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Carnival plc's Chinese joint venture could follow AIDA Cruises' model

  • Written by Kari Reinikainen

The new cruise brand Carnival Corporation & plc's British holding company Carnival plc and its two Chinese business partners will launch in China could be based on the model of AIDA Cruises, the Carnival group's German brand, said Alan Buckelew, COO of Carnival Corporation & plc.

"We think there's an opportunity for an AIDA type brand, more focused on the Chinese market than international but we need to do research on that. In many categories, products made in China are not seen as having the same value and quality as those abroad. Services are a different animal than products," Buckelew said at a conference call today.

AIDA Cruises features food market type dining, with table service alternative dining options at an extra charge.

"This new brand won't be of any scale for five to 10 years. Initially it won't have any impact. We think that developing the China market is a very positive thing for the cruise industry. It opens up a large, vibrant market. Allows us to further diversify our sourcing."

Moving on to recent news about China's economic setbacks, Buckelew said: "The best proxy for us is outbound tourism, up 12% this year. Our yields remain strong. We put our ships where we can earn the most money. We made that investment with Costa where we were willing to take losses. We don't take losses for strategic growth anymore. The beauty of our industry is if China was to slow down we could move our ships somewhere else

Carnival group's China operations fall under UK holding company

  • Written by Kari Reinikainen

Carnival Corporation & plc group's Chinese operations, including a new Chinese brand the launch of which was unveiled today, are part of the group's UK domiciled holding company Carnival plc, said Alan Buckelew,COO of Carnival Corporation & plc, at a conference all.

"All of our operations in China fall under the PLC part of our Carnival Corporation and David Dingle is the lead; he's been very active from the beginning. Equally likely is the newly created will fit within the UK tonnage tax structure so there is a positive UK story which made it appropriate for us to sign the deal in the presence of Cameron (British prime minister David Cameron) and Xi (Chinese president XI Jinping). Just as the Chinese government is greatly looking forward to developing with us, the British government is looking forward to playing its part in the development," Buckelew said..

When asked to comment on the value of the deal Carnival signed with China State Shipbuilding Corporation (CSSC) and China Investment Corporation (CIC) in London to form a joint venture to launch a Chinese cruise brand, he said: "Very hard to put a value on it, alternative business plans that show a range of different ships we can bring into this joint venture. This is a 25-year deal. What we will actually end up building and buying in 25 years is hard to forecast. Both sides are quite happy with … an investment of $4 billion in the first ten years. Capital investment. In total, this is meant to be an ongoing concern."

"The intention now that we've agreed to all the terms for the joint venture is to move, once we get final governmental approval is to move immediately into implentation phase. Not a specific set of dates but that will be the first order of business: Agreeing on final business plan and introduction of vessels," he continued.

The new joint venture aims to buy second hand vessels to start the operation and then to build ships in China. "The Chinese government has been very vocal about developing service industries, and cruising is specially mentioned as an industry they want to encourage from both the shipbuilding and travel perspective," Buckelew stated.


Carnival, CSSC and CIC to launch Chinese cruise brand

  • Written by Kari Reinikainen

Carnival Coprporation & plc the world's largest cruise shipping company, today announced it has formed a joint venture in China that intends to launch the first world-class, multi-ship domestic cruise brand in the Chinese market. "Carnival Corporation & plc is partnering with China State Shipbuilding Corporation (CSSC) and China Investment Corporation (CIC) on the new venture aimed at accelerating the development and growth of the overall cruise industry in China, which is expected to eventually become the largest cruise market in the world," the Anglo-American company said in a statement.

Carnival Corporation & plc and its partners formalised the joint venture agreement at a signing ceremony held today at the Mansion House in London. British Prime Minister David Cameron and Chinese President Xi Jinping attended the ceremony, signifying both the importance of the joint venture and the prominent role that the travel and tourism industry will play in China's economic growth plans. Also in attendance were Dong Qiang, chairman of CSSC, and Ding Xuedong, chairman of CIC, along with Carnival Corporation & plc CEO Arnold Donald and Alan Buckelew, global COO for the company.

Under the structure of the new joint venture, Carnival Corporation & plc and CSSC, the largest shipbuilder in China, plan to purchase and operate cruise ships as part of what is expected to be the first multi-ship fleet sailing for a domestic Chinese cruise brand. Specific fleet details will be announced at a later date, but potential plans could include the purchase of both new and existing cruise ships to homeport in China.

The CIC, currently one of the world's largest sovereign wealth funds with over $740 billion in assets under management, will serve as a significant investor in the new cruising joint venture with CSSC and Carnival Corporation & plc. CIC's involvement as a strategic partner reinforces China's commitment to developing a strong domestic cruise presence and growing demand for cruising as a key driver of the expanding Chinese tourism market, which is a top priority for longer term economic development in China.

"This cruising joint venture is a significant step forward for the cruise industry in China and a tremendous opportunity for us to work together with CSSC and CIC to grow awareness, interest and demand for cruise vacations amongst domestic Chinese travelers," said Buckelew, global chief operations officer for Carnival Corporation & plc. "Cruising is a relatively new vacation experience in China, and we believe this collaborative approach with our partners is critical to not only developing the country's domestic cruise business, but also supporting China's goal to become one of the world's leading cruise markets in coming years. We are excited about using our scale and decades of experience as the world's largest cruise company to help launch a multi-ship domestic cruise brand that will help spread the enjoyment of cruising to millions more Chinese vacationers."

Today's joint venture announcement builds on recent news from Carnival Corporation & plc that the company is again expanding its leadership position in the Chinese cruise market with growth plans in 2016 and 2017.

The company announced in July that its existing brands already sailing in China – Costa Cruises and Princess Cruises – will continue to expand in 2016 with each brand adding a ship to its fleet in China in 2016, making Carnival Corporation & plc the first global cruise company with six total ships based in China and extending the company's industry-leading market presence in the overall market.

The expansion of Carnival Corporation & plc's China fleet to six ships will represent a 58 percent increase in capacity in China in 2016, including three year-round ships and three seasonal ships in the market. Together, the Costa and Princess brands will potentially offer about four million passenger cruise days in 2016, giving Chinese guests more choice and flexibility in both the contemporary and luxury segments.

In addition to expanding its industry-leading presence in China in 2016, Carnival Corporation & plc announced last week that it plans to operate two additional cruise brands in China in 2017. Carnival Cruise Line and AIDA Cruises will join Costa Cruises and Princess Cruises in the Chinese market in 2017, making Carnival Corporation & plc the first company to operate four cruise brands in China.

In a separate announcement in early October, Princess Cruises announced the name of its new ship that will be based year-round in China when it is introduced in summer 2017. Based in Shanghai, the all-new Majestic Princess will be the first year-round international cruise ship built specifically for Chinese guests incorporating a unique blend of international and Chinese features.

Goldman, Sachs & Co. acted as a financial advisor for Carnival Corporation & plc in this transaction

MedCruise members need to become ‘marketeers’ in order to face competition challenges

  • Written by Teijo Niemelä

Frances Gannon reports from Olbia.

Members of MedCruise, the organisation that promotes the Mediterranean as cruise destination, need to become “marketeers” in order to face competition and to match changing expectations of passengers, speakers said at a conference arranged by the organisation.

Kyriakos Anastassiadis, CEO of Celestyal Cruises posed the question "Do you market yourself as a destination: individually or regionally? The Med should really be the best destination for cruise and we need to start clustering and working with itineraries, we need to educate itinerary planners, we need to become ‘marketeers’!"

Anastassiadis, who gave an invigorating presentation at the 47th MedCruise General Assembly that took place last week in Olbia in Sardinia, stated: “For business to grow in the Med we need to do things differently.” Acknowledging Celestyal as a smaller operator than other cruise companies in the Mediterranean region, which is their bread and butter, he pointed out challenges arising from political events in the region.

Celestyal has had to face moving from destinations in the southern part of the Mediterranean, while it is going through a crisis, and focus on the northern part instead. He also stated 15% of their passengers are students with a wide spectrum of clientele including very affluent clients from 60 to 70 nationalities. Anastassiadis pointed out that Med Cruise members need to be more informed on what each particular cruise line is selling.

He posed the question: "How can ports help to make the cruise industry grow?" He continued by answering: "One thing ports need to consider – do you provide a good experience for cruise guests?" He also questioned why is the Turkish market not being included when discussing target markets considering the population is almost 77 million.

Carla Salvado, MedCruise President provided statistics indicating the strong continuous growth trend enjoyed in the Mediterranean for many years has now stabilised for the past three years.

Dr. Raphael von Heereman, Secretary General & CEO CLIA Europe advised travel agents are still an integral part of the industry with 70% of bookings being done through travel agents.

CLIA Europe and MedCruise are in the process of launching a joint venture by setting up an online training tool to educate and certify travel agents. Herema stated: ‘They need to be better informed which leads to better informed potential cruise guests.”

The first phase of the training tool will be launched in November 2015 and will be available in French to French Travel agents. He hopes the next launch to be available by April next year to the Spanish market.

Dustin Nason, Director, Worldwide Port Operations, Royal Caribbean Cruises Ltd (RCCL) stated that expectations of cruise guests have changed, mentioning their need for fast broadband, observing guests are multi generational and want ‘a unique experience – cruise guests want an experience of a lifetime’. He mentioned that Royal Caribbean satisfaction rates highly at 8.4 out of 10 for culture in the Mediterranean.

RCCL group have 16 ships in the region and it remains of strategic importance, particularly for the group’s premium market Celebrity Cruises brand. He did however mention some external threats: growing demand for cruises in the Caribbean and entry of Cuba as a cruise destination plus decisions to redeploy capacity to Asia. However he stated at the end of the day “Yield is King,” but he also mentioned outlook for Mediterranean is strong and a key strategy for the group brands is extended seasons in the region.

Bruce Krumrine, Vice-President Shore Operations Europe & Exotics, Princess Cruises, Holland America Line and Seabourn stated: "Mass market tourism is gone, guests are looking for more meaningful travel."

He discussed the top ten shore excursion travel trends noting there is still a growth in traditional source market: North America and the UK and more nationalities travelling than ever before with rapid growth of the Chinese market.

Other trends include small group tours and multi generational family travel. "What does this mean for MedCruise and its members," he asked, suggesting an answer: "Continued growth, new marketing and promotions opportunities for new products and services."


Norwegian Epic-re-enters service after drydocking at Damen Brest Shipyard

  • Written by Teijo Niemelä

Norwegian Epic welcomed guests onboard on Monday, October 19, following a three week dry dock where the ship received significant enhancements across the vessel, including entertainment, dining, technical operations and more. The new features come as Norwegian Epic readies for her winter and summer season sailing the Mediterranean from Barcelona, followed by her return to the United States and her new home in Port Canaveral in the fall of 2016.

Norwegian Epic now features a brand new entertainment outlet The Cavern Club, bringing the legendary Liverpool venue where the Beatles saw their popularity skyrocket to life. Following the addition of Broadway sensation Burn The Floor earlier this year, Norwegian Epic was outfitted with a second new Broadway show during the dry dock, Priscilla Queen of the Desert - The Musical. Based on the Oscar-winning movie, the show is a heart-warming, uplifting comedy adventure of three friends who hop aboard a battered old bus searching for love and friendship and end up finding more than they could have ever dreamed of discovering. The Tony Award winning musical features a dazzling array of over 500 award-winning costumes, 200 extraordinary head-dresses and a hit parade of dance floor favorites, including “It’s Raining Men,” “I Will Survive,” and “Girls Just Wanna Have Fun.”

Dining enhancements for Norwegian Epic include extensive renovations to the existing Moderno Churrascaria, Cagney’s, La Cucina, Le Bistro, Garden Café, Manhattan Room restaurant and Taste restaurant. Many of the onboard dining venues received a refreshed look with new carpeting, reupholstered furniture, new décor and more.

Norwegian Epic was also outfitted with a brand new photo gallery, library and card room. Guests looking for a “cool” adventure can tee up at the new SplashGolf, which was installed in the ship’s Kids Aqua Park. This new attraction combines two age-old elements of fun –water features and mini golf— into one completely new, interactive water based game attracting all age groups for more family fun. Additionally, the vessel received major renovations and enhancements to the Mandara spa, Bliss Ultra Lounge, pool deck Marketplace, Epic Theater, Casino, and the exclusive Haven suite complex; including new lighting fixtures, artwork, wall covering, furniture and more.

“Norwegian Epic’s extended dry dock has given us the opportunity to not only enhance the ship’s public spaces but to add significant new features, including a brand new Tony Award-winning musical with Priscilla Queen of the Desert, a new entertainment venue with The Cavern Club and new activities like SplashGolf,” said Andy Stuart, president and chief operating officer of Norwegian Cruise Line. “We continue to heavily invest in our current fleet, to ensure that guests have a consistent experience across all Norwegian ships and the freedom and flexibility to create their ideal cruise vacation.”

Technical modernizations and maintenance also took place during the dry dock at the Damen Brest shipyard. The ship received a new pair of Becker rudders together with more efficient propeller caps, and state-of-the-art energy efficient hull paint. Additional significant technical and safety updates include: lifeboats and tender boats release systems upgrade; thrusters and stabilizers full maintenance, air ducts upgrades as well as improved storerooms’ refrigeration systems.

CBR 2/2015 contents

CBR 1/2015 contents

CBR 3/2014 contents