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Originally published August 20, 2014 at 10:55 AM | Page modified October 15, 2014 at 4:56 PM

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Cruise lines flock to China

Royal Caribbean will base its new $935 million Quantum of the Seas in Shanghai next summer, and Carnival will have four ships in China starting in April.


The Associated Press

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HONG KONG — Royal Caribbean’s newest ship has attractions not usually seen on cruise liners, including bumper cars, a skydiving simulator and a glass observation capsule on a mechanical arm that lifts its passengers high into the air.

What’s also a surprise is the vessel’s intended home port: Shanghai.

After floating out of a German shipyard recently, the $935 million Quantum of the Seas will spend the winter running between New York and the Caribbean before moving to its new base next summer in mainland China’s financial center.

It’s a gutsy move for the world’s second-biggest cruise company. Cruise operators have traditionally sent older vessels to developing countries while saving their most advanced ships for U.S. and European customers. But surging growth in China means it’s a market operators can no longer ignore.

“For the next five to 10 years, greater China including Hong Kong will play a critical role to the global cruise industry’s development,” said Zinan Liu, Royal Caribbean Cruises’ managing director for China.

Carnival Corp., the No. 1 cruise company (with 10 brands including Holland America, Carnival and Seabourn), will become the first global cruise operator to have four ships based in China when it deploys its Costa Serena to Shanghai in April. (And Carnival is planning a joint venture to help China build a major cruise ship.)

The race for China underscores the growing strength of the leisure and travel industries in the world’s No. 2 economy as authorities try to spur domestic spending rather than trade and investment as an engine of growth.

Executives are confident about China’s prospects even as its economy struggles with a prolonged slowdown from double-digit rates of expansion, saying that growth is still strong when compared with developed markets.

Miami-based Carnival expects to carry 500,000 Chinese cruise passengers in 2015, up from 350,000 this year. “We know that’s just a drop in the bucket to what lies ahead in terms of the market in China, which we believe is going to someday represent more than half of all the cruise guests,” said Carnival CEO Arnold Donald..

The Asian Cruise Association estimated last year that the overall Asian market, which totaled 1.3 million passengers in 2012, could nearly triple to 3.8 million in 2020, including 1.6 million from China. Carnival is even more optimistic, predicting the number will grow to 7 million by 2020, or about a fifth of the global market.



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