China’s outbound cruise market is growing rapidly.
The Cruise Line Industry Association (CLIA) announced that the market grew 79% between 2012 and 2014. The industry was valued at $6.8 billion in 2013 and is expected to hit $11.5 billion in 2018. But with just 9% of Chinese cruisers venturing beyond Asia, can lines like Royal Caribbean and Carnival convince the Chinese to go farther afield?
“Ten years ago, the numbers for Chinese cruises in Asia were small, so it seems well worth the undertaking to encourage Chinese travelers to cruise wherever we sail,” CIA chairman and Royal Caribbean Cruises COO Adam Goldstein said in an interview with The Motley Fool.
Last year, 700,000 Chinese went on cruises, but just 63,000 of them boarded ships that went beyond Asia.
To encourage more extensive travel by sea, major cruise lines like Royal Caribbean are moving ships into Chinese ports, and seeking partnerships with Chinese companies that can provide reliable supplies and repairs. Royal Caribbean has even teamed up with the Tianjin Maritime College, which trains dual-language crew and staff by working on China-based ships, like Ovation of the Seas.
Although air travel has taken off across China, cruising is still a new vacation option for most of the country’s travelers. Royal Caribbean is investing heavily selling this demographic on cruises beyond Asia, even though the potential outcome remains unclear. The cruise line, however, is optimistic.
“We’ve very interested in the outbound 100 million Chinese travelers who left the country last year for business or leisure,” Goldstein said. “That’s an incredible number. Even if the bulk of that travel is in Asia, I’m very optimistic as the next five to 10 years unfold, Asian travelers will go further afield. We want to be well positioned to serve them wherever they go.”
Royal Caribbean believes they can entice those Chinese who have traveled to Japan or Malaysia to go farther afield if they provide the right accommodations. Young travelers are also a target for marketing efforts. The CLIA, citing data from the World Tourism Cities Federation, notes that the majority of outbound trips from China are taken by travelers under the age of thirty-five. If cruisers learn to love the high seas early on, they may become loyal customers for life.
Chinese travelers who went abroad in 2014 spent $164.8 billion – a new record. The average Chinese tourist spends $5,400 per trip, outspending other international travelers by 20%. Even selling a small percentage of Chinese travelers on international cruises has the potential to net big paydays for Royal Caribbean.
image credit: brook ward