International cruise ships have returned to China and found that consumer demand, sales patterns and even the entire market have changed, but what has not changed is the huge consumption potential
Foreign-owned cruise ships are returning to China.
On April 26, after four and a half years, the "Spectrum of the Seas", a subsidiary of the luxury cruise brand Royal Caribbean, returned to its home port in Shanghai and officially resumed international operations.
The $1.25 billion, 170,000 gross tonnage and maximum passenger capacity of 5,200 passengers was custom-built by Royal Caribbean for the Chinese market in 2019.
Spectrum of the Seas
Source: Royal Caribbean Group
Just a month ago, MSC Cruises' Glory also returned to the Chinese market, becoming the first international cruise brand to set sail from its home port in Chinese mainland after the pandemic. It is understood that in the winter of 2024, MSC Brilliant will also berth in Shenzhen and Xiamen, forming a two-ship and four-home port deployment in the Chinese market.
After four years, it is not easy for a large cruise ship to set sail again. From crew members to travel agents to consumers, there is a need to reshape the perception of cruise ships.
One of the difficulties of cruise operations is scale. Disney Cruise Line Enchantment, for example, has a capacity of 2,700 passengers, and the week-long journey requires 15,000 liters of water, more than 4,500 kilograms of chicken and 70,000 eggs. Cruise room staff are faced with more than 7,000 towels being washed and folded every day.
Not only that, after the return of international cruise companies, they found that the Chinese market had changed.
"For example, the consumer's booking cycle is more advanced; Compared with 2019, the average age of passengers departing from China has decreased by 2.6 years, and people are more rational and their consumption is upgrading as they choose high-end room types and prefer to choose suites and balcony rooms. Royal Caribbean said.
There are three major challenges to overcome in re-adapting to the Chinese market.
The first level is the onboard experience. Liu Jianbin, CEO of Let's Get on the Ship, said that the atmosphere on board is very important, not just the crew themselves, but everyone likes to see it.
The second level is the destination. In order to create an itinerary that is different from the traditional shore and more in line with the needs of consumers, Liu Zinan, senior vice president of Royal Caribbean Group and chairman of Asia, has flown to Japan many times to experience different routes, such as dolphin watching, whale watching, and bird's-eye view of the crater.
The third hurdle is the change in the sales model. "After the resumption of sales, our direct sales ratio will increase further. The development of social media has shortened the communication path and efficiency between us and consumers, and we can have first-hand insight into consumer needs. Liu Zinan said.
To come back again, there is still a need to run in
2024 is known as the year of recovery for China's cruise market. After a three-year hiatus, international cruise lines are facing new challenges.
The recovery of the cruise industry began in the first half of last year, and in March 2023, the Ministry of Transport issued the "Orderly Pilot Resumption Plan for International Cruise Transportation", proposing to resume international cruise transportation on a pilot basis at cruise ports in Shanghai and Shenzhen; In September, a full recovery was announced.
Searching for "cruise tourism" on social media, Caijing found that in addition to Amway posts, there are also many persuasion posts. For example, some netizens mentioned that the AIDA cruise ship "Mediterranean", which will resume sailing quickly at the end of September 2023, had toilets, air conditioners, telephone failures, and no hot water on the first voyage; Previously, it was claimed to provide 6 network packages, but only one was available after boarding the ship due to system problems.
In addition, there is a lack of organization, insufficient manpower, slow serving, the crew does not speak Chinese, and the waiting time for disembarkation is long, and some tourists have a poor experience. MSC, a foreign-funded company that has been deeply involved in the cruise industry for decades, has faced similar problems since its launch.
"Some of the problems encountered on the first voyage were predicted, and some were completely unexpected. For example, the problem of worrying about having nothing to eat on a cruise ship and waiting in line for a meal is too long, which is unlikely to be encountered before the epidemic. Huang Ruiling, President of MSC Cruises China, responded.
Source: MSC MSC Cruises
In her opinion, many people are taking a cruise for the first time, and they don't know that international cruise ships will provide meals most of the day, and they will not run out of food. On the other hand, most of the tour leaders of travel agencies are also newcomers and need to re-understand cruise conventions.
Data show that the penetration rate of cruise tourism in China is only 1 in 10,000, that is to say, only one in 10,000 people may have taken a cruise, and the repurchase rate is low, only about 20%-30%, while the repurchase rate of cruise ships in the United States can reach 70%, and the development of China's cruise market still has a long way to go.
The difficulties in cruise operation include not only the relatively unfamiliar Chinese consumers with cruise ships, but also the huge number of passengers on one ship. Assuming a ship with a capacity of 3,000 passengers, the number of eggs prepared is more than 70,000, not to mention the various service needs.
"Ports, shipowners, travel agencies, and consumers all need time to get used to the way cruise travel is done. Through the follow-up period, we have seen the active efforts of all parties in this process and the rapid improvement actions. I hope that everyone can give more support to the cruise industry, give some understanding to enthusiastic elderly tourists, and make cruise travel stable and far-reaching. Wang Hong, President of China Europe International Business School, said.
Source: MSC MSC Cruises
It is worth noting that on April 2, the Cruise Yacht Branch of the China Communications and Transportation Association (CCYIA) issued a new version of the "Civilized Postal Passenger Convention", proposing that passengers should board and disembark the ship in the order of time and batch arranged by the cruise company or cruise port, obey the command, do not crowd, do not cut the queue; Promote the CD-ROM campaign to eliminate food waste.
In addition, if there is a dispute with a cruise company or travel agency, it can be resolved through the cruise company's 400 customer service center, 12315 Consumer Council, or legal channels, and excessive behavior is not recommended.
Tailor-made for the Chinese market
The arrival of the "Ocean Spectrum" also carried nearly 4,000 international tourists from Singapore, Malaysia, Thailand, Indonesia, Australia and other countries and regions into Shanghai, which is also the largest number of international tourists entering Chinese at one time so far.
Zinan Liu, senior vice president and chairman of Royal Caribbean Group for Asia, said that since the announcement of the return of Spectrum of the Seas, 70% of his energy has been occupied by operations and product upgrades.
Cruise operations are mainly divided into two parts: onboard experience and shore trip. For international cruise lines, many models need to be tailored to the Chinese market.
"The Chinese market is a very distinctive market, and some aspects cannot copy foreign operation processes," Liu Zinan said, "For example, most of the foreign tourists are individual tourists, but at present, in China, there are still the majority of group tourists, and we need to fully consider the travel characteristics of group tourists in the process of embarking and disembarking, and standardize the process to ensure a smooth experience." ”
Source: MSC MSC Cruises
For example, when operating in China, most cruise lines will issue numbered badges to passengers, requiring passengers to meet at different locations first, and then disembark in batches according to the time. During the peak dining period, the practice of staggering the peak in batches will also be adopted.
Another example is the dining mode, in which foreign guests are bound to the table number, and in China, in order to show friendliness, they are served by staff with seats.
"The atmosphere on board is also very important, not just for the crew themselves, but for everyone to enjoy." Let's get on board, CEO Liu Jianbin said. Usually, there will be all kinds of theme parties on the ship, and how to use the "party" of Western culture to drive Chinese middle-aged and elderly passengers to participate in it, instead of standing idly by as spectators, is a great test of the ship's ability to operate activities.
Although cruise industry insiders generally believe that the cruise ship itself is the destination, the shore cruise is still another highlight and selling point of cruise travel.
Before the pandemic, people often criticized that except for one or two free check-in spots on the shore, they were immediately pulled to duty-free shops to shop.
"The traditional shore excursion model is inevitable in the process of development, but it is not practical to use the old way today. Four and a half years have passed, consumer needs have changed a lot, and now consumers are very focused on quality consumption and experience, cruise is a new way of vacation, and new and different scenes should be created. Liu Zinan said.
He believes that there is nothing wrong with the shopping itinerary itself, shopping is also one of the needs of tourists, and what is wrong is the information asymmetry. Cruise companies should innovate and develop a variety of onshore products that meet the needs of consumers of different ages and interests, and then present all the information and options to consumers, who can choose the right products according to their spending power.
Liu Zinan mentioned that in order to better develop the itinerary, he has flown to Japan many times to experience shore trips. At present, Royal Caribbean Cruises has developed about 100 routes for more than 10 destination cities in Japan.
For example, the "Spectrum of the Seas" launched paid activities such as dolphin watching (210 US dollars/person, about 1,520 yuan/person), helicopter bird's eye view of the crater (366 US dollars/person, about 2,650 yuan/person), and experiencing lava foot bath in Kagoshima (86 US dollars/person, about 622 yuan/person).
However, consumers should pay attention to the fact that if they have high expectations for shore trips, they need to make sure before booking whether the voyage offers the shore itinerary you want to choose. In addition, some cruise ships are also open to paid free travel, but you need to return to port at the specified time to board the ship, so as not to affect the whole ship's itinerary.
The online economy is reshaping the cruise sales model
After three years, when cruise companies came to the Chinese market again, they found that the traditional sales model had undergone subversive changes, and e-commerce, online shopping, and online social media had deeply penetrated into the lives of Chinese consumers, which was a new opportunity for cruise companies.
Huang Ruiling bluntly said that in the past business, the direct sales cost of foreign-funded cruise ships in the Chinese market was too high, so the upstream and downstream partners of the industrial chain, including travel agencies, played a major role.
With the changing times, consumers have more channels to contact and purchase cruise ships than before the epidemic, and the proportion of direct sales is rising.
"After the resumption of sales, our direct sales ratio will further increase, from 10%-20% before the pandemic, to 30% now. The development of social media has shortened the communication path and efficiency between us and consumers, and we can have first-hand insight into consumer needs. Liu Zinan said.
Cruise lines are aggressively changing their channels to increase their share of direct sales in a short period of time, but travel agencies are still the largest sales channel, and travel agencies are also embracing social media as an emerging sales method.
"Fliggy and Ctrip have successively opened video accounts, Douyin live broadcasts, etc., and the use of new media gives everyone the opportunity to learn more about cruise ships, which is good for the market." Liu Jianbin said.
MSC Glory
Source: MSC MSC Cruises
Channel change is only a means, the goal is to promote the healthy development of the cruise market through channel change, and enter the virtuous circle of the market for a long time in order to further grow, Liu Zinan believes.
One of the part of the channel change is to expand the number of distribution channels of travel agencies, and encourage qualified travel agencies to directly participate in the distribution system to market and sell different types of route products, so that travel agencies can also expand their contact points with consumers.
According to the latest "2024 State of the Cruise Industry Report" released by the International Cruise Lines Association, the number of cruise passengers worldwide will reach 31.7 million in 2023, an increase of 6.8% over 2019. Among them, the number of passengers in Asia reached 2.3 million, a decrease of 37.7% from 2019. By region, the number of cruise tourists departing from Asia and China in 2023 accounted for only 4.6% of the world's total.
"China's cruise market is far from reaching its potential, and in terms of consumer base, income level, destination resources and attractiveness, the Chinese market should have the potential to account for one-third of the global cruise market, that is, 10 million passengers per year." Liu Zinan said.
Source: Travel One Guest