Arnie Weissmann
At CruiseWorld China in Shanghai last week, there were voices that raised alarms about the illegal "dumping" of ultralow-priced cabins into the marketplace. Infrastructure concerns were expressed. A warning was issued that a surplus of brands was causing confusion among consumers. The current distribution system, built on wholesaling and charters, was characterized as "broken." Existing ports are overcrowded, the boarding experience in some terminals was described as "chaotic" and it was pointed out that there are too few Chinese ports to support variety in itineraries. A shortage of retailers was found to be troubling, and the downturn in the nation's economy was a recurrent theme.
At the same event, however, other voices pointed to sector growth rates that suggest China will, in two years, pass both the U.K. and Germany to become the second-largest cruise market in the world. The upcoming 10 years was characterized as "the golden decade" for anyone connected to cruising. Amazing features that aren't available in other markets will debut on ships sailing exclusively in Chinese waters. Data was presented showing that Chinese consumer confidence has not flagged despite economic difficulties. Billions of dollars of new equipment will soon be arriving in China. Travel agents were praised by all, valued for their ability to sell and innovate.
In Shanghai that day, mixed messages were the norm, with optimism and pain points voiced within moments of each other, sometimes by the same speaker.
Hundreds of Chinese agents in the CruiseWorld China audience heard these messages voiced from the very top: Roger Chen, Carnival Corp. chairman in China; Zinan Liu, president of the China and North Asia Pacific region for Royal Caribbean International; David Herrera, president of Norwegian Cruise Line Holdings, China, and Harry Sommer, executive vice president, international business development for Norwegian Cruise Line Holdings; Anthony Kaufman, executive vice president, international operations, for Princess Cruises; and Fan Min, chairman and CEO of SkySea Cruises.
China's top cruise industry executives addressed hundreds of Chinese travel advisers at Travel Weekly CruiseWorld China, held in Shanghai last week. From left, Roger Chen, chairman for China, Carnival Corp.; David Herrera, president, Norwegian Cruise Line Holdings China; Travel Weekly Editor in Chief Arnie Weissmann; Zheng Weihang, secretary general, China Cruise and Yacht Industry Association; Zinan Liu, president of China and North Asia Pacific Region, Royal Caribbean International; and Susan Li, editorial director, Travel Weekly China.
It was a fascinating look into an intriguing market at a remarkable point in its history. For those involved in Chinese cruising, it seemed exciting in the way that being a teenager is exciting: a mix of present-day frustrations and insecurities but with a world of unlimited possibilities tantalizingly near.
Perhaps it's a sign of the rapid pace of change in China that six months ago my analogy for its stage of development was "infancy," and a half-year later, it has reached "adolescence."
The personalities emerging as China's cruise pioneers are an intriguing group. Royal's Liu is analytical, candid in his observations and a self-confessed workaholic. (Asked what he does to relax, he said: "Work.")
Carnival's Chen, on the job only three months, nonetheless proved a quick study and is already bringing to bear his experience as a former Chinese diplomat and China-based executive for Microsoft, Volvo and General Electric. (And he was the first Travel Weekly CruiseWorld speaker on either side of the Pacific to say that something reminded him of a quotation by Chairman Mao.)
Norwegian's Herrera is moving his young family to Shanghai as well as bringing along NCL's "Partner First" attitude. ("I will ask for friendship before I ask for business," he told agents in the audience.)
My overall impression is that whatever headwinds China is experiencing, it remains a monster opportunity and is being shaped by an interesting set of executives who are backed by long-view commitments from U.S.-based cruise lines.
In an interview after the conference, Chen brought his other business experiences, and perhaps some of his diplomatic skill, to bear in evaluating the mixed messages.
"All the issues are true, but I'd say it's growing pains," he said. "It happens in all industries in their initial stages. The challenges last year made us more mature and ready for new challenges."
At the conference, a number of new and exciting "firsts at sea" were announced for the Norwegian Joy, a ship built specifically for the Chinese market but whose features would be tremendously appealing in the U.S. market.
Is there also perhaps a mixed message being sent to American agents? Are they being told that they're still very important as part of the No. 1 cruise market in the world, but China will get the first shipboard racetrack, virtual reality feature and Star Wars attraction?
I asked Norwegian's Herrera whether going into China inspired the line to load the ship with over-the-top additions.
He cast it differently: "Was the Escape better than the Getaway? The Getaway better than the Breakaway? The creative energy that went into this ship wasn't different because it's going to China. It's in our culture to consistently get better. Just wait until the next ship goes into the Caribbean. It will be better than this."
He's right that each line must up its game considerably with each new vessel built.
And viewed broadly, the challenges and lessons of opening a new market, and the different set of tests encountered, actually advance progress in all cruise markets. There's something energizing for companies to undertake new ventures, whether in emerging markets or via product innovation.
Learning and growth are accelerated by adversity and opportunity. The mixed news coming out of China is strengthening the cruise industry, and those selling and sailing half a world away will benefit.