Royal Caribbean Steers China’s Seaward Travelers Beyond Asian Cruises

    As most Chinese cruise passengers opt to stay onboard ships within Asia, the cruise liner is hoping to get them to venture further abroad for packages in distant destinations.
    Jing Daily
    Jing DailyAuthor
      Published   in Finance

    Royal Caribbean is hoping that Chinese tourists will expand their cruise bookings beyond Asia. (Shutterstock)

    Although relatively new to the China market, international cruises have steadily gained in popularity in recent years, powered primarily by middle-aged travelers less interested in cutting their own paths in foreign locales than all-you-can-eat buffets, guided tours, and stress-free itineraries. With the vast majority of these nascent cruise-lovers still staying close to home—an estimated 91 percent of cruises booked by Chinese tourists stick to East and Southeast Asia—major cruise lines are redoubling efforts to get these travelers to venture further afield.

    It’s not hard to see why. According to the Cruise Line Industry Association (CLIA), the Chinese cruise market saw 79 percent growth from 2012-2014, with an estimated 700,000 mainland Chinese travelers setting sail on domestic and international cruises in 2014. The association expects China’s domestic cruise industry alone to rise from $6.8 billion in 2013 to over $11 billion by 2018.

    For most leading cruise lines, most of which are eager for Chinese travelers to opt for longer, more expensive cruises, it’s only a matter of time before the Chinese market matures. The key at this point, according to Royal Caribbean Cruises President Adam Goldstein, is to cater to those new to cruises and wait for them to naturally turn to trips beyond the normal ports of South Korea or Japan.

    In response to rising demand for cruises, Royal Caribbean—as well as Carnival—is sending ships to ports in China and even working with domestic businesses to build new ships. Royal Caribbean is also taking staff training into its own hands in China—much as luxury conglomerates like Richemont have in recent years—working with Tianjin Maritime College to train crew and staff to work on ships like the Ovation of the Seas (currently under construction), which will be based in Tianjin after it launches next year.

    For the moment, the key is to gently nudge Chinese cruise-goers to go beyond Asia. Currently, only 9 percent of Chinese tourists who buy cruise packages venture outside of East and Southeast Asia. While some of this is motivated by cruise lines hoping to sell big-ticket getaways, part of it comes down to the fact that cruise-bound Chinese tourists—like Chinese tourists in Paris or New York—are big spenders. According to the Motley Fool, cruise lines like Royal Caribbean see Chinese tourists spending heavily onboard.

    Additionally, cruise lines see strong potential for growth simply because outbound travelers from China skew slightly younger—indicating massive room for repeat trips in future. If young Chinese tourists try a domestic or East Asian cruise, the thinking goes they’ll be more open to taking another cruise, next time to a more distant destination.

    For their part, cruise lines remain cautiously optimistic. As Royal Caribbean’s Goldstein says of the potential for Chinese tourists to become cruise-ship devotees, “It won't be huge in the near term, but the potential is there.”

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