With four brands – Costa, Princess, Carnival and AIDA – set for the Chinese market in 2017, and a domestic brand to be named later, Arnold Donald, president and CEO of Carnival Corporation, stressed that the companies will remain distinct brands in China.
Meanwhile, Carnival is coming off an exciting 2015 that saw a nine-ship order, announcements of the first LNG-powered newbuilds ever, and the introduction of not only the domestic Chinese brand, but Fathom as well, which is focused on engaging travel in the Dominican Republic and Cuba with one ship and premium pricing.
New Chinese market entrants Carnival and AIDA will show off their respective products, Carnival offering a more American experience and AIDA a German product.
“All our brands have their own expansion plans and cater to a different psychographic market,” said Donald, who sat down for a one-on-one interview with Cruise Industry News in Shanghai at the tenth China Cruise Shipping (CCS) conference and trade show. “With the Carnival brand it is the right timing with some of the newbuilding plans they have. We think the brand will resonate with a segment of the Chinese segment.”
Carnival has confirmed the Carnival Miracle will head for China on year-round basis in 2017 followed by the Splendor in 2018. With new ships destined for North America in 2016 and 2018, Carnival is limiting capacity growth in the west, a sign the market may have found its ceiling.
“Carnival has outperformed in the Caribbean, and we have had continued success because of all our brands, so it’s not running to China because of weakness,” answered Donald, responding to market concerns in North America at a press conference.
Is sending more brands diluting the market and raising marketing costs?
“Our advantage is scale,” said Donald. “Scale tends to lower your costs and we have an inherent advantage as the world’s largest cruise company.”
Domestic brand plans in China continue to move forward, with Carnival Corporation recently announcing itself a minority partner (60/40) with China State Shipbuilding Corporation and China Investment Corporation to launch a new Chinese cruise line.
The ships will have British flags and be bought (second-hand) before domestic newbuilding efforts begin in China.
“It does make sense for there to be domestic brands here,” Donald said. “It can help accelerate the development of the cruise industry and our five-year plan.”
“In my experience here and the conversations I have had, the demand is here,” said Donald. “We have to connect the demand to the ships and bring in capacity. The long-term (future) looks really bright.”