China to lead Asian cruise industry

Costa Victoria cruise at Wusongkou International cruise port in Shanghai. Wusongkou is expected to be built into an international cruise port of East China. Provided to China Daily

Winter is seen as the industry's off-season. Load factor measures capacity usage.

The Henna has worked four routes since January 2013 and new ones, including Xiamen-Taiwan and Tianjin-Japan are planned.

"The company expects to enlarge our fleet by 12 to 13 liners in the next 10 years," HNA said in a statement to China Daily.

Some tour companies - seeing just two domestic cruise operators and the high level of investment needed to enter the industry - are seeking ways to get a slice of the market.

Ctrip.com International Ltd sees the cruise industry as a main path to development, Senior Vice-President Tang Lan, said.

Almost 10 percent of Chinese cruise travel was booked through Ctrip.com, the country's largest online travel agency, in 2013. It will launch 15 exclusive cruise trips this year, catering to about 40,000 travelers.

Ctrip.com invested more than 200 million yuan ($32.45 million) in its cruise operations this year, director of its cruise business Yang Lei, said.

Other travel agencies, such as Beijing UTour International Travel Service and China International Travel Service Co Ltd, also invested.

"Seats on liners in peak season, like summer and winter vacations and some public holidays, sold out very early," said a Utour manager.

China's cruise industry still faces challenges as it's at an early stage of development, some experts said.

This year, only two liners out of eight operating in China had domestic owners, the Henna and Zhonghua Taishan, Zheng at the industry association said.

"Chinese operators are still too small and weak to compete with the international giants," he said, regardless of their "facilities or services".

Chinese companies have capital to buy vessels but lack talent and operational experience, according to Zheng.

"The managers and service staff on liners need knowledge of both voyages and high-end hotels," he said. "There are so few in China now."

International operators also have management systems from ticket selling and onboard service, but no Chinese company has, Zheng said.

He criticized the low-price strategy usually taken by Chinese companies, saying it's not a long-term policy where high quality, not just price, is important. At the same time, few options for routes are also limiting industry development, he said.

"The market is actually virgin territory," Zheng said.

The transport ministry guidance identified Northeast and Southeast Asia, the Taiwan Strait and South China Sea islands as the main areas for the country's cruise industry by 2020.

"There's still a long way to go before we achieve the target" set in the guidance, Zheng said. "But the industry is very promising."

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