New cruise economy sets sail

The plans for upscale cruise terminals are being shaped by the commercial success of duty-free shops at key airports, such as Shanghai Pudong International, fueled by a constantly growing number of international travelers with strong spending power.

The airport said in its earnings report that income growth outside the aviation sector mainly comes from the growth of duty-free retail. Tourists spend not just on hotels, local travel, food and shopping at malls and other areas but also at airports.

China is the world's No 1 outbound tourism market. According to the United Nations World Tourism Organization, the country's 142 million outbound travelers spent an estimated $258 billion (226 billion euros; ￡203 billion) traveling abroad last year.

If they are encouraged to spend at home as well, and if more Chinese people begin traveling, then new attractions such as cruise trips and modern terminals at ports could prove to be a big draw.

Consequently, Shanghai will encourage cruise operators and third-party agencies to further develop the domestic cruise markets. Efforts are underway to introduce links between cruise lines, airlines, trains and buses to enable multimodal transport for travelers.

In addition, the city will promote cruises at airports, train stations and other places with large passenger flows.

At the corporate level, CSSC Carnival Cruise Shipping, the China-based joint-venture cruise line, will be operating its own fleet to serve Chinese guests by the end of 2019.

It announced an agreement to purchase two existing ships from Carnival Corp's Costa Group, a major cruise operator in Europe and Asia.

The first of these ships, Costa Atlantica, is scheduled to be transferred to the new Chinese cruise line by the end of 2019.

Currently, Costa Atlantica mainly sails from southern China seaports like Shenzhen to Southeast Asian countries such as Vietnam and the Philippines. Its sister ship, Costa Mediterranea, will be transferred at a later date, according to the company.

Moreover, the joint venture signed a contract for two new cruise ships, the first in a China-built large cruise fleet.

The two new cruise ships will be built by Shanghai Waigaoqiao Shipbuilding Co, a State-owned shipyard in Shanghai. The first vessel is expected to be delivered in 2023 to serve the Chinese cruise market.

The agreement also gives the joint venture the option to order four additional China-built cruise ships to serve the growing demand of Chinese consumers.

Thamm of Carnival Asia said: "As a large, dynamic and underpenetrated cruise market with continued long-term projections for outbound tourism growth, China represents a significant opportunity for the cruise industry to raise awareness, consideration and demand for cruise vacations in the coming years."

But the cruise industry in China faces a significant hiring challenge in the face of growing demand. By 2020, the talent gap in the sector will reach 280,000, according to the Cruise Lines International Association.

MSC Cruises, one of the major cruise lines with a dominant market share in Europe, South America and South Africa, entered the China market in 2010. The company said it needs 32,000 new crew members, including entry-level employees and midlevel managers by 2022.