Donald on China: Market Strengthening

Costa Venezia

The new Costa Venezia is on its way to China to join the year-round Costa operation in Asia, and the overall Chinese market is on the comeback, according to Arnold Donald, president and CEO of Carnival Corporation, speaking on the company’s first-quarter earnings call.

“Overall, things are strengthening there. There's less capacity expansion than it's been in previous years,” Donald said. “And we've expanded our distribution approach and we’ve had success with that. And so, things are strengthening.

“Our philosophy there remains the same, that we see it as accretive overall as long as it’s accretive, a ship will be there,” he continued. “If it's not accretive, we would move it and so, generally speaking, China in particular is definitely strengthening from yield standpoint, et cetera, all that. But we think this could be choppy for a while and so we always prepare to do whatever we need to do right now. We think Venezia in particular is going to strengthen the industry in China, period, and definitely be an enhancement to our fleet. And right now, things are going well.”

The Venezia will launch year-round service from Shanghai in May, and has been built by Fincantieri just for the Chinese market. A second ship follows in 2020 and is also set to move to China.

With the arrival of the new ship, Costa will have four ships homeporting in China, including the Serena and Atlantica, plus a seasonal deployment from the neoRomantica.

Key homeports this year will be Shanghai, Shenzhen, Tianjin, Wenzhou, Dalian and Xiamen, with almost all cruises heading to Japan.

A new Carnival Corporation deal with Sasebo will be beneficial, as the company will invest in a new terminal and thus receive preferential pier space.

The Costa Serena will have a heavy focus on the North China market, homeporting in Tianjin. The Costa Atlantica and seasonal neoRomantica will source from the South China market, with most turnarounds being done in Shenzhen and Xiamen.

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