Royal Caribbean adds China in 2024, the first major cruise line to return
Royal Caribbean International CEO Michael Bayley didn’t hesitate during Royal Caribbean Group’s early May earnings call to indicate that the line was planning a return to China.
“We’ve still got some work to do, but we’ve now started to rebuild our sales organization in China,” he said. The target, he said, was spring or summer of 2024.
Eleven days later, the line announced it would return to serving the China market in April 2024, beginning with four- and five-day sailings on the Spectrum of the Seas out of Shanghai.
The move is an important one in the cruise industry. According to CLIA, 3.7 million people from Asia sailed in 2019, making it the third-largest source market, behind North America at 15.4 million people and Western Europe at 7.2 million. Of those Asia passengers, 54% cruised from China.
And the China market has been among the slowest to recover and reopen due to a number of factors; its closed-border policy persisted until this year. Although 2 million people sailed from China in 2019, only 2,000 did so last year, CLIA said.
Royal’s announced return makes it the first of the big three cruise lines to rebuild its China operations.
The Chinese government’s slow start to reopen gave Carnival Corp. time to pivot its Costa brand, which served the China market. The company has since repositioned Costa out of China and has no imminent plans to return.
Costa operated five ships in Asia before the pandemic. As China’s continued closure to tourism dragged on, Costa shed five ships from its fleet and focused on the European market.
Carnival Corp. CEO Josh Weinstein told investors in December that it was too early for him to plot a return to China.
“The great thing about our assets [is] they’re mobile, and we’ve moved them to optimize our demand and our revenue generation,” he said at the time.
Asked for the company’s current position, a Carnival Corp. spokeswoman said, “We will assess our plans as things develop over time.”
Norwegian Cruise Line abandoned its plans to serve the Chinese market even before the pandemic. The line sent the Norwegian Joy to sail year-round out of China in 2017, then pulled out in 2019, saying its ships were better deployed in Alaska.
Royal has been more bullish on the market. Before the pandemic, it operated several ships from China. The Spectrum’s positioning is a sort of homecoming: The ship debuted in Shanghai in 2019.
Royal was so invested that it had scheduled an Oasis-class ship, the Wonder of the Seas, to launch there in 2021. The pandemic foiled that plan, and the ship instead began sailing from Fort Lauderdale in 2022.
Bayley said he expects the China market will return to prepandemic levels. China is attractive because net revenue from a Chinese passenger is slightly higher than from an American one, he said.
Bert Hernandez, Royal’s senior vice president of international, said this was a moment Royal and Chinese travelers have been waiting for.
“Our return to China is an exciting milestone that could only be marked with Spectrum of the Seas, which became a household name with Chinese families and travelers alike when it debuted in Shanghai,” he said.
While the brand readies for its return to China, Royal Caribbean Group CEO Jason Liberty tempered its expansion plans and said the company is going to continue to focus on the Caribbean, where it sails the majority of its capacity.
“I think our broader portfolio of deployment [will] more or less look like it does this year with … probably a little bit more indexing into China,” he said.
U.S. cruisers in Asia
While Royal’s announcement is a significant strategic move for the company to serve Asian cruisers, travel advisors said they are seeing growing interest among some American clients to cross the Pacific.
Several cruise lines have plans to call in China this fall. For instance, Hong Kong will see calls from Holland America Line, Oceania Cruises, Princess Cruises, Royal Caribbean, Silversea, Viking and Windstar toward the end of the year.
“For 2024, everyone is looking to Asia,” said Sharon Concepcion, an advisor with Travel Leaders Vacation Center, part of Internova Travel Group.
Europe is too crowded for her well-traveled luxury clients, she said, and they are instead looking for new destinations. Japan, she said, “is going to sell very well, but if you need space, you’re going to have to [book] it soon.”
Many of her clients saw their China land itineraries canceled earlier this year, she said, which has spurred her to propose sailings paired with land immersions, often in Japan, which has become her most popular Asian destination.
Lainey Melnick, who owns the Westlake Hills branch of Dream Vacations in Austin, Texas, said she has had two inquiries in recent days for Asian cruises.
“The reopening of China is a long time coming and is very exciting for our industry,” she said. ”
But the feeling isn’t universal. Excitement to sail for China was high but is now like a “deflated balloon,” said Angela Hughes, who operates Trips and Ships Luxury Travel in Winter Garden, Fla., and said her clients are distrustful of the Chinese government due to the geopolitical conflict with Taiwan and its positioning closer to Russia in terms of the war in Ukraine.
They’re also concerned about wrongful detentions, she said.
On March 10, the U.S. Department of State’s Bureau of Consular Affairs issued a travel advisory recommending people reconsider their travel plans to China because of arbitrary enforcement of local laws and wrongful detentions.
“It’s not the Chinese people, it’s the Chinese government that they’re afraid of,” Hughes said.
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