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Cruises boom as millions of Chinese take to the seas

05/17/2017| 8:57:50 PM| 中文

Cruise operator firms like Royal Caribbean and Carnival Corp have sent an armada of luxury vessels to China to tap the world’s fastest-growing market, but they face turbulent waters.

In addition to satisfying the tastes of Chinese passengers, they sail in the shadow of the region’s increasingly volatile politics. And soon, a new threat will emerge: Chinese companies are building their own big ships.

“Right now it’s a learning process,” said Ken Muskat, chief executive officer at SkySea Holding International Ltd., a Shanghai-based cruise operator. “Everybody is adapting and learning more about what the Chinese market is looking for.”

The number of passengers in China has risen tenfold in five years, to around 2 million in 2016, and the government expects 4.5 million by the end of the decade. 

Most make shorter trips -- five days on average -- and call in South Korea and Japan, the top two destinations in Asia outside of China, according to industry body Cruise Lines International Association.

With so much potential -- China is still nowhere close to the 11 million plus Americans who cruise each year -- companies are bringing bigger and better ships to the Yellow Sea, tailoring their offerings and seeking new destinations in an effort to persuade Chinese travelers that a cruise is more than just a form of transportation.

But perhaps the biggest difference in China is that cruises are often a multigenerational holiday. “Chinese cruise travelers are very family oriented," said Muskat at SkySea, which counts Royal Caribbean and Ctrip as major backers. 

Tailoring ships to win over Chinese seafarers may provide an advantage to local cruise lines that can adapt quickly to the rapidly changing tastes of Chinese consumers, said Yu Dunde, CEO of Chinese online travel booking service Tuniu Corp.

Companies are trying to diversify, with more ships departing from southern ports like Guangzhou and Xiamen into the warmer waters of the South China Sea for the winter market.

But for both local and foreign operators, the waters around China have become increasingly risky due to the region’s politics. Both Royal Caribbean Cruises and Costa scrapped calls to South Korean ports in March for their cruises departing from China amid escalating tensions between the two countries over the deployment of a U.S. THAAD missile defense system.

China has had similar brushes with Japan and its Southeast Asian neighbors over disputed islands.

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TAGS: cruise tourism | passengers | China
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