Royal Caribbean feeling impact of China-Japan territorial dispute

Skift Take

On the sales side, Royal Caribbean realizes it needs to use sophisticated marketing techniques and social media. The cruise line won’t say it, but it also realizes that direct sales to consumers will become an increasing important part of its business.

— Dennis Schaal

Royal Caribbean Cruises Ltd. pointed to Australia and China as regions that are performing well, but an official noted that in June the line will be eliminating almost all Japanese port calls from Shanghai and Tianjin, China.

Normally sailings from Shanghai and Tianjin head to destinations in Japan and South Korea, but the territorial dispute between China and Japan over the uninhabited Diaoyutai/Senkaku islands in the East China Sea has prompted Royal Caribbean to drop Japan itineraries from China.

“It is not clear what will happen in the summer months,” Adam Goldstein, CEO of Royal Caribbean International, told analysts as he discussed the company’s fourth quarter earnings. “We certainly hope a reduction in tension emerges in the very near future.”

Royal Caribbean International will be utilizing two Voyager class ships in the region by this summer, officials said.

Meanwhile, Goldstein broached what is always a touchy subject in the cruise industry — marketing direct to consumers. That’s because the cruise industry is undoubtedly the travel sector most heavily dependent on travel agent distribution, although direct-to-consumer sales have been building in recent years and undoubtedly will pick up additional momentum.

“We clearly want to invest in the new available ways of doing target marketing, of reaching people on a one-to-one basis and engaging with them in conversations that weren’t possible even 5 or 10 years ago, to take advantage of the interest that people have in cruising in general and in our brand specifically,” Goldstein said.

Commenting on Royal Caribbean’s increased marketing and technology investments, Goldstein said the cruise line will also invest in new ways to reach and motivate travel agents, and needs to become a global marketer, given the uneven development and cultural differences in regions around the world where it does business.

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