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  January 28th, 2015 | Written by

Carnival Going Deeper Into China

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Travel and leisure industry giant Carnival Corp. has inked a Memorandum of Understanding (MOU) with the China Merchants Group (CMG) to “explore the possibility of two joint ventures designed to accelerate the development and growth” of China’s nascent cruise industry.

The MOU “outlines a potential strategic partnership between Florida-headquartered Carnival and CMG that includes exploring two possible joint ventures in support of China’s ambitions to grow the cruising industry in China and meet escalating demand for cruises amongst Chinese travelers,” the Florida-based company said in a statement.

Under the terms of the MOU, Carnival and CMG—China’s oldest state-owned infrastructure consortium—will explore a joint venture that would own and operate its own cruise ships as part of the first-ever domestic Chinese cruise line specifically targeted to the Chinese market. The joint venture “would explore the possibility of sourcing new ships that are designed and built in China, along with the possibility of acquiring existing cruise ships.”

The Port & Destination Development joint venture calls for Carnival and CMG to develop turnaround and transit ports within and around China beginning with a “flagship port” currently under development. Dubbed the Prince Bay Cruise Terminal, the new facility will be located in Shenzhen, near Hong Kong in southern China’s Guangdong province. The two partners would work to have cruise ships sail from the new flagship port “while also developing other cruise ship destinations across China and Northern Asia,” Carnival said.

“The MOU we signed today signifies a great opportunity to take the next step in the future of Chinese cruising, while addressing some key needs for both the cruise industry and its passengers in China,” says Alan Buckelew, COO of Carnival Corporation. The agreement, he says, “will help us explore immediate ways to impact cruise growth in China, including the possibility of a new Chinese cruise brand and new destinations.”

Carnival expects to grow its market presence by 140 percent from 2013 to 2015 and expects to carry 500,000 cruise passengers in China in 2015 with its two major brands—Costa Cruises and Princess Cruises—planning to increase their existing capacity there to meet growing demand. Costa Cruises has said it will add an additional ship to its China service in April, making Carnival the first global cruise company with four ships home-ported in the country: the Costa Serena, the Costa Atlantica, the Costa Victoria and the Sapphire Princess.

In October 2014, Carnival and the China State Shipbuilding Corp. signed a separate MOU to explore the possibility of creating a partnership to build cruise ships. The company said that potential joint venture could also include Italian shipyard Fincantieri, which has a long history of building ships for Carnival.