Chinese travel agency buys Celebrity Cruises ship

Chinese travel agency buys Celebrity Cruises ship

By Jerry Limone
Celebrity CenturyRoyal Caribbean Cruises Ltd. (RCCL), parent of Celebrity Cruises, has agreed to sell the Celebrity Century ship to Ctrip.com International, the largest online travel agency in China.

Ctrip is acquiring the ship through a holding company called Exquisite Marine Ltd., a subsidiary of Skyseas Holding International. Skyseas was founded by Ctrip and other investors to offer cruises to Chinese customers.

Ctrip and RCCL said that they have entered into a memorandum of understanding to form a joint venture to manage the operations of the acquired cruise ship “and potentially broaden the relationship.”

“Ctrip will capitalize on our strong brand, large customer base and superior service quality, as well as our partner’s extensive cruise operating experience, to generate great value to our customers and shareholders,” Ctrip President Min Fan said in a statement.

The 1,815-passenger Century will sail for Celebrity Cruises until April 2015. After that, the ship will be renovated, Ctrip said.

The Century’s final Celebrity cruise has been altered. A 15-night Dubai-to-Rome sailing departing April 5 is now a 14-night cruise from Dubai to Singapore.

Guests have the option to cancel and receive a full refund or take another cruise and receive an onboard credit as well as compensation to cover air change fees.

RCCL said that the sale of Celebrity Century will result in a noncash loss of approximately $20 million. The ship entered service in 1995 and is now the oldest and smallest ship in Celebrity’s fleet.

RCCL Chairman Richard Fain called the ship’s sale “an excellent business opportunity for both Royal Caribbean and Ctrip.”

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.

Shutdown disappoints a lot of Chinese visitors

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.