Viking banks on Chinese travelers to sustain cruising fortunes

Rising demand for high-end river cruises from Chinese travelers will be the mainstay and account for 7 to 8 percent of the total cruising business of US-based cruising firm Viking Cruises by 2020, a top company official said on Tuesday.

Jeff Dash, executive vice-president of Viking Cruises, said that the firm is looking to build on its joint venture with China Merchants Shekou Industrial Zone Holdings Co Ltd, a unit of State-owned China Merchants Group. The two sides had in April decided to team up to bring global cruises to the Chinese market.

"We want to build the greatest Chinese cruise line here. We are actually in a detailed process of forming the joint venture. It is something that we are absolutely pushing forward as fast as we can," said Dash.

The two sides will have a wide-ranging partnership, ranging from product development to sales and marketing. In addition, China Merchants Group's shipbuilding subsidiaries will partner with the joint venture to design and build new ocean cruise ships dedicated to the Chinese market, according to the agreement inked between the two sides.

"I think CMG is the right partner, and I think there is tremendous opportunity for both of us ... I have done a complete marketing study on the Yangtze, and I believe the Yangtze is a huge market with big opportunities. We are going to go and get it," said Dash.

Viking will also look to boost cruises on China's inland waterways, such as in the scenic Yangtze River.

The collaboration between Viking and CMG comes at a time when China is actively taking steps to build a complete industrial chain for the cruise sector. The Ministry of Culture and Tourism recently approved the setting up of the nation's first cruise tourism development demonstration zone in Shanghai.

Shanghai has already formulated plans to transform the Wusongkou Cruise Port into the world's third-largest in terms of passenger trips and create an industrial chain in the city's northern Baoshan district, according to Su Ping, deputy director of Baoshan district.

China's cruise industry has witnessed a golden decade with annual growth rates of above 30 percent, and has the potential to create an annual cruise market of over 14 million passenger trips by 2035, according to guidelines jointly published by 10 ministries and government agencies including the Ministry of Transport.

The 13 cruise ports in the nation handled 364 international cruise vessels during the first six months of this year and received 1.78 million passenger trips during the same period, said China News Service, citing a recent report from the China Cruise and Yacht Industry Association.

The cruise tourism sector in the country has entered a period of adjustment and optimization since 2017. Ever since, major cruise operators are adjusting their strategy to adapt to the new market trends, with river cruises and upgrade of major cruise home ports being key growth areas, the report said.

Since setting up local operations in China in 2016, the company has seen strong momentum in its European river cruise products tailored for Chinese-speaking guests. China has become Viking's fastest growing market and could account for 7 to 8 percent of its overall business by next year, according to Dash.

"I would like to think that by 2030 China will be on par with the rest of our source markets," said Dash.