Northstar

CRUISE CRUISE LEADERS TALK AWARENESS, PRICING AND DISTRIBUTION AT CRUISEWORLD CHINA The one-day event saw over 400 participants from the industry. By Lee Xin Hui and Arnie Weissmann Cruise industry executives will need to address challenges in order to tap on the tremendous opportunities available in the China market, said Bob Sullivan, president of Travel Group, Northstar Travel Group, at CruiseWorld China in Beijing. The Travel Weekly China event, held at The Westin Beijing Chaoyang hotel, brought together over 400 participants comprising cruise industry leaders and travel agents for a day of networking, discussion and learning about the rapidly evolving cruise market in China. A significant challenge raised was the lack of consumer awareness. "A vast number of people have no idea what a cruise vacation is about, what happens onboard, and how it offers great value," said Adam Goldstein, chairman of CLIA, president and COO of Royal Caribbean Cruises Ltd. He was sharing during the 'Meet the Leaders' session, moderated by Arnie Weissmann, SVP/editorial director & editor-in-chief of Travel Weekly, and Susan Li, editorial director of Travel Weekly China. "We need to bring across the idea that the cruise is the destination, instead of just a mode of transportation," emphasised Zheng Weihang, EVP & secretary general of China Cruise & Yacht Industry Association (CCYIA). It's the travel agent's duty to "understanding the uniqueness of each cruise product and imparting that knowledge to the consumers," counselled Anthony H Kaufman, executive vice president of International Operations for Princess Cruises. This, in turn, helps the travel agents to sell effectively, without having to rely heavily on price. At the moment, there is an imbalance (in supply and demand) as sellers are lowering prices to fill ships, noted Travel Weekly's Weissmann. "When we talk about huge increase in supply, there is one important thing to note: ships are still sailing full. It's the kind of price that we're getting from the guests onboard. That is a deeper discussion we need to have with our partners," said Budhy Bok, president of Costa Group Asia. "The challenge is, how do we get more reasonable demand, instead of customers who are simply out to look for low prices, or think of cruise ships as vacation vehicles," added Fan Min, chairman and CEO of SkySea Cruise Line. THE SUSTAINABILITY OF THE CHARTER MODEL IN CHINA The vast majority of cruises in China are charters, with cabins sold by a handful of mega-agencies, some of them larger than the cruise lines themselves. They rely on a network of sub-agencies to help them fill ships. The general consensus among the cruise industry leaders: it has helped the market get to where it is today, but it is not sustainable – more diversity in sales options will be healthier. Calling charters a 'force-feeding' model, Dr Zinan Liu, president of China and North Asia Pacific region of Royal Caribbean International updated details about the Norwegian Joy, a ship being built specifically for the Chinese market, whose inaugural cruise is slated for June 23, 2017; • MSC Cruises CEO Gianni Onorato provided more details after announcing the day before that a second ship, the Splendida, would be heading to China to join the Lirica. In addition to the international development and regional line executives quoted above, other speakers included David J. Herrera, president, Norwegian Cruise Line Holdings China; Roger Chen, chairman, Carnival Corporation China; and Harry Sommer, executive vice president for international development, Norwegian Cruise Line Holdings. We need to bring across the idea that the cruise is the destination, not just a mode of transportation. Cruise leaders gathered at CruiseWorld China 2016 in Beijing on September 22, 2016. & chairman of CLIA (North Asia), said the model was successful in the past six years when consumer awareness was low and sales force of cruise lines small, and will continue to co-exist in future with other distribution models. Echoing his thoughts, Princess Cruises' Kaufman said it continues to be the foundation for China's cruise market and at present allows travel agencies to have better control of the customer experience and pricing, but whether it continues to dominate may depend upon individual company strategies. That each of the four largest cruise lines was represented by a top corporate executive indicates China's potential is still very much front of mind: • Carnival Corporation COO Alan Buckelew provided an overview of the company's 10 brands and revealed that the most luxurious Princess ship yet built will sail Chinese waters. Goldstein wore two hats; as chairman of CLIA, he provided an overview of industry growth, with a focus on China, and as president and COO of Royal Caribbean Cruises Ltd. promoted Royal Caribbean International ships; • Norwegian Cruise Line Holding Ltd. CEO Frank Del Rio provided

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