Norwegian Joy’s China exit a boon for Royal Caribbean, Dream Cruises

Quantum of the Seas sailing near Shanghai at twilight

Royal Caribbean International and Dream Cruises are two cruise lines that stand to benefit from Norwegian Cruise Line (NCL)’s decision to pull out Norwegian Joy from March 2019 and return to China to operate seasonally from summer 2020.

One successful ship which accommodates more than 4,000 guests is out of the way as the two companies ramp up on China homeporting. Royal Caribbean will introduce its first Quantum Ultra class ship, Spectrum of the Seas, which has room for 5,622 guests, from June 2019. By then, the line will be fully deployed in China with Spectrum in Shanghai, Quantum of the Seas in Tianjin, and Voyage of the Seas in Shenzhen and Hong Kong.

Quantum of the Seas sailing near Shanghai at twilight

Royal Caribbean International’s president China and North Asia, Zinan Liu, said Spectrum would reach “new milestones in the luxury cruise sector in China”.

Dream Cruises will continue to dual-homeport World Dream in Hong Kong and Guangzhou Nansha next year while waiting for a new Global Class ship, which will debut in 2020. Not only will the third ship be 25 per cent larger and double the capacity of her sister ships, it will be “a pace setter” with “focus on Asia, and more specifically China”, said Thatcher Brown, president Dream Cruises.

In the face of lower ticket prices as a result of explosive capacity increase during 2016-2017, both players have similar strategies: pump in more luxury, in the belief the Chinese consumer has evolved and will be swayed to cruise by more innovative products and destination experiences.

They also vow to continue training and educating smaller agents to sell cruises, so they can break through the predominantly wholesale charter distribution that is also partly responsible for China having few repeat guests compared to the US. Both acknowledge the need to create more enticing and longer itineraries.

Royal Caribbean, for instance, has planned “a more diversified” line-up of cruise itineraries sailing from China homeports. Among 117 open-to-sail sailings, guests can choose from 27 unique itineraries, featuring 23 destinations across four countries, Liu said.

Without revealing details, he said: “The exciting sailings include 17 well-selected long ones – six or more nights – taking guests to their favourite Asian destinations; eight warm-winter sailings bringing guests to sub-tropical and tropical destinations and providing an escape from the chilly winter weather; 12 weekend sailings, each of which lasts for three to four nights, tailor-made to meet millennials’ needs for a brief escape from the hustle and bustle of their urban life; and special holiday/festival sailings to discover new cultures and traditions.

“Instead of reducing the number of cruise ships or cutting down the sailing season, Royal Caribbean International has always sought a more sophisticated way to serve the Chinese customers, i.e. by offering new, groundbreaking and customised options such as top-choice staterooms, meals, entertainment, shops, and even destination tours,” Liu said.

“Chinese consumers’ needs have already evolved from cursory travels to an in-depth vacation experience. They prefer more customised products and services (so cruise companies will go) for more segmentation, tailor-made service, innovation and user-friendly technology.”

Echoed Brown: “China’s long period of sustained growth has spurred and expanded the middle class rapidly, simultaneously growing the cruise industry with more affluent Chinese consumers pursuing cruising as a vacation choice that offers value, convenience and enrichment.

“As the cruise market continues to evolve and mature, so will the need to provide a variety of cruise products that will be able to accommodate the various needs and tastes of a new generation of travellers. We must continue to educate and support our industry partners so that they can help us grow our addressable cruise market in China.”

Geopolitical crises such as the spat between China and South Korea which affected some routes could of course happen. But overall, they believe the market will continue to grow and evolve. In just four years, the number of Chinese cruisers has grown five-fold to almost 2.5 million, a rate of growth the cruise industry has never seen before.

“With advancements in high-speed rail connectivity and the continued growth of value regional carriers, there is opportunity to reach new audiences throughout China,” Brown added.

Read the full Analysis in TTG Asia, September 2018 issue

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