Abta 2015: Partners are key to cracking Chinese cruise market, says Royal

Securing the right distribution partners has been key to Royal Caribbean’s attempts to break into the Chinese cruise market, the line’s vice president international told the Abta Travel Convention.

Speaking about the future of travel, Dominic Paul outlined the huge potential for cruise in China although he warned the country was a complex place to do business.

“It’s really different to doing business anywhere else we have done business before,” he said. “It takes years to learn how to do business there.”

Paul said at the heart of Royal’s strategy has been to commit some of its newest ships to China rather than the usual tactic of deploying older vessels to establish a base first.

And he said it was also important that the operator adapted its product based on feedback from its partners in the market.

Paul pointed out that a new rail link to mainland China from Hong Kong will bring 250 million people to within four hours travel from the city’s cruise port.

And he said Shanghai alone represents a potential market that is larger than Australia.

“It [China] provides incredible opportunity for you to grow your business internationally. Travel is one of the main areas the Chinese want to spend their money,” said Paul.

Royal’s business in China has gone from 40,000 customers in 2010 to 400,000 this year and that will rise to 700,000 next year.

And Paul said focussing on the customer has been vital as well as getting distribution right, so Royal has partnered with trade payers in all the main Chinese cities.

“You cannot run your business from your head office. You have to run your business locally. We have spent the last six years developing a truly empowered team in China.

“We have trust them. They are closest to the market. Everything they have pushed for has been absolutely correct. We have gone from a team of 30 people to 200 in two years excluding crew. We are investing heavily in our brand.

“Once you have learned about the market you have to back that up with investment. We are localising all the marketing we are doing in China.

“We have totally changed how we sell. We now have 60 sales managers, more than in the US. We have learned from the UK that our trade partners are critical to our success.

“Distribution is key and for us travel agents are critical for our future.”

Paul said there have been challenges operating in China including the outbreak of MERS in South Korea and an unprecedented number of typhoons this year.

But he said: “We have come up with innovative solutions for each one of those shocks. The travel industry is brilliant at adapting itself to the local market.

“Companies that disrupt the market and are willing to invest for the future and to take risks are the ones that will win out.”

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