Sailing on longer trips, domestic cruise operators eye 'golden decade'

China's cruise market this summer presents a nuanced picture that affords cause for congratulation, and misgivings. The recovery of multiple routes by international cruises, as well as the sudden rise of domestic cruises, make for an unusually vibrant scene of rivalry.

The unexpected price wars just ahead of the summer holiday, however, caught many operators off guard.

Given the cutthroat competition on short trips to Japanese and South Korean destinations, relatively higher-priced voyages are gaining more favor, with a number of cruise ship companies launching long-haul routes tailored to Chinese consumers.

A trend-setter is Adora Cruises, formerly known as CSSC Carnival Cruises, which was set up in 2018. It changed its name to Adora Cruises in June last year, signifying the start of the internationalization of the Chinese cruise market.

So far the two ships under the company have operated a total of 93 voyages, involving nearly 300,000 passengers. The Mediterranea, taken over from Costa Cruises in 2021, set out on its maiden voyage in late 2023, with Tianjin as its home port, while Adora Magic City, which began its voyage on January 1 this year, sailed with Shanghai as its home port.

Another example is Blue Dream Cruises, a domestic cruise company launched in 2016, whose visibility was still quite limited prior to the pandemic.

Currently the company owns Blue Dream Star and Blue Dream Melody. Blue Dream Star is not yet in operation, while Blue Dream Melody is gaining more attention with the 33-day long journey it will take across Asia.

Prior to the pandemic, cruise ships operated by foreign brands accounted for about 90 percent of the market. Most of them have since gone under, or gone through a shakeup due to the slack market.

As an insider observed, domestic cruises would account for half of the market, as their share continues to edge up.

According to Shao Yuhua, who has been in the industry for more than 10 years, foreign operators still have a long learning curve to flatten in terms of localization, like providing Chinese language services, where domestic cruises are proving more attractive.

Adora Cruises rechristened "Costa Mediterranea" "Adora Mediterranea" on July 23, and just two days later the cruise announced the launch of a 13-day trip including destinations covering five Southeast Asian countries. The ship is to set to sail from Xiamen, southeastern Fujian Province, on December 6, 2024, and will arrive in Guangzhou, southern Guangdong Province, on December 18, after 13 days and 12 nights.

Unlike traditionally shorter journeys to destinations in Japan and South Korea, this journey would cover five hot tourist destinations namely Manila (Philippines), Sabah (Malaysia), Brunei, Singapore and Ho Chi Minh City (Vietnam). As Adora Cruises CEO Liu Hui believes, the enriched line-up would cater to travelers' growing need for quality as well as in-depth and culturally diverse travels.

Meanwhile, the second domestically made cruise ship for Adora Cruises, due to be completed in late 2026, is expected to launch journeys in South Asia and Southeast Asia, with Guangzhou serving as its home port.

Earlier, another domestic cruise, the Blue Dream Melody, announced it would operate a long 33-night journey starting from Shanghai, calling at Xiamen, Hong Kong, Da Nang, Ho Chi Minh City, Sihanoukville, Bangkok, Pattaya, Singapore and other ports.

A single ticket for the trip, now available, starts at 28,640 yuan (US$4,033), and a suite can cost 135,000 yuan.

Sources revealed that for the Blue Dream Melody, long and medium trips (6 nights and above) would account for 35 percent of all voyages.

The creation of long trips by domestic cruises testifies to their ambition to beef up their international competitiveness by providing more differentiated products.

Longer voyages seem a vital tactic for domestic cruises to distinguish themselves, though this development could also be attributed to maturing Chinese cruise travelers, and the types of domestic cruises available.

In the past, the short Japanese and South Korean journeys, due to their mature operations and scale of economy, could largely meet the holiday needs of Chinese tourists. Unfortunately, homogenization had led to intensifying price wars. The surprising price wars during this summer holiday were also related to these short voyages.

In a recent interview, Xu Ying, general manager of Blue Dream Cruises, said that launching longer journeys is a company ploy at sharpening its competitive edge.

As Xu explained, before acquiring Blue Dream Melody, their investigation of planned journeys for all cruises from 2025 to 2027 found that if they tried to rely on their carrying capacity to succeed, then they would not enjoy much advantage. The company therefore purchased Blue Dream Melody, with a capacity for 1,500 travelers. The small capacity means it could call at smaller ports, such as Amami (islands of Japan), thus circumventing the limitations subjected to larger ships.

The Chinese cruise market is not conducive to the creation of long journeys. One exception is a 86-day global journey by Costa Cruises in 2015 starting from Shanghai that covered three oceans, and five continents. The journey, priced at tens of thousands of yuan, ultimately succeeded in luring 600 Chinese travelers, though the cruise could accommodate 2,680 passengers.

This bold endeavor to launch a 86-day package was encouraged by forecast of the Chinese market. Statistics show that in 2015 China had handled a total of 629 cruise journeys, a year-on-year growth of 35 percent. Inbound and outbound travelers totaled 2.48 million, a growth of 44 percent.

During the first six months of this year, about half a million travelers were carried in over 200 journeys on 23 cruises, showing signs of a rebound, but still a long way from the heydays in 2015.

"On the basis of past experience, we have fostered and identified some travelers really keen on cruise trips, thus laying a solid foundation for longer journeys in China," said Xu.

"In China, the number of travelers who would book cruise journeys again is far less than the figures in Europe and North America, hence the need for more types of cruises for those who have already experienced cruise travel," Xu explained, adding that by restricting the journey time to five or six days, lack of options would disincentivize repeat travelers.

Low perception remains a stumbling block.

According to Shao Yuhua, from Spring Tour, currently longer journeys remain under-subscribed. Those who have booked long journeys are also keen to know if the cruise fare would cover expenditures on land tours, and what kinds of land tours would be included.

"Our eyes would light up at the sight of differentiated long-haul products, but when we tried marketing to consumers, they tended to be anxious, uncertain about various problems that might crop up while being adrift at sea for a whole month," she said, citing the need for reassuring would-be travelers.

Shao reiterated that, given the types of holidays available in China, these long journeys are more suitable for wealthy middle-aged and elderly tourists with plenty of time.

Industry experts believe that with the steady recovery and cultivation of the sector in 2024 and 2025, the cruise market is expected to witness a golden decade from 2026, with some of the traditional international operators replaced by domestic operators.