Published on : Monday, July 25, 2016
Norwegian Cruise Line Holdings ceo Frank Del Rio sees unbounded potential for China, but the market will soon hit a couple obstacles that have to be overcome, he recently told reporters on the new Seven Seas Explorer.
Recounting how modern cruising began in the Bahamas and Caribbean, close to the large US source market, then branched out to Alaska, Europe and beyond, Del Rio said the fuel for that growth was ‘elderly’ travelers.
They have the time and the disposable income to afford longer, nicer vacations.
‘The question in China is will the elderly take up cruising now, and how quickly?’ Del Rio said. To date, the market consists of mainly younger people on short, close-to-home getaways.
With its huge 1.4bn population, China had 120m outbound travelers in 2015, a number that’s forecast to grow substantially. GDP, though slowed in recent years, is an impressive 6%. Government policies are promoting leisure time and travel, and China is building infrastructure and berths to support cruising.
But with the current typical four- and five-day cruises, it’s possible to reach only a couple ports in Korea and what Del Rio called ‘secondary’ ports in Japan—not top draws like Yokohama for Tokyo. Of the ships sailing from Shanghai, Tianjin (Beijing) and Hong Kong, most offer short cruises.
‘We have to jump-start that next step in China,’ Del Rio said. ‘The Chinese have got to start cruising in the Caribbean and Alaska.’
He mentioned talk of a nonstop air connection between Shanghai and Miami, a long 18 hours.
Ships sailing from China are positioned for the mainstream market. Asked about the potential for basing a luxury vessel there, Del Rio said an appetite for luxury cruising may develop over time, so it’s conceivable.
‘By 2020, the cruise industry in China may be, may be,’ he stressed, large enough to support a luxury ship. ‘Sooner or later, there will be niches.’
After all, the Chinese are the largest consumers of luxury in the world, Del Rio noted.
‘They buy more Ferraris and drink more Bordeaux wines than anybody, and there are more Gucci purses in Shanghai than Rome.’