Competition for Chinese guests intensifies with Princess ship deployment

Shanghai Cruise Terminal

By sending its next ship to sail from Shanghai, Princess Cruises will vault into the vanguard of Western cruise lines seeking to source passengers from fast-growing China.

Princess said it will use the third ship in its Royal class, set for delivery in 2017, to establish a year-round presence in China, one of only three cruise lines to have done so.

The 3,560-passenger ship will be from the largest class of vessels that Princess sails, one-third larger than the 10-year-old Sapphire Princess, which begins its second season of summer sailings from Shanghai next week.

“Deploying our next new ship in China underscores our strong commitment to growing the China cruise market,” Princess President Jan Swartz said in a statement.

The move echoes the decision in April 2014 by Royal Caribbean International to commit the Quantum of the Seas to Shanghai even before it had been delivered. After six months of interim sailings, the ship left New York on a transit cruise May 2 and will begin year-round cruising in China in June.

At the time, Royal Caribbean CEO Adam Goldstein said the company felt it had an asset in the Quantum that was impossible to match.

The Princess ship, as yet unnamed, will be a follow-up to the Royal Princess and Regal Princess, which will remain on U.S.- and European-based itineraries. When they were introduced in 2013 and 2014, respectively, they made a splash with their protruding SeaWalk platforms, dancing water fountains and a pair of elegant chef’s table restaurants.

In addition to those features, the 2017 ship under construction at the Fincantieri shipyard in Italy will be customized for Chinese guests, using the Princess Class elements pioneered on the Sapphire Princess.

They include the World Leaders Dinner, a traditional English afternoon tea, a Lobster Grill, Ultimate Balcony Dining, an oceanview, hot-pot dinner option, ballroom dancing and expanded duty-free shopping.

“And as this ship is still in the design phase, we are looking forward to creating other new and exciting venues and experiences catering to the Chinese vacationer, which we will reveal in the coming months,” Swartz said.

In announcing the ship, Princess said it will be “the first year-round international luxury vessel designed and built specifically for Chinese guests.”

The announcement comes as competition begins in earnest for the Chinese customer.

On May 15, a joint venture between Royal Caribbean Cruises Ltd. and Chinese online travel agency Ctrip will begin sailing the former Celebrity Century from Shanghai.

The 1,800-passenger ship has undergone a renovation, which included the addition of an ice bar, a trampoline and minigolf as well as a makeover of the restaurants to tailor them to Chinese tastes. It will sail under the name SkySea Golden Era.

On May 21, the Sapphire Princess begins its second summer of sailings from Shanghai, followed by the arrival of the Quantum in June.

Carnival Corp. is also represented in the Chinese market by Costa Cruises, which has been sailing the Costa Serena from Shanghai since April.

In a note to investors issued after the Princess announcement, UBS Securities predicted that 2015 will be the tipping point for China to become a “game-changing force” for the cruise industry.

UBS analyst Robin Farley said China will not only provide a new source of demand but will reduce capacity and strengthen pricing in more mature markets such as North America and Europe.

The international cruise industry’s presence in China has been growing since 2008 when Costa first put a ship there dedicated to the Chinese market. Carnival Corp. sent then-Costa chairman Pier Luigi Foschi to oversee its Asian operations.

After Foschi left Carnival, former Princess Cruises president Alan Buckelew was named chief operations officer and was dispatched to China. Although Costa has two other ships, the Costa Victoria and Costa Atlantica, also sailing from China, the shift of a Princess newbuild to China will significantly step up Princess’ presence there.

After the 2017 delivery, Princess has no new ships on order, although Carnival Corp. recently announced an agreement in principle with two European shipyards to build nine vessels from 2019 to 2022.

Carnival Corp. has also agreed to explore a joint venture with Fincantieri and the China State Shipbuilding Corp. to develop the first “world-class cruise ship” to be built in China.

Norwegian Cruise Line has formed a task force to evaluate whether and how to enter the Chinese market. However, its largest shareholder is Genting Group, a Malaysia-based company that also owns Star Cruises, a line that is focused solely on the Asia market.

Quads for Quantum: Royal Caribbean orders fourth ship in the class

Royal Caribbean ordered a fourth Quantum-class vessel from the Meyer Werft shipyard for delivery in 2019.

The cruise line recently announced that a third Quantum ship, Ovation of the Seas, would debut in China in 2017.

Royal have not yet released the name of the new Ship, but they still have two registered names, Passion of the Seas and Pulse of the Seas, which one do you think?

The 4,180-passenger ships have a sky-diving simulator, bumper cars and a crane-powered observation gondola.

Royal Caribbean did not disclose the cost but said that based on current ship orders, its projected capital spending for 2019 would be $1.3 billion.

Royal Caribbean Cruises Ltd. said its projected capacity increase in 2019 would be 6.5% across all of its brands.

Princess Cruises to put new build in China

Photo of the Regal Princess.
Princess Cruises said its 3,600-passenger ship under construction for delivery in 2017 will be deployed to China full time, with special modifications for the Chinese market.

The announcement makes Princess the second line, and the first owned by Carnival Corp., to commit an as-yet unfinished ship to China.

Royal Caribbean International broke the mold by announcing last year that the Quantum of the Seas would be stationed year-round in Shanghai after a six-month season in New York. More recently, it said a third ship in the Quantum class, the Ovation of the Seas, would also be devoted to China and Australia.

With the news, Princess Cruises dramatically increases its involvement in China. To date, Costa Cruises has been the main Carnival Corp. vehicle for China-sourced business, with the Sapphire Princess stationed in China only last year for a four-month summer season.

“Deploying our next new ship in China underscores our strong commitment to growing the China cruise market,” said Princess President Jan Swartz.

The new ship, as yet unnamed, is based on the same platform as the Royal and Regal Princess. However, it will also include distinctive features created for the Sapphire Princess, such as the World Leaders Dinner, traditional English afternoon tea, a Lobster Grill, Ultimate Balcony Dining, an ocean-view hot pot dinner option, ballroom dancing and an unparalleled duty-free shopping experience.

“And as this ship is still in the design phase we are looking forward to creating other new and exciting venues and experiences catering to the Chinese vacationer, which we will reveal in the coming months,” Swartz added.