Miami-based Carnival Corporation (nyse/lse:CCL), the world’s largest cruise ship company, has announced the signing of a memorandum of understanding (MOU) with China Merchants Group (CMG) outlining the potential for two joint ventures in support of China’s cruise industry ambitions and to meet escalating demand for cruises amongst Chinese travelers.
“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,” said Alan Buckelew, COO of Carnival Corporation. “With CMG’s amazing track record, reach and influence in the market, we are working with a strategic partner that can help us explore immediate ways to impact cruise growth in China, including the possibility of a new Chinese cruise brand and new destinations.”
Carnival Corporation and CMG formalized their strategic partnership during an event held today at the Hilton Shenzhen Shekou, including an MOU signing ceremony involving Yang Tian Ping, general manager of China Merchants Shekou Industrial Zone, and Alan Buckelew, chief operations officer of Carnival Corporation. The ceremony was also attended by the vice president of China Merchants Group, Sun Cheng Ming, among other distinguished officials and guests.
Specifically, the first joint venture will include a Ship-Owning Joint Venture, where Carnival Corporation and CMG 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 second joint venture will be for Port & Destination Development, where CMG and Carnival Corporation would collaborate to develop turnaround and transit ports within and around China beginning with a flagship port currently being developed by CMG called Prince Bay Cruise Terminal in Shekou, located in Shenzhen. The partners would work to have cruise ships sail from this flagship port, while also developing other cruise ship destinations across China and Northern Asia.
CMG is China’s oldest state enterprise founded in 1872 and focuses on transportation, infrastructure, financial services and real estate development.
Carnival Corporation already has two of its cruise brands offering sailings in China – Costa Cruises and Princess Cruises. In April, Costa Cruises will be adding its fourth ship, the Costa Serena, to the list of ships homeported year-round in China, joining Costa Atlantica, Costa Victoria and Sapphire Princess.
Carnival Corporation says it expects to grow its market presence in China 140 percent from 2013 – 2015 and expects to carry 500,000 cruise passengers in China in 2015.