Not-so-smooth sailing for cruise operators in China - SupChina

Not-so-smooth sailing for cruise operators in China

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The major international cruise firms have been keen to capitalize on the rise of China’s leisure-oriented middle class, sending as many as 10 percent of their ships to Chinese ports. But now they are planning to divert boats away from the country as the Financial Times (paywall) reports that, following several years of 70 percent annual growth, “the number of Chinese cruise passengers is set to fall for the first time next year” to 2.4 million from 2.8 million this year. Here are some reasons for the decline:

  • Geopolitics was cited by one industry executive as playing a major role, particularly Beijing’s ban on Chinese tour groups visiting South Korea.
  • Regulatory restrictions are pushing operators away from China. They are not allowed to sell cruises directly to passengers, and travel agents tend to offer heavy discounts that cut into profitability.
  • The spending habits of the typical Chinese passenger (who tends to be older and more frugal), underdeveloped port facilities, and even the seasonal nature of the Chinese cruise industry are other factors at play.
  • But in the long term, cruise operators are looking to entice millennials to increase the popularity of cruises in the Chinese market, where only 0.2 percent of the population has been on a cruise, compared with 3.5 percent in the U.S.

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—Lucas Niewenhuis and Sky Canaves


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Sky Canaves

Sky Canaves previously reported for The Wall Street Journal in Beijing and Hong Kong, where she covered media, culture, social issues, and legal affairs, and served as the founding editor and lead writer of the WSJ’s China Real Time site. Prior to becoming a journalist, Sky worked in the China corporate law practice of Baker & McKenzie, and she has also taught journalism and media law at the University of Hong Kong. She speaks Mandarin and has accumulated more than a decade's experience living, studying and working in China.