New joint venture targets boom in Chinese tourism

featured image

A new strategic alliance between Royal Caribbean Cruises Ltd. and its Chinese travel partner, Ctrip.com, will create the first national cruiseline “tailor-made for Chinese travelers.” The new joint venture, to begin operations in mid-2015, will be called SkySea Cruises, and pairs Royal Caribbean with China’s largest online travel agency.

“We look forward to working with Ctrip, a Chinese travel leader, to build a national cruise line for China,” said Richard D. Fain, chairman and chief executive officer of Royal Caribbean Cruises Ltd. “SkySea Cruises represents an important strategic milestone in our expansion efforts in the Chinese market.”

SkySea will begin operations with a single ship, Celebrity Century, built in 1995 with a capacity of 1,814 passengers, and sold by Royal Caribbean to Ctrip affiliate Exquisite Marine in September. She will continue to sail for Celebrity Cruises until April. After that, she will sail for SkySea as the Sky Sea Golden Era.

“Our partnership with Royal Caribbean Cruises Ltd. will allow us to bring the very best cruise vacations tailor-made for Chinese travelers,” said Min Fan, SkySea’s chairman and chief executive officer. “We expect SkySea cruises to be an integral part of China’s fast-growing cruise market.”

Under the joint venture, Royal Caribbean and Ctrip will each own 35 percent of SkySea, with the balance owned by SkySea management and a private equity fund.

Burgeoning travel demand in the Chinese market has outstripped providers’ ability to meet it with leased vessels, according to a Ctrip press release about the joint venture.

“Chartered cruise ship products can no longer satisfy online tourism companies, so purchasing cruise ships and setting up cruise ship companies may become an important strategy to compete in (the) domestic cruise ship market,” the release says of joining forces with the “world leading cruise ship company, Royal Caribbean Cruises Ltd.”

SkySea “will strengthen the partnership between Ctrip and Royal Caribbean and escalate the fierce competition in (the) cruise ship market,” the release continues.

It also notes a previous statement by SkySea chief Fan that “China is going to become one of the biggest cruise ship markets in the world.”

Clearly, Royal Caribbean agrees.

Bolstering its commitment to the market potential of China, Royal Caribbean recently announced that Shanghai will be the home port of Quantum of the Seas, the newly launched megaship bristling with industry innovations.