After a hiatus of almost four years, Royal Caribbean International has decided to resume cruises for the Chinese market. This move comes after the cruise line left the market in early 2020 due to the pandemic. During the Royal Caribbean Group’s Q1 earnings call, executives expressed their excitement for the return to China, citing booking volume and prices for cruises in the Chinese market that have exceeded those of 2019.
Michael Bayley, the president and CEO of Royal Caribbean International, mentioned during the earnings call that the deployment of a second ship to the China market is a testament to the success of the first ship. The Spectrum of the Seas, which first set sail in Shanghai in 2019, is currently cruising from Singapore to Shanghai, where it will begin homeporting this weekend. The Anthem of the Seas will take over for the Spectrum later this year, with plans to add a second ship, the Ovation of the Seas, in 2025.
Net revenue from Chinese passengers has been noted to be slightly higher than that from American passengers. This shift in revenue can be attributed to Royal Caribbean’s stronger focus on direct sales in China. Despite many retailers going out of business during the pandemic, the brand had already started investing in technology, resources, and personnel to improve its direct sales strategy in the region. The efforts seem to be paying off, as demand for cruises in China is currently very strong.
Returning to China will signify a shift for the Royal Caribbean brand, making it slightly less North American-centric. Currently, 80% of the brand’s customers are sourced from North America. While other contemporary cruise lines have not yet decided to re-enter the Chinese market, several lines carrying international cruisers began calling in China last fall. These include Holland America Line, Oceania Cruises, Princess Cruises, Royal Caribbean, Silversea, Viking, and Windstar. Additionally, a Chinese-built cruise ship, Adora Magic City, began operating in the market in January.
With the resumption of cruises in the Chinese market, Royal Caribbean International is demonstrating its commitment to a global presence and its willingness to adapt to changing market dynamics. The success of the brand in China reflects not only its resilience but also its ability to innovate and capitalize on emerging opportunities. As the company continues to grow and evolve, it will be interesting to see how its strategy in China unfolds and how it impacts its overall business strategy.
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