The dilemma of charter sales in Chinese cruise market: Formation mechanisms and countermeasures

Abstract

The rapid development of its cruise market has made China the shining star all over the world. The average annual growth rate of over 30 % in the Chinese market is achieved by the charter-based sales system. However, in recent years, there has been a repeated occurrence of market crises, which gives rise to low-price competition. The charter sales model has thus been cast into serious doubt. In this study, through the combined methods of literature review and interviews, we carried out an in-depth investigation with a view to revealing the formation mechanism and the characteristics of the sales model, as well as its impact on the market. The study found that the supply-demand imbalance, policy constraints, the lack of related regulatory systems, the imperfect sales system, the sensitive market and weak risk tolerance together with other factors all combined to lead to the frequent occurrence of the market crises. With respect to the cruise sales in China, the research puts forward the corresponding countermeasures and suggestions from the perspectives of cruise companies, travel agencies, administrators and policy-makers.

Policy-driven or market-driven? A new perspective on the development of China’s cruise industry

“…After a dozen years of rapid growth, China's cruise market has jumped to the second largest one next only to the United States (Table 1). With a high percentage of about 90%, the travel agency charter model is a unique sales mode in China and a catalyst for the vigorous growth of the Chinese market (Sun et al, 2016;Li et al, 2021a).…”

“…Within just a dozen years, China ranked second in the global cruise market, with 2.1 million tourists in 2016 and 4.88 million in 2018 (Wang et al, 2020). Increasing Chinese tourists begin to accept and love cruise travel, which is a new means of tourism (Li et al, 2021a). During this period, Carnival Corporation & plc, Royal Caribbean International, Star Cruises and Mediterranean Shipping Company S.A. entered the Chinese market one after another and they deployed 15 ships in the Chinese market, with more than 40,000 beds on board in 2020 (Qian et al, 2021).…”