Recently, the news of Costa Cruises' withdrawal from the Asian market has sparked heated discussions among travel industry operators on the Internet.
Originating from Italy and with a history of more than 160 years, Costa Crociere has been the first to enter the Chinese market since 2006 and is the first international cruise line to set up regular routes with China as its home port. But after more than ten years of glory and bleakness, he finally chose to leave.
As an industry media, Sohu Travel is not surprised by Costa 's departure. Since 2018, when Costa Cruises established China Shipbuilding Carnival Cruise Co., Ltd., a joint venture between Carnival Cruise Lines, parent company of Costa Cruises, and CSSC in China, Costa Cruises' position in China has been somewhat awkward. In 2021, the year following the epidemic, Ye Peng, the top head of its China business and senior vice president of sales and commerce of Costa Cruises Greater China and Southeast Asia, also left the company. At present, Costa Cruises' official website can no longer be found on Chinese website.
Why did Costa choose to say goodbye to the Asian market that has been cultivated for more than 10 years? What are the prospects for the recovery of the Chinese and Asian cruise markets now and in the future? Let's take these questions with us today and look back at the past and present life of this cruise brand that has been cultivating in China for 16 years.
Costa Atlantic
The forerunner of the integration of East and West: let the grassroots of ordinary people also consume
Costa Cruises has experienced a golden age of accelerated expansion of China's cruise market.
From the first entry into China in 2006 to 2019, China's overall cruise market has a compound annual compound annual growth rate of more than 52%, and in just a few years, the Chinese market has become the world's second largest mobile source market after the United States. But at the same time, the penetration rate of cruise ships in China is still very low, compared with the penetration rate of 2%-3% in the European and American markets, the Chinese market is still only less than 0.1%.
Recognizing the huge potential of the Chinese market, Costa also sees a change in the mentality of Chinese consumers. For example, people are gradually becoming more rational about cruise travel, realizing that cruise products themselves are a combination of land and sea, not the only destination, nor just a means of transportation. In addition, the marketing and sales channels are also changing. From the earliest bulk sales to charter shipping, cabin cutting, and then to the combination of "direct sales + cabin cutting" in the years before the epidemic.
After coming to China, Costa Cruises has been committed to giving full play to its unique concept and advantages - to bring Italian style to China, and to always maintain flexibility and provide diversified products as consumers and markets change, integrating Chinese elements with European elements to continuously improve the quality of the brand.
Advertisement for Costa New Romance
In the eyes of many Chinese consumers, Costa is a foreign cruise brand known for its "cost performance". "Especially suitable for the elderly and children, suitable for families with a small budget, everything to eat and play!" Some seasoned consumers also commented on Costa Cruises: "The meals are average, the performances are average, and the entertainment is more traditional, but if you are taking a cruise for the first time, you will not be disappointed when you choose it!" ”
"The lowest is only 999 yuan / person, 5 days and 4 nights cruise trip to Nagasaki" "2999 per capita, 6 days and 5 nights stay in the sea view to Japan and South Korea" is its good show, in the Chinese market has been tried and tested. Although this marketing strategy was not "recognized" by Costa Steine, it was also called a cruise brand that "knows China best" by netizens.
Operating the Chinese market for more than ten years, Costa Cruises has achieved great success. A total of 2,194 voyages were operated, serving more than 4.8 million tourists; At the same time, it has carried out home port operations in 26 ports in Asia, visited 40 countries and regions, and 129 ports, becoming a model of foreign-funded cruise brand integrating East and West.
A long-term strategy with an unexpected outcome
Costa has a far-reaching strategic presence in China.
In 2019, Costa Cruises introduced Costa Venezia, the new and largest cruise ship to its home port in China, with a gross tonnage of 135,500 tons, a length of 323.6 meters and a capacity of 5,260 passengers. Mario Zanetti, President of Costa Cruises Asia, called it "a cruise ship that meets China's expectations". Shortly after, Costa announced that its sister ship, Costa Firenze, was scheduled to be delivered on September 30, 2020.
It should be known that the two giants "Venice" and "Florence", from concept conception to product design, are focused on the preferences and needs of Chinese consumers, which is a strong proof that Costa Cruises continues to increase investment and deeply cultivate the Chinese market. Together with the Atlantic, Selena and New Romance, which were also deployed in China's home ports at the time, the cruise fleet in the Chinese market will become the largest fleet of this European brand for more than 160 years.
In an interview, Mario Zanetti, President of Costa Cruises Asia, also said with great ambition: "As a pioneer in the cruise industry, it is incumbent upon us to take responsibility for promoting the culture of the industry. We hope to make more Asian tourists reach out to and understand cruise travel, and create their own cruise culture for the new generation of young people. With the arrival of Costa Venice, the entire cruise market will mature, Costa Cruises' pricing will be slightly adjusted upwards, and we are confident that we will welcome more guests, even younger ones, on board. ”
"Venice" interior
However, the sudden onset of the coronavirus pandemic has disrupted all plans and visions.
At the beginning of the epidemic, Costa China's senior management was full of confidence: "Costa Cruises has always had confidence in the Chinese cruise market. We will not reduce our investment and attention to the Chinese market, and are actively preparing to resume cruise operations. As soon as the situation allows, we hope to be able to provide our guests with a safe and comfortable Italian cruise holiday as always. He also advocated that cruise operators should make "how to reconstruct the travel confidence of Chinese cruise tourists" a top priority.
The impact of the epidemic on China's cruise industry and even the tourism service industry is far-reaching. Although Costa has been following China's epidemic prevention and safety directives and actively preparing to resume operations, the hope of resuming flights has not yet come.
Since its maiden voyage in China in May 2019, the Costa Venice, a giant ship built for Chinese tourists, has been on hold for less than a year before it has been suspended due to the epidemic. Later, seeing the restart of the European market, the "Venice" could not wait any longer in 2021, announcing its withdrawal from the Asian market and rearranging its route to the Mediterranean.
And its other sister ship, the Florence, is also destined to be out of China. It was originally planned to make its maiden voyage to China in October 2020, but the pandemic postponed its first voyage in the Western Mediterranean region on 28 February 2021; Finally, on December 17, 2021, a grand maiden voyage celebration was held at the newly built Dubai Cruise Port.
Dream of China, flower in Dubai. Who could have predicted such an ending?
Leaving the ambush, there can be a period of reunion
From an industry perspective, Costa is a very understandable choice to exit the Asian market. The Chinese market accounts for more than half of Costa Cruises' total visitors to Asia, and at present, Chinese outbound tours have not yet opened, and the epidemic has also brought great uncertainty to the operation of cruise business, so its Asian market has died in name only.
As Costa withdraws from China, other cruise lines in the Asia-Pacific market are experiencing similar difficulties. In January 2022, Genting Hong Kong and Dream Cruises, which own Dream Cruises, Star Cruises and Crystal Cruises, were ordered to be liquidated by the court; In February, Royal Caribbean Cruises also ended its Hong Kong voyage early, but still firmly stated in the interview: "Once cruise tourism is opened, it will continue to send large ships and new ships to continue to serve Chinese tourists." ”
Dream Cruises
Looking at the Asia-Pacific cruise market, since the beginning of this year, a number of cruise lines have started business in Singapore, including Royal Caribbean, Princess Cruises and Genting Singapore. This is a signal that the Asia-Pacific cruise market is beginning to recover. At present, there are many cruise operators in China who have not left the industry.
In fact, we don't have to grieve the separation of Costa Cruises. Because, Costa has actually "stayed" in China in another form - its parent company Carnival Group and China Shipbuilding Group established a joint venture in 2018 to establish CSSC Carnival Cruises Co., Ltd., which operates Costa Atlantic and Costa Mediterranean, and will continue Costa in the form of a joint venture.
According to industry insiders, Costa has also retained a certain number of employees in its China office to ensure the "Fly Cruise" (i.e. "aircraft + ship") business, if Chinese users want to go to non-Asian countries or regions to take a cruise, they can book ferry tickets through the above employees; At the same time, these employees will also maintain close contact with agents in China.
This may also be the foreshadowing of Costa for its future re-entry into the Chinese and Asian markets.
Everyone expects that once the epidemic eases and the travel industry recovers, it can regain the trust of consumers in the best possible position. Just as many have worked hard in the past.