Introduction

Popular Cruise Destinations: Where Are They Heading?

According to cruise sales data from Ctrip, the most popular routes for Chinese tourists currently are those to Japan and Korea. Cities such as Naha in Okinawa, Fukuoka, Jeju, Nagasaki, and Yatsushiro are common destination, with routes typically including one to three cities[ii].

Who’s Cruising?

The consumer demographics of cruise travel have undergone significant changes before and after the Covid-19 pandemic. According to the strategic targets analyzed by the Chinese cruise company Adora Cruises, cruise passengers are mainly divided into three categories:

“Generation Z”

Born from the mid-1990s to the early 2010s, Generation Z is curious and eager to explore new experiences. As a key consumer group in China today, Gen Z comprises approximately 260 million people, making up about 20% of the country’s total population. Their purchasing power significantly surpasses that of other age groups, with an average disposable income per capita of 4,193 yuan per month (approximately $590 USD)[iii].

“New Seniors”

“New Seniors” refers to individuals in their mid-50s to 70s who have recently retired and seek a certain quality of life, possessing both spending power and time. As of December 2022, the number of elderly internet users reached 153 million, with many spending over four to six hours online daily​​. Over 80% of this age group receive pensions and own their housing. In China, urban pensions typically exceed 4,000 yuan (approximately $560 USD) in first-tier cities[1], 3,000 yuan (approximately $420 USD) in second-tier cities, and 2,000 yuan (approximately $280 USD) in third and fourth-tier cities[iv].

“New Middle-Class Families”

“New Middle-Class Families” are those in their 30s and 40s with a decent level of spending power, seeking leisure and entertainment for the whole family. The annual income of middle-class families in China typically ranges from 100,000 to 500,000 yuan (approximately $14,000 to $70,000 USD). There are approximately 140 million families totaling 400 million individuals who have the financial capability for leisure travel, mostly residing in China’s first and second-tier cities[v].

Why Cruises? Key Attractions for Chinese Tourists

Convenience of Visa-Free Travel

One of the main attractions of cruises for Chinese tourists is the visa-free policy. According to the regulations of the immigration authorities of China and Japan, passengers can enter without a visa at designated ports of call, only needing to pay a nominal tax of 1,300 yen (approximately $8.5 USD), greatly simplifying the pre-travel procedures.

Cost-Effective Cruises with Perfect Itineraries

Economically, cruise travel offers significant advantages. The all-inclusive service provided on cruises (accommodations, dining, and entertainment) costs far less than conventional travel options. For example, some cruise companies offer off-season Japan routes (Shanghai-Naha (Okinawa)-Shanghai) priced at less than $355. These last four to five days and provide excellent value for money. Additionally, the duration of these trips closely matches the typical holiday length for Chinese travelers​.

Embracing Cruise Culture: Opportunities and Challenges

The Acceptance and Challenges of Cruise Culture in China

Overcoming Cultural Hurdles: The Tipping Challenge​

However, the tipping culture prevalent in Western countries continues to discomfort Chinese passengers. Hidden costs such as tips for meals and accommodation detract from the overall satisfaction of passengers’ cruise experiences.

Strategies for Japanese Cruise Lines: Leveraging Strengths to Attract the Right Tourists

Given the competitive pressure on pricing from Chinese cruise companies, Japanese cruise lines should focus on delivering exceptional service to attract and retain customers. Renowned internationally for its service quality, Japanese cruise companies can leverage this reputation to provide an unmatched customer experience.

For example, cruise lines could offer streamlined boarding procedures, high-quality dining services, a variety of entertainment options, and ensure there are no hidden costs, making every moment onboard comfortable and enjoyable for guests. Particularly in catering based on feedback from older Chinese cruise passengers, they appreciate not only luxurious and high-end food options but also lighter, more traditional Chinese dishes such as congee​.

After identifying the strengths of their cruises, companies should target consumers who are less sensitive to price changes, typically including “new middle-class” and “new seniors.” Cruise lines can find appropriate social media platforms or channels for promotion. Especially for “new seniors,” who often have more time to use mobile apps after retirement, finding the right channels and methods to reach them becomes crucial.

Conclusion

Although the number of Chinese cruise travelers increased from 660,000 in 2012 to nearly 5 million in 2019, this is still quite low compared to China’s total population of 1.5 billion, indicating significant untapped potential in the Chinese cruise market. As travel preferences among Chinese diversify, the cruise industry is expected to encounter even greater opportunities for growth​.

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Reference

1. 36kr – Chuxingyike. (2023, December 25). Cruises in China: A Cost-effective Choice for Seniors or a Fashion for the Wealthy. Retrieved April 24, 2024, from https://36kr.com/p/2576079193138817
2. CSSC Cruise Technology Development Co., Ltd. (n.d.). Design and Development. Retrieved April 24, 2024, from https://www.chinacruise.net.cn/col18/
3. Ministry of Land, Infrastructure, Transport and Tourism (MLIT). (n.d.). About visit Japan cruise passenger numbers. Retrieved April 24, 2024, from https://www.mlit.go.jp/common/001324822.pdf
4. Ministry of Land, Infrastructure, Transport and Tourism (MLIT). (n.d.). Visit Japan cruise passenger numbers and cruise ship port calls. Retrieved April 24, 2024, from https://www.mlit.go.jp/report/press/port04_hh_000447.html
5. Ctrip.com. (n.d.). All routes – Cruise booking, from https://cruise.ctrip.com/newpackage/search/o4d1.html
6. Zhaopin. (2021). 2021 Gen Z Workplace Status and Trends Research Report, from https://www.fxbaogao.com/view?id=3179805
7. Chinese Academy of Gerontology, Renmin University of China. (2016). The China Longitudinal Aging Social Survey: Research Report. Published in The China Longitudinal Aging Social Survey.
8. China Development and Reform News Agency. (2022). Three magic weapons for expanding domestic demand: Digital transformation, new types of consumption, and effective investment. Published by the National Development and Reform Commission (NDRC). Retrieved from https://www.ndrc.gov.cn/wsdwhfz/202203/t20220307_1318210.html
9. Employment Department, National Development and Reform Commission. (2021). China’s middle-income group exceeds 400 million: How to expand this group. Retrieved from https://www.ndrc.gov.cn/fggz/jyysr/jysrsbxf/202109/t20210924_1297381_ext.html

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[1] First-tier cities include Beijing, Shanghai, Guangzhou, and Shenzhen. Second-tier cities include Chengdu, Hangzhou, Wuhan, Xi’an, and Nanjing. Third-tier cities include cities like Hefei, Kunming, and Shijiazhuang. Fourth-tier cities include smaller cities such as Zhuhai, Weihai.

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[i] Ministry of Land, Infrastructure, Transport and Tourism (MLIT). (n.d.). Visit Japan cruise passenger numbers and cruise ship port calls. Retrieved April 24, 2024

[ii] Ctrip.com. (n.d.). All routes – Cruise booking.

[iii] Zhaopin. (2021). 2021 Gen Z Workplace Status and Trends Research Report.

[iv] Chinese Academy of Gerontology, Renmin University of China. (2016). The China Longitudinal Aging Social Survey: Research Report.

[v] Employment Department, National Development and Reform Commission. (2021). China’s middle-income group exceeds 400 million: How to expand this group.