Carnival Deploys Liner for Booming China Cruise Market

Carnival Corp. (CCL) will dispatch a fourth
ship to China next April, escalating the battle for passengers
in the fastest-growing cruise market.

The Miami-based cruise company, the world’s largest, is
transferring the 3,780-passenger Costa Serena to Shanghai from
Europe to join three other company ships that travel to ports in
Japan and South Korea, Alan Buckelew, Carnival’s chief operating
officer, said in a telephone interview.

“We’re growing by leaps and bounds,” Buckelew said.
“It’s a market that can support that kind of growth.”

Carnival is squaring off against Royal Caribbean
International Ltd., the No. 2 operator, which said last month
its newest ship, the 4,180-guest Quantum of the Seas, will start
sailing from Shanghai to Japan and Korea next May, after an
inaugural season traveling from New Jersey to the Caribbean.

Carnival rose 1.8 percent to $39.82 at 12:19 p.m. in New
York. The stock had fallen 2.6 percent this year as of May 9.

Cruise vacations are a relatively new travel option in
China, with Carnival first entering the region in 2006. China is
poised to become the world’s second-largest market, after the
U.S., by 2017, according to the World Travel Market and
Euromonitor International.

Carnival Corp.’s Costa Serena leaves Civitavecchia port in Italy. Close

Carnival Corp.’s Costa Serena leaves Civitavecchia port in Italy.

Open

Photographer: Tiziana Fabi /AFP/Getty Images

Carnival Corp.’s Costa Serena leaves Civitavecchia port in Italy.

Chinese cruise customers are typically younger than
travelers from Europe and the U.S. with many 25-to-45-year-olds
traveling with their children and parents, Buckelew said. The
Chinese tend to have less vacation time, so itineraries focus on
three- to five-day voyages, he said.

Social Media

One reason the Chinese market is growing fast is that its
younger customers are active in social media, Buckelew said.

“They’re taking pictures of the meals they’re eating,
pushing them out to their friends,” he said. “The cruise story
is getting out a lot quicker.”

The Sapphire Princess, Carnival’s first premium-priced ship
in the region, begins a four-month season in Shanghai on May 21.
Customized touches for the market include Tai Chi classes and
English-style afternoon tea.

Princess and Costa cruises are two of the 10 lines operated
by Carnival.

The seven-year-old Costa Serena features a two-level spa
with Turkish bath, a Grand Prix-racing simulator, water slide,
casino and outdoor jogging track. Meals, entertainment and gift-shop items will be changed to reflect Chinese tastes, with a nod
to well-known global labels.

“It’s very luxury and brand-name oriented, particularly
for the European and American brand names,” Buckelew said.

Carnival has been trying to improve its image and reassure
passengers after incidents in recent years including onboard
illnesses, a fire on a Triumph cruise and the wreck of its Costa
Concordia ship off the Italian coast in 2012. It has introduced
a $25 million marketing campaign and made investments in ship
safety and entertainment.

To contact the reporter on this story:
Christopher Palmeri in Los Angeles at
cpalmeri1@bloomberg.net

To contact the editors responsible for this story:
Anthony Palazzo at
apalazzo@bloomberg.net
Ben Livesey, Rob Golum