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Industry Updates September Issue INDUSTRY UPDATES Presented by: 5 – 7 December 2018 Guangzhou, China http://www.maritimeshows.com/china/ News 1. Cruise industry's growth buoyant .............................................................................................. 2 2. Shipbuilders may shift focus to cruise market ......................................................................... 3 3. Cruise travel rides wave of growth in China ............................................................................ 4 4. China State Shipbuilding to build 5 luxury cruise liners with Italian partner ....................... 5 INMEX China @ Guangzhou ................................................................................ 6 1 http://www.maritimeshows.com/china/ Page September Issue 1. Cruise industry's growth buoyant By ChinaDaily Posted on September 23, 2017 This undated photo shows the Norwegian Joy, the largest cruise ship in the Asia-Pacific region was built in Germany. The 'Breakaway Plus' class cruise ship was designed specifically for the Chinese market.[Photo/VCG] The explosive growth of China's middle class is driving growth in the cruise business, making China the world's second largest cruise market by number of passengers after the United States. Experts and business insiders say a golden age for the cruise industry is coming with more Chinese people willing to pay for ocean views, onboard entertainment and exploration to lands nearby and distant. The number of trips by cruise ship travelers leaving from Chinese home ports reached nearly 4.3 million in 2016, nearly double that of a year ago. At the same time, Shanghai has become Asia's largest cruise port city, according to the 2016-2017 China Cruise Industry Development Report published on Friday. The annual report, often called the white paper of China's cruise industry, is jointly published by China Cruise & Yacht Industry Association under the direction of the National Development and Reform Commission, Asia Cruise Academy at Shanghai Maritime University and the China Ports& Harbors Association. In 2016, China's 11 major cruise ports served as home ports for 927 cruise ships, representing year- on-year growth of 72 percent. Passenger trips from Chinese home ports surged 93 percent to 4.29 million. "The year 2017 is going to be a turning point for China's cruise industry, which entered its golden decade starting this year," said Zheng Weihang, executive vice-president of China Cruise & Yacht Industry Association. Cheng Juehao, deputy secretary-general of CCYIA and a professor at Shanghai Maritime University, said that in the past 10 years, China has nurtured the cruise industry, which has gained global strategic influence thanks to the rising spending power of Chinese consumers. The first made-in-China cruise ship is being built at Waigaoqiao, Shanghai, by a joint venture of the China State Shipbuilding Corp and Italy's Fincantieri SpA, the world's largest builder of cruise ships. It will be delivered in 2023, followed by a delivery rate of one vessel per year between 2024 and 2028. Shanghai has outperformed other port cities in attracting capital and passengers. In 2016, Shanghai's Wusongkou Cruise Port, the busiest in Asia, welcomed 471 cruise ships, up from 60 vessels in 2012. Wang Younong, chairman of Shanghai Wusongkou International Cruise Terminal Development Co, recently told China Daily that the port is aiming to handle up to 5 million passenger trips by 2023, from 2.85 million from last year. 2 http://www.maritimeshows.com/china/ Page September Issue The growing capacity of China's cruise market has also attracted global cruise companies to increase their stake here. Princess Cruises, which is part of Carnival Corporation & plc, this year debuted the cruise ship Majestic Princess, which is specially tailored for the China market, with its home port in Shanghai. 2. Shipbuilders may shift focus to cruise market By ChinaDaily Posted on September 1, 2017 Chinese shipbuilders are becoming more interested in the cruise liner market, as cruise shipbuilding accounted for 43 percent of global new shipbuilding orders last year, sources said. Fu Chunhong, vice-chairman of the Chinese organizing committee of Marintec China, said: "In addition to China State Shipbuilding Corp, quite a few other Chinese shipbuilders such as China Shipbuilding Industry Corporation and China Merchants Heavy Industry, are proactive in cruise liner building." China's first domestically manufactured cruise liner will be delivered in 2023, followed by a delivery rate of one vessel per year between 2024 and 2028. The cruise liners will be constructed at Waigaoqiao Shipbuilding Co Ltd, a company controlled by CSSC. At a time when international shipbuilding, offshore equipment and related markets continue to weaken, major shipyards are wrestling with difficulties in securing new orders and delivering vessels. In contrast, the cruise sector remains sound. "Last year, new cruise liners accounted for 43 percent of total global new shipbuilding orders, and nearly 40 percent of new ship orders are cruise vessels so far this year," said Fu. Michael Duck, executive vice-president of UBM Asia, said from 2017 to 2026, the world's cruise shipbuilding industry was expected to produce 97 new cruise ships with investment totaling $53 billion, more than twice the figure a decade ago, according to Cruise Lines International Association (CLIA) data. This prospect will provide unprecedented opportunities for Chinese shipbuilders that are ready to shift their focus to cruise vessel manufacturing, considering the limited capacity of European shipyards. Last year, as many as two million Chinese passengers travelled by cruise liners, representing 9 percent of global total cruise passengers, said Fu. Developing the cruise industry has been included into the new economic planning of several coastal cities in China, as the sector is able to drive the growth of many related industries, including shipbuilding, port services, logistics, transport, sightseeing, catering, shopping and insurance. 3 http://www.maritimeshows.com/china/ Page September Issue "What should be kept in mind is that Chinese shipyards are short of experience in building cruise liners. They need to learn a lot from their European leaders like Italy-based Fincantieri SpA and Germany's Meyer Werft," said Fu. 3. Cruise travel rides wave of growth in China By ChinaDaily Posted on July 22, 2017 China has become the world's second-largest market for cruise travel, according to industry reports. Since Italian cruise liner Costa Cruises came to China in 2006, annual growth for the cruise tourism market has exceeded 40 percent. By 2030, China will become the world's largest cruise market, with 8 to 10 million customers each year, according to figures by the Shanghai International Shipping Institute. In 2016, more than two million people boarded cruises for overseas travel, according to the China Communications and Transportation Association. Ten Chinese ports, including Shanghai and Guangzhou, registered 996 tours by cruise liners in 2016, up 58 percent. Global cruise operators see great business opportunity in China, and more overseas cruises will operate in the country, said Wang Ping, deputy manager of the China district of Princess Cruises. "There has been extremely fast growth in the Chinese market. But on the other hand, its market penetration is still low compared to North America and Australia, so there is great market potential," said Wang. According to Ctrip.com, China's largest online travel agency, cruise customers are expected to grow by 30 percent year-on-year in July. Since the beginning of this year, ports have been renovated to accommodate more cruise liners, and companies have also increased the number of ships serving the Chinese market, said Ctrip in a statement. Cruise travel is becoming popular not only in larger cities like Shanghai, Tianjin and Guangzhou, but also in smaller cities such as Chengdu, Qingdao and Xiamen, according to Ctrip. "There have been many bookings from third- and fourth-tier cities, and we will see more bookings from mid-western cities like Guiyang in the next three years," said Wang. It is important to improve service for tour operators to cater to the growing needs of Chinese travellers, she said. The Chinese tourism market has been developing rapidly as people have more money to spend. According to a report released by the China Tourism Academy and online travel agency giant Tuniu.com, around 4.7 billion domestic, inbound and outbound tourists spent 5.5 trillion yuan ($816 billion) in 2016. China's tourist spending is expected to exceed 6 trillion yuan ($890 billion) in 2017, it said. China plans to raise tourism revenue to 7 trillion yuan by 2020, according to the country's five-year tourism plan (2016-2020). 4 http://www.maritimeshows.com/china/ Page September Issue 4. China State Shipbuilding to build 5 luxury cruise liners with Italian partner By ChinaDaily Posted on July 7, 2017 Speedboats pass the Harmony of the Seas cruise ship as it sails from the STX Saint-Nazaire shipyard in France. [Photo/Agencies] China's first luxury cruise liner will be able to carry up to 5,000 passengers when it is delivered in 2021, creating a new opportunity for the country to enter the world's lucrative cruise liner market. State-owned China State Shipbuilding Corp and Italian shipbuilder Fincantieri Cantieri Navali Italiana SpA will establish a joint venture in Hong Kong. The joint venture will spend 25 billion yuan ($3.74 billion) building five luxury cruise liners. CSSC will take a 60 percent stake in the new company, while the Italian side will hold the remaining shares. The money will come from an industrial development fund for cruise liners from five Chinese banks, including Bank of China, Agricultural Bank of China and China Construction Bank, according to CSSC. Under the framework, Shanghai Waigaoqiao Shipbuilding Co, a subsidiary of CSSR, will be responsible for building the liners. Chen Gang, vice-president of Shanghai Waigaoqiao Shipbuilding, said each of these ships displaces 133,500 tons and their length will exceed 300 meters. Each ship will cost around 5 billion yuan to build.
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