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Chinese cruise tourism market to flourish with massive growth potential
6/17/2019



Photo: Xinhua
China enjoys the potential to become the world's largest cruise market, as its cruise tourism industry is expected to boom, driven by international players and government supports, according to industry insiders and market researchers.
China's annual growth for the cruise tourism market has exceeded 40 percent since 2006. It is expected to grow into the world's largest cruise market by 2030, with 8 to 10 million customers per year, according to figures by the Shanghai International Shipping Institute.
ECONOMIC MULTIPLIER WITH GROWTH POTENTIAL
China continued dominating the passenger share of Asia's cruise market, contributing over 70 percent of the region's 4.24 million passengers in 2018, according to data released by Cruise Lines International Association in May.
Cruise travel has become increasingly popular in both metropolitan cities such as Shanghai, Tianjin and Guangzhou, and smaller cities including Chengdu, Qingdao and Xiamen, according to Ctrip.com, China's leading online travel agency.
Riding the wave, international cruise operators have identified China as a valuable source market for growth and begun to gain more footholds in the country, including Carnival Corporation & plc, and Norwegian Cruise Lines.
"China has the largest cruise market potential in the world. And it's a great economic multiplier," Arnold Donald, president and CEO of Carnival Corporation, told Xinhua in a recent interview.
"We felt that we wanted to be a part of that, as the world's largest cruise line (operator), to help China and (the) Chinese experience all the great aspects of cruise," Donald said.
The CEO mentioned that the Chinese government has made great efforts to boost the country's cruise tourism, so as to help prop up its economic growth.
"Cruise is in the five-year plan for China, because of the great economic multiplier effect that it has for the economy. So one cruise ship job creates about five to seven other jobs in the economy. All those things make it positive," the CEO elaborated.
China's 13th five-year development plan has set out that the country should take steady steps to build international cruise terminals during 2016-2020, amid the overall efforts to further propel tourism as one of the pillars of the country's strategic industries.
Overall, the country has planned to raise tourism revenue to 7 trillion yuan (about 1.01 trillion US dollars) by 2020, according to its five-year plan for the tourism industry.
Specifically, China's cruise tourism industry is expected to grow at a compound annual growth rate (CAGR) of 5.23 percent during the forecast decade of 2016-2026, according to a report published by global market research firm AllTheResearch in May.
CAGR refers to the growth rate calculated by assuming that profits were reinvested at the end of each year of the investment's lifespan, which is often seen as one of the most accurate ways to calculate returns.
INT'L MARKET PLAYERS TO DRIVE DOMESTIC INDUSTRY
China's cruise tourism is prospering thanks to a growing number of travelers opting for cruise tourism and a stronger presence of international market players, AllTheResearch said in its report.
In this aspect, Donald mentioned that he's been traveling to China for business since 1985, and witnessed "a nation on a path to greater quality of life of every citizen," which is now "a great growing economy filled with talented people."
Italian cruise liner Costa Cruises in March officially took delivery of Costa Venezia, its first ship designed specifically for the Chinese market, in which the company launched business in 2006.
With a gross tonnage of 135,500 tons, 323 meters in lengthF and a capacity for over 5,200 guests, Costa Venezia would be the largest ship introduced by Costa Cruises to the Chinese market, according to a company statement.
Costa Venezia would help the company further develop China's cruise market, which has "a great unexplored potential." Currently, it's estimated that 2.5 million Chinese people choose to go on a cruise vacation every year.
Carnival Corporation also announced its cruise joint venture (JV) with China State Shipbuilding Corporation (CSSC) under the name CSSC Carnival Cruise Shipping Limited on Nov. 6, 2018.
The new China-based cruise liner is set to operate its own fleet to serve Chinese guests by the end of 2019.
The new JV signed an agreement to purchase two existing ships from Carnival Corporation's Costa Group, a leading cruise operator in Europe and Asia, with the first to be transferred to the new Chinese cruise line by the end of the year.
It also signed a contract to order two new cruise ships to be built by a ship builder in Shanghai, with the first ship expected to be delivered in 2023.
"We're excited about the first ship in 2023, the second one is already ordered and I'm sure that would be many to follow," said Donald, who saw the JV as "a significant milestone in the strategic development of a strong and sustainable cruise industry in China" in a previous statement.
He also mentioned that the Chinese authorities have been "extremely supportive of us" for the upcoming JV.
"All the ministries have been supportive of developing cruise (industry). They have given CSSC the support it needs, the capital it needs, and they've given us guidance and support as well," he noted.


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