Fast Sailing: China's Cruise Market To Become World's Second Largest By 2017

There's a reason that 2013 was marked the Marine Tourism Year by China's government. Some 530,000 Chinese tourists took cruises beyond the mainland, more than double the previous year. Industry forecasts have the country second only to the U.S. in passengers by 2017.

To Chinese, ship travel once meant taking a steamer down the Yangtze River, mostly as basic transportation before jet service and an expansive highway system became the norm. Today, though, it has taken on an ever more luxurious sheen. This month Carnival's Carnival's Princess Cruises will christen a Sapphire voyage from Shanghai, with the 2,670 on board paying $900 to $5,000 to float to South Korea and southwestern Japan over six days.

Carnival, the world's largest cruise line, began the current era in 2006 when Allegra , from its more basic Costa line, departed from the old Shanghai docks. International rivals like Royal Caribbean and Star followed, along with a smaller domestic contingent. Now few can afford to stay away. They're banking on a potential market above 100 million in a few years–and an actual load, Carnival figures, of 2.3 million passengers.

Cruising with "Chinese characteristics" includes not only Chinese cuisines and language services but also mah-jongg rooms, larger duty-free shops with more European luxury brands and, in the case of one Carnival "global first," a "presidential menu" enjoyed by former president Hu Jintao during his 2011 White House visit. Although gambling tables are a mainstay in international waters, the lines say they aren't emphasizing that element in Chinese marketing.

Just about any cruise in China is likely to have the word "luxury" attached to it, and no doubt a first-generational sense of wealth is fueling the boom. If it's good enough for entertaining Westerners, why not? "First you have to play golf and tennis. Then you have to drink Bordeaux or expensive whiskey, and then travel internationally," says Wolfgang Georg Arlt, who runs a China outbound tourism research center in Germany. "To go on a cruise is just one of the things that the rich Americans do."

But, in fact, even the modestly affluent can take part. Four- to six-day cruises can cost as little as $600 and go up to $2,000 per person on Ctrip.com. Popular Popular destinations range from Hong Kong, Macau and Taiwan to a few non-Chinese ports that accept visa-free visits. (Korea allows for three-days' entry; Japan still requires the paperwork.)

The growing Chinese middle class, seeking an escape from the city, fresh air, romance or, simply, as the Americans would say, to "chillax," are the real drivers. " A cruise cuts you off from your life. You can't really work on a cruise, and for a lot of time you have nowhere to go," says Shen Liang, a 34-year-old general manager at a software company in Shanghai, who was going for six days to Korea. Shen hastens to add that he can finally get his friends to play poker now that they're all trapped at sea.

Domestic lines are playing catchup by purchasing vessels from the multinationals because China's own cruise history is a blank slate. Henna, a cruise liner that HNA Group bought from Carnival, went on its maiden voyage last year. In March state-controlled Bohai Ferry rebranded imported Costa Voyager as China Tai Mountain. Another four domestic companies are contemplating similar schemes, according to Zheng Weihang, vice director at the China Cruise & Yacht Industry Association.

But if lacking in managerial experiences, the domestic players will at least benefit from policies that ban international cruises from ?sailing along China's coast lines and limit them from taking trips to Taiwan, which Zheng says has a high demand among mainland travelers.

The Chinese government itself is targeting 4.5 million in Chinese cruise traffic by 2020. Big bucks have gone to constructing terminals in Shanghai, Sanya, Tianjin and Xiamen in the past three years. The $140 million Wusongkou International Terminal in Shanghai now claims to be the largest in Asia. Terminals in Tsingtao, Zhoushan, Dalian and Shenzhen are under construction, and another seven are in the pipeline. The scale and grandeur of each terminal have made positive returns on investments difficult for the local governments, however. "Perhaps, with the exception of Wusongkou, all the other ports are losing money," Zheng says.

For cruise operators good terminal operations are as important as having the new berths. Paul Chong, vice president of business development for Carnival Asia, recalls an incident where the terminal's operators forgot to turn on the air conditioning, so passengers were waiting inside "a greenhouse."

China's political particulars, especially the visa constraints, are another big factor. The limited waiver choices have prompted concerns that "the cabin will become increasingly difficult to sell," Chong notes, and Beijing's tensions with neighbors are "making the ship difficult to sail." As Carnival's Costa unveils an 86-day global trip from China across five continents for next year, the ship-to-shore hurdle is probably looming larger than the peak price of $50,000 per person.

Jane Ho contributed to reporting from Shanghai. 

Royal Caribbean Cruises Royal Caribbean Cruises last year brought its latest Mariner of the Seas ship to Hong Kong in its bid for a Chinese clientele. Adam Goldstein, president/COO, discussed the company's China plans recently with FORBES ASIA's Russell Flannery. Click here  for the interview.