Foreign Cruise Lines, Airlines Temporarily Leaving China - Why?

Source: OT-Team(G),Sohu Travel

  Major cruise lines and airlines are temporarily exiting China, prompting a closer look at the reasons behind these changes.

  This year, two major international cruise brands, Royal Caribbean and MSC Cruises, have canceled their scheduled sailings from Tianjin. Originally planned for 2025, these China-bound routes have been scrapped. Additionally, several foreign airlines have recently announced the cancellation of their newly resumed routes, temporarily exiting the Chinese market.

Cruise Industry

  The cruise market this summer has exhibited a "high-to-low" pricing trend, where prices drop as the departure date approaches. Industry experts describe this as an "abnormal" state, attributed to insufficient market planning and product arrangement, forcing companies to use low-price strategies to attract customers. Currently, many cruise companies employ both direct sales and agent distribution models. Facing market competition and losses, agents often resort to heavy discounts, further destabilizing market prices.

  Some industry insiders point to "market oversupply" as a key issue. Cruises only resumed operations between January and May, resulting in limited supply. However, supply surged severalfold by July and August. 

  Consumer demand is also significantly influenced by the reputation of cruise tourism, with social media amplifying any issues. The lack of preparedness by domestic cruises in their resumption year has led to numerous complaints from tourists regarding service, hardware, dining, and shore excursions.

  In addition to internal issues, some agents say that insufficient consumer spending power is cited as a fundamental reason for the lackluster peak season.

Airline Sector

  Apart from the cruise industry, several foreign airlines have also announced their temporary withdrawal from the Chinese market. 

  British Airways, Virgin Atlantic, Royal Air Philippines, and Qantas have recently decided to suspend or significantly reduce their China routes. Analysts attribute these decisions to both the high costs of rerouting and insufficient market demand. Earlier this year, Delta Air Lines also canceled its planned resumption of the Los Angeles-Shanghai Pudong route, with their reservation system indicating no plans to resume flights before March 30, 2025.

Expert: Long-termism is needed

  The strong performance of the international cruise market presents a significant challenge for the domestic market. With international cruises performing well, many brands are prioritizing the deployment of their main vessels overseas, adopting a more cautious, small-scale strategy in China.

  Despite these challenges, data suggests that China's cruise tourism market will continue to grow, potentially reaching 14 million passengers annually by 2035. In discussions with Royal Caribbean and MSC Cruises China representatives, both emphasized the significant consumption potential in the Chinese market. As a new form of tourism, there is a low level of consumer awareness and acceptance, necessitating market education and promotion by cruise brands.

  For emerging markets, experts highlight the importance of product innovation, brand building, operational optimization, marketing strategies, and sales systems, all requiring a spirit of long-termism. Reasonable pricing is crucial in ensuring the interests of tourists, cruise lines, and agents are all safeguarded.