China's slowing growth hasn't shaken the cruise industry's enthusiasm. But as executives like to point out: Cruise ships can easily relocate if demand dwindles.
Royal Caribbean Cruises CEO Richard Fain says cruises are just the thing for China’s travelers in an era of economic concern.
Fain, in Beijing to announce a partnership between Royal Caribbean International and the Imperial Palace Museum, appeared on CNBC’s Squawk Box Asia Tuesday morning local time.
Anchor Bernie Lo quickly brought up the issue of China’s slowing growth and global worries about the stock market’s performance.
“There’s questions about the economy, a lot of people feel like they’ve really taken a beating in the stock market and in previous years the property market,” he said. “Any negatives associated with getting them to part with money and spend with you?”
Fain gave his answer an optimistic spin.
“Well, I think that’s part of the beauty of cruising is that it’s such a great value,” he said. “This is something that, as you point out, is brand new to the Chinese market. They’ve simply never had the opportunity to take these kinds of vacations. So we’re still at a very embryonic stage and to some extent, that overcomes the economic ins and outs.”
The Miami-based cruise line is counting down to the June arrival of Ovation of the Seas, which will sail from Tianjin. Last year, Royal Caribbean brought sister ship Quantum of the Seas to Shanghai after it sailed for a short season from the New York area. The ships can carry 4,180 passengers at double occupancy.
After praising the Quantum, referring to the “sheer magnitude of that floating metropolis,” Lo asked: “Richard, did you really need to one-up yourself on Quantum with Ovation? When is enough enough?”
Clearly enjoying the question, Fain said the company is trying to get that exact reaction from potential cruisers.
“Because we want people to say exactly what you’re saying: ‘Wow, these people compete with themselves more than anyone else,'” Fain said. “We want to be in a class by ourselves. And bringing in the first new ship ever to come to China with Quantum of the Seas and now the second new ship ever to come to China, we’re really trying to up our game constantly.”
Including Ovation of the Seas, Royal Caribbean will have five ships in China later this year. Other cruise lines are also growing their fleets in the country, leading cruise giant Carnival Corp. to caution that pricing growth could suffer as a result.
Fain didn’t talk about pricing, but said the company is still more focused on growth in China than elsewhere in the globe.
“We’re still growing in those other markets, it’s just that the Chinese market is so strong and so hungry for the kind of activities that we bring that most of our growth is actually going to satisfy this market,” he said.
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Photo credit: Quantum of the Seas sails into Victoria Harbour in Hong Kong. Royal Caribbean International