China’s cruise market, the world’s fastest growing, is undergoing a capacity adjustment, which is hoped will guide it back onto the right course and benefit both operators and consumers, said industry experts.
As the cruise travel market enters its peak season, vessels operating out of domestic ports are decreasing. According to the voyage plans published by major cruise brands, the number of such vessels in operation in China this year is 11, down 38 percent from 18 last year, China Transportation News Network reported.
“In past years, the Chinese cruise market saw a rapid increase with the annual growth rate reaching 40 percent. However, we have witnessed an obvious slowdown since last year, when the growth rate was less than 20 percent for the first time,” said Cherry Wang, vice president and general manager of Princess Cruises China.
Since entering the China market in 2014, Princess Cruises has accommodated nearly 700,000 Chinese passengers and expanded to three ports — Shanghai, Tianjin, and Xiamen in Fujian province — in three years.
“The Chinese cruise market saw soaring growth of similar products by almost all global cruise operators trying to expand their business here, and in order to compete with each other, ticket prices nose-dived from 20 percent higher than sophisticated markets such as Europe and the United States, to between 30 percent and 40 percent lower,” said Cheng Juehao, deputy professor at Shanghai Maritime University and deputy head of the Shanghai International Shipping Institute Cruise Economy Research Center.
As a result, operators are finding it difficult to remain profitable, and customer experience is being sacrificed due to low expenditure.
“Cruise travel during the summer holiday has always been popular, and to date, we have already seen more than 50 percent growth in reservations compared with the annual average,” said Liu Xiaolyu, head of the cruise division at Ctrip, China’s biggest online travel agency.