential to deliver 83million cruise passengers a year, which would represent a complete domination of the current industry (where 23million passengers cruise worldwide). With an ever-growing middle class, in a population of 1.4billion, who have seemingly fallen head over heels for cruising, it’s clear these numbers aren’t fanciful. The last few months have seen the China boom step up a gear after a spate of announcements. With state-of-the-art ships moving to China and new ones on the way, 2016 could see the cruise industry change forever.

Carnival Corporation is perhaps the key player. It led the way in 2006 when a refurbished Allegra, from Costa Cruises, was moved to Shanghai, while Royal Caribbean International and Star also sent ships (see box-out, below). Carnival Cruise Lines’ Jubilee — via P&O Cruises Australia — was sold to Chinese brand HNA and renamed Henna, becoming part of a smaller group of domestic lines.

In October 2015, Carnival Cruise Lines announced it would move Miami-based Carnival Miracle (below) to China in 2017 and Los Angeles-based Carnival Splendor in 2018. The same month its parent company announced it would be building a ship for the Chinese market in a joint venture, while its Costa, Aida and Princess brands announced expansion. The latter’s Majestic Princess, will launch in summer 2017, designed with Chinese passengers in mind.

Here, Roger Frizzell, Carnival Corporation’s chief communications officer, talks us through the moves.

How will purpose-built Chinese ships differ from North American offerings?
Like all Princess cruises in China, Majestic Princess will showcase the brand’s exclusive Princess Class experience, designed specifically for the Chinese market. These enhancements enrich the travel experience of each cruise guest: authentic, classic events like the World Leaders Dinner and Traditional English Afternoon Tea; special culinary experiences such as the Lobster Grill, Ultimate Balcony Dining, and an ocean-view hot pot dinner option; and an unparalleled duty-free shopping experience, featuring designer brands.

Does this mean North Americans will lose out on the best ships?
The North American market is still the largest cruise market by far and will remain vital to the industry over the long term based on the amazing and convenient experiences for cruisers travelling to a multitude of destinations. This market will continue to get great new ships across the brands, and we are expecting to receive delivery of 18 new ships between 2016 and 2022, so our guests around the world will have a tremendous opportunity to sail on our innovative new ships in the coming years.

How does China’s growth affect the industry as a whole?
For the cruise industry, the growth and opportunity in China is significant.  We are excited about the possibilities in China, and as an industry, our growth and commitment to cruising in China is aligned with the government’s vision to make cruising a priority for the travel industry in the market. More Chinese travellers are trying cruising for the first time and we are creating word of mouth organically and on social networks, which is a plus and helping fuel double-digit annual growth. China will continue to be a growth-driver for many years to come in cruising, and will eventually be the largest market in the world, so we are dedicated to keeping our leadership in the market. We have nearly half of the market share in China, carrying more than 500,000 guests this year and approaching one million in 2016 potentially.

Can Shanghai replace Miami as the cruise capital of the world?
There are currently 100 million or so outbound travellers in China each year and only about one million cruise annually, so the growth and upside for the industry is very strong. The industry is early on in its development in China, so as ports and infrastructure grow in China, the itineraries and destinations can expands, so it is hard to say whether individual port cities in the future will be larger or smaller than one another. At the same time, the cruise industry expects to grow passengers and demand around the world.

How will Southeast Asia in general benefit from the China boom?
As the market matures, we see great potential for growth in new offerings and destinations in China and all of Asia as well. Out of Shanghai, we are able to visit Japan and Korea, both of which show increasing demand for cruising.  As you may know, the Chinese government is keen to develop cruising and has supported the of a number of new cruise terminals throughout China. Based on weather in the region, it is important for us to cruise out of Southern China on a more consistent basis, which is what we call our “Miami opportunity” in the region.

Leaders of the pack

It’s not just Carnival Corporation moving east. Royal Caribbean International’s Quantum of the Seas – one of the lines most advanced ships – will join Mariner and Voyager of the Seas in the region, increasing the company’s capacity there by 66 percent. The line also revealed that a 4,200-passenger vessel – ready for delivery in 2017 – will be devoted to Chinese travellers

Norwegian Cruise Line’s second Breakaway Plus-class ship, originally named Norwegian Bliss, will be designed specifically for the China market and delivered in 2017, while MSC Cruises will deploy the 2,600-passenger MSC Lirica to Shanghai.

Chinese cruise lines are also investing heavily. Bohai, which runs a ferry service between China and Japan, has bought Costa’s 836-passenger Costa Voyager (renamed Zhong Hua Tai Shan).