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By 2020, China’s Ministry of Transport expects 4.5 million Chinese cruise passengers, which albeit representing close to 100 percent growth from 2017’s figure of 2.8 million, still means substantially slowed year-over-year growth. In comparison, CLSA expects the total number of global Chinese travelers to reach 200 million by 2020—from 122 million in 2016—whereas China’s National Tourism Administration has a more modest forecast of 150 million international travelers by 2020. However, contrary to industry expectations, it looks like cruising is falling out of favor with Chinese tourists both faster and more dramatically than even the most bearish take on China’s nascent cruise industry. According to a Financial Times report, the Chinese cruise industry is poised for a drop by 14.3 percent in 2018—with cruise travelers declining from last year’s 2.8 million down to 2.4 million travelers in 2018. Major cruise operators have been quick in their response to the cooling Chinese cruise market. According to the FT report, Princess Cruises are withdrawing its two China-based ships from China altogether, and the Royal Caribbean Mariner of the Seas’ China ambitions are facing a similar fate.
The sudden downturn of China’s previously booming cruise industry isn’t only a setback for international cruise operators, but also the Chinese government which had lofty ambitions for a “made in China” cruise and shipbuilding industry. The reasons for the downturn are multifaceted, and it’s impossible to put it down to one major reason alone. Instead, a potent mix of heavy-handed Chinese regulation, tourism bans, and downward price pressures proved enough to turn a booming industry into a declining one. While all is not lost for cruising in China, there are undoubtedly good reasons to revise a bullish outlook on China’s cruise industry to a bearish one—at least until the Chinese government proves that it’s not all talk with it’s 4.5 million cruise passenger projection for 2020. As it turns out, tourism growth isn’t marked by decree but by providing an environment conducive to industry growth. Read Original Article |
