Full steam ahead: Chinese tourists flock to cruise ships

Global cruise operators are seeing a rise in demand from Chinese travelers, presenting new opportunities for expansion and revenue, even as the Chinese domestic cruise industry evolves and becomes a formidable competitor in the Asia-Pacific region. According to data from the Piraeus Port Authority in Greece, Chinese tourists – while still a small proportion of total cruise travelers in Europe compared to Europeans and North Americans – are a demographic not to be ignored. For a trip lasting around one week, the typical Chinese cruise passenger in Europe budgets around 10,000 euros ($10,755), and 45% of these passengers are under 40, compared to just 31% from the US. More importantly, Chinese cruise passengers are also quickly spreading out beyond the usual ports of call. As Theodora Riga, Strategic Planning and Marketing Manager at the Piraeus Port Authority, put it, “The Chinese have various options in the Mediterranean, such as Venice and Barcelona, but Piraeus is also one of their targets,” adding, “We are continuously promoting Piraeus as a destination for Chinese cruise passengers.” European cruise tourism powers ahead Post-pandemic, the global cruise industry is poised for strong growth. The global cruise ship tourism market is projected to expand from $7.4 billion in 2023 to $22.6 billion by 2033 at a compound annual growth rate of 11.8%, according to research from Spherical Insights & Consulting. The Caribbean remains the world’s leading cruise destination, accounting for 34.4% of all cruise deployments. Europe is the second most popular region, accounting for 28.4%, with the Mediterranean Sea comprising 17.3% of this total. Asia also contributes significantly, making up 9.2% of global cruise traffic, with China alone accounting for 4.9%. Looking to expand, key players such as Carnival Corp, Royal Caribbean Cruises, and Norwegian Cruise Line Holdings, are investing in new (and bigger) ships, innovative onboard amenities, and diverse itineraries. Led by the ocean cruise segment, seven-day cruises are becoming increasingly popular, and the 40 to 49 age group is anticipated to dominate the market due to its members’ financial stability and willingness to explore new experiences. Although North America – powered by the popularity of Caribbean and Latin American cruises among American travelers – holds the largest market share in the cruise industry, Europe is the fastest-growing cruise tourism submarket. Between 2012 and 2018, passenger volume from European ports increased from 6.1 million to 7.2 million. Yet, Asia is gaining market share at a breakneck pace. Over the next five years, it is anticipated that the cruise industry in the Asia-Pacific region, with China at its core, will be the primary driver of passenger growth, and by 2027, cruises originating in Asia are expected to account for 17.5% of global passenger traffic, up from just 5.7% in 2019. While the majority of Chinese cruise tourists stick to domestic river cruises, or ocean cruises to nearby destinations in East Asia, an increasing number are heading farther afield, attracted by the ease of visiting several countries on one trip. Other attractive destinations for Chinese cruise-goers include expedition trips to the Arctic and Antarctica, cruises through the Panama Canal, and along the South American coast. Over the past half-decade, major cruise lines have gradually rolled out specialized offerings to attract the burgeoning Chinese market. Viking Cruises, for example, sought to capitalize on the rise of river cruises among Chinese travelers seeking authentic European experiences. As Jeff Dash of Switzerland-based Viking noted at the time, his company’s ships offer “home-like services onboard rather than luxury entertainment facilities,” aligning with a preference for curated cultural immersion over simple sightseeing. The motivation to appeal to the growing China market is reflected throughout Europe, with cruise operators ramping up marketing efforts. As Thomas Boardley, Secretary General of Cruise Lines International Association (CLIA) Europe, recently noted, Chinese cruise tourism – estimated at around 2.4 million travelers – is second only to the US at 11.2 million cruise tourists, presenting significant potential for European destinations. Chinese competition Europe- or North America-based cruise lines have had little choice but to keep up with growing competition from China’s domestic cruise industry, which has gone from virtually nonexistent to a multi-billion-dollar powerhouse in a matter of years. The China Cruise and Yacht Industry Association and the Shanghai Academy of Social Sciences estimate that by 2035, China’s domestic cruise ship industry could generate an economic output of 550 billion RMB (approximately $77.5 billion). This growth is expected to be powered in no small part by a nascent domestic cruise industry. Earlier this year, China’s first domestically manufactured cruise ship, the 35,500-ton Adora Magic City, a joint venture between the China State Shipbuilding Corp and US-based Carnival Corp, saw strong demand during the Lunar New Year holiday. Featuring Chinese-style designs, Chinese catering, and entertainment options such as mahjong facilities and a comedy show, the Adora Magic City appeals to multi-generational family travel – perhaps the most important single travel segment around holiday seasons. Since its maiden voyage, the ship has completed more than 30 journeys and welcomed nearly 150,000 tourists. Demand for cruises is reflected in search data before and during this year’s Spring Festival. According to data from the travel booking platform Fliggy, bookings for domestic and international cruises during the Spring Festival holiday jumped 445% YoY. Over the eight-day holiday, Shanghai processed inspections for four inbound and outbound cruise ships, with more than 21,200 people entering and exiting, a nearly 22% month-on-month increase. According to Sienna Parulis-Cook, director of marketing and communications at Dragon Trail International, cruises offer a comfortable environment with catering and activities for all ages, making it easy for families to travel together. This trend is supported by the rapid booking of family suites for Royal Caribbean’s 2024 sailings, particularly during peak holiday seasons like the May Labour Day holiday. The rising popularity of cruises has continued since the lifting of Covid restrictions at the end of 2022, once again led by trips to nearby international destinations like Japan and South Korea, which previously accounted for over 85% of cruises departing from China. Additionally, there is growing interest in longer routes to Southeast Asia and expeditions to Antarctica. Younger tourists and honeymooners The big question for the future of cruises in China, is how much they appeal to younger tourists, particularly the new generation of culturally and gastronomically minded Gen Zers. Here, Europe-focused cruises have something of an advantage, offering multi-country itineraries, often at relatively affordable prices that allow younger travelers to experience several countries and cities in a curated experience. An increasing focus on onboard offerings, such as Michelin-star cuisine and technology-led amenities, may also appeal to Chinese foodies, while honeymooners could enjoy the ability to follow set itineraries without the stress of pre-travel research or language obstacles.

Sectors

Insights

Company

Full steam ahead: Chinese tourists flock to cruise ships