China’s Cruise Market Sees Boom

There is a great potential for cruise operators to grow their business both in China and in Europe. As Chinese demands for Europe cruise tours continue to grow, China’s cruise industry is set to develop faster in the next decade.

China cruise industry has seen many extraordinary results in 2015. China’s Top 10 cruise ports received a total of 539 home-porting cruise calls, representing a 47% year-on-year growth according to the 2015 China Cruise Industry Development Report.

A large number of cruise companies are entering into China market, as a result of the staggering growth of China’s cruise market. Carnival Corporation and runner-up Royal Caribbean Cruises are already in the Chinese market. More ships are added to the China market by Norwegian Cruise Line and MSC recently. In 2016, cruise operators like Carnival Corp., Norwegian Cruise Line Holdings and MSC Cruises,  outlined strategic plans for China market, such as deploying more ships to boosting their sales, brokering partnerships to build ships, etc., for the purpose of capturing more business and shore up future growth.

Domestic companies have also entered the market. Back in 2013, HNA Group launched China’s first luxury cruise ship, which it later abandoned in 2015 due to a string of controversies and some operational problems. State-owned operator Bohai Ferry also entered the market in 2014. China-focused SkySea Cruise Line was jointly launched by Ctrip and Royal Caribbean to attract Chinese tourists. In addition, the Malaysian conglomerate Genting—best known for its many casinos—has also decided to enter the Chinese cruise market.

SkySea Cruise Line, renowned as the most high-profile joint venture in the Chinese cruise industry so far, has brought China’s leading online travel agency Ctrip and the world’s second-biggest cruise operator Royal Caribbean together. The two hold 35 percent of the joint venture respectively, and Shanghai-based Stone Capital responsible owns the remaining shares. This almost makes it a Chinese-held company. Carnival Corporation has also announced a joint venture together with China State Shipbuilding Corporation (CSSC) and China Investment Capital Corporation, but details about it are still under wraps.

In the highly competitive Chinese cruise market, downward pricing pressures are inevitable for cruise operators. But thanks to the sustained double-digit growth and large players in the cruise market, it seems that they’re all in it for the long haul. Royal Caribbean set a good example about partnering with dominant and marketing-oriented domestic companies such as Ctrip, and proved it could be one effective way to enter the market while strengthening the bottom line. Although it’s unclear to see whether any other Chinese online travel agency would be interested in cooperating with an overseas cruise operator to expand the cruise business, but one thing for sure, it’s a good idea and worth trying as many potential suitors do exist in the market.