Tag Archives: China

Amid Asia tensions, uncertainty over expansion

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Amid Asia tensions, uncertainty over expansion

By Tom Stieghorst
*InsightMaritime disputes in Asia have thrown a crimp into the cruise industry’s plans to expand in that fast-growing area of the world, and signs are the problem is growing worse.

The latest is a report in the Wall Street Journal that China is challenging archaeological exploration of hundreds of shipwrecks, many of them distant from its own shores.

The article says China views the wrecks as proof of Chinese exploration of islands in the South China Sea, in areas close to the Philippines, Malaysia, Vietnam and Brunei.

According to the report, of particular concern was an incident last year off the coast of the Philippines, when Chinese vessels forced a French archaeological team to abandon its exploration of a 13th century Chinese junk.*TomStieghorst

Already, China and Japan are in a standoff over disputed islands in the East China Sea. As a result, Royal Caribbean International and other cruise lines are not including Japan on their itineraries from China, opting for only Korean ports on cruises from northern Chinese cities.

The tensions in that area have escalated, too, with China claiming air rights over a wide swath of international ocean, including the disputed islands known as Diaoyu in China and Senkaku in Japan.

In its new air defense identification zone, China seeks to require all aircraft to file flight plans before entering the area. Japan and the U.S. immediately sent military planes into the space unannounced, to challenge the newly asserted Chinese zone.

None of this can improve the chance that China will get more big cruise ships. Until the uncertainty clears, the cruise industry’s Asia expansion, certainly in China, will not be full steam ahead.

Speaking on a third-quarter conference call to analysts, before China asserted its new air defense rights, Royal Caribbean International President Adam Goldstein said Royal had been hoping in 2013 to announce plans to resume calls in Japan on its China cruises aboard the Mariner and Voyager of the Seas. Instead, it has been forced to open 2014 bookings with only Korean destinations again.

“This is, of course, frustrating particularly since we do not see any signs of positive geopolitical change in the dynamic between China and Japan,” Goldstein said. “We continue to build our brand, our distribution and our management team in China with a view to making the best of the itinerary options that are available to us.”

Shutdown disappoints a lot of Chinese visitors

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Shutdown disappoints a lot of Chinese visitors

By Michelle Baran
The U.S. government’s partial shutdown this week coincided with a heightened period of inbound travel from China, resulting in disappointment for visitors encountering closed national parks, monuments and museums.

“Many Chinese visitors have saved for years to take the trip of a lifetime to our country. They wanted to see Yellowstone, the Statue of Liberty and the Grand Canyon. But they’re seeing none of it. They are extremely frustrated and confused by U.S. politics,” Haybina Hao, director of international development for the National Tour Association, said in a statement.

NTA oversees the China Inbound Program, which facilitates inbound leisure travel to the U.S. from China through a list of approved U.S. ground operators.

The U.S. had been named one of the top destinations for Chinese travelers, the fastest-growing tourism demographic into the U.S.

The U.S. government’s partial shutdown coincided with Golden Week, a period designated by the Chinese government as a time for its citizens to travel.

The shutdown meant tour operators had to reroute groups to alternative destinations, and in the process many operators had to cancel and rebook hotels and make new transportation arrangements.

“I had a group of 25 Chinese visitors who planned to visit Yellowstone this week, but they cannot get in,” said Sonny Sang of Los Angeles-based ACC America China Connection, a member of NTA’s China Inbound Program.

“I rerouted them to another destination, but I’ll lose $10,000 on this group. And I have another group of 22 arriving on Sunday to see Yellowstone. The financial consequences are unbearable for me as a small tour operator.”

Hao said one tour operator has more than 20 groups traveling in the U.S. this week.

Neil Amrine, owner of Guide Service of Washington, said, “The biggest disappointment is the Smithsonian being closed, but we’re coming up with other solutions.”

Amrine revised the itinerary for a group of Chinese travelers this week by adding privately run attractions and finding alternative viewing sites of popular monuments.

“They weren’t thrilled at first, but I think they’ll leave happy,” he said.

With destinations worldwide competing to attract Chinese travelers, Hao said that the shutdown will hurt U.S. travel companies investing in the Chinese inbound market.

In 2012, Chinese visitation to the U.S. increased 41% over 2011, and spending by Chinese travelers rose 19%, according to the Commerce Department.

Cruise must provide shareholder value to invest and grow

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Cruise must provide shareholder value to invest and grow

By Lee Hayhurst

Shareholder return is a vitally important part of the cruise industry if it is to attract more investment to allow it to grow, says Celebrity Cruises chief executive Michael Bayley.

Bayley told the Clia Columbus Day in Liverpool that profitability was a core component for cruise operators that need to invest billions of dollars to build new vessels.

“It’s incredibly important that we are providing an adequate return to shareholders and investors who put literally billions of dollars into the product. The marketplace for capital is very competitive. It’s not just available anywhere, people want to know that when they invest in whatever sector that they can get the return associated with any risk.

“We need to be able to encourage more investment. We need to introduce new brands and products and certainly need to introduce new ships. To achieve that we must achieve more revenue and reduce costs.”

Bayley, for instance, called for a more collaborative approach to port development in emerging cruise markets, the costs of which are currently passed on to the cruise lines which in turn pass them on to customers. “That’s really something that needs to be worked on,” he said.

Bayley added that the cruise industry must look to develop new sources of passengers like in the fast-growing markets of South East Asia, China and South America.