Ctrip aims to have the largest cruise line in Asia
Ctrip and Royal Caribbean joint venture Sky Sea Cruise CEO and Ctrip co-founder Min Fan reveals the company's plans.
Ctrip and Royal Caribbean joint venture Sky Sea Cruise has set its sights on becoming China’s largest domestic cruise line and tapping the enormous potential for cruise holidays in China, its CEO and Ctrip co-founder Min Fan revealed.
Mr Fan said that the Chinese cruise market has tremendous potential as the market penetration in Asia at 0.05% is far lower than the 3.2% penetration rate in the US and 2% in Europe.
“The huge difference that we can see in the regional markets presents us with a great business opportunity. Chinese outbound tourism is booming. Last year over 90 million outbound trips were recorded and this number will grow to over 400 million in the next five years. As China’s population is aging and the size of the middle class is expanding, they will become a sizeable target market for cruise travel,” said Mr. Fan.
He said that Ctrip has the financial muscle to enter the cruise market that has a high capital investment threshold. “Ctrip has chosen to partner with Royal Caribbean to develop the cruise industry in China. Royal Caribbean will manage nautical operations and Ctrip will handle land operations,” he said, adding that Ctrip is already the biggest cruise distributer in China with 10% market share in cruise travel handling over 120,000 passengers. He expects the company's share of the market will double annually.
Sky Sea Cruise’s first ship is the refurbished cruise liner Celebrity Century. “Besides our first homeport Shanghai, we will develop other home ports in China and expand the fleet and crew every year,” Mr Fan said.
Sky Sea Cruise will target middle-class individuals and families in the age range of 30 to 60 and will also further develop product differentiation to enhance its competitiveness, he said.
As Ctrip’s platform also distributes for other cruise lines like Costa Cruises, it will have to deal with the delicate balance between competing and collaborating with other cruise liners. “China’s cruise market is so big that there’s room enough for all to enter and the Ctrip platform can distribute for all the cruise lines,” Mr Fan assured.
Sky Sea Cruise’s first liner will set sail for its maiden voyage from its Shanghai home port for a 4-5 night trip to Korea in May 2015. “The first liner will service the Suzhou-Zhejiang area and the first- and the second-tier coastal cities. In the coming years, Sky Sea Cruise will develop its local luxury cruise fleet to fully meet the needs of Chinese passengers. Our immediate to mid-term goal is to become the largest domestic luxury cruise line in China,” he said.(Translation by David)