Following the publication of CLIA’s latest set State of the Industry figures, which showed another year of impressive growths in Asia and Australasia, a panel discussion was held at CSM to debate whether or not China would transform the cruise industry. Alan Lam reports from Miami.
China is now the biggest source of international travel market; in 2014 the country contributes about 110 million tourists to the world, with only 700,000 of which being cruise passengers. A conservative estimate puts the country on course to achieve three million by 2020; in fact, if this rate of growth continues, it is likely that the Chinese cruise tourist number will reach eight million by then. This will mean becoming the second biggest source market. In any case, China will become a main engine driving the global cruise business.
China represents about one half of the total Asian market. Ann Sherry, CEO of Carnival Australia and Chairman of CLIA SE Asia, urged the industry not to overlook the rest of Asia while all the attentions are on China. A number of other markets are also strong and growing, such as Singapore, Taiwan and Indonesia.
All Asian markets are different; therefore we cannot generalize and regard them as one. However, there is one unique feature that is shared throughout the region; that is, the demographics of cruise tourists are the same as those of other forms of tourism.
Without exception, all the panelists believed in the great potentials of the region, especially China. “We’ll see double-digit growth in the next five to ten years,” said Alan B. Buckelew, COO, Carnival Corp. & plc. “The middle class in China will expand to 225 million people by 2020. More and more ships will be deployed to Asia in response to demand.”
“The potential is almost limitless,” said Dominic Paul, SVP International, Royal Caribbean International, Celebrity Cruises & Azamara Club Cruises, and MD, RCL Cruises Ltd. “China’s domestic market will continue to grow and the rest of the world, particularly Europe and Mediterranean, will also benefit from it.”
However this dynamism is not without its challenges. “China is not an easy market to break into,” warned Dominic Paul. “It is a market that takes a lot of understanding and hard work to succeed. It is not as simple as just putting a ship in and expecting success. In the coming years, we expect a lot of hard works to build up the demand.”
Ann Sherry agreed with this sentiment, “The challenge for the next five to ten years will be to sell and distribute the products effectively in the region.”
Gavin Smith, Regional Vice President, Asia-Pacific, RCL Cruises Ltd., & Chairman, CLIA Australasia, highlighted a very valid challenge the industry would be facing in the next 10 years. Australia is meant to absorb capacities from China during the winter months in the northern hemisphere. “Fifteen percent of the world population live in China,” he said, “and only two percent live in Australia. If Australia were to accommodate ships from China in winter, this would be a challenge.”
In this connection it becomes imperative to develop year-round cruising in China.
“Success in Asia will be a huge benefit to global cruise industry,” said Dominic Paul. “It will drive cruise shipbuilding and improve earnings across the board. I am optimistic about Asia.”
China is transforming the cruise industry.
