Mixed reactions to state-owned cruise line enterprise in China

China’s plan to combine all state owned cruise lines under one umbrella, Huaxia International Cruise, with support from the Chinese central government was the major topic of conversation during the ‘Resumption of Cruise Operations in East Asia’ panel at Seatrade Cruise Asia today, moderated by Ted Blamey, principal, CHART Management Consultants. Huaxia is a planned JV between China Travel Group, China Ocean Shipping Group, China Merchants Group, Jinjiang International Group, Shanghai Jiushi Group, and Wusongkou Cultural Tourism Investment Group.

‘The rise of this state owned sector in China is motivated by the desire to build a cruise ship in China,’ explained Dr Zinan Liu, SVP & chairman, Royal Caribbean International, Asia. 

‘We only hope the government will maintain a level playing field for consumer interest and standards of the industry… it’s competition that drives the quality of our services.’ 

The international cruise industry will continue to be a ‘driving force’ if this is the case ‘because it is the international companies that have the best technology and the best know-how, talent, and they have the business model,’ Liu added.

It prompted Anthony Kaufman, head of commercial strategies, Mitsui Ocean Cruises, to say, ‘In terms of this nationalisation of the cruise industry in China, I agree with Dr Liu. Everybody in this room knows that operating a cruise line is not an easy thing to do, and it's a complex process, and you need experience, skill and knowledge and you need… to know how to operate. For a new company to do that and compete with the formidable Royal Caribbean is not an easy thing to do.’ 

Related:Cruise industry leaders delve into the future prospects of Asia's cruise market

A positive development 

Jianfeng Tong, GM, Shanghai Blue Dream International Cruise Co., believes the move is mostly positive. 'They [the brands under Huaxia] have leverage from the central government [and] the local government, and from the central media to the local media, to promote the cruise concept… ‘ He said that creating more awareness of the industry in China could succeed in ‘bringing more opportunities to each cruise line.’  

Undecided 

Meanwhile, Oliviero Morelli, president, Japan, South-Korea, South East Asia cruise division, MSC Group, will wait to see the effects of Huaxia. ‘I don't want to dive too much into the politics of this aspect,’ he explained, ‘but I want to keep it strictly down to the travel partners, the bus companies, the excursion companies, the end consumer.

‘In the end, if this will benefit the people that work within the cruise industry and ultimately our guests will have an enjoyable holiday, then it's more than welcome. If this is going to disrupt what we have been creating throughout all these years, then my sentiment is different.’ 

Related:President of the Philippines attends Seatrade Cruise Asia Welcome Reception

For MSC, the Chinese market is a ‘big, important focus.'

Blue Dream, which will be inaugurated on Friday, acquired Blue Dream Melody in March (ex. AIDAvita) and the vessel launched in June. It sails from Shanghai, Qingdao, Shenzhen and Guangzhou. ‘We stay focused on our domestic market,’ noted Tong. In 2025, the line will move towards the south rather than north or east China.

‘Consumer confidence needs to be rebuilt and it takes some time,’ he said, ‘but we are confident and we will stick to our plan. And though we are small, we are very, very committed to the Chinese market.’

China is the ‘powerhouse’ and without it, the Asian market is ‘minimal in size’ noted Liu. He added the building of 13 cruise ports in China is ‘too many’ stating that for the next 10 years or so, only three first tier ports are needed: Tianjin, Shanghai and Hong Kong.

Japan and Taiwan

Richard Wu, director, International Cruise Council Taiwan spoke of ‘linking up Taiwan and Korea together to make a [cruise] package that’s more attractive.’ The value of teaming up with other destinations was highlighted when Wu remarked, ‘Taiwan is a small market… We think we should restart the ACC [Asia Cruise Cooperation alliance] again.’

Taiwan welcomed 720,000 cruise passengers last year and is set to receive 894,000 by the end of the year. 

In 2018, Taiwan recorded 322 calls while in 2024, 218 are expected. 

And ‘Japan is one of the best opportunities right now,’ according to Kaufman. In 2023, passenger numbers from Japan were a touch below pre-pandemic levels, but last year grew to 11 times the level in 2020.

The country, he remarked, has 'benefited from the opportunity for new entrants into the market,' with the country also reaping the benefits of the current dollar-yen exchange rate. ‘I think Japan is like a new discovery… There are people who continue to look for new destinations and new places to go, and Japan is seen as a very safe, organised place…’ 

Seatrade Cruise Asia, taking place November 12-13, is co-located with Seatrade Maritime Crew Connect Global at Shangri-La The Fort, Manila, the Philippines.