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1 Analysis on the Development Environment of Chinese Cruise Industry

1.1 The Macroeconomic Development Is Stable and the High-Quality Development Brings About a Good Start

At present, China’s economic development is in a stage transforming from rapid growth to high-quality development and shows a steady growth trend as a whole. The reform and opening up and supply-side structural reform have been deepened constantly, the economic structure has been constantly optimized, the main economic indicators have maintained a good development trend, the economic strength has been significantly enhanced, the economic development has been more dynamic, and the contribution to global economic development has been continuously promoted. China’s gross domestic product (GDP) reached CNY 82.71 trillion in 2017, showing a year-on-year growth of 6.9%; the annual per capita GDP reached CNY 59,660, showing a year-on-year growth of 6.3%. The tertiary industry has maintained a sound momentum of development, with an increase in output of CNY 42.7 trillion and a year-on-year increase of 8%. The proportion of the added value of the tertiary industry in the total GDP has increased to 51.6%, accounting for more than half of the total contributions. The contribution of final consumption to the growth of total GDP in the whole year is at a high level and nearly 60%. Domestic trade remained sound development momentum. The national total retail sales of social consumer goods in 2017 reached CNY 36.62 trillion, showing a year-on-year growth of 10.2%. The retail sales of urban consumer goods reached CNY 31.42 trillion, showing a year-on-year growth of 10%; the retail sales of rural goods reached CNY 32.6 trillion, showing a year-on-year growth of 10.2%. Foreign economy maintained a good growth momentum. In 2017, the total export-import volume of goods reached CNY 27.79 trillion, showing a year-on-year growth of 14%. The construction effect of “the Belt and Road” was obvious. The total export-import volume of countries along the Belt and Road reached CNY 7.37 trillion, showing a year-on-year growth of 17.8% (Fig. 1).

Fig. 1
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Data source Statistical Bulletin of the State Statistics Bureau

Changes in proportion of tertiary industry to GDP in 2011–2017.

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1.2 The Growth of Residents’ Consumption Capacity Has Been Driving the Growth of Cruise Market Scale

The development of cruise tourism market is directly related to the increase of residents’ purchasing power. The improvement of consumption capacity will effectively promote the increase of market scale. In 2017, the per capita disposable income of Chinese residents reached CNY 25,900, showing a year-on-year growth of 9%; the median per capita disposable income of Chinese residents reached CNY 22,400, showing a year-on-year growth of 7.3%. The median per capita disposable income of urban residents reached CNY 33,800, showing a year-on-year growth of 7.2%. In 2017, the per capita disposable income of Chinese urban residents reached CNY 36,300, showing a year-on-year growth of 8.3%. It actually increased by 6.5% excluding the impact of price changes. The per capita disposable income of Chinese rural residents reached CNY 13,400, showing a year-on-year growth of 8.6%. According to the division of the five equal income groups of national residents, the per capita disposable income of people in the middle income group reached CNY 22,400, and that of people in the high income group reached CNY 64,900 (Fig. 2).

Fig. 2
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Data source Statistical Bulletin of the State Statistics Bureau

Changes in per capita disposable income in China.

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With the development of China’s social economy, the per capita consumption expenditure of Chinese residents has greatly increased and reached CNY 18,300, showing a year-on-year growth of 7.1%. The per capita consumption expenditure of urban residents has reached CNY 24,400, showing a year-on-year growth of 5.9%; the per capita consumption expenditure of rural residents has reached CNY 10,900, showing a year-on-year growth of 8.1%. The Engel coefficient of Chinese residents reached 29.3%, showing a year-on-year decrease of 0.8%. The urban Engel coefficient reached 28.6%, was in a good development level and had a good promotion effect on improving residents’ consumption ability. Among the indicators reflecting residents’ consumption ability, the per capita disposable income is an appropriate indicator. The increase of residents’ purchasing power will be conducive to the development of the existing tourism market and the development of the potential market.

1.3 The Healthy Development of Tourism Is Providing a Good Foundation for Cruise Tourism

Chinese tourism economy has been developed rapidly. The industrial pattern is improving day by day, and the market scale and quality are improved synchronously. China remains the world’s largest source of outbound tourists and the world’s fourth largest destination tourism host country. Tourism has been an important lifestyle of people. In 2017, the number of domestic tourists reached 5 billion, showing a year-on-year growth of 12.8%; the domestic tourism income reached CNY 4.5661 trillion, showing a year-on-year growth of 15.9%. In 2017, the average number of trips was 3.7 per person. Tourism has been an important indicator for measuring the modern living standards and people’s rigid need for happy life. In 2017, the comprehensive contributions of tourism were CNY 8.77 trillion. The contributions to national economy reached 11.04% and that to accommodation, catering, civil aviation and railway passenger transport exceeded 80%. A total of 28.25 million people were employed in tourism. A total of 80 million people were directly or indirectly employed in tourism. The comprehensive contribution of tourism to the society reached 10.28%.

In terms of outbound tourism, Chinese outbound tourism market reached 131 million tourists in 2017 and the expenses of outbound tourism USD 115.29 billion, showing a year-on-year growth of 6.9% and 5.0% respectively. As of March 2018, China has officially launched group business in 129 outbound tourist destinations, including the republic of Sudan, Uruguay, Sao Tome and Principe and French New Caledonia in 2017. According to statistics, the number of China’s outbound travel agencies with business qualifications increased to 4442 in 2017, showing a year-on-year growth of 14.6%. The top 15 destinations for Chinese tourists in 2017 were Hong Kong, China, Macau, China, Thailand, Japan, Vietnam, South Korea, the United States, Taiwan, Malaysia, Singapore, Indonesia, Russia and Australia. The proportion of traveling abroad continued to increase and accounted for 33.3% of the total number of outbound trips in 2017 and was approximately 2% higher than the 31.24% in 2016 (Fig. 3).

Fig. 3
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Data source China Port Association Cruise Terminal Branch

Changes in China’s outbound tourism and inbound tourism.

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With regard to the development of inbound tourism, in 2017, global international tourism showed a sustained growth trend, and emerging economies continued to make efforts. The total number of inbound tourists received worldwide in 2017 was 1.322 billion, showing a year-on-year growth of 7.00%. Europe, the Asia-Pacific and the Americas remained the world’s top three international tourist attractions. In 2017, the number of inbound tourists in the Asia-Pacific region increased by 5.8%, and the growth rate of inbound tourists in Europe and the Americas was 8.4 and 2.9% respectively. In 2017, China’s inbound tourism started to rise again. In 2017, China received 139,482,400 inbound tourists, showing a year-on-year growth of 0.80%. The total number reached a record high. The size and growth rate of the foreign inbound tourism market were 29,165,300 and 3.60% respectively, and the total number also reached a record high. Mainland (inland) China received 110,317,100 tourists from Hong Kong, Macao and Taiwan, making the total number a record high. In 2017, China’s foreign exchange income from inbound tourism reached USD 123.417 billion, showing a year-on-year growth of 2.90%, continuing to maintain a good momentum of steady growth. Foreign tourists consumed USD 69.547 billion, showing a year-on-year growth of 4.1%, continuing to maintain a good momentum of steady growth. In 2017, Hong Kong, China, Macao, China and Taiwan, China remain the main force in the inbound tourism market of mainland China (inland), accounting for 79.09% of the total market share. In terms of inbound tourism market demand, the main purpose of travel is sightseeing and leisure vacation. There still are some shortcomings of inbound tourism services. The majority of inbound tourists are first-time visitors to China; the consumption level of inbound tourists is still low, the expenditure of more than 80% of inbound tourists is between USD 1001 and USD 5000.

The tourism market has great development potential. China’s tourism revenue will reach CNY 5.98 trillion in 2018, with a year-on-year growth of 13%. Among them, the number of domestic tourists was 5.5 billion and the domestic tourism income was CNY 5.05 trillion, with an increase of 10.8 and 13% respectively; the number of inbound tourists was 142 million and the international tourism income was USD 127.3 billion, with an increase of 1.4 and 2.5% respectively; the number of outbound tourists was 134 million, with an increase of 4.5%; the investment completed was CNY 1.8 trillion, with an increase of 20%. By 2020, the total size of the tourism market will reach 6.7 billion tourists; the total investment in tourism will be CNY 2 trillion; the total tourism revenue will reach CNY 7 trillion; and the comprehensive contribution of tourism to the national economy will reach 12%. The objective of strong tourism country in the world will be achieved by 2040.

China’s tourism status and international influence have increased greatly. Passivity has been changed to initiative. In 2017, China led the establishment of the world tourism alliance, becoming an important force in improving the global tourism governance system. China successfully hosted the first World Tourism Development Conference, Sino-Japan Friendly exchange conference, Sino-Japan-Korea tourism year activities such as tourism ministers’ meeting, the 22nd plenary meeting of the United Nations World Tourism Organization (UNWTO), the seventh plenary session of the G20 tourism ministers’ meeting and other grand meetings with stronger international influence, making the world better understand China’s current situation and tourism development trend. The rapid development of China’s tourism has made important contributions to the development of the world’s tourism, effectively promoting the growth of the scale of global tourism economy and the scale of the sources of tourists. China has become an important force in changing the world tourism map.

Although the development of China’s tourism has made brilliant achievements, there still are some problems and bottlenecks which mainly lie in the following aspects: the regional development of tourism is unbalanced; the supply of tourist products is insufficient; the travel civilization level remains to be improved;, tourist products are not innovative enough; the leisure experience of outbound tourism is insufficient; the revisit rate of inbound tourists is relatively low. However, in general, China’s tourism maintains a good growth situation and great development potential, adheres to advanced development concept, is one of the most important parts of the world’s tourism development and has a strong impetus to the national economic growth, the comprehensive contribution of society and the growth of the global tourism economy.

China’s tourism has developed very rapidly in recent years. The three major formats of tourism showed comprehensive prosperity. China ranked first in the scale of the sources of tourists of outbound tourism in world. China’s cruise tourism market has also developed rapidly and has been the second largest cruise market in the world, and is expected to be the world’s largest cruise tourist source market.

2 Analysis on the Development Trend of China’s Cruise Industry Chain in 2017–2018

2.1 Analysis on the Development Trend of China’s Cruise Market

2.1.1 The Growth of China’s Cruise Market Is Slowing Down Momently, Which Is Conducive to Market Adjustment

According to the statistical data released by China Cruise & Yacht Industry Association (CCYIA), in 2017, China’s 11 largest cruise ports, including Shanghai, Tianjin, Dalian, Qingdao, Zhoushan, Wenzhou, Xiamen, Guangzhou, Shenzhen, Haikou and Sanya, received 1181 cruise ships, showing a year-on-year growth of 17%. Among the cruise ships received, the number of home-port cruise ships reached 1098, showing a year-on-year growth of 18%; the number of visiting-port cruise ships remained unchanged from 2016 and was 83. With regard to the number of cruise tourists received, China’s 11 largest cruise ports received a total of 4.954 million inbound and outbound tourists, showing a year-on-year growth of 18%. The number of home-port inbound and outbound Chinese tourists reached 4.2897 million. It was the first time to exceed two million since 2006. The number was 93% higher than that in 2015. The number of foreign cruise tourists reached 277,500, showing a year-on-year growth of 8%. Among China’s top ten cruise ports, Shanghai Cruise Port received a total of 512 cruise ships, showing a year-on-year growth of 0.5% and accounting for 43.3% of the market share in China; the number of inbound and outbound tourists received was 2.978 million, showing a year-on-year growth of 2.9% and accounting for 60.1% of the total number in China; Tianjin Cruise Port received a total of 175 cruise ships, accounting for 14.8% of the market share in China; the number of inbound and outbound tourists received was 942,000, accounting for 19% of the total number in China; Guangzhou Cruise Port developed very rapidly and received a total of 122 cruise ships in 2017, accounting for 10% of the market share in China; the number of inbound and outbound tourists received was 403,000, accounting for 8% of the total number in China. Shenzhen Shekou International Cruise Home Port was put into operation on October 31, 2016 and has become an important driving force of South China cruise market and has maintained high growth rate. In 2017, the Port received 109 cruise ships and 189,000 inbound and outbound tourists. In 2017, only Shanghai, Tianjin, Guangzhou and Shenzhen cruise home ports received 100 or more cruise ships. Sanya, Zhoushan, Dalian, Haikou and Yantai cruise ship ports received less than 50 cruise ships and were faced with great operating pressure (Table 1).

Table 1 Comprehensive statistics of China’s major cruise ports in 2017
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In terms of China’s four major cruise home ports, from January to June 2018, Shanghai Wusongkou International Cruise Terminal, the largest cruise home port in Asia-Pacific region, received a total of 188 cruise ships, showing a year-on-year decrease of 11% and accounting for 42% of the total number in China; the number of inbound and outbound tourists received was 1.283 million, showing a year-on-year growth of 7% and accounting for 56.1% of the total number in China. The number of home-port cruise ships was 182, showing a year-on-year decrease of 11%; the number of home-port inbound and outbound tourists was 1.257 million, showing a year-on-year growth of 8%. From January to June 2018, Tianjin International Cruise Home Port, the second largest cruise home port in China received 54 cruise ships, showing a year-on-year decrease of 40%; the number of inbound and outbound tourists reached 352,000, showing a year-on-year decrease of 14%; the number of home-port cruise ships received was 45, showing a year-on-year decrease of 43%; the number of visiting-port cruise ships received was 9, showing a year-on-year decrease of 18%. From January to June 2018, Guangzhou International Cruise Home Port, the third largest cruise home port in China received 51 cruise ships, showing a year-on-year decrease of 25%; the number of inbound and outbound tourists reached 245,600, showing a year-on-year growth of 24%; the Port was expected to exceed Tianjin International Cruise Home Port and become China’s second largest cruise home port. From January to June 2018, Shenzhen Shekou International Cruise Home Port, the fourth largest cruise home port in China received 50 cruise ships, showing a year-on-year increase of 100%; the number of inbound and outbound tourists reached 183,800, showing a year-on-year increase of 191%; the number of home-port cruise ships received was 49, showing a year-on-year increase of 96%; the number of home-port inbound and outbound tourists received was 183,700, showing a year-on-year increase of 191%. The Port became the international cruise home port that grows the fastest in China. From January to June 2018, Xiamen International Cruise Home Port, the fifth largest cruise home port in China received 41 cruise ships, showing a year-on-year decrease of 7%; the number of inbound and outbound tourists reached 134,800, showing a year-on-year increase of 69%; the number of home-port cruise ships received was 35, showing a year-on-year increase of 6%; the number of home-port inbound and outbound tourists received reached 116,500; the number of visiting-port cruise ships received was 6, showing a year-on-year decrease of 45%; the number of visiting-port inbound and outbound tourists received reached 18,200, showing a year-on-year growth of 21%. It can be seen that the total number of cruise ships berthing at China’s five largest cruise home ports was 384, accounting for 86% of the total number in China; the number of outbound tourists received was 2.197 million, accounting for 96.1% of the total number in China. Therefore, the market is highly concentrated.

The number of cruise ships berthing at home ports decreased significantly. The number of tourists, however, increased to some extent mainly due to the launch of large cruise ships that have large capacity. From January to June 2018, the development of inbound cruise tourism decreased significantly. The number of visiting-port cruise ships decreased remarkably. The number of visiting-port cruise ships received in China was 45, showing a significant decrease from the 61 in 2017. Even Shanghai Port International Passenger Transport Center that receives the most visiting-port cruise ships in China received only 11 inbound cruise ships in the first half year; and the number was significantly lower than the 17 in 2017. Sanya Phoenix Island International Cruise Terminal was China’s largest visiting port in China in 2017, but the port only received four visiting-port cruise ships in the first half year in 2018, showing a year-on-year decrease of 33% (Tables 2, 3 and 4).

Table 2 Comprehensive statistics of China’s cruise ports in the first half year of 2018
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Table 3 Number of home-port and visiting-port cruise ships received in 2018
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Table 4 Number of home-port and visiting-port cruise tourists received in 2018
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2.1.2 Homeport Cruise Ships in China Has Entered a Period of Accelerated Updates

In 2017, there were 18 homeport cruise ships operating in the Chinese market. Although the Princess Cruises made some adjustments to its fleet deployment, it is still full of confidence in the development potential of cruise market in China. International cruise lines have put their world’s latest luxury cruise ships into the Chinese market one after another to provide Chinese tourists with world-class cruise products and services, so as to accelerate the cultivation of cruise consumption culture of Chinese tourists, thus increasing the scale of cruise market in China. In 2017, the homeport cruise lines in China mainly included: the giants of international cruise lines operating in the Chinese market all the year around, Royal Caribbean International, MSC Cruises, Costa Crociere S.p.A, Princess Cruises, and Genting Cruise Lines; new entrants, Norwegian Cruise Line and Sliversea Cruises; and three local cruise lines, SkySea Cruise Line, Bohai Cruises, and Diamond Cruises. Homeport cruise ships are mainly popular ones, covering Quantum of the Seas, Ovation of the Seas, Voyager of the Seas, Mariner of the Seas, Serena, Atlantic, Victoria, Fortuna, Lirica, Golden Era, Glory Sea, Chinese Taishan, Sapphire Princess, Majestic Princess, SuperStar Virgo, Genting Dream, Joy. Luxury cruise ships include Silver Shadow with a total tonnage of 1.8764 million gross tons, an average tonnage of 104,200 gross ton, an average standard passenger capacity of 2580, and an average maximum passenger capacity of 2934. For the homeport cruise ships operating in China, the average value of the maximum passenger capacity/standard passenger capacity is 1.13, the maximum value thereof is 1.28 from Costa Fortuna, and the minimum value thereof is 1. The smaller the value is, the more passengers in the lower berth and the fewer passengers in the upper berth there are, and the more comfortable the tourists feel. In terms of standard passenger capacity/crew number, the average value is 2.52, the maximum value is 3.44 from Glory Sea, and the minimum value is 1.29 from Silver Shadow, a luxury cruise ship. The smaller this value is, the more sophisticated the services are provided to tourists, so basically in the homeport cruise ships in China, a waiter will serve 2.5 tourists, at a relatively general level (Table 5).

Table 5 Development of homeport cruise ships in China in 2017
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In April 2017, “Sapphire Princess” of Princess Cruises withdrew from the Chinese market. In September 2017, “Mariner of the Seas” of Royal Caribbean International gave up the Chinese market temporarily and returned to the United States for Miami route. In 2018, the six-year-old Costa “Victoria” was temporarily absent from the Chinese market. In 2018, MSC Lirica left the Chinese market for operation in the Mediterranean market. In September 2018, Majestic Princess will bid farewell to its home port in China and transfer to cruise market in Australia. It will sail to 16 destinations, including Fiji, New Zealand and Tasmania, with Sydney as its home port during the summer in the Southern Hemisphere from September 2018 to March 2019. In 2018, there are 16 homeport cruise ships in China, including Quantum of the Seas, Ovation of the Seas, Voyager of the Seas, Glory Sea, Serena, Atlantic, Fortuna, SuperStar Virgo, SuperStar Gemini, SuperStar Aquarius, Golden Era, Joy, Majestic Princess, Splendida, Chinese Taishan, and World Dream. “Quantum of the Seas” will travel to Singapore in 2019 and will make 34 voyages in six months from November 2019 to April 2020 with Marina Bay as its home port, including four nights, five nights and a few seven nights. Its main destinations include Kuala Lumpur, Phuket and Penang. “Ovation of the Seas” will be absent from Tianjin Home Port from May to September 2019, the “peak season” of cruise market in China, to deploy Alaska route in Seattle, USA. “Voyager of the Seas” will be back to Australia for operation of Sydney route from 2019 to 2020 (Table 6).

Table 6 Statistics of homeport cruise ships in cruise market in China in 2018
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On May 18, 2018, MSC Splendida launched its maiden voyage at Shanghai Wusongkou International Cruise Terminal in China. It is the 20th large cruise ship with Wusongkou International Cruise Terminal as its home port. At the same time, Wusongkou International Cruise Terminal welcomed its 10 millionth inbound and outbound tourists. In 2018, “SuperStar Gemini” resumed its homeport route with Xiamen as its home port. On June 13, 2018, “SuperStar Aquarius” of Star Cruises, the pioneer in Asia-Pacific cruise industry, entered Qingdao and launched its maiden voyage. On May 18, 2019, “Venezia”, the first Costa cruise ship tailored for the Chinese market, will make its maiden voyage in China. On June 6, 2019, “Spectrum of the Seas”—the first cruise ship of the Quantum Ultra Class of Royal Caribbean International, will make its maiden voyage in Shanghai. By 2020, “Bellissima”, MSC Cruises’ future flagship of the new generation, will be officially named and make its maiden voyage in Southampton, UK in 2019, and will enter home ports in China in the spring of 2020 to set a new benchmark for homeport cruise ships in China (Table 7).

Table 7 2018–2020 Homeport cruises distributed in the Chinese market
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2.2 Cruise Port Facilities in China Have Been Improved Stage by Stage

2.2.1 The Distribution of Cruise Ports Is Basically Completed in China

According to the Planning on Distribution of Costal Cruise Ports in China (2015), by 2030, the distribution with 2 and 3 cruise home ports as mainstay, port of departure as main part, and port of visit as supplement will be formed at the coastal area of China. In the distribution of port of departure, it is proposed to give priority to developing Dalian Port in Liaoning Coast, to take Tianjin Port as the port of departure of Tianjin and Hebei Coast, Qingdao Port and Yantai Port as the port of departure of Shandong Coast, Shanghai Port as the port of departure of Yangtze River Delta where Ningbo-Zhoushan Port are to be developed accordingly, Xiamen Port as the port of departure of South-East Coast, to give top priority to developing Shenzhen Port in Pearl River Delta where Guangzhou Port is to be developed accordingly, and to take Sanya Port as the port of departure of South-West Coast where Haikou Port and Beihai Port are to be developed accordingly. At present, there are 15 cruise ports in China, including eight cruise terminals. The eight cruise terminals include Shanghai Wusongkou International Cruise Terminal, Shanghai Port International Cruise Terminal, Tianjin International Cruise Home Port, Qingdao Cruise Home Port, China Merchants Shenzhen Shekou International Cruise Home Port, Sanya Phoenix Island International Cruise Terminal, Zhoushan Archipelago International Cruise Port, and Xiamen International Tourist Pier. In addition, there are seven ports transformed from freight terminals, including Dalian Port International Cruise Center, Guangzhou Port International Cruise Home Port, Yantai Port, Xiuying Port, Wenzhou International Cruise Port, Fangcheng Port, and Beihai Port. There will be several new cruise ports under planning, including Dalian International Cruise Home Port, Guangzhou Nansha Cruise Home Port, Beihai International Cruise Port, Haikou South China Sea Pearl International Cruise Port, Xiamen International Cruise Home Port, Ningbo International Cruise Port, and Qinhuangdao International Cruise Port, most of which are targeted to Home Port.

There is one cruise port in Northeast China, that is, Dalian Port International Cruise Center, which will be reconstructed step by step to be Dalian International Cruise Home Port in the future, with its tourists mainly from the three provinces in Northeast China. There is only Tianjin International Cruise Home Port in North China, which is the second largest international cruise home port in China, with its tourists mainly from Beijing and Tianjin. East China is the most concentrated area of cruise ports in China, with seven cruise terminals, and several cruise ports including the largest international cruise home port in Asia-Pacific region, Shanghai Wusongkou International Cruise Terminal, Shanghai Port International Cruise Terminal, Qingdao Cruise Home Port, Zhoushan Archipelago International Cruise Port and Wenzhou International Cruise Port; moreover, Lianyungang and Yantai Port are also actively developing cruise economy. There is only Xiamen International Tourist Pier in Southeast China, which will be transformed into Xiamen International Cruise Home Port in the future. There are two international cruise home ports in South China, Guangzhou Port International Cruise Home Port and Shenzhen China Merchants Shekou International Cruise Home Port. There are two international cruise home ports in the South China Sea, Sanya Phoenix Island International Cruise Terminal and Haikou Xiuying Port. And there are two cruise ports in Southwest China, Fangcheng Port and Beihai International Cruise Port (Table 8).

Table 8 Regional distribution of cruise ports in China
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2.2.2 The Service Level of Cruise Ports Continues to Be Improved

In recent years, in order to accelerate the development of cruise ports and improve service level of ports, many cruise ports have made transformations to enhance their accommodation capacity. The later construction of Shanghai Wusongkou International Cruise Terminal started on June 18, 2015, located at upstream side and downstream side of the existing construction. It was proposed to build a new terminal with a total length of 380 m at upstream section, a new terminal with a total length of 446 m at downstream section, a new approach bridge at downstream side, and a passenger terminal at both sides, so as to ensure that the total area of passenger terminal reaches 79,000 m2. About 80,000 m2 hydraulic architectures will be built and completed in July 2018. After completion, Wusongkou International Cruise Terminal will be able to berth two 150,000 GT cruise ships and two 230,000 GT cruise ships at the same time.

Xiamen International Cruise Home Port launched a project on upgrading and transformation of its berths. This project was located in Dongdu Port Area, covering a shoreline of 1419 m. It was planned to build four berths, including No. 0–2 berths for cruise ships and No. 3 berth for 20,000-ton ro-ro ships. The total investment was expected to exceed CNY 500 million. In the next few years, Xiamen will invest tens of billions of Renminbi in building a new cruise home port. The shoreline length of home port will exceed 1400 m, capable of berthing 3 and 4 medium and large cruise ships at the same time, and berthing 220,000-ton world’s large luxury cruise ships. Over 1000,000 m2 construction are planned to realize synchronous development of “ships, ports and cities”. A new terminal building will be built for Xiamen International Cruise Home Port, which is specially designed for cruise services, including waiting area, customs clearance area, joint inspection area and office area about 50,000 m2. After completion, its annual passenger throughput can reach 800,000 person times, greatly improving customs clearance and waiting conditions.

At present, Guangzhou Port Authority is preparing the Cruise Terminals Planning of Guangzhou Port, in which a cruise port distribution with “main and auxiliary combination” is proposed, that is, to give top priority to the construction of a large cruise terminal in Nansha in the near future, followed by the construction of medium cruise terminals in Huangpu and Panyu in the medium and long term according to the demand for cruise tourism market. Guangzhou has accelerated the construction of Nansha International Cruise Terminal. In November 2017, The project on Nansha Cruise Terminal kicked off. In Phase I, one 225,000 GT cruise berth, one 100,000 GT cruise berth and a 35,000 m2 terminal will be built, with an annual through capacity of 750,000 to one million person times, striving to be completed and put into operation in 2020.

In recent years, Dailian Port has actively advanced the upgrading of hardware facilities of its cruise terminal. Before, Dalian Port has completed the renovation of the cruise waiting hall on F1, Reservoir No. 22, capable of meeting the needs of 3000 tourists for customs clearance, check-in, baggage check-in and waiting. In middle April 2018, Dalian Port further optimized and upgraded this cruise waiting hall. In regard to berth upgrading, Dalian Port had completed the renovation of the 150,000-ton cruise berths at Berth Nos. 10 and 11 in the port area at the end of last year, with the upgrading and renovation of Berth Nos. 8 and 9 being under construction. It is expected that by 2020, Dalian Port will further build a 38,000 m2 international cruise center, with the through capacity reaching 10,000 person times.

2.2.3 The Cruise Ports Continue to Bring Service Innovation

In order to better improve port service experience and raise service level, major cruise ports continue to bring service innovation. In April 2017, Shanghai Wusongkou International Cruise Terminal began trial operation of “Bar Code for Speedy Cruise Customs Clearance”. Firstly, the 144-h visa-free transit policy and 15-day visa-free stay policy was implemented for international cruise tourist groups, so as to simplify the re-entry procedures for Chinese tourists after exit, with the average time of customs clearance being decreased from 15 to 3 s, reaching the world leading level. Shanghai Wusongkou International Cruise Terminal has made great efforts to promote standardized construction. In November 2017, it successfully passed the certification of DNV GL and obtained the certificates of quality management system (QMS), environment management system (EMS), and occupational health and safety assessment series (OHSAS). On December 29, 2017, Shanghai International Cruise Tourism Service Center initiated trial operation of Hongqiao Hub Service Station of “High-speed Rail-Cruise Train”. The system of “online check-in and admission and boarding by ticket (boarding pass)” was comprehensively implemented in Shanghai. Royal Caribbean International, as a pilot company of the Measures for the Implementation of Cruise Ticket System in Shanghai (Trial), tried the ticket system on December 15, 19 and 24, 2017 and scored initial success. Since March 31, 2018, Shanghai Port has fully implemented the system of admission and boarding by ticket, becoming the first port to pilot the cruise ticket system in an all-round way in China. The ticket system plays an important role in further improving the passengers’ boarding experience, strengthening terminal security and emergency handling. To raise berthing and departing punctuality rate of cruise ships, on August 31, 2017, the real cape-size vessels encountering test was carried out at the Yangtze estuary deep-water channel, with “two-way traffic” adopted for large cruise ships and heavy-load freight containers, effectively reducing the delay rate of cruise ships.

To improve tourists’ customs clearance experience, Tianjin, the second largest cruise home port in China, continues to bring policy innovations In March 2017, Tianjin International Cruise Home Port officially opened nine automated channels, becoming the first open port with automated channels in Tianjin and even the entire northern cruise ports. The visa-free policy innovation provides a good opportunity for the inbound tourism development of Tianjin Cruise Home Port. From December 28, 2017, Tianjin International Cruise Home Port officially implemented visa-free transit policy for foreigners who hold international travel documents of 53 countries including Austria, Russia, the United States, Australia and South Korea and joint-way tickets to a third country (region) with date and seat being confirmed within 144 h. On June 25, 2018, Tianjin International Cruise Home Port initiated the new model of “boarding by ticket”, becoming the second pilot port for implementation of cruise ticket system in China after Shanghai Port.

2.3 The Design and Manufacture of Domestic Cruise Ships Are Being Accelerated

Building domestic cruise ships is an important part and key activity for extension of cruise industry chain in China. It can give full play to China’s advantages in shipbuilding on a global scale. To build localized domestic cruise ships and to organize local cruise fleets are important for mastering the dominant power of the world cruise industry. The current world cruise shipbuilding market is monopolized by European cruise builders, mainly including the two major shipbuilding giants, Meyer Werft GmbH and Fincantieri S.p.A. Local shipbuilding enterprises in China continue to advance the exploration of the design and building of domestic luxury cruise ships. Moreover, relevant policies have been continuously issued to support cruise shipbuilding and industrial support funds for cruise design and building have also been continually given to speed up the goal of being “jewel in the crown” in shipbuilding industry, expected to make breakthroughs in the building technology of luxury cruise ships.

China State Shipbuilding Corporation (CSSC) has made great efforts to promote the design and building of domestic large cruise ships. From middle 2012, it began a study on involvement in the building of large cruise ships. In October 2015, it issued a joint declaration on the six-party cooperation in the cruise industry together with Baoshan District, China Investment Corporation (CIC), Lloyd’s Register of Shipping, Carnival Corporation, and Fincantieri S.p.A. In May 2016, CSSC established CSSC Cruise Technology Co., Ltd. by integrating its superior resources in cruise design and building; two months later, it concluded the Joint Venture Agreement on General Contracting for Building Luxury Cruise Ships with Fincantieri. In September 2016, CSSC, CIC, Carnival Corporation and Fincantieri concluded the Letter of Intent for Building 2 + 2 New 133,500-ton Cruise Ships. In February 2017, CSSC signed a memorandum of agreement (MOA) on building of the first domestic large cruise ship in China with Carnival Corporation and Fincantieri. According to the agreement, the cruise shipowner-based joint venture set up by CSSC and Carnival Corporation will order the first batch of 2 + 4 Vista class large luxury cruise ships from the cruise shipbuilding company co-funded by CSSC and Fincantieri to serve Chinese market specially. The first new cruise ship is expected to be delivered in 2023. In February 2018, Guangzhou Shipyard International Company Limited under CSSC and China Shipbuilding Trading Co., Ltd. concluded a contract for building 4 + 2 + 2 ships of 2500-passengers/3765 m-lane luxury cruise ro-ro vessels with Mediterranean Shipping Company (MSC) and MOBY of Onorato Shipping Corporation. The contracted luxury cruise ro-ro vessel is 229.5 m long and 32 m wide with 536 compartments, capable of accommodating 2500 passengers. Its cargo lane is 3765 m long and service speed is about 23.5 knots. It has been classified into Registro Italiano Navale (RINA). This vessel is environmentally friendly, with waste heat recovery system and reserved liquefied natural gas (LNG) as fuel. The first ro-ro vessel will be put into use in 2020. On June 28, 2018, Shanghai Waigaoqiao Shipbuilding Co., Ltd. intended to transfer its 43.4% equity of Cruise Technology to CSSC upon negotiation. After the transfer, CSSC will invest additional CNY 400 million to Cruise Technology and will hold 60.523% of shares, becoming the largest shareholder. CSSC Cruise Technology Co., Ltd. will be built into a cruise business platform of CSSC, responsible for cruise operation and supply chain investment.

China Merchants Industry Holdings Co., Ltd. (CMIH) has launched the design and building of polar adventure cruise ships in Haimen City, Jiangsu Province. On March 16, 2018, the commencement ceremony of polar adventure cruise ships and signing ceremony of the contract for building of No. 2 vessel kicked off at Jiangsu Haimen Shipbuilding Base. It acted as a pioneer in making breakthroughs in the design and building of cruise ships in China and became the first enterprise to officially build its own cruise ships. The polar adventure cruise ship is the first vessel of polar adventure cruise series of CMIH and is also the first cruise ship built independently in China. It is the first vessel in the contract for building of 4 + 6 polar adventure cruise ships concluded between CMIH and Sunstone, and as expected, it will be delivered in August 2019. In the meantime, it leads to the creation of the first supporting industrial park for building of domestic luxury cruise ships in Haimen City, Nantong. China Merchants Heavy Industry Co., Ltd. (CMHI) will also turn to medium and large luxury cruise ships from polar adventure cruise ships step by step. It is expected that the first large luxury cruise ship “made in China” will also be deliverable in 2022. The basic design of Ulstein will be applied in the polar adventure cruise ship. The cruise ship is 104.3 m long and 18.2 m wide, with the design speed being 15.5 knots at least, which is classified into BV Classification Society. It is able to accommodate 254 people, including 160 passengers and 94 crew members, with electric propulsion and advanced control systems. In November, 2017, CMIH and Taihu International Cruise Co., Ltd. signed a framework agreement on cooperation of 2 + 2 luxury cruise ships. In February 2018, CMIH and Shanghai Shitian Cruise concluded the Framework Agreement on Cooperation Project for New Luxury Cruise Ships to carry out the cooperation for building of 1 + 1 + 2 luxury cruise ships. As the “heart” of a cruise ship, the power system features large system capacity, high degree of integration, high technical indexes and high design redundancy. It is the most advanced ship system in the world. In 2018, the high-tech vessel research project of MIIT, the Research on Integration of Power System and Auxiliary System of Cruise Ship and Commissioning Technology, demonstrated and declared by CSSC Marine Power Co., Ltd. (CMP) was approved. At present, this project has been officially launched, marking that CMP has begun its trip of luxury cruise ship “heart”. Following the strategic cooperation agreement on the 70,000-ton luxury cruise project with Wuchang Shipbuilding Industry Group Co., Ltd., Fujian Guohang Ocean Shipping (Group) Co., Ltd. (FGOS) conducted a strategic cooperation with CMIH on the 70,000 GT luxury cruise project. On July 8, 2018, CMIH and FGOS concluded the Cooperation Framework Agreement on Luxury Cruise Project to carry out comprehensive cooperation for the 70,000 GT luxury cruise project. On July 17, 2018, the State-owned Assets Supervision and Administration Commission of the State Council convened a mid-year meeting, proposing to build a platform to develop large cruise ships in a coordinated way in the second half of 2018.

2.4 Relevant Supporting Policies of Cruise Industry Is Being Perfected Step by Step

The cruise industry can drive regional economy greatly. It has strong economy driving capability and industry attractiveness. The national and local departments at all levels have issued a number of policies and measures to promote the development of local cruise tourism, standardize the development of cruise tourism in China, and improve cruise industry chain in China, providing a lot of convenient conditions for the development of cruise industry. In the development process of cruise tourism in China, the healthy and stable development of cruise industry is inseparable from the support of policies. The exploration of policy innovation for new ways to develop cruise tourism has created a good environment for promoting the development of cruise tourism. The massive construction of new cruise home ports in China and the construction of related service infrastructure have also benefited from strong support of the government. The construction of new home ports has enhanced the service capacity and attractiveness of cruise ships, providing a good hardware foundation for regional cruise ships to exert their economic effects. In the Guiding Opinions of the CPC Central Committee and State Council on Supporting Hainan to Deepen Reform and Opening-up in an All-round Way, it is proposed to give support for Hainan to open transnational cruise tourism routes and for Sanya and other cruise ports to develop pilot routes on open seas so as to accelerate the development of Sanya into home port. In December 2017, Weihai City issued the Opinions on the Financial Incentives for Development of International Cruise Tourism Industry mainly for domestic and overseas cruise lines, cruise ports (terminals) operators and shipping agencies that provide cruise services. Since March 31, 2018, Shanghai Port has fully implemented the system of admission and boarding by tickets, becoming the first port in China to pilot cruise ticket system. The requirement for 72-h information declaration is more conductive to protecting the legitimate rights and interests of tourists. In order to better promote the development of cruise economy, in February 2018, Shanghai Baoshao District released the Implementation Opinions on Accelerating the Cruise Economy Development of Baoshan District, mainly giving supports in five aspects including building a headquarter base of cruise enterprises with global influence, constructing a cruise home port with global competitiveness, building a cruise economy development highland of the whole industry chain, promoting city-industry integration and joint development of port and region, so as to provide good support for optimizing the business environment of cruise economy of Baoshao. In April 2018, Guangzhou Municipal People’s Government issued the Notice on the Issuance of the Three-Year Action Plan for the Construction of Guangzhou International Shipping Center (2018–2020) to encourage developing cruise tourism service industry such as cruise design, repair, supply, talent training, cruise tourism insurance, duty-free shopping and so on (Table 9).

Table 9 Supportive policy on cruise industry newly launched in 2017–2018
Full size table

In May 2018, Xiamen Sub-district Management Committee of China (Fujian) Pilot Free-Trade Zone issued the Interim Measures for Promoting the Development of Cruise Supply and Service Industry in Xiamen Pilot Free-Trade Zone, proposing to give 2% of the total value of domestic goods annually delivered to the cruises berthing in Xiamen Free Trade Zone as rewards, with a maximum subsidy of CNY one million per year for each enterprise. In order to promote the development of cruise industry in Nansha and strengthen policy guidance, in May 2018, Guangzhou Nansha District issued the Supporting Measures of Guangzhou Nansha New District (Free-Trade Sub-district) for Promoting the Development of Cruise Industry, proposing to subsidize new cruise lines for their establishment, cruise port (terminal) operators, and cruise organizations. It is made clear that one-time funding support of CNY 500,000 to 5 million shall be given to the cruise lines that are registered in Nansha District with independent legal personality and pay taxes in Nansha. In May 2018, in order to speed up the development of international cruise industry in Haikou, innovate the mode of foreign trade in services, and enhance the level of tourism internationalization, Haikou City issued the Measures for the Implementation of Financial Subsidies of Haikou City to Encourage the Development of Cruise Industry, proposing to give subsidies to cruise lines (or cruise chartering enterprises), cruise port operators and travel agencies that develop cruise business.

3 Analysis on the Dilemma and Problems Cruise Industry in China in 2018

3.1 The Investment in Cultivation of Cruise Tourism Market Needs to Be Increased in China

In the past years, the cruise culture was promoted at a slow pace. Most tourists focused on the onshore tour at the destination and attached too much importance to cost performance of cruise products instead of the essential attribute of the leisure on the ship itself, and they always considered luxury ships as a kind of relatively cost-saving and comfortable maritime means of traffic. It is not easy to convert Chinese cruise tourists’ cognition of cruise tour. In the history of China’s tourism, people always took natural, historical and cultural sceneries as the destination of a trip, especially scenic areas rated above Class A. Cruise tourism, however, is a product of the western culture, and it is hard for Chinese tourists to deeply understand and take it granted that a ship itself is a destination. Therefore, more efforts shall be made to publicize and popularize cruise tourism. Both cruise lines and travel agencies shall undertake the responsibility to popularize cruise culture. Once deeply understanding cruise tour, tourists will obtain higher “cost performance” from such a tour. At present, the cruise culture in China is developing. The market cognition of cruise tour and cruise brands is at a low level. The urgent need is to vigorously publicize and popularize cruise tour and convey information about cruise tour to the public. To expand the cruise market, it is essential to improve the universality of cruise tourism and enable more people to know about, understand and be fond of this mode of outbound tour, which is the key to expand China’s cruise market.

3.2 Cruise Route Is Relatively Single in China, not in Line with Diversified Market Demands

For the moment, restricted by location and revenue management and other factors, there are fewer options for cruise trips departing from China. The lack of options will, to some extent, damage the market attraction and reduce the willingness of existing cruise tourists to take more trips in the future, which is unfavorable for the sustainable and rapid growth of international cruise market. Among outbound cruise routes departing from China, those to Japan and South Korea occupy an important position. More than 95% outbound cruise ships departing from China are to Japan and South Korea. However, the cruise routes between Japan and South Korea are vulnerable to the influence of the political relations between China, Japan and South Korea. Once there is a change in international relations, it will have a greater impact on the development of the cruise market in China. Other destinations currently available are farther from China’s cruise terminals. Such trips will take longer time and higher economic cost of tourists. Thus, China’s cruise market needs to expand the range of operation and explore more cruise routes. Although there are abundant cruise port resources, coastline resources and featured tourism resources, it is difficult to effectively link up with them with cruise tourism. The cruise routes in offshore areas have not yet been developed. At present, the South China Sea route is only at the stage of exploration. Its abundant and unique marine resources have not been fully utilized. In this case, only a small market scale has been formed. The single “Japan-South Korea Route” not only limits the diversified demand choices of Chinese tourists, but also restricts the scale of cruise market in China to a certain extent, and weakens its ability to resist market risks.

3.3 The Standardization and Openness of Cruise Products Sales Market Need to Be Improved

At present, cruise lines have strong ability to select and control the chartering party. However, in a multi-level system, the insufficient management of the end of the sales chain results in low reliability of the sales platform. Once there is a problem in one of the links, there will be disputes. Moreover, the management of downstream retailers from various cruise lines is relatively inadequate, and ticket price and space are almost out of control, which greatly increases the risk coefficient of the entire sales chain system. At present, cruise tickets adopt “futures transactions” rather than “spot transactions”, and tourists can only get tickets before they travel. However, cruise products are different from other commodities. Tourists spend a lot of time and money for preparation. Unavailable travel will cause losses to tourists, and then disputes appear easily. In the redundant cruise distribution links, there is a phenomenon that travel agencies may submit incomplete or untrue tourist information to cruise lines, which is mainly because the information is distorted during its level-by-level transmission or travel agencies provide false information for self-protection. In this case, it is hard for cruise lines to get personal information of tourists in time, with certain loopholes. And it is difficult for cruise lines to contact tourists in time when dealing with problems, being more passive in case of emergencies. According to the Tourism Law, travel agencies operating outbound package tourism products must have the qualification of outbound tourism before they operate and sale products, making the cruise distribution channels “narrow and long”, which is not conductive to the expansion of distribution channels.

3.4 The Development of Inbound Cruise Tourism Is Still Relatively Slow in China

Inbound tourism is given top priority in the tourism industry in China. Its development depends on the construction of good tourist destinations where a good brand image is to be formed to gain attraction. For the moment, the main development pattern of China’s international cruise tourism is that Chinese tourists take luxury cruise ships owned by foreign cruise lines to Japan and South Korea etc., and the number of foreign tourists to China by cruise ship is still few, that is, there are fewer inbound cruise ships to ports in China. With an annual growth rate about 10%, the growth rate of inbound tourism of China had been at a relatively high level between 1996 and 2005. However, it dropped sharply after 2006. There was even a negative growth witnessed for three years in a row from 2012 to 2014. In order to promote the development of inbound cruise tourism, the “144-h visa-free transit policy for Jiangsu, Zhejiang and Shanghai” and the “15-day visa-free stay policy for international cruise tourist groups” were implemented, but the development effect was barely satisfactory. It is proposed to extend the time limits for cruise transit and entry visas further, and even to implement a whole journey visa-free policy for inbound cruise tourism. For example, maybe tourists who enter China by air and then tour by cruise ship could be regarded as only entering China once. In addition, although there are abundant tourism resources in Shanghai and its neighboring regions, the lack of comprehensive integration brings about the lack of mature cruise destinations, so Shanghai is not that attractive to inbound cruise tourists.

3.5 The Economic Contribution of Cruise Industry in China Needs to Be Improved

During the development of international cruise tourism in China, foreign cruise lines play an important leading role in the cruise market, and are a part of the most profitable links in cruise industry chain of China. The main revenue sources include cruise ticket sales, tourists’ consumption on board and at destination, and so on. The majority of the revenue finally gets to the headquarters of foreign cruise lines. At present, China is engaged in only a few profiting segments in the international cruise tourism and the profitability is weak. Most operation revenues are from berthing fees of cruise terminals, fees related to cruise ship provisioning, price spread of travel agencies, etc., at a relatively low level in comparison with revenues of international cruise lines. The berthing fee and service package fee have a relatively high proportion in the total operating revenue, while other related supporting businesses of cruise ports bring in money at a lower level due to their underdevelopment. In the midstream and upstream of cruise industry chain in China, cruise design, manufacture, maintenance and other links have not yet made significant breakthroughs. They are in urgent need of a greater degree of policy innovation and financial support. The cruise enterprise headquarters economy has not yet reached a larger scale, and the development of the cruise industry chain is still in its infancy. The local cruise brand SkySea Cruises will also withdraw from the Chinese market in September 2018. Without the cruise fleet operation capability, local cruise route products and an operation team, tourists’ robust demand for domestic cruise tourism is difficult to satisfy. Furthermore, the local cruise tourism for coastal zone tourism resources has not been developed. The structural imbalance of cruise tourism demand and supply is outstanding. The pressure facing the development of local cruise brands is great, resulting that their local economic contribution is also at a low level.

4 Analysis on the Development Trend of Cruise Industry in China in 2018

4.1 High-Quality Cruise Products Are Becoming the Mainstream of Market Development

China’s economy is changing from high-speed development to high-quality development. New and old kinetic energy conversion, supply-side reform deepening, and continuous consumption upgrading have brought about industrial structure upgrading and life quality upgrading, and forced leisure tourism quality to be upgraded. Cruise tourism is just one of the typical upgraded tourism products. From the perspective of the entire tourism industry, the tourism industry in China is no longer developing a single format business. Diversified and trans-boundary development has become the main theme of various business formats. Personalized and high-quality products have become the focus of tourism enterprises. With the continuous increase of China’s per capita wealth and the day-by-day growth of middle class, people become more demanding for the content and quality of leisure tourism, a representative for spiritual and cultural consumption in China. Therefore, making life better will also lead and promote the upgrading of China’s fourth consumption structure. High-quality development has become the theme of our time. Cruise tourism should also adapt to such changes. The development of high-quality products shall be accelerated to better satisfy people’s needs for a better life. Cruise tourism services are intangible. Cruise products are tangible. They jointly determine the core competitiveness of international cruise enterprises. They are also an extremely important “supply side”. To continuously promote the upgrading of cruise products, Norwegian Cruise Line’s “Joy” launched the concept of “First Class at Sea”; Royal Caribbean International made every effort to create the concept of “Luxury Mansion on the Sea”, and MSC Cruises launched the concept of “Yacht in Ship”. Even if travel agencies have powerful channels, its image and benefits will be greatly ruined and reduced if there is no high service quality and excellent cruise tourism products. With the rapid development of cruise tourism, there are more and more online and offline cruise tourism service agencies, developing many tourism products. It seems that there are many kinds and patterns of products, but the homogenization of products is serious and the tourism experience is less satisfactory. Simple duplication and price competition have become useful strategies for competing for customers. Therefore, high quality of cruise products has become the mainstream of market development and a treasured trick to enhance the competitiveness in the cruise market and the attractiveness of the brand.

4.2 The Extension of Various Sectors of the Cruise Industry Chain Will Be Gradually Accelerated

From the perspective of supply side, the international cruise industry chain basically consists of three links: The first one is the design and building of cruise ships (In this link, the core of the cruise design is to grasp and reflect the Western noble culture, and the focus of building includes luxuriousness, comfort and safety); the second is the operation of cruise ships (Cruise lines are capital-intensive enterprises, and they adopt international operation. They are reflectors of economic globalization.); the third is the supporting construction of the terminal area, including the construction of cruise terminals, supporting facilities in port areas and other related infrastructures. From the perspective of international experience, with its development, the cruise tourism can naturally form an interdependent industry chain. Unlike other industries, cruise tourism is not a single industry but an industrial cluster composed of multiple industries with diversity and compositeness. From the perspective of international experience, with its development, the cruise tourism can naturally form an interdependent industry chain. Currently, China is in a period when its economy is transforming from rapid growth to high-quality growth. It is a strategic opportunity period for the transformation and upgrading of the industry. The cruise industry is a part with relatively rapid growth and higher added value in the tourism industry, including cruise design and building, cruise operation, cruise port operation and related supporting industries and service industries. Its combination with the industry chain is an effective way to improve the economic benefits of the cruise industry.

In the upstream of cruise industry chain, large luxury cruise ships are hailed worldwide as “the jewel on the crown of shipbuilding industry” in the field of civil shipbuilding. They are higher-tech than airplanes. There are many kinds of mechanical and electrical equipment and various devices with advanced performance installed on board. Their satellite navigation systems, environmental protection systems, and sea water desalination systems, etc. represent today’s cutting-edge technology in the world. CSSC has vigorously promoted the building of large domestic cruise ships, and CSSC Cruise Technology will be built into a cruise business platform of CSSC in June 2018, responsible for cruise operation and supply chain investment etc. In March 2018, CMHI (Jiangsu) held a commencement ceremony for building of polar adventure cruise ships, opening a new era of domestic cruise ships for polar adventure.

In the midstream of cruise industry chain, China currently attracts and gathers a number of internationally renowned cruise lines such as Royal Caribbean International, Costa Crociere S.p.A, Norwegian Cruise Line, MSC Cruises, Princess Cruises, Star Cruises, Viking Cruises, etc. Some cruise lines have settled in Baoshan, Shanghai, including Costa Crociere Cruise Ship Management Company, MSC Cruise Ship Management Company, SkySea Holding International Ltd. and Taihu Cruises. Baoshan has successfully introduced more than 50 cruise enterprises, and the “cruise lines headquarters economy” has gradually become prominent. At present, among Chinese-funded cruise brands, there are cruise ships such as “Golden Era” registered in Malta, Bohai Cruises’ “Chinese Taishan” registered in Panama, Diamond Cruise International’s “Glory Sea” registered in the Bahamas. In terms of building local cruise brands, CSSC, CIC and Carnival Corporation have established a joint venture “CSSC Carnival Cruise Lines” to create the first world-class domestic cruise brand in China. China Merchants Shekou Holdings and Carnival Corporation signed a memorandum of cooperation to co-fund a shipping company, and Carnival Corporation and China Merchants Group will jointly create the first Chinese cruise brand that specializes in serving the Chinese market and owns and operates cruise products independently.

In the downstream of cruise industry chain, there is a need to further upgrade the cruise service, improve the capacity of serving for national strategies, optimize the cruise service supply, raise the supply quality, perfect the supporting facilities, enhance the satisfaction of the cruise service objects, refine the function layout of cruise port areas and surrounding regions, and better tourists’ experience of centralization of food, accommodation, transportation, travel, shopping and entertainment. For example, Shanghai is speeding up the development of the entire cruise industry chain by establishing a supporting industry platform for cruise ship manufacturing, a public platform for cruise ticket sales, an allocation and distribution platform for cruise supply, and a commercial service platform for cruise tourism. Through establishing platforms, the radiation capacity of cruise services will be improved. The agglomeration development of the cruise service industry is to be promoted by optimizing the cruise economy business environment.

4.3 The Reception Capacity of Cruise Ports in China Will Be Further Enhanced

In terms of international cruise ports, coastal cities in China have established international cruise ports or reconstructed existing freight terminals one after another to gain the ability of berthing international cruise ships. At present, there are 15 cruise ports in China, including eight cruise terminals. At present, there are eight cruise terminals in China, including Shanghai Wusongkou International Cruise Terminal, Shanghai Port International Cruise Terminal, Tianjin International Cruise Home Port, Qingdao Cruise Home Port, China Merchants Shenzhen Shekou International Cruise Home Port, Sanya Phoenix Island International Cruise Terminal, Zhoushan Archipelago International Cruise Port, Xiamen International Cruise Center, etc. International cruise terminals have been built in cities such as Tianjin, Dalian in North China, Qingdao, Yantai, Shanghai and Zhoushan in East China, Xiamen and Fuzhou in Southeast China, and large-scale international cruise terminals have been built in cities such as Guangzhou, Shenzhen, Sanya and Haikou in South China. Furthermore, the construction of international cruise terminals in Beihai, Guangxi in Southwest China has also begun. Most cruise terminals are oriented as international cruise home ports, with related services carried out actively, leading to an obvious trend of homogenization. At present, the construction and planning of international cruise terminals are mostly implemented by local governments and enterprises independently. They didn’t take the national situation into consideration, resulting in a large number of idle cruise ports and poor profitability. It is expected to achieve the coordinated development between the cruise home ports and the visiting ports during the development of international cruise ports so as to further improve the overall planning level of cruise ports.

4.4 The Cruise Market Distribution Mode in China Will Be Further Innovated

Compared with the US market, the revisiting rate in Chinese market is relatively low. In the US market, 80% of tourists will take the cruise again. While in China, the revisiting rate probably should be around 15%, which means that 85% of tourists are taking cruise ships for the first time. I believe there are many reasons. Firstly, China is an emerging cruise market. Secondly, the itinerary is relatively monotonous, mainly focusing on four-night or five-night Japan-South Korean cruise products, which also leads to a decrease in revisiting rate. Another important reason is that cruise vacation is still a new way for people to spend their holidays in China, not as a way of life as the United States or Europe. At present, the cruise market in China is dominated by wholesales, featuring chartering mode. In fact, the chartering mode is only a phenomenon, the substantive problem lies in that Chinese market is a team market rather than a FIT market compared with the US market. There are so many levels in current sales model that getting information to the end consumers is actually much more difficult than FIT model of overseas fleet. New opportunities will be brought to the cruise industry in this digital age. Online bookings, official flagship stores and on-board Alipay consumption have also become the priority of cruise lines in 2018. In fact, more and more tourists will make reservations on the mobile phone or on the Internet. According to incomplete statistics, 70% of tourists currently book their tickets online and 30% of them book their tickets through the traditional travel agency, and this proportion will be decreasing. We firstly encourage advance booking, which helps to raise prices. Besides, we will provide real-time booking information for revenue management and pricing. Full communication with tourists is also quite necessary. In the process of communication, their experience of cruise products can be enhanced so as to optimize our profit margin and increase repurchase rate. In addition to the changes in consumers, another big change in China lies in the development of digitalization, such as digital payment, which can be said to be incomparable with other countries in the world. Therefore, the products we offered must conform to the new lifestyle and must meet the needs and challenges of the growing new middle class of China.

5 Suggestions on Promoting the Deepening Development of Cruise Industry in China

5.1 Investments in the Cultivation of Cruise Tourism Market in China Should Be Increased

Firstly, the publicity of cruise culture should be strengthened, including: intensifying the publicity of public media, encouraging the publicity of cruise culture in various public channels and platforms, and supporting the setting up of cruise columns in radio, television, newspapers, magazines, the Internet and other media channels, as well as the production of a series of public service announcements on cruise culture, and cruise-themed film and television works; strengthening the integration of industry communication channels and resources, promoting cooperation with railways, airlines, star-rated hotels and other units, and intensifying precision marketing promotion; providing financial support for hosting or participating in major domestic and international tourism exhibitions and cruise-themed festivals.

Secondly, the development of cruise tourist market in mainland China should be support, including: encouraging cruise lines and agencies to develop cruise tourist market in mainland China, support to establish a joint-way and collaboration mechanism for the airlines and railways in Shanghai, and advancing the orderly development of “cruise + aviation”, “cruise + railway”, “cruise + interprovincial bus” and other “other+” in order to provide tourists with more convenient transportation conditions; asking the government departments at all levels for issuance of relevant policies to encourage and support cruise lines and agencies to cultivate and developing tourists market from overseas and other provinces and cities.

Thirdly, the social influence of important cruise festivals should be enhanced, including: increasing the support for important cruise featured brand activities to further improve the social visibility and influence of Shanghai Cruise Tourism Festival and other activities that promote cruise culture communication; continuing to give full play to Shanghai’s influence and resource advantages in the Asia-Pacific cruise market and striving for a permanent presence of cruise-related conferences with greater international influence in Shanghai, such as Seatrade Asia Pacific Cruise Congress, so as to enhance its engagement in international cruise economic cooperation and competition.

Fourthly, the development of local cruise brands should be supported, including: highlighting the building of local cruise ships, supporting the development of associated industrial park of CSSC Cruises and improving the supporting system for building of cruise industry; actively calling for the issuance of special policies to support the development of local cruise brands from the national ministries and commissions, for low interest and discounts and preferential taxes and fees for the purchase of cruise ships, for the establishment of a special life limit system for mandatory scrapping of cruise, for the release of nationality restrictions on the crews of local cruises, and for the operation of inland and offshore routes for local cruises; Combine the basic development sources of China and Shanghai and the policy orientation of cruise industry in China and Shanghai to gather global superior resources and give full play to local innovation advantages of Shanghai, accelerate the organization of local cruise fleets and give priority support to the building of local cruise brand; Exert the policy and capital advantages of Shanghai in promoting the building of domestic cruise ships, and facilitate the building of local luxury cruise ships and master its own intellectual property rights.

5.2 The Well-Ordered and Competitive Development of Cruise Tourism Market in Shanghai Should Be Accelerated

Firstly, the supervision of the cruise tourism market should be strengthened. We should strengthen the supervision and management of related institutions operating cruise tourism products to ensure an orderly development of product sales channels; incorporate the sales of cruise tourism products into Shanghai tourism industry management and integrity construction system for implementation of blacklist system; establish a regular mechanism of joint law enforcement among all departments and conference, to crack down on illegal space retention and other acts that disrupt the healthy development of the cruise market.

Secondly, support should be provided for building a cruise ticket management platform. We should implement the pilot tasks of ticketing system of the Ministry of Transport in an all-round way, and establish a public cruise ticket management platform with supervision and service functions such as certification and inquiry; research and establish a mechanism for the admission, evaluation, punishment and withdrawal of a ticket sales agent based on the management system.

Thirdly, cruise ticket control mechanism should be perfected. We should require cruise lines to establish an admission system and a supervision system for ticket sales agencies to specify their ranks and standards and carry out rating, registration, certification, assessment and supervision to authorized agencies, and grant high-ranking ones the right to issue tickets; encourage cruise lines to establish a management and control mechanism of ticket information, and improve the ticket refund & change system.

Fourthly, cruise lines should be encouraged to develop direct selling model. We should encourage cruise lines and their sales agencies to explore the distribution models of direct selling and retailing in line with the characteristics of cruise market in China and to develop boutique onshore routes for cruise tourism; allow cruise lines to sell cruise tourism related service products provided by other qualified enterprises on their sales platforms.

5.3 Favorable Conditions for the Growth of Inbound Cruise Tourism Should Be Provided

Firstly, building destinations of cruise tourism. Having nearly 50% of the global cruise destinations, the United States remains the world’s largest cruise destination. To build China’s cruise destinations, we need to compare domestic cruise cities with international cruise destinations, in order to identify our strengths and weaknesses. We should effectively integrate tourism resources to speed up the development of cruise destinations; enhance advertising for cruise cities around China to build attractive international brands as cruise tourism destinations; and to facilitate a unique development mode featuring “air-to-water linkage” and “water-to-water linkage”. With the help of domestic and foreign tourism promotion conferences and exhibitions, we should make more efforts to advertise Shanghai cruise tourism to the world. For example, Shanghai could grasp the historical opportunity for vigorously promoting the integration of tourism in the Yangtze River Delta, and leverage this region’s advantages such as rich tourism resources, convenient transportation, developed economy and preferential policies, in order to push forward the development of inbound cruise tourism and increase tourism consumption, making greater contribution to cruise economy.

Secondly, we should make greater efforts to promote China’s cruise tourism to the world. Cruise cities where preferential policies (such as 144-h visa-free transit and 15-day visa-free entry for international cruise tour group) are implemented should take the advantageous opportunity to attract international tourists to China by cruise ships. We should explore possible incentives for international cruise lines and foreign travel agencies who constantly organize foreign tourists for inbound tourism, and optimize favorable policies to further ease transfer at Shanghai Port for international guests, so as to nurture the growth of the cruise inbound tourism market.

Thirdly, we should offer better tourist service. We should, in accordance with the all-for-one tourism concept and the standards of international cruise tourism services, comprehensively improve the infrastructure of cruise tourism, optimize short-distance service at cruise ports, make transportation to the port more convenient, improve the facilities in the cruise port area, and enhance customer experience at the port. Additionally, we should ensure more efficient cooperation among the departments at the cruise port, promote innovations in the customs clearance system and model of the cruise port, and comprehensively promote the general application of advanced technologies, such as face recognition, to reach higher clearance efficiency. We should try to expand the coverage of the 144-h visa-free transit policy and the activity area for visa-exempted international cruise tour groups.

5.4 Policies that Are Conducive to the Development of New Cruise Routes Should Be Applied

We should apply to competent national ministries and commissions for favorable policies and incentives to create new cruise routes, especially long-distance routes; develop multi-port routes starting from Shanghai, and multi-destination routes involving Hong Kong, Macao, Taiwan and overseas ports; strengthen cooperation with foreign port cities to promote the development of multi-country multi-home-port cruise routes running with regularly scheduled cruise ships; and with necessary conditions, try to create destination-free cruise routes and routes to surrounding islands. We should continue to deepen the implementation of policies for “multi-port call” and routes involving Hong Kong and Macao; and try to change the current operation-after-approval system to operation-after-filing system. We should actively promote the development of “marine + river” cruise tourism by encouraging interaction between Shanghai cruise tourism and the upper-end aquatic tourism of cities along Yangtze River and in Yangtze River sub-region; explore and establish cruise routes covering the middle and lower reaches of the Yangtze River; and actively develop the tourism products combining marine and river transportation.