The Chinese Market Continues To Grow – Other Cruise News: Classic International Fleet Totally Immobilized – FCCA Counts $2 Billion Caribbean Cruise Impact

by Kevin Griffin
A report from China last week indicated that the Chinese cruise market continues to develop, not only with the big lines like Costa and Royal Caribbean but also with new local operations, two of them by members of the origjnal Royal Caribbean trio. Meanwhile, with the arrest in Crete last week of the Princess Daphne, all five Classic International ships have now been brought to a halt. And charterer of the Princess Danae, French-based NDS Voyages, also ceased trading last week. Meanwhile, Germany’s Ambiente Cruises, which had charters on both Princess Daphne and Athena for the summer of 2013, has announced that it is seeking a new cruise partner. Finally, according to a study completed for the FCCA the Caribbean cruise market generated almost $2 billion for local economies in 2011-12. But the surprising news is that the ships’ crews spent more in the Caribbean that the cruise lines did themselves!

THIS WEEK’S STORY

The Chinese Market Continues To Grow

The China Cruise and Yacht Industry Association (CCYIA), a nationwide non-for-profit organisation established in 2006 has announced that more Chinese are now spending their holidays on board cruise ships. It also announced that 262 international cruise ships had called in China in 2011, a 17.5% increase on 2010.

To date, the Chinese cruise market is mostly supplied by foreign cruise lines with larger ships, including Royal Caribbean International, Costa Cruises and Star Cruises as well as many calls by other lines.

Statistics indicate that 709,000 Chinese cruised abroad in 2010 – the 2011 figure is seemingly not yet available. This compares to f 500,000 for Australia, a country with a population of 22.6 million. China has about sixty times the population but it is only now that a burgeoning Chinese middle class is starting to take to the water in cruise ships.

Shangai

In order to attract more Chinese cruisers, operators are adding a number of Chinese features to their ships. Royal Caribbean now offers Chinese-language service and Chinese menus, as well as stocking merchandise and brands that are favoured by Chinese consumers in its on-board shops, while Costa, the first Western cruise operator to enter China, in 2006, offers Chinese menus and Chinese-speaking staff on its ships.

Western ships now carry Sichuan, Shanghai and Guangdong cuisine, and also feature karaoke, a favourite not only of Asians, but also of many Westerners these days. And MSC Cruises is even offering a Chinese New Year cruise for Chinese passengers.

Meanwhile, on the ship side, Royal Caribbean will introduce the 3,114-berth Mariner of the Seas in 2013, in addition to sister ship Voyager of the Seas, that made her Chinese debut this year, while Costa is adding a second cruise ship to serve the China market with its 2,112-berth Costa Atlantica.

A number of medium-sized and smaller cruise ships are also opening routes from China to cities in Japan, South Korea and Southeast Asia and among these is the first Chinese-owned cruise ship. The China Cruise Company’s upmarket 200-berth China Star, once well-regarded as the Radisson Diamond, has begun operating 4- and 5-day cruises from Hong Kong and from Zhoushan, her home port in Zhejiang Province.

P&O Cruises’ former 1,480-berth Pacific Sun has meanwhile been acquired by HNA Tourism and, renamed Henna, and will soon be cruising from Sanya and Tianjin to South Korea and Vietnam, reportedly under the management of Star Cruises.

A third such ship is the Oriental Dragon, originally the Sun Viking of Royal Caribbean Cruises, which has been operating from Shanghai for over a year now. This ship has been in Far East waters since 1998, sailing under a variety of names, first for Star Cruises and then for other operators.

Taipei - Taiwan

Across the Taiwan Strait, the cruise trade has also been picking up.
There, Asia Star Cruises started operation this July using the Royal Caribbean’s original Song of Norway. Once a sister ship of the Oriental Dragon, the 1,200-berth vessel has been renamed Formosa Queen to operate cruises from Keelung around the island calling at the ports of Hualien, Kaohsiung and Taichun.

Star Cruises’ 1,529-berth Superstar Aquarius has also been operating from Keelung to Okinawa and Ishigakijima for some years now.

And in future, as reported by The Cruise Examiner a year ago now, the Xiamen Shipbuilding Industry Co Ltd may be about to build China’s first major cruise ship, a $490 million vessel of 100,000 tons and 2,000 berths to be delivered in 2018. The ship will reportedly be named either China Xiamen or Mazu, reports from China on this subject seeming to differ.

OTHER CRUISE NEWS

Classic International Fleet Totally Immobilized

Princess Daphne chartered to Ambiente Kreuzfahrten

Princess Daphne chartered to Ambiente Kreuzfahrten

After the mid-September arrests of the Athena and Princess Danae in Marseilles and the Arion in Kotor, and with the Funchal laid up in Lisbon, the last operating ship in the fleet of Classic International Cruises was finally arrested in Crete last week, putting an end to the operations of Classic International Cruises.

For more than a fortnight after the arrest of the other three ships, Princess Daphne had managed to continue operating her cruise for Ambiente Kreuzfahrten through the Canary Islands and Spain and got as far as Greece before she too was halted.

Ambiente Kreuzfahrten of Berlin, which had had the Princess Daphne under charter since April, immediately announced that it was terminating its relationship with Classic International. This included not only the charter on the Princess Daphne but future charters on both Princess Daphne and Athena in the summer of 2013.

Princess Danae

Princess Danae

In the meantime, after failing to come to an arrangement to get the ship to Istanbul, its final scheduled destination, it ended up flying the 189 passengers concerned home from Crete, also giving them a pro rata refund for the last part of the cruise that was missed.

Reports in September from Portugal indicated that Classic’s bankers Montepio had stated that it would stop funding the company and it would not see out its 2012 season. Whether other banks might also be involved is not known but one of Classic’s companies at one point also had a relationship with Hamburg-based HSH Nordbank, which has interests in shipping.

Since the death of Classic International Cruises founder George Potamianos on May 29, the business has been managed by his sons Alexandros and Emilios.

After the initial ship arrests, came a report from Paris that Terre Entière had actually had its charter for two cruises out of Nice on Arion terminated by text message. A week later, NDS Voyages of France, founded in 1872, and charterer of the Princess Danae, and a company in which Classic International had an interest, announced that it had ceased trading, and stated that all future cruises on the Princess Danae, including its 127-day 2013 world cruise, had been cancelled.

A French court will make a ruling this Thursday on whether the company should be liquidated.

Athena - Ex Valtur Prima, ex Italia Prima, ex Caribe

Athena - Ex Valtur Prima, ex Italia Prima, ex Caribe

Down in Australia, Classic International Cruises’ local office seems to think that the Athena will be freed and it will operate the winter season that is still scheduled from Fremantle. More likely, if they can find any backers at all, another ship would have to be substituted for the Athena, which remains under arrest in Marseilles. But even that outcome seems unlikely in the circumstances, even in Australia where the cruise market grew by a quarter last year.

It seems that the arrest of the Princess Daphne will bring an end to thirty-five years of cruising under the Portuguese flag, something that Classic’s predecessors started with the Funchal in 1977, operating out of Gothenburg for Stena Line and later for its own account. The Funchal has been laid up in Lisbon in recent months, undergoing on-again off-again repairs and updating to the latest Safety of Life at Sea standards.

And to add to the ignomy of it all, the Arion managed to achieve the worst score among the small ship category in the latest issue of the Berlitz Complete Guide to Cruising & Cruise Ships, just released.

Funchal - Photo D.R.Carneiro

Funchal - Photo D.R.Carneiro

Ambiente, meanwhile, has announced that it is in the market for a new partner. Likely candidates include International Shipping Partners, who have available the 800-berth Gemini; Majestic International Cruises, whose 780-berth Ocean Countess is about to be replaced by the Discovery with Cruise & Maruitime Voyages; or possibly Louis Cruises, whose 486–berth Calypso is laid up in Greek waters.

A fourth ship well-known in Germany is the Restis-controlled 650–berth Aegean Paradise, once Delphin Voyager, which has been trading recently on charter to Turkish operator Etstur, and is now laid up at Perama, her summer season having ended on September 28.

FCCA Counts $2 Billion Caribbean Cruise Impact

The Florida-Caribbean Cruise Association (FCCA) in a report conducted by the Business Research and Economic Advisors (BREA) announced last week that regional cruise tourism in 2011-2012 generated more than $1.9 billion in direct expenditures, creating 45,000 jobs and $728 million in wages among twenty-one destinations in the Caribbean.

If we compare this with the European Cruise Council’s report of 2012, the impact of the cruise industry in Europe was about $48 billion in goods and services and employment for more than 315,000. Of course, in its mix, Europe has nearly all the shipyards that build cruise ships, plus the marine suppliers and more cruise lines than even North America.

Interesting too is the fact that $2 billion is about the same figure that cruising is estimated to be bringing to the Australian economy now.

Santo Domingo - Plaza Colòn - Photo Stefano Fermi

BREA-surveyed destinations included Antigua, Aruba, the Bahamas, Barbados, Belize, the British Virgin Islands, the Cayman Islands, Colombia, Costa Rica, Curacao, Dominica, the Dominican Republic, Grenada, Honduras, Nicaragua, San Juan, St Kitts, St Maarten, St Vincent, the Turks and Caicos and the US Virgin Islands.

The report found that 15.4 million cruise passengers spent close to $1.5 billion in these twenty-one destinations, with passenger expenditures ranging from $27.10 per head in St Vincent and the Grenadines to $185.40 in St Maarten, and averaging $95.92 overall.

Just over half of passengers bought shore excursions, generating $270 million in payments to tour operators. Other purchases include $583 million on watches and jewellery, $158 million on clothing, $106 million on food and beverages and $87 million on crafts and souvenirs.

In addition, some 2.7 million crew visits resulted in a spend of over $261 million, ranging from $21.40 per head in St Vincent and the Grenadines to $138.30 in the US Virgin Islands, and averaging $96.98 overall – marginally more per head than was spent by passengers, although crew accounted for just 15% of the total number of shore visits.

The cruise lines also reportedly spent almost $250 million in port fees and taxes, utilities, navigation services and supplies. It is interesting to see here that the ships’ crews actually made a bigger contribution to the Caribbean economy than cruise line direct spending!

(Kevin Griffin is managing director of specialist cruise agency The Cruise People Ltd in London, England. For further information concerning cruises mentioned in this article readers can visit his blog)

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