Comment: Cruise industry must take China’s rise on board

Comment: Cruise industry must take China's rise on boardFollowing the announcement of the deployment of Royal Caribbean’s newest ship year-round from Shanghai next year, David Selby assesses the significance of the decision and the impact on established markets

China is vast – it has a population over 20 times that of the UK and is the world’s second largest country by land mass.

Between 2007 and 2011, its economy grew at the rate of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States combined – and while we dither in the UK about where the next commercial airport capacity will be situated, around two-thirds of the world’s airports are being built in China, with 55 planned between 2013 and 2015!

Shanghai is China’s biggest city, with a population of over 22 million, according to the last National Population Census in 2010. While a significant number of residents still have insufficient income or interest in cruising, it was perhaps only a matter of time before a major international cruise line would announce year-round deployment from the city, as Royal Caribbean has done.

The fact that it is its newest and “shiniest” ship, Quantum of the Seas, does make it interesting. It goes against the traditional idea of growing “new to cruise” markets typically using older tonnage, and keeping the key markets fresh with the newest innovation hardware.

During last week’s announcement, Adam Goldstein, Royal Caribbean’s president and chief operating officer, said: “Every trend we are seeing in China tells us we can achieve real long-term competitive advantage and appealing returns on our investments in this fast-growing market by accelerating our presence there. We will have to be nimble, but the ability to move fast is one of our strengths.”

I agree! It comes from having – in my view – the strongest single international cruise brand in the world.

Meanwhile, analysis commissioned last year by the Asia Cruise Association predicts a market size in Asia by 2020 of 3.8m, of which China will be 1.7m – just below what the UK is today. Cruises are typically of short duration and to serve 3.8m cruisers on 5 night voyages, the region will need the equivalent of eighteen 3,000 berth ships sailing in the region year round. It is unlikely to stop there.

Where will they come from, and what of traditional core markets?

Well, Royal Caribbean points out that the ports of Florida (with ships sailing to the Caribbean – the most popular cruising destination), will be operating with record levels, while from New York passengers will have the chance to cruise on ships not previously deployed from there.

In the UK of course, we look forward to seeing Anthem of the Seas – Quantum’s sister-ship – sailing from Southampton after she is launched next year. Longer term however, we could see a general shift away from current core markets unless there is an acceleration of new-build activity.

For the remainder of this year, apart from Quantum, there are just three ships over 2000 berths being launched worldwide – for Princess, Costa and Tui in Germany. Next year there are five, in 2016 there are six and in 2017 there are so far just three. While this may increase, it is barely enough to cover the Asian growth over the next six years.

Therefore, the challenge is on for the industry in traditional markets to keep the product and marketing fresh, to drive value and deliver exceptional levels of customer service – and the same goes for the destinations the ships visit.

Looking even further ahead – once the Chinese have tried cruising at a local level, they will without doubt be cruising further afield and coming to Europe.

So while we sort out the runway problem, it would be a good idea to sort out the UK Visa situation at the same time.

Preview 2014: Destinations

By Gay Nagle Myers

Antarctica is high on lists for 2014.Twirl a globe and randomly stab it as it spins. Chances are that wherever your finger lands is a place that someone, or lots of someones, will be traveling to next year.

That said, however, a number of unknowns remain: What’s in? What’s out? Who’s going where in 2014? Does travel next year signify a return to old haunts, or will consumers throw off the bowlines, leave the safe harbors and set forth on new pathways?

A random sampling of travel agents revealed that there clearly is no single answer or set answer; it’s pretty much a mixed bag across the board.

Mary Ann Ramsey, president of Betty MacLean Travel in Naples, Fla., which specializes in multigenerational adventure travel, responded from Cuba, where she was taking part in a people-to-people program.

She said she’s had queries from clients who wanted to experience, firsthand, Cuba, Cubans and the people-to-people programs.

The Galapagos Islands are also on her clients’ radars, especially since the launch in late September of the 100-passenger Silver Galapagos, Silversea’s expedition vessel.

Cold Antarctica is another hot destination for Ramsey’s agency.

“Seabourn Quest’s new voyages to Antarctica this winter are bringing luxury to an unspoiled continent,” she said.

In terms of trends, Ramsey reported an increase in demand and bookings for privately guided programs in the U.S. national parks and in western Canada.

Shambala Private Reserve, South AfricaMultigenerational travel on African safaris is big at SRH Travel in Greensboro, N.C.

“We’re seeing quite a lot of interest there, as well as in new resorts and lesser-visited Caribbean islands,” said Shannon Haynes, the owner and travel consultant.

Europe has picked back up, she said, as has Disney, with its newly renovated Magic Kingdom.

“Travelers who are familiar with Disney parks are excited to try out the MagicBands [the all-in-one gadgets that serve as ticket, room key and more] and the new restaurants, as well,” Haynes said.

Some of the old favorites are making a comeback in itineraries next year.

Allison Harris, co-partner in the Travel Corner in Williamsburg, Va., said that national parks, travel to Hawaii and cruises to Alaska are more popular than in the recent past.

“Our clients are diverse, well-heeled and have the wherewithal to travel where and when they want,” Harris said.

River cruising has been and remains a big seller, she said, adding, “The small cruise ships, too, are getting a lot of respect from our older clients who don’t want all the glitz and gizmos of the super-large ships.”

River cruising also looms large at Cruise One in Ponte Vedra Beach, Fla.

“There’s a lot of awareness of river cruising in Europe, but less availability even though there are more ships,” said Mara Hargarther, the franchise owner. “Clients are so surprised to find that many ships already are full for 2014.”

Most of her clientele book luxury ship accommodations “because it is the ship, not the destination, that is most important for them.”

Hargarther has branched out into niche cruising for specialty groups.

“I take a whole group of knitters, for example,” she said. “We have classes and instructions as we cruise our way to the Caribbean, Mexico, Canada and throughout Europe.”

Whatever the formula, it seems to be working. Hargarther said her business is up 42% year to date, “and we’re breaking records all over the place.”

For Dan Ilves, vice president of leisure sales and marketing at the Travel Store in Los Angeles, “Europe always is hot. France is very strong for 2014, and river cruises have shown the greatest increase year over year. They’re through the roof. In fact, it’s hard to get space, especially for families or small groups. I’ve hit the wall several times on that.”

Greece is showing “a bit of activity, and so are Fiji and Tahiti, in terms of hits on our website.”

The South Pacific looms big for Terry Bahri, travel specialist at En Route Travel in Pacific Palisades, Calif.

“Bookings are way ahead for 2014, with a lot of interest in Fiji, Tahiti and private island resorts,” Bahri said. “Although Bali never recovered from the bombings in 2005, my clients go everywhere else. I’m booking India, Vietnam and China. Africa is a big seller next year.”

What her clients want most, she said, are special experiences.

“One couple visiting the Caribbean befriended some local islanders and were invited to share a dinner at their house,” she said. “That was what they talked about when they returned home.”

Experiential travel is the buzz phrase that represents a large chunk of the bookings at Strong Travel Services in Dallas, owned by Jim and Nancy Strong.

“I’m always surprised by the variety of requests we get,” Nancy Strong said. “There’s a lot of interest in Africa, especially Namibia, Rwanda and Uganda to see the gorillas.”

The agency received calls for Christmas travel to India, Brazil and the Caribbean with the caveat that it be upscale, private, unique, enlightening and new within those destinations, according to Jim Strong.

“We look for the wow factor when planning these trips for our clients,” he said. “If it’s Paris, then we find the new hotel, a special driver, a guide who will take them behind the scenes and to an off-the-beaten-path restaurant.”

Food is a big factor in travel these days, Nancy said: “For many of our clients, the most important questions when we are booking their travels are, ‘Where will I eat?’ ‘What will I eat?’ and ‘What will I experience?'”

Noting that the agency is making more lunch and dinner reservations than ever before, the Strongs dubbed the growing passion for food “a new cultural phenomenon.”

Carnival introduces guarantee

Carnival introduces guarantee

By Tom Stieghorst
Carnival CruisesCarnival Cruise Lines unveiled a guarantee, promising to refund 110% of the fare if guests cut short their cruise for any reason.

The offer includes complimentary return transportation and a $100 onboard spending credit for a future Carnival cruise.

To activate the guarantee, passengers must report to the guest services desk within the first 24 hours of a cruise.

The guarantee applies to U.S and Canadian residents only and is valid on three- to eight-day voyages to the Bahamas, Caribbean, Mexican Riviera, Alaska, Canada and New England departing through April 30, 2015.

“The ‘Great Vacation Guarantee’ is designed to provide an assurance to those consumers who may be considering a cruise that we stand behind our product,” said Carnival Cruise Lines CEO Gerry Cahill.

It is designed to give potential cruisers “complete peace of mind,” Carnival said.

Carnival will promote the guarantee with ads, through travel agents, and on a section of its website.