Easing travel rules key to China cruise growth

With only 0.1 per cent of the Chinese population opting to take cruise ship holidays, the mainland offers the biggest potential in the global cruise industry, but only if the current regulatory restrictions are eased, industry executives say.

The number of Chinese taking holidays on cruise ships would triple to three million by 2020, accounting for almost 75 per cent of total guests in the Asia-Pacific, said Liu Zinan, a China and North Asia vice-president at Royal Caribbean Cruises, the world’s second-largest cruise company.

But existing regulations, including immigration restrictions, needed to be loosened for growth to happen, Liu said on the sidelines of the Cruise Shipping Asia-Pacific conference. “The government is gradually becoming more liberal, but still more work needs to be done,” he said.

Foreign cruise lines, the dominant players in the mainland market, are prohibited from directly selling tickets to individual passengers, most of whom hold group travel visas and book their trips through agencies. This means only outbound travel agency licence holders can sell to group travellers, leaving foreign cruise lines to depend on local travel agencies to fill their luxury mega ships.

Constraints also exist on trips to specific destinations. For example, direct cruises between the mainland and Taiwan are not allowed unless a special permit is obtained. “It needs to be applied for on a case-by-case basis and is very cumbersome,” Liu said.

Still, the authorities have become more flexible as acceptance of cruise holidays and their economic and social benefits grow. In 2009, the Ministry of Transport granted foreign passenger cruise lines an exemption to the mainland’s maritime law that forbids foreign-flagged vessels providing transport services along the country’s coastline.

The ministry last month also approved Shanghai, Tianjin, Xiamen and Sanya as home ports where passengers can embark and disembark, and foreign cruise ships can load supplies.

Royal Caribbean is deploying Quantum of the Seas to Shanghai in May next year. With a capacity of carrying 4,180 passengers, it will be the largest and newest cruise ship with a home port on the mainland.

Dominic Paul, a senior vice-president of Royal Caribbean International, said each cruise could contribute U$500,000 to the economy of the home port city. “If a ship makes 150 turns a year, it will contribute between US$75 million and US$100 million of economic benefit.”