ASEAN Cruise News speaks to Carnival Cruise Line’s Chairman of its China operations, Roger Chen about the growth of the line in the region.
- China’s cruise market is expanding – what do Carnival’s futurologists say about how many Chinese will be cruising by 2020?
A: There are 100 million or so outbound travelers in China each year and only about 1 million of them cruise annually, so the growth opportunity in China for cruising is significant and supported fully by the Chinese government. We have nearly half of the market share in China, carrying more than 500,000 guests in 2015 and potentially approaching one million in 2016. There are a variety of forecasts of the industry’s growth, but we anticipate that by 2020 the cruise industry will grow from today’s 1 million passengers to more than 4 million. Clearly this represents a huge opportunity for our industry and Carnival Corporation.
- A large number of ships are being built for the Chinese market. Do you see a time when ships will cover both Chinese and other markets?
A: For the near term it is likely that ships based in China will serve primarily Chinese guests. That said, a number of ships are based in China seasonally and therefore do support other markets for a portion of the calendar year. In 2016, we have an industry leading six ships in China – three are year-round and three are seasonal – so we definitely have ships covering China and other markets.
We also have great itinerary options for guests that include China and other markets. For example, our Princess Cruises brand offers a 17-day journey from Beijing that visits South Korea, Japan, Shanghai, Hong Kong, Vietnam, Thailand and Singapore to give guests a variety of experiences in the region. So across our brands operating in Asia, there are some great options available today for guests who want to visit multiple destinations in a single trip.
- Carnival has ships in both South East Asia and China. Many in SE Asia are concerned they might be overlooked in the rush to service the Chinese market. What are Carnival’s plans for growth in areas like Singapore and Malaysia?
A: We really view Asia as a great opportunity for everyone who loves cruising and those who are discovering cruising as a great vacation option for the first time, so that should definitely not be a concern. The growth potential for new offerings and destinations is strong in China and across all of Asia. Great cruise opportunities already exist in the Southeast Asia region, and based on the weather and rising demand there, Singapore and other Southeastern Asian countries offer great cruising opportunities throughout the year. As the Southeast Asia cruise market matures and investments in port development continue over time, you’ll see us expanding our presence there and we really see it as a potential growth market in coming years.
- Do you foresee China, SE Asia and Australia forming a source and destination cruise market to rival the Caribbean?
A: We certainly hope to see that level of growth and demand in the region, which would be a tremendous opportunity for the entire cruise industry. As I mentioned, China is expected to eventually be the largest cruise market in the world, and we plan to continue our expansion in that market, including in Southern China, which we sometimes refer to as our “Miami opportunity” in the region. Australia has been one of the fastest growing markets in the world recently, and we see great potential in Southeast Asia as a growth market. Based on growing demand for cruising across these markets and great weather in many areas of this part of the world, we are excited about the future of serving new cruisers in the region.
Ultimately cruise expansion is premised on the ability to create exciting itineraries. The Caribbean has many islands with very different histories and cultures; all located in close proximity to one another. To rival the Caribbean much port development will need to occur, and we are confident that it will.
- What are the main changes to cruise do you envisage in the next 12 months – and into 2020.
A: We’re excited about several new ships coming into our fleet in 2016, and we have the all-new Majestic Princess coming in 2017 as the first luxury cruise ship to be purpose built for China. The new ships have the latest features and innovations, along with new dining and entertainment options, which have been growing trends and will continue in the next year. Many of our guest want to disconnect and unplug on vacation, but others want to stay connected and share their experiences on social media, so you’ll also see improved connectivity bandwidth and plan options coming.
Further out, new destinations and new experiences for cruisers will always be a trend, including places to visit in growth areas like Asia, but also new destinations in the Caribbean like Cuba. We’ve announced we’re building the first cruise ships powered by liquefied natural gas, which is a big step for the industry and the environment. We’re also working on longer-term innovations with new team members and new ideas that we believe can fundamentally change the guest experience, so that is an area to watch in coming years.
- What do you see as the main challenges to growth in the Asian region? Agent training? Communicating the cruise message? Capacity? Price?
A: Since the industry is not quite as developed in Asia, especially in China, infrastructure development is important. In China, the government has made cruising a priority, so infrastructure development should accelerate. Same for Asia, where port development needs to continue, especially as sourcing from China increases and itineraries become more varied and sophisticated. As an industry, our collective goal should really be to make sure everyone who tries a cruise has a great time, so they’ll repeat and recommend to others. If we do that, we’ll grow awareness, consideration and demand for cruising, which is great for vacationers across Asia and a real positive for our industry.
We estimate that the greater Asian market has huge potential, but to unlock that potential we will have to work with our travel agent partners to develop more effective marketing and sales practices. We believe cruising offers a unique vacation alternative, but as a relatively new holiday option we need to communicate the efficacy of cruising both to our travel agent partners and to the traveling public.