China: Cruise market second biggest by 2017

China: Cruise market second biggest by 2017

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There’s a reason that 2013 was marked the Marine Tourism Year by China’s government. Some 530,000 Chinese tourists took cruises beyond the mainland, more than double the previous year. Industry forecasts have the country second only to the U.S. in passengers by 2017.

To Chinese, ship travel once meant taking a steamer down the Yangtze River, mostly as basic transportation before jet service and an expansive highway system became the norm. Today, though, it has taken on an ever more luxurious sheen. This month Carnival’s Princess Cruises will christen a Sapphire voyage from Shanghai, with the 2,670 on board paying $900 to $5,000 to float to South Korea and southwestern Japan over six days.

Carnival, the world’s largest cruise line, began the current era in 2006 when Allegra , from its more basic Costa line, departed from the old Shanghai docks. International rivals like Royal Caribbean and Star followed, along with a smaller domestic contingent. Now few can afford to stay away. They’re banking on a potential market above 100 million in a few years–and an actual load, Carnival figures, of 2.3 million passengers.

Cruising with “Chinese characteristics” includes not only Chinese cuisines and language services but also mah-jongg rooms, larger duty-free shops with more European luxury brands and, in the case of one Carnival “global first,” a “presidential menu” enjoyed by former president Hu Jintao during his 2011 White House visit. Although gambling tables are a mainstay in international waters, the lines say they aren’t emphasizing that element in Chinese marketing.

Domestic lines are playing catchup by purchasing vessels from the multinationals because China’s own cruise history is a blank slate. Henna, a cruise liner that HNA Group bought from Carnival, went on its maiden voyage last year. In March state-controlled Bohai Ferry rebranded imported Costa Voyager as China Tai Mountain. Another four domestic companies are contemplating similar schemes, according to Zheng Weihang, vice director at the China Cruise & Yacht Industry Association.

But if lacking in managerial experiences, the domestic players will at least benefit from policies that ban international cruises from sailing along China’s coast lines and limit them from taking trips to Taiwan, which Zheng says has a high demand among mainland travelers.

The Chinese government itself is targeting 4.5 million in Chinese cruise traffic by 2020. Big bucks have gone to constructing terminals in Shanghai, Sanya, Tianjin and Xiamen in the past three years. The $140 million Wusongkou International Terminal in Shanghai now claims to be the largest in Asia. Terminals in Tsingtao, Zhoushan, Dalian and Shenzhen are under construction, and another seven are in the pipeline. The scale and grandeur of each terminal have made positive returns on investments difficult for the local governments, however. “Perhaps, with the exception of Wusongkou, all the other ports are losing money,” Zheng says.

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