Cruise chief plots new wave of success

Former athlete sees tide of change ahead

Adam Goldstein was a formidable athlete but he had to give up track pursuits because of a back injury.

Nonetheless, the former middle-distance runner knows better than most the value of being prepared, mentally and physically, for any course life throws at you.

His company is riding a wave of success, based on cruise liners, and not surprisingly has made a splash among Chinese passengers.

"China is already our third-largest market in the world, behind the US and the UK, which is amazing, and we believe it will grow even more," said Goldstein, president and CEO of Royal Caribbean International, the world's leading cruise company. The company was founded in the US in 1968.

The number of embarking passengers at Royal Caribbean International China home-port sailings quadrupled to 115,000 last year from 25,000 in 2010.

It is expected to welcome guest number 300,000 in China this year.

It will take some time for China to replace the US as the biggest market, but it is very likely that it will replace the UK in five years, Goldstein said.

The company introduced the 138,000-ton Mariner of The Seas to Shanghai in June, and it docked at the Wusongkou International Cruise Terminal in Baoshan, its new homeport.

Three times as big as the Titanic, the 15-deck super luxury liner is the newest and displaces the most water in Asia. Equipped with 17 bars, cafes and lounges, it can accommodate 3,807 passengers. More a floating city than a ship.

This is the second big ship that Royal Caribbean has introduced to China. With Shanghai as its home port, the ship sails the seas to South Korea, Japan and Taiwan.

"When we first came to China in 2008, and talked about 2,000 people getting on in Shanghai and getting off in South Korea, no one believed it," Goldstein recalled.

Impressisve

For most Chinese people, the term cruising brings to mind ferry trips on the Yangtze River with basic on-board amenities.

Zhang Jin, deputy manager of the cruise department, Shanghai Airlines Tours, has seen the passengers react when they board the liner for the first time.

"It definitely wows them when they board the big lavish fancy American-style ship, spoiled by recreations ranging from ice skating to golf. There is a great variety of food and drink available," Zhang said.

"Almost all the big travel agencies in Shanghai have set up cruise divisions."

The company has invested $20 million to refurbish the Mariner of The Seas, including expanding the shopping arcade.

The company realized that Chinese customers want to buy top-brand products on board, and demand the best.

"Clearly, Chinese are very interested in shopping, more than most. The decision (renovating the shopping area) was made based on feedback from the Chinese customers," said Goldstein.

Moreover, to make Chinese customers more comfortable, signs in Chinese and there are many Chinese speakers among the crew.

"We want them to experience new things, we want them to try Western food, to enjoy the ice skating show, but we also want to make them comfortable," said Goldstein.

Full steam ahead

Royal Caribbean operates two world-class ships in China, with Shanghai as their homeport.

"Shanghai is vitally important to our business and the market is growing," said Goldstein.

According to the 2013 Shanghai Cruise Tourism Festival, Wusongkou International Cruise Terminal is the largest in Asia and received 120 cruise ships and 285,000 passengers in 2012. This year 256 international cruise liners are expected to berth here, with 608,000 passengers disembarking.

Shen Xiaosu, deputy director of the city's Urban Construction and Communications Commission, said Shanghai should "take the opportunity as incomes surge and further nurture the cruise market by building the city into an important homeport for major liners".

However, Shanghai is facing major competition from other coastal destinations, including Tianjin, Qingdao, Hong Kong and Singapore.

For Goldstein, he is more than excited to see the competition and looking forward to develop more cruise liners with the ports.

"We are very pleased that cities including Shanghai, Tianjin, Hong Kong and Singapore built these fantastic ports. Every one of the cities had serious limitations just a few years ago, and now they are building some of the greatest cruise terminals in the world," he said.

As for Shanghai, it is important to strengthen connections with South Korea, Japan and even Russia, so that we can bring new ships, more ships, bigger ships, he added.

Hong Kong will probably benefit, in weather terms, from the early spring and late fall.

But Shanghai is going to do well no matter what Hong Kong does, based on the immense market here, Goldstein said.

And the seasons in China and Australia are well suited in terms of cruising.

The Asian cruise market today is similar to the US in the 1980s.

Asians now take about 1.5 million cruises a year, similar to the 1.4 million in US some 30 years ago. The number of US voyagers has grown to about 12 million, and Asia accounts for only 6 to 7 percent of the world's total cruises.

When you look at the income and wealth growth in China, especially in the coastal cities, we believe the potential is huge. We also want to introduce Royal Caribbean to inland cities, he added.

Focus

The company, which has focused on destinations within Asia for Chinese customers, will eventually seek to take them to distant shores, such as Europe.

The global cruise market is estimated to grow 4.5 percent this year to $36.2 billion, according to industry data and analysis provider Cruise Market Watch.

Meanwhile, world giants are focusing on the China market.

Star Cruises announced that Xiamen will be its new homeport for three new itineraries from October. Costa Cruises said it will offer the first roundtrip world cruise from China next year. The Costa Atlantica will depart Shanghai on March 22 on an 83-day cruise.

"Cruising, as a new product in China, has a market penetration that is still very low when compared to other markets we operate in," said Gianni Onorato, president of Costa Crociere, the parent company of Costa Cruises.

"It is not easy to predict how big the China market will be in 10 or 20 years."