Tag Archives: China

China ‘Stronger Than Last Year’ For Carnival Corp

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Costa Serena

“The bottom line is things are stronger for sure that they were last year at this time,” said Arnold Donald, president and CEO of Carnival Corporation, touching on China on the company’s Monday morning second quarter earnings call.

Donald said he still believes China will eventually be the largest cruise market in the world and putting in new hardware (ships) still made sense.

“The market there is very large in terms of overall travel, both from cities in China and, of course, as a huge potential source market for fly/cruise all over the world,” Donald said.

“In terms of the distribution system itself, yes, we’ve moved from full-ship charters primarily now to group sales and partial ship charters,” he continued. “We’ve added a large number of additional distributors. All of that kind of de-risks things a bit from being overly concentrated and what, in effect, today is still pretty much a B2B market. The direct sales component is slowly growing a bit there. There’s an opportunity to grow that over time. But a timeline in China, we’ll see. It’s a small market.

“I don’t see a dramatic increase in per cent of total capacity in the short term there. And the reason is not so much because of China, but because of the demand everywhere else in the world. And then as I mentioned, there are large addressable markets everywhere in the world that are under-penetrated, including the United States.

“And so it looks positive for the year on a relative basis so far. But China’s China, and we have to see how things play out for the full year,” Donald said.

“But right now, conditionally, things definitely look stronger. In terms of sanctions, we haven’t heard of any sanctions on either side that would directly impact the cruise industry.”

Travel to Korea is still unofficially restricted, and Donald said if that opens up, it could help the situation.

Costa Venezia Poised for Taiwan Stint

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Costa Serena

The new Costa Venezia is heading for China in 2019 after her delivery from Fincantieri, and will also spend a month sailing from Taiwan next May, according to local media reports.

The 4,232-guest ship is a sister to the Carnival Vista and will spend next May on charter to a local tour operator in Taiwan, offering cherry blossom-themed sailings to Japan, according to Taiwan media.

The report said the ship would carry around 12,000 guests from Keelung, noting at least one cruise will be an eight-day sailing will include port calls in Kagoshima, Miyazaki and Osaka.

Pictured above: the Costa Serena in Keelung, Taiwan, earlier this month.

Norwegian’s Del Rio sees room for expansion

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Norwegian Cruise Line entered the Chinese market last year with the Norwegian Joy.Norwegian Cruise Line Holdings CEO Frank Del Rio told analysts that his ships were “in the right place at the right time” in 2017 but admitted that there were plenty of spots on the map he’d like to cover with new ships.

“We have so many markets that are unserved by us or grossly underpenetrated by us,” Del Rio said in a question-and-answer session with analysts to discuss fourth quarter and 2017 earnings in February.

“We don’t have a presence in the Mid-Atlantic states,” he said. “We’re not in Baltimore. We’re not in Charleston. We don’t have a presence at all in the world’s second-largest port, which is Fort Lauderdale.”

And the list kept growing.

“We don’t have a presence in the Gulf states of Texas or Alabama,” he said. “We don’t have a year-round presence in Tampa or New Orleans or Los Angeles. We only have three ships in Alaska, which is a very high-yielding market. Some of our competitors have up to eight vessels.”

Del Rio said that given the fleet size and the company’s intention to build only one new ship a year for its Norwegian Cruise Line brand, it could be a couple of years before he would consider adding a second ship in China, because, although profitable, it was not a banner year in China in 2017.

“I don’t think China is hitting on all cylinders as it can,” he said, referencing the continued tensions with South Korea and the resulting uniformity of short cruise itineraries, which only visit Japan.

Del Rio said that the Wave season for 2018 started strong and the company’s outlook is bullish, driven by a strong economy and consumer demand.

“Our overall booked position during the first seven weeks of 2018 further improved compared to the same time last year,” he said.

In addition to Norwegian Cruise Line, NCLH owns Oceania Cruises and Regent Seven Seas Cruises. The three lines operate a combined fleet of 25 ships with some 50,400 berths, offering itineraries to more than 450 destinations.

On average, guests of NCLH brands are booking five weeks earlier than they did at the end of 2016, Del Rio said.

NCLH net income rose 23% last year, to $780 million, as European pricing and bookings recovered faster than expected and the booking curve extended to a near-optimal length.

Revenue rose 10.7%, to $5.4 billion.