**8. The Asian market post-2005: rejuvenation and growth**

In 2004 *Leo* returned to Hong Kong for a short period of time before being transferred to NCL as *Norwegian Legend*. Star's fleet remained steady until 2006 when NCL's 1988-built *Norwegian Sea* arrived in Asia as *SuperStar Libra*. At the same time, Costa Crociere positioned the mid-sized 1992-built *Costa Allegra* in Shanghai and Hong Kong on a year-round basis. Their target market was Mainland China. This was in contrast to *Sun Viking* who targeted Royal Caribbean's traditional customers. In 2007 Star introduced NCL's 1993-built *Norwegian Wind* as *SuperStar Aquarius* on short multi-night cruises out of Hong Kong. *Pisces* was primarily used in one-night cruises to nowhere. *Libra* was used to test new markets in Asia and the Mediterranean. The next change was the lay-up of *Gemini* in 2009. *Costa Allegra* operated through 2010; however, after her first season she was also marketed in Europe. In 2011 she was replaced by the larger 1992-built *Costa Classica*. *Classica* remained in Asia through 2012. That year she was joined by the still larger 1996-built *Costa Victoria*. In 2013 *Classica* returned to Europe and was replaced by the 2000-built *Costa Atlantica*. In 2012 Star added NCL's 1992-built *Norwegian Dream* as *SuperStar Gemini*. *Libra*, *Aquarius*, and *Gemini* were deployed throughout Asia in 2013.

As previously mentioned Costa upped the ante by increasing their ship numbers and size 2010 through 2013. Having seasonally deployed the 1995-built *Legend of the Seas* in Asia since 2008, Royal Caribbean International (RCI) assigned her to Asia year-round in 2010. Post-Panamax1 1999-built *Voyager of the Seas* joined *Legend of the Seas* in 2012. This was a bold move and a strong statement of RCI's confidence in the Asian market as she was the largest ship in Asia. In 2013, *Legend of the Seas* was replaced by *Voyager*'s larger near-sister the 2004-built *Mariner of the Seas*. RCI deployed their ships out of Shanghai spring through fall and out of Hong Kong and Singapore in the winter. However, they advertised that worldwide RCI's primary target market was the local Asian population. With these two ships, RCI had the newest and largest ships in the Asian market, a generation ahead of the competition. Historically, this has been a winning combination in passenger shipping. Star's response was refurbishment and opening new homeports and markets by deploying their ships throughout Asia. They homeported a ship in Kota Kinabalu, Malaysia, and Xiamen, China, and made maiden calls in Yangon, Myanmar. Indigenous cruise lines also started in China and Korea in 2012, though they would be gone in several years. China Cruise started operations out of Hong Kong with the 1992-built ex-*Radisson Diamond* as *China Star*. As the first SWATH2 cruise ship, *China Star* holds a special place in cruise ship history. HNA Tourism brought the 1986-built ex-*Jubilee* and is operating her as *Henna* out of Hainan Island. In Korea, Harmony Cruise started operations with the 1990-built ex-*Costa Marina* as *Harmony Princess*. In 2013, Oriental Dragon entered the cruise field with the 1982-built ex-*Sun Viking* as *Oriental Dragon*.

After 2008, a new category of Asian Market ships has been developed, ships that seasonally migrated throughout the Pacific. Spending the northern winter in Australia or Asia and the summer in Alaska, US West Coast, or Northern Asia, these ships can be called pan-Pacific ships. They include some of the lines' most modern and cutting-edge ships. Examples are: Princess Cruises' 1995-built *Sun Princess*, 2004-built *Diamond Princess* and *Sapphire Princess* rotating between Australia

<sup>1</sup> Post-Panamax: A ship too large to fit through the Panama Canal, generally a ship exceeding 100,000 grt.

<sup>2</sup> SWATH: Small water plane area twin hull.

and Japan; RCI's 1997-built *Rhapsody of the Seas* and 2001-built *Radiance of the Seas* rotating between Alaska and Asia and Australia, respectively; and Celebrity Cruises' 1995-built *Celebrity Century* and 2008-built *Celebrity Solstice* following a similar pattern as the RCI ships. The migration patterns are shown in **Figure 10**.

2013 was an important year for the question, "Is Asia the next global cruise center?" What was different from the mid to late 1990s, the last period of rapid growth? In the mid to late 1990s, Star Cruises was the only company introducing relatively new ships on a regular basis. Seasonal deployments by major cruise ships were pass-throughs as part of world or circle Pacific long cruises. The major cruise terminals were Singapore's Cruise Centre, Yokohama Cruise terminal, Hong Kong's Ocean Terminal, and Langkawi, Malaysia. While both Singapore and Hong Kong promoted their cruise facilities and location as cruise hubs, there were no regional cruise port organizations. Cruising Down Under was just getting started and writing the book on regional cruise port promotion. The Seatrade Organisation held a cruise tourism forum in Yokohama in 1993; cruise conferences in Singapore in 1994, 1996, and 1998; and cruise conferences in Cairns, Australia, in 1995 and 1997. These conferences/conventions provided an opportunity for cruise industry executives, tourism officials, and port authorities to get together. They also served to raise the industry's awareness as a vacation option through accompanying travel agent training sessions. The budding industry was hard hit by the Asian financial crisis toward the end of the decade and then again by the SARS epidemic in 2003. Star Cruises, with parent company Genting, was able to rationalize their fleet and persist.

While most of Asian tourism was suffering from the impact of the SARS crisis, Chinese tourism made a quick rebound in the second half of 2003 and into 2004.

**253**

*Globalization of the Cruise Industry: A Tale of Ships Part II - Asia Post 1994*

China Today [26] wrote "The 'Analysis of Functioning Characteristics of the 2003 Consumer Products Market and Prices and 2004 Development Trends' published by the China National Commercial information Center isolates five characteristics. The first is the rapid growth in commodity housing and tourism that kept the retail volume of consumer products at a stable rate of increase as hot consumer products like cars and IT electronic products continued to increase. The second is unbalanced development of urban and rural areas and of different regions. Third is the contribution of hot consumer products to the increase in the total retail volume of social consumer products. Fourth is substantial growth in the catering industry, and fifth, that the middle class is a main force in hiking up consumption growth." This was the same year that Costa Crociere opened its office in Hong Kong to prepare for *Costa Allegra*'s China Debut in 2006. As the world's economies slipped into the Great Recession, China's continued with relatively robust growth. By 2008, Royal Caribbean was back in Asia on a seasonal basis. Saporito and Ramzy wrote "The world's largest multinational companies, many of them headquartered in the U.S., have been betting on the rise of the Chinese consumer for many years now. But as the economies in the U.S. and Europe have struggled to revive in the past few years, firms in nearly every sector, from automobiles to consumer goods to telecommunications, have placed a larger share of their chips on the Middle Kingdom. It is simply a matter of numbers: China's economy grew 9.1% in the last quarter, compared with <2% in most of the West. While incomes in the West are stagnant, individual

The situation in 2013 was much different from in 1998. Instead of Star being the only major year-round cruise line, Costa Crociere and RCI were also operating frontline ships on a year-round basis. Seeking to take advantage of what Saporito and Ramzy (2011) termed China's shift toward consumerism "As for China, the numbers behind any big shift toward consumerism there are potentially world altering. China's 2011 GDP is roughly \$6 trillion. If consumer spending goes up from the current 36% to reach 45% of GDP-the government's stated goal-\$540 billion in spending would flow into consumer goods and services…." With regard to travel potential, they wrote "Boston consulting Group estimates there are 1 million millionaire households in China, When those folks start hitting the road, Bridle (Hong Kong-based luxury-hotel company New World Hospitality's Chief Operating

Officer) wants to be ready, and so New World recently spent \$230 million to acquire Rosewood hotels and resorts, to lure travelers…The exodus is already under way. There are an estimated 54 million outbound trips from China, a number that quadrupled in the past 10 years. By the end of the decade, the figure could easily

By 2013, there were also a number of pan-Pacific ships seasonally rotating through the region. The world cruise and circle Pacific ships still passed through, but the pan-Pacific ships made concerted efforts to target the local source passenger. More importantly, the infrastructure for growth was in place. New dedicated cruise terminals had been constructed or were under construction in Singapore, Hong Kong, Shanghai, Xiamen, Sanya, Qingdao, Dalian, Tianjin, Busan, Keelung, and Kaohsiung, to name a few. Ports had formed alliances to promote cruise calls such as Japan-Korea Strait Coastal Region Tourism Promotion Network, Kyushu District Transport Bureau, Taiwan Strait Tourism Association, and Micronesian Cruise Association. In 2008, the Hong Kong Tourism Board (HKTB), in cooperation with CLIA, set up a program to train travel agents in selling cruises. The Chinese Government included cruise industry development in its Fifth Five-Year Plan (2011– 2015) and declared 2013 as marine tourism year [28]. Among measures to increase cruise tourism, China's Ministry of Transport and Communications has streamlined customs' procedures, permitted Chinese companies to form cruise lines, and eased

*DOI: http://dx.doi.org/10.5772/intechopen.88157*

Chinese are expected to get a lot richer [27]."

reach 100 million… [27]".

**Figure 10.** *Cruise ship migration patterns 2017.*

#### *Globalization of the Cruise Industry: A Tale of Ships Part II - Asia Post 1994 DOI: http://dx.doi.org/10.5772/intechopen.88157*

*Education, Human Rights and Peace in Sustainable Development*

and Japan; RCI's 1997-built *Rhapsody of the Seas* and 2001-built *Radiance of the Seas* rotating between Alaska and Asia and Australia, respectively; and Celebrity Cruises' 1995-built *Celebrity Century* and 2008-built *Celebrity Solstice* following a similar pattern as the RCI ships. The migration patterns are shown in **Figure 10**. 2013 was an important year for the question, "Is Asia the next global cruise center?" What was different from the mid to late 1990s, the last period of rapid growth? In the mid to late 1990s, Star Cruises was the only company introducing relatively new ships on a regular basis. Seasonal deployments by major cruise ships were pass-throughs as part of world or circle Pacific long cruises. The major cruise terminals were Singapore's Cruise Centre, Yokohama Cruise terminal, Hong Kong's Ocean Terminal, and Langkawi, Malaysia. While both Singapore and Hong Kong promoted their cruise facilities and location as cruise hubs, there were no regional cruise port organizations. Cruising Down Under was just getting started and writing the book on regional cruise port promotion. The Seatrade Organisation held a cruise tourism forum in Yokohama in 1993; cruise conferences in Singapore in 1994, 1996, and 1998; and cruise conferences in Cairns, Australia, in 1995 and 1997. These conferences/conventions provided an opportunity for cruise industry executives, tourism officials, and port authorities to get together. They also served to raise the industry's awareness as a vacation option through accompanying travel agent training sessions. The budding industry was hard hit by the Asian financial crisis toward the end of the decade and then again by the SARS epidemic in 2003. Star Cruises, with parent company Genting, was able to rationalize their fleet and persist.

While most of Asian tourism was suffering from the impact of the SARS crisis, Chinese tourism made a quick rebound in the second half of 2003 and into 2004.

**252**

**Figure 10.**

*Cruise ship migration patterns 2017.*

China Today [26] wrote "The 'Analysis of Functioning Characteristics of the 2003 Consumer Products Market and Prices and 2004 Development Trends' published by the China National Commercial information Center isolates five characteristics. The first is the rapid growth in commodity housing and tourism that kept the retail volume of consumer products at a stable rate of increase as hot consumer products like cars and IT electronic products continued to increase. The second is unbalanced development of urban and rural areas and of different regions. Third is the contribution of hot consumer products to the increase in the total retail volume of social consumer products. Fourth is substantial growth in the catering industry, and fifth, that the middle class is a main force in hiking up consumption growth." This was the same year that Costa Crociere opened its office in Hong Kong to prepare for *Costa Allegra*'s China Debut in 2006. As the world's economies slipped into the Great Recession, China's continued with relatively robust growth. By 2008, Royal Caribbean was back in Asia on a seasonal basis. Saporito and Ramzy wrote "The world's largest multinational companies, many of them headquartered in the U.S., have been betting on the rise of the Chinese consumer for many years now. But as the economies in the U.S. and Europe have struggled to revive in the past few years, firms in nearly every sector, from automobiles to consumer goods to telecommunications, have placed a larger share of their chips on the Middle Kingdom. It is simply a matter of numbers: China's economy grew 9.1% in the last quarter, compared with <2% in most of the West. While incomes in the West are stagnant, individual Chinese are expected to get a lot richer [27]."

The situation in 2013 was much different from in 1998. Instead of Star being the only major year-round cruise line, Costa Crociere and RCI were also operating frontline ships on a year-round basis. Seeking to take advantage of what Saporito and Ramzy (2011) termed China's shift toward consumerism "As for China, the numbers behind any big shift toward consumerism there are potentially world altering. China's 2011 GDP is roughly \$6 trillion. If consumer spending goes up from the current 36% to reach 45% of GDP-the government's stated goal-\$540 billion in spending would flow into consumer goods and services…." With regard to travel potential, they wrote "Boston consulting Group estimates there are 1 million millionaire households in China, When those folks start hitting the road, Bridle (Hong Kong-based luxury-hotel company New World Hospitality's Chief Operating Officer) wants to be ready, and so New World recently spent \$230 million to acquire Rosewood hotels and resorts, to lure travelers…The exodus is already under way. There are an estimated 54 million outbound trips from China, a number that quadrupled in the past 10 years. By the end of the decade, the figure could easily reach 100 million… [27]".

By 2013, there were also a number of pan-Pacific ships seasonally rotating through the region. The world cruise and circle Pacific ships still passed through, but the pan-Pacific ships made concerted efforts to target the local source passenger. More importantly, the infrastructure for growth was in place. New dedicated cruise terminals had been constructed or were under construction in Singapore, Hong Kong, Shanghai, Xiamen, Sanya, Qingdao, Dalian, Tianjin, Busan, Keelung, and Kaohsiung, to name a few. Ports had formed alliances to promote cruise calls such as Japan-Korea Strait Coastal Region Tourism Promotion Network, Kyushu District Transport Bureau, Taiwan Strait Tourism Association, and Micronesian Cruise Association. In 2008, the Hong Kong Tourism Board (HKTB), in cooperation with CLIA, set up a program to train travel agents in selling cruises. The Chinese Government included cruise industry development in its Fifth Five-Year Plan (2011– 2015) and declared 2013 as marine tourism year [28]. Among measures to increase cruise tourism, China's Ministry of Transport and Communications has streamlined customs' procedures, permitted Chinese companies to form cruise lines, and eased

cabotage3 regulations so that foreign flag cruise ships can call at multiple Chinese ports on a single itinerary [29]. The cabotage issue was critical in the development of the China source market. China's long coastline makes short cruises, 3–5 days popular in the Asian market, difficult to operate without calls at Chinese ports. For example, Shanghai to Hong Kong is 824 nautical miles.4 In addition, there's the political situation which can change itineraries overnight as in 2017 with South Korea. The other major factor was the relaxation of restrictions on overseas travel in the early 2000s. In side conversations with China Overseas Shipping Company (OSCO) executives at Seatrade's 1998 Asia/Pacific Cruise Conference, they mentioned the issue with cruise development in China wasn't money/affordability but travel restrictions. In 2006, the China Cruise and Yacht Industry Association (CCYIA) was formed. CCYIA is a nonprofit organization dedicated to the development of the cruise industry in China. It conducts research and serves as a forum for discussions between key stakeholders. The Asia Cruise Association was formed in 2009 and serves as the cruise industry's association in Asia. It recently joined CLIA's global organization and performs the same functions but in Asia. The Asia Cruise Terminal Association (ACTA) was formed in 2010. Led by the Singapore Cruise Centre, it is mandated to promote cooperation among terminal developers and operators, increase awareness of existing facilities, and promote the region's development as a primary cruise destination. UBM's Seatrade returned to the region with a "House Party" conference to promote cruising in 2005 in Singapore. In 2008 they held their first All Asia Cruise Convention at the North Bund Cruise Terminal in Shanghai. The second convention was held in Suzhou in 2010. For the third they returned to Shanghai in 2012. Cruise Shipping held their first Cruise Shipping Asia/ Pacific conference in Singapore in 2011. The second was held in 2012 and the third in 2013. Like the conferences in the 1990s, these five were accompanied by travel agent training sessions. In 2014 Cruise Shipping and UBM combined efforts under the Seatrade Asia/Pacific brand. Cruise Shipping Conferences were held in Hong Kong in 2014, Busan Korea in 2016, and Baoshan Shanghai in 2016 and 2017. One can conclude that the hardware is in place, but the modern cruise operations are extremely complicated. With the average cruise ship carrying close to or more than 2000 passengers, and newbuildings (new ships) carrying 4000 plus, the software has become increasingly more important. Rapid clearance of customs, quarantine, and immigration (CQI) is important, as are sufficient tour options and language capable guides. Yap [30] questions the return on investment from the new terminals. It's very difficult for a cruise terminal to make money unless it's a mixed-use facility with multiple revenue generators. The value of a cruise terminal is its ability to increase the number of cruise calls. Using a conservative estimate of \$100.00 US spent per passenger or crewmember, each call can be worth between \$200,000 and \$300,000 US. If the terminal can take yearly calls from 10 to 50, it may well be worth the cost. The number of ships trading in Asian waters has been rising steadily over the last few years.

When the bulk of this chapter was written, the question was "Is Asia the next global cruise hot spot?" By 2017 the answer was a firm "Yes!" From 2013 through 2017, major developments had taken place in the Asian operations of Star Cruises/ Genting Hong Kong, Costa Crociere, Royal Caribbean International (RCI), and Princess Cruises. Post 2017 these are being joined by global brands Norwegian Cruise Line, MSC Cruises, AIDA Cruises, and Carnival Cruise Line. Corben wrote

**255**

*Globalization of the Cruise Industry: A Tale of Ships Part II - Asia Post 1994*

*"Asia's tourism industry is booming, buoyed by rising incomes, low-cost air transport, and China's growing outbound market….The World Travel and Tourism Council said dependence on tourism has been growing, especially with the 'spec-*

*"The growth of the middle class-the strength of the Asian middle class, the emergence of [air] carriers that are specifically targeted in wealth and well within the Asian middle classes' needs and low fuel prices-you are getting a perfect storm of positive dynamics for leisure travel in the Asia Pacific," Lamb told VOA [31].*

The growth of the low-cost carriers has been a boon to the pan-Asia ships by

In 2015, RCI placed their lead ship of the *Quantum* Class, *Quantum of the Seas*, into service in Shanghai. She was the first newbuilding since *SuperStar Virgo* to enter the Asian Market. The same year, RCI started a joint venture, SeaSky Cruises, with Ctrip.com, exclusively for the Chinese market. Celebrity Cruises 1995-built *Celebrity Century* was renamed *Golden Era* and modified for the Chinese passenger. Costa also augmented their Asian fleet with the 2003-built *Costa Fortuna* and the 2007 built *Costa Serena*. Meanwhile, Princess Cruises made a concerted effort to develop their Japan market and establish a strong presence in China by deploying their 2015 Mitsubishi Heavy Industries-built sisters, *Sapphire Princess* and *Diamond Princess*. In 2016, Genting Hong Kong, parent company of Star Cruises and Crystal Cruises, introduced the first ship of their Chinese market luxury brand, Dream Cruises. *Genting Dream* rotates between Guangzhou (Nansha Port), Hong Kong,

In 2017, Princess Cruises introduced their purpose-built *Majestic Princess* into the Chinese market. She was joined by another purpose-built ship, Norwegian Cruise Line's *Norwegian Joy*. AIDA Cruises joined the list of Western cruise lines operating year-round in Asia with the 2008-built *AIDAbella*. Not to be outdone, Costa added the extensively rejuvenated 1993-built *neoRomantica* to their Asian fleet. In 2019, Costa will add the purpose-built *Costa Venezia*. In 2020, she will be joined by a yet unnamed sister. 2017 was a landmark year as *Cruise Industry News Annual 2017–2018* [1] designated Asia/Pacific as the number 2 cruise region with a 15.7% market share, 59 ships, and a capacity of 3,972,701 passengers. In 2018, MSC Cruises will dedicate the 2009-built *MSC Splendida* to Asia and China. While seemingly late to the game, MSC Cruises had maintained a sales office in Hong Kong targeting the Asian and

Of the 84 cruise ships on order as *Cruise Industry News Annual 2017–2018* [1] went to press, seven were dedicated to the Asian (1) and Chinese (6) markets. Maybe more important than the number of ships being dedicated to the Asian market was the 2017 agreement, announced by Carnival Corporation press release on February 22, 2017 [32], between Carnival Corporation, Fincantieri S.p.A., and the China State Shipbuilding Corporation (CSSC). This brings together the world's largest cruise corporation, one of the world's most prolific cruise ship building yards and China's major shipbuilding corporation. The binding agreement called for the building of two 135,000 grt/4200-passenger cruise ships, with an option

*'China expanded its 'approved destination status' scheme from 14 countries to 113 by 2012, leading to a 700 per cent increase in outward visits by Chinese tourists, from 10 million in 2000 to 78 million by 2015,' the Council said." Corben goes on to quote Oliver Lamb, of Sydney-based Pacific Aviation Consulting, "regional economic progress has driven tourism growth. The middle class is forecast to grow* 

*DOI: http://dx.doi.org/10.5772/intechopen.88157*

*tacular growth' in China's outbound market.*

*from 190 million to 400 million in the coming decade."*

greatly reducing the cost of the air portion of a cruise.

and Sanya. In 2017 she was joined by sister ship *Genting World*.

Chinese source markets since 2004.

<sup>3</sup> Cabotage: The right to transport passengers and goods directly between two ports in the same country. Usually restricted to national/domestic flag carriers and can be a detriment to foreign flag cruise operations.

<sup>4</sup> 1 nautical mile = 2000 yards.

*Education, Human Rights and Peace in Sustainable Development*

For example, Shanghai to Hong Kong is 824 nautical miles.4

regulations so that foreign flag cruise ships can call at multiple Chinese

In addition, there's

ports on a single itinerary [29]. The cabotage issue was critical in the development of the China source market. China's long coastline makes short cruises, 3–5 days popular in the Asian market, difficult to operate without calls at Chinese ports.

the political situation which can change itineraries overnight as in 2017 with South Korea. The other major factor was the relaxation of restrictions on overseas travel in the early 2000s. In side conversations with China Overseas Shipping Company (OSCO) executives at Seatrade's 1998 Asia/Pacific Cruise Conference, they mentioned the issue with cruise development in China wasn't money/affordability but travel restrictions. In 2006, the China Cruise and Yacht Industry Association (CCYIA) was formed. CCYIA is a nonprofit organization dedicated to the development of the cruise industry in China. It conducts research and serves as a forum for discussions between key stakeholders. The Asia Cruise Association was formed in 2009 and serves as the cruise industry's association in Asia. It recently joined CLIA's global organization and performs the same functions but in Asia. The Asia Cruise Terminal Association (ACTA) was formed in 2010. Led by the Singapore Cruise Centre, it is mandated to promote cooperation among terminal developers and operators, increase awareness of existing facilities, and promote the region's development as a primary cruise destination. UBM's Seatrade returned to the region with a "House Party" conference to promote cruising in 2005 in Singapore. In 2008 they held their first All Asia Cruise Convention at the North Bund Cruise Terminal in Shanghai. The second convention was held in Suzhou in 2010. For the third they returned to Shanghai in 2012. Cruise Shipping held their first Cruise Shipping Asia/ Pacific conference in Singapore in 2011. The second was held in 2012 and the third in 2013. Like the conferences in the 1990s, these five were accompanied by travel agent training sessions. In 2014 Cruise Shipping and UBM combined efforts under the Seatrade Asia/Pacific brand. Cruise Shipping Conferences were held in Hong Kong in 2014, Busan Korea in 2016, and Baoshan Shanghai in 2016 and 2017. One can conclude that the hardware is in place, but the modern cruise operations are extremely complicated. With the average cruise ship carrying close to or more than 2000 passengers, and newbuildings (new ships) carrying 4000 plus, the software has become increasingly more important. Rapid clearance of customs, quarantine, and immigration (CQI) is important, as are sufficient tour options and language capable guides. Yap [30] questions the return on investment from the new terminals. It's very difficult for a cruise terminal to make money unless it's a mixed-use facility with multiple revenue generators. The value of a cruise terminal is its ability to increase the number of cruise calls. Using a conservative estimate of \$100.00 US spent per passenger or crewmember, each call can be worth between \$200,000 and \$300,000 US. If the terminal can take yearly calls from 10 to 50, it may well be worth the cost. The number of ships trading in Asian waters has been rising steadily

When the bulk of this chapter was written, the question was "Is Asia the next global cruise hot spot?" By 2017 the answer was a firm "Yes!" From 2013 through 2017, major developments had taken place in the Asian operations of Star Cruises/ Genting Hong Kong, Costa Crociere, Royal Caribbean International (RCI), and Princess Cruises. Post 2017 these are being joined by global brands Norwegian Cruise Line, MSC Cruises, AIDA Cruises, and Carnival Cruise Line. Corben wrote

<sup>3</sup> Cabotage: The right to transport passengers and goods directly between two ports in the same

country. Usually restricted to national/domestic flag carriers and can be a detriment to foreign flag cruise

cabotage3

**254**

operations.

over the last few years.

<sup>4</sup> 1 nautical mile = 2000 yards.

*"Asia's tourism industry is booming, buoyed by rising incomes, low-cost air transport, and China's growing outbound market….The World Travel and Tourism Council said dependence on tourism has been growing, especially with the 'spectacular growth' in China's outbound market.*

*'China expanded its 'approved destination status' scheme from 14 countries to 113 by 2012, leading to a 700 per cent increase in outward visits by Chinese tourists, from 10 million in 2000 to 78 million by 2015,' the Council said." Corben goes on to quote Oliver Lamb, of Sydney-based Pacific Aviation Consulting, "regional economic progress has driven tourism growth. The middle class is forecast to grow from 190 million to 400 million in the coming decade."*

*"The growth of the middle class-the strength of the Asian middle class, the emergence of [air] carriers that are specifically targeted in wealth and well within the Asian middle classes' needs and low fuel prices-you are getting a perfect storm of positive dynamics for leisure travel in the Asia Pacific," Lamb told VOA [31].*

The growth of the low-cost carriers has been a boon to the pan-Asia ships by greatly reducing the cost of the air portion of a cruise.

In 2015, RCI placed their lead ship of the *Quantum* Class, *Quantum of the Seas*, into service in Shanghai. She was the first newbuilding since *SuperStar Virgo* to enter the Asian Market. The same year, RCI started a joint venture, SeaSky Cruises, with Ctrip.com, exclusively for the Chinese market. Celebrity Cruises 1995-built *Celebrity Century* was renamed *Golden Era* and modified for the Chinese passenger. Costa also augmented their Asian fleet with the 2003-built *Costa Fortuna* and the 2007 built *Costa Serena*. Meanwhile, Princess Cruises made a concerted effort to develop their Japan market and establish a strong presence in China by deploying their 2015 Mitsubishi Heavy Industries-built sisters, *Sapphire Princess* and *Diamond Princess*.

In 2016, Genting Hong Kong, parent company of Star Cruises and Crystal Cruises, introduced the first ship of their Chinese market luxury brand, Dream Cruises. *Genting Dream* rotates between Guangzhou (Nansha Port), Hong Kong, and Sanya. In 2017 she was joined by sister ship *Genting World*.

In 2017, Princess Cruises introduced their purpose-built *Majestic Princess* into the Chinese market. She was joined by another purpose-built ship, Norwegian Cruise Line's *Norwegian Joy*. AIDA Cruises joined the list of Western cruise lines operating year-round in Asia with the 2008-built *AIDAbella*. Not to be outdone, Costa added the extensively rejuvenated 1993-built *neoRomantica* to their Asian fleet. In 2019, Costa will add the purpose-built *Costa Venezia*. In 2020, she will be joined by a yet unnamed sister. 2017 was a landmark year as *Cruise Industry News Annual 2017–2018* [1] designated Asia/Pacific as the number 2 cruise region with a 15.7% market share, 59 ships, and a capacity of 3,972,701 passengers. In 2018, MSC Cruises will dedicate the 2009-built *MSC Splendida* to Asia and China. While seemingly late to the game, MSC Cruises had maintained a sales office in Hong Kong targeting the Asian and Chinese source markets since 2004.

Of the 84 cruise ships on order as *Cruise Industry News Annual 2017–2018* [1] went to press, seven were dedicated to the Asian (1) and Chinese (6) markets. Maybe more important than the number of ships being dedicated to the Asian market was the 2017 agreement, announced by Carnival Corporation press release on February 22, 2017 [32], between Carnival Corporation, Fincantieri S.p.A., and the China State Shipbuilding Corporation (CSSC). This brings together the world's largest cruise corporation, one of the world's most prolific cruise ship building yards and China's major shipbuilding corporation. The binding agreement called for the building of two 135,000 grt/4200-passenger cruise ships, with an option

for 4 more, for the new Carnival China brand. The first ship is to be delivered in 2023. These will be the first major cruise ships constructed in China and may mark the emergence of China as a major player in cruise ship construction. Mitsubishi Heavy Industries is the only other Asian shipyard with major cruise ship construction experience. Their ships include Crystal Cruises' 1990-built *Crystal Harmony*, NYK Cruises' 1991-built *Asuka*, and Princess Cruises' 2004-built sisters, *Diamond Princess* and *Sapphire Princess*. However, they have been unsuccessful in obtaining continuous orders. The Carnival China ships may mark the emergence of China as a major player in cruise ship construction. Given the size of China's coastal middle class, the growth of cruising as a vacation option, and the low market penetration, the potential exists for China for China to be not just a major source of cruise passengers but a new major center for cruise ship construction. True globalization will be achieved when these yards are constructing ships for non-Asian brands for non-Asian deployment.

Meanwhile, the Australian-South Pacific market continued to grow. By 2017, P&O Australia's fleet consisted of 5 secondhand ships: ex-Holland America ships, 1993-built ex-*Ryndam*, *Pacific Aria*, and 1994-built ex-*Statendam*, *Pacific Eden* and ex-Princess' ships, 1991-built ex-*Regal Princess Pacific Dawn*; 1997-built ex-*Dawn Princess*, *Pacific Explorer*; and 1990-built ex-*Crown Princess*, *Pacific Jewel*. In 2019, they'll be joined by the rebranded 2008-built ex-*Carnival Splendor*. P&O Australia is augmented by Carnival Corporation sister brands, Princess Cruises and Carnival Cruise Lines. Princess is represented by formerly North America, and Europe deployed 1998-built *Sea Princess*, 1995-built *Sun Princess*, and 2001-built *Golden Princess*. Carnival is represented by the 2001-built *Carnival Spirit*.

Royal Caribbean International (RCI) and Celebrity Cruises represent Royal Caribbean Cruises Limited. RCI's fleet includes 2000-built *Explorer of the Seas*, 2001-built *Radiance of the Seas*, and 2016-built *Ovation of the Seas*. *Ovation of the* 

**257**

**Figure 13.**

**Figure 12.**

*Globalization of the Cruise Industry: A Tale of Ships Part II - Asia Post 1994*

*Seas* rotates between seasonal homeports of Sydney and Shanghai. 2010-built

*Total berths (lower) on cruise ships operating year-round in the Asia/South Pacific region 2004–2024.*

**Figures 11**–**13** show the growth in Asia/South Pacific cruise ships, berths, and

*Celebrity Solstice* flies the flag for Celebrity.

number of cruise lines operating year-round, respectively.

*Cruise lines operating year-round in the Asia/South Pacific region 2004–2024.*

*DOI: http://dx.doi.org/10.5772/intechopen.88157*

**Figure 11.** *Cruise ships operating year-round in the Asia/South Pacific region 2004–2024.*

#### *Globalization of the Cruise Industry: A Tale of Ships Part II - Asia Post 1994 DOI: http://dx.doi.org/10.5772/intechopen.88157*

#### **Figure 13.**

*Education, Human Rights and Peace in Sustainable Development*

non-Asian deployment.

for 4 more, for the new Carnival China brand. The first ship is to be delivered in 2023. These will be the first major cruise ships constructed in China and may mark the emergence of China as a major player in cruise ship construction. Mitsubishi Heavy Industries is the only other Asian shipyard with major cruise ship construction experience. Their ships include Crystal Cruises' 1990-built *Crystal Harmony*, NYK Cruises' 1991-built *Asuka*, and Princess Cruises' 2004-built sisters, *Diamond Princess* and *Sapphire Princess*. However, they have been unsuccessful in obtaining continuous orders. The Carnival China ships may mark the emergence of China as a major player in cruise ship construction. Given the size of China's coastal middle class, the growth of cruising as a vacation option, and the low market penetration, the potential exists for China for China to be not just a major source of cruise passengers but a new major center for cruise ship construction. True globalization will be achieved when these yards are constructing ships for non-Asian brands for

Meanwhile, the Australian-South Pacific market continued to grow. By 2017, P&O Australia's fleet consisted of 5 secondhand ships: ex-Holland America ships, 1993-built ex-*Ryndam*, *Pacific Aria*, and 1994-built ex-*Statendam*, *Pacific Eden* and ex-Princess' ships, 1991-built ex-*Regal Princess Pacific Dawn*; 1997-built ex-*Dawn Princess*, *Pacific Explorer*; and 1990-built ex-*Crown Princess*, *Pacific Jewel*. In 2019, they'll be joined by the rebranded 2008-built ex-*Carnival Splendor*. P&O Australia is augmented by Carnival Corporation sister brands, Princess Cruises and Carnival Cruise Lines. Princess is represented by formerly North America, and Europe deployed 1998-built *Sea Princess*, 1995-built *Sun Princess*, and 2001-built *Golden* 

Royal Caribbean International (RCI) and Celebrity Cruises represent Royal Caribbean Cruises Limited. RCI's fleet includes 2000-built *Explorer of the Seas*, 2001-built *Radiance of the Seas*, and 2016-built *Ovation of the Seas*. *Ovation of the* 

*Princess*. Carnival is represented by the 2001-built *Carnival Spirit*.

*Cruise ships operating year-round in the Asia/South Pacific region 2004–2024.*

**256**

**Figure 11.**

*Cruise lines operating year-round in the Asia/South Pacific region 2004–2024.*

*Seas* rotates between seasonal homeports of Sydney and Shanghai. 2010-built *Celebrity Solstice* flies the flag for Celebrity.

**Figures 11**–**13** show the growth in Asia/South Pacific cruise ships, berths, and number of cruise lines operating year-round, respectively.
