Marriott hotels rush to invest in China, maybe too fast.

Chinese photographer- China Elite FocusThe Chinese economy may be slowing but tourist numbers are still growing, prompting international hospitality giants to place bullish bets on the sector by opening new hotels and cruise routes.

Marriott International and Royal Caribbean Cruises are among companies looking to cater to a rapidly growing number of wealthy Chinese who are not only spending more at home but also flocking overseas, executives from the companies told CNBC.

“Outbound Chinese travelers are still growing faster than the economy in China, so we don’t see the same thing that everyone is talking with the economy happening with the Chinese travelers,” said Marriott International’s president and managing director for Asia Pacific, Craig Smith.

Over the week-long Lunar New Year holidays, room revenue growth in Marriott resorts within China rose 12 percent from a year ago, Smith told CNBC’s Squawk Box on Wednesday.

To target fast-growing middle class Chinese who will not just need leisure but business accommodation, Marriott and China’s Eastern Crown Hotels signed an agreement recently to open 100 mid-scale Fairfield by Marriott hotels in mainland China by 2021. Another 40 hotels are slated to open later.

Intercultural aspects are also important: “U.S. hotel chains like Marriott should carefully analyze what Chinese travelers want. A common misconception is that Chinese travelers are interested in cheap, mid-range hotels.” said Pierre Gervois, CEO of China Elite Focus Magazines LLC, a publishing & consulting company based in New York. “The truth is that most of Chinese travelers are ready and willing to pay for five star premium hotels, and are tired of these stereotypes” added Pierre Gervois. “Marriot should focus more on attracting High Net Worth Chinese in their U.S. five star properties rather than investing in hastily strategized risky ventures in Mainland China ” he concluded.Gervois Rating Banner 01

As for outbound travel, Chinese tourists undertook more than 120 million trips overseas in 2015, according to the China National Tourism Administration. That number is expected to grow by 11 percent this year, Smith added.

To tap this growing market, Royal Caribbean Cruises will in April launch cruise ship Ovation of the Seas, with Tianjin as the home port.

Royal Caribbean is upbeat on the nascent cruise industry in China even though it is likely to capture just a fraction of the vacation traffic—typically 2 percent globally—said president and chief executive officer of Royal Caribbean Cruises, Adam Goldstein.

With over 100 million outbound departures a year, there are “not enough ships based in China right now … to even take 2 percent of the outbound travelers”.

There are just about one million cruise passengers in China now, he added.

Sources: CNBC / Huilen Tang / The New Chinese Tourist / Chinese Tourists in America

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Chinese tourists “crucial” for cruise industry’s future, in Europe and the Caribbean

Shanghai Travelers Club magazine - CaribbeanThe potential of growth of the Chinese society, and its desire to explore the world are crucial factors for the cruise industry’s future, a high-ranking representative for the Cruise Lines International Association (CLIA) said in a recent interview.
“We believe what we are seeing today is just the beginning of a trend, with respects to Chinese tourists,” CLIA Italy’s national director Francesco Galietti told Xinhua.
Some aspects would so far distinguish Chinese from other tourists cruising in Italy.
“The first is a strong preference for cultural heritage cities such as Rome, Florence, and Venice, and a second aspect is that, when they visit Italy for the first time on cruise ships, they tend to repeat the travel, maybe in another way,” Galietti explained.
A third element would be related to a specific city, Venice, and to its power of attraction through the years.
“An important aspect we observe is a sort of ‘Silk Road tourism’ in that city… Because Venice used to be one of the final destinations of the ancient Silk Road,” he said.
Despite an increasing tourism flow from China to Europe, Chinese would yet represent still a large world to explore for cruise operators. “We believe Chinese are critical for our industry,” Galietti stressed.
“The potential of the Chinese society, and the Chinese people’s will to explore the world and put their own culture in contact with western culture… This is very important to us, and CLIA cruise lines are aware of that,” he said.
The changing trend in Chinese tourism would also impact China’s major shipping operators, whose presence used to be much limited to trade.
“Take Chinese COSCO shipping company as example: it is a big name in cargo, and we are now seeing its transition from a leadership in this sector towards tourism… It will be interesting to see whether (cities of) destinations will be able to match this growing demand from Asian tourism,” he said.
According to the CLIA representative, China’s domestic cruise market is also going through an unexpected phase.
“At the beginning, cruise lines thought that they would create hubs in China for the Chinese market, through river trips, domestic cruises, and so on… Whereas now, we see that it is not just the regional market expanding,” Galietti explained.
As such, cruise lines have adjusted and arranged for longer trips from China to other destinations, and some companies within CLIA have developed a strong footprint in Asia.
“I am thinking especially to Royal Caribbean International and Carnival, and also to Italy’s leading shipbuilding company Fincantieri, which has opened a big production site in China,” he said.

The prestigious travel publication “Shanghai Traveler’s Club magazine” published this month its first ever issue entirely about the Caribbean, featuring Jamaica and Tobago as well as cruise stories in the Caribbean. ” We have published this special issue because our readers told us they wanted to experience the Caribbean, while traveling on luxury cruise boats or super yachts between islands” told us Pierre Gervois, Publisher of the Shanghai Travelers’ Club magazine.
The cruise industry impacts widely on the European economy as a whole, and the sector registered a 40.2-billion-euro (44.6 billion U.S. dollars) output in 2014 with a 2.2 percent increase over 2013, according to CLIA data.
This performance led to the creation of almost 10,000 new jobs in Europe last year, bringing the overall number of people employed in the sector up to some 348,000.
According to the association, Italy is the country benefitting most from the cruise sector in Europe, despite a slowdown in 2014 compared to other European competitors, and visiting the country on cruise ships would remain a special attractiveness for tourists.
“We are speaking of a country that is a peninsula: the largest portion of Italy’s perimeter is on water… So, explore the country with cruising indeed makes sense and has something special,” Galietti said.
Source: New China/ Xinhua agency

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Chinese tourists love cruises

Chinese tourists cruising - China Elite FocusChinese tourists are beginning to shift their gaze from the landscape on the mainland to the blue ocean, after China’s tourism administration decided to make 2013 the Year of Marine Tourism. A variety of marine holidays are driving new demand.
A voyage on a cruise ship is gaining popularity among Chinese tourists. At the beginning of this year, Henna, the first passenger liner based on the Chinese mainland set sail from Sanya, marking China’s entry into the world cruise ship tourism market. At the same time, cruise liner giants including Royal Caribbean, Star Cruises and Costa are stepping up their offers in an attempt to attract Chinese customers.
In October SuperStar Gemini, a 50,000-ton passenger cruise vessel of Star Cruises, started its first trip from southeast China’s Xiamen city to Taiwan. According to official statistics, more than 40,000 cross-Strait passengers travelled on 23 cruise liners this year.
In November, China implemented new measures easing sailing restrictions to support border tourism projects by the passenger liners cruising between China’s Hainan Island and Vietnam. Under the new policy, all Chinese citizens can use an entry and exit permit that can be applied for in Sanya and Haikou to join a cruise.
China is ahead of other markets in the growth of cruise ship holidays. During the six years from 2006 to 2012, the number of voyages made by international cruise vessels departing from Chinese mainland ports or carrying Chinese passengers grew sevenfold.
Cruise ship tourism may contribute an estimated 51 billion yuan (nearly 8.4 billion U.S. dollars) to the Chinese economy by 2020. Currently, more than 10 cities along China’s coastline have built or are planning to build world-class hubs for cruise ships.
China has five major coastal tourist resorts – on Bohai Bay, in the Yangtze River Delta, in the Pearl River Delta, on the coast on the west side of the Taiwan Strait, and on Hainan Island.
At present, China’s marine tourism industry focuses on sightseeing, health vacations, water sports, adventure, and pop-science. Leisure fishing and cruise voyages will complement the overall structure of China’s marine tourism.
Coastal tourist resorts are trying to combine culture with natural scenery. Southeast China’s Fujian province is carrying out pilots to incorporate the Hakka culture and sea silk culture in its marine tourism programs. Dai Bin, head of the China Tourism Institute, suggests that the marine tourism industry should try to capture the attention of the younger generation with innovative cultural ideas.