Familiar themes emerge at CruiseWorld China

From left: Alan Buckelew of Carnival Corp., Adam Goldstein of Royal Caribbean Cruises Ltd., Frank Del Rio of Norwegian Cruise Line Holdings and Gianni Onorato of MSC Cruises.

BEIJING — To U.S. travel agents, the themes that emerged from this week’s CruiseWorld China might have seemed reminiscent of issues that surfaced over the past three decades of cruise industry development in the U.S.

“We need to bring across the idea that the cruise is the destination, instead of just a mode of transportation,” said Zheng Weihang, executive vice president and secretary general of the China Cruise & Yacht Industry Association.

Adam Goldstein, chairman of CLIA and president and COO of Royal Caribbean Cruises Ltd., added: “A vast number of people have no idea what a cruise vacation is about, what happens onboard and how it offers great value.”

And Anthony Kaufman, executive vice president of International Operations for Princess Cruises, counseled that a travel agent’s responsibility includes “understanding the uniqueness of each cruise product and imparting that knowledge to the consumers.”

Although much of the conversation sounded like Cruise Sales 101, not all of the issues facing a quickly-growing, rapidly evolving industry have a North American parallel. The vast majority of cruises in China are charters, with cabins sold by a handful of mega-agencies, some of them larger than the cruise lines themselves. They, in turn, rely on a network of sub-agencies to help them fill ships.

The sustainability of the charter model was called into question by most of the cruise executives present, though none called for abandoning it outright. The general consensus was that it has helped the market get to where it is today, but more diversity in sales options will be healthier for long-term growth.

Calling charters a “force-feeding” model, Zinan Liu, Royal Caribbean International’s president of China and North Asia Pacific region and chairman of CLIA North Asia, said the charter model was successful in the past six years when consumer awareness was low and the sales force of cruise lines small. He predicted it will likely continue to coexist with other distribution models.

Kaufman noted that it continues to be the foundation for China’s cruise market and at present enables travel agencies to maintain better control of the customer experience and pricing. But, he said, whether it continues to dominate might depend on individual company strategies.

That each of the four largest cruise lines was represented by a top corporate executive suggests that China’s potential is still very much front of mind:

• Carnival Corp. COO Alan Buckelew provided an overview of the company’s 10 brands and revealed that the most luxurious Princess ship yet built will sail Chinese waters.

• Goldstein wore two hats. As chairman of CLIA, he provided an overview of industry growth, with a focus on China, and as president and COO of RCCL, he promoted Royal Caribbean International ships.

• Norwegian Cruise Line Holding Ltd. CEO Frank Del Rio provided updated details about the Norwegian Joy, a ship being built specially for the Chinese market, whose inaugural cruise is slated for June 23.

• MSC Cruises CEO Gianni Onorato provided more details after having announced the day before that a second ship, the Splendida, would be heading to China to join the Lirica.

In addition to the international development and regional line executives quoted above, onstage were Buhdy Bok, president of Costa Group Asia; David Herrera, president of Norwegian Cruise Line Holdings China; Roger Chen, chairman of Carnival Corp. China; Harry Sommer, executive vice president for international development at Norwegian Cruise Line Holdings; Helen Huang, president of Greater China, MSC Cruises; and Fan Min, chairman and CEO of SkySea Cruise Line.

Carnival building two Vista-class ships in China

Buhdy Bok (left), president of Costa Group Asia, and Carnival Corp. CEO Arnold Donald at the China Cruise and Yacht Industry Association conference, after Donald announced an agreement to build ships in China. Photo Credit: Arnie Weissmann
 

Carnival Corp. has signed a memorandum of understanding to build two Vista-class cruise ships in China intended for use by a Chinese cruise brand.

The ships have been discussed in general terms as part of an earlier disclosure of a shipbuilding joint venture between Carnival, China State Shipbuilding Corp. and Italian firm Fincantieri.

The agreement was announced at the 11th annual China Cruise Shipping and International Cruise Expo in Tianjin, China.

The memorandum specifies that the first of the two ships would be delivered in 2022. There is also an option to build two more Vista-class ships. The first Vista-class ship, the Carnival Vista, entered service last May.

Carnival said that the agreement is “non-binding.” If the ships are built, it would be a groundbreaking development, marking the first time that sophisticated cruise ships are built in China for the Chinese domestic market.

A Carnival joint venture in China would operate the new ships as part of plans to launch the first multi-ship domestic cruise brand in China.

If the joint venture is finalized, in all likelihood older ships from Carnival Corp. brands would sail for the new brand in advance of the 2022 newbuild, said Roger Frizzell, chief communications officer for Carnival Corp.

Other partners in the operating joint venture include China State Shipbuilding Corp. and the China Investment Capital Corp.

“Being able to offer cruises on China-built cruise ships represents a new opportunity for us to generate excitement and demand for cruising amongst a broader segment of the Chinese vacation market,” said Alan Buckelew, Carnival Corp.’s global chief operations officer.

Separately, Carnival and its Chinese partners announced that the Chinese central government has granted approval for the cruise joint venture to incorporate in Hong Kong.

P&O Cruises announces order for biggest ever ship

Image result for brittanya cruise ship

P&O MV Britannia

The first next generation mega ship for a British cruise line has been ordered today for P&O Cruises.

US parent company Carnival Corporation signed an agreement for the 5,200-passenger vessel.

The new ship for P&O Cruises will be built by Meyer Werft at its shipyard in Papenburg, Germany, with an expected delivery date in 2020.

The vessel will be powered by liquefied natural gas (LNG), an energy source claimed to be more environmentally friendly than traditional diesel fuel through reduced exhaust emissions.

Carnival Cruise Line will also take delivery of two similar 180,000 ton ships in 2020 and 2022.

The unnamed new P&O Cruises ship will carry significantly more passengers than current 3,637-capacity flagship Britannia, launched last year by the Queen.

At 180,000 tons, the new P&O Cruises ship will not be as big as the 227,000 ton Harmony of the Seas, currently the world’s largest cruise ship operated by Royal Caribbean International and capable of carrying 6,780 passengers.

P&O Cruises senior vice president Paul Ludlow said: “These are very exciting times.

“The number of British passengers taking a cruise in the past five years has significantly increased, boosted most recently by our very successful launch of Britannia last year.

“We know there is still huge potential as more and more people realise the value for money, choice and range of dining and entertainment options available on ships of all sizes.

“With an amazing range of itineraries, from two days to three months, there is a cruise to suit every budget.

“P&O Cruises is uniquely experienced in designing ships to meet the specific needs and aspirations of British passengers and the agreement by Carnival Corporation & plc to build a new ship of this size reflects all that our guests and prospective cruisers have been telling us and shows our confidence in the growth of the UK market.

“This ship will be the largest in the P&O Cruises fleet, will have a striking new exterior and interior design and will comprehensively embrace the company’s classic and iconic features. Innovative new guest experiences will be announced soon.”

In conjunction with the order, the delivery dates for new builds for AIDA Cruises and Costa Cruises for 2020 will shift to 2021 to allow the company :to more effectively allocate measured capacity growth across its 10 global cruise brands in more markets throughout the world,” the global cruise company said.

Chief executive Arnold Donald said: “We are proud to be at the forefront of introducing LNG-powered ships to the cruise industry, working with our partners to achieve shipbuilding breakthroughs like this that will help us produce the most efficient and sustainable ships we have ever built.

“This is also an important step in our fleet enhancement plan that enables us to execute on our long-term strategy of measured capacity growth over time, while delivering innovative new ships that further elevate our already great guest experience.

“Every time we launch a new ship, we have a new opportunity to create excitement and show consumers why cruising is a great vacation at an exceptional value, especially for those who typically consider land-based vacations.”

Bernard Meyer, managing partner of Meyer Werft, said: “We are excited to welcome P&O Cruises back to Meyer Werft in Germany and Carnival Cruise Line back to Meyer Turku in Finland.

“These new ships will be built in our most modern and environmentally friendly facilities, and we are very proud to design, build and deliver these ships that provide breakthroughs in innovation and for the environment.”