Beaten by the buffet: NCL
The Chinese dama first made their name internationally in 2013, with some frenetic buying in the gold market. Since then the dama – middle-aged women with an eye for a deal and a disposition for dancing (see WiC345) – have made waves by bidding up Bitcoin and piling into foreign property.
But it turns out they are capable of ‘killing’ a business too. Their victim this time: Norwegian Joy, a luxury vessel operated by Norwegian Cruise Lines (NCL).
The cruise ship was the second biggest by tonnage in the Miami-based line’s fleet. It was also custom-built for the Chinese market, with artwork on its hull featuring a phoenix designed by artist Tan Ping, mahjong rooms, hotpot restaurants and a huge area for duty-free shopping.
But NCL has now announced that it will spend $50 million in a revamp as the 3,802-passenger ship moves its home port from Shanghai to Seattle. The news came as a surprise to the industry because Norwegian Joy only made its debut in the China market in the summer of 2017.
Chinese media was quick to point the finger at the dama as the reason for the decision, citing gluttony as a key culprit.“The damas and uncles on the ship only make waste, but don’t spend,” Sina.com noted.
Sina says that NCL hadn’t budgeted for the vast amounts of complimentary food gobbled down by this bargain-conscious group. A five-day excursion typically saw consumption of an enormous 60 tonnes of meat, 20.5 tonnes of fish, 7 tonnes of watermelon, a tonne of bananas, 11 tonnes of potatoes and 52,000 eggs, it claims.
The feasting was frenetic, it seems. The dama and their husbands were lining up for the breakfast buffet an hour before it began, and they had little interest in the ship’s paid services, going to bed straight after dinner.
Sales of alcohol (unlike food not inclusive in the voyaging fees) were tiny compared to the fleet’s average, because all the bars were empty too (beer sales were just 1% of the total sold on all NCL ships).
NCL seems to have budgeted for onboard spending at similar levels to other markets – but the dama did things differently, squeezing every last drop of value out of their cruise.
In fact, the Chinese cruise market is turning out to be more of a challenge than many operators expected. Passenger numbers are predicted to drop 14.3% on the year to 2.4 million in 2018, versus annual growth of 70% in the four years to 2016.
“A potent mix of heavy-handed Chinese regulation, tourism bans, and downward price pressures proved enough to turn a booming industry into a declining one,” says Skift, a trade publication, noting that cruise lines were forced to sell tickets in bulk to travel agencies due to rules blocking direct marketing. That translates into lower per-ticket revenue in China versus other markets.
Other major cruise operators are also having a rethink. Royal Caribbean Cruises and Ctrip announced in March that they would call a halt on their SkySea Cruise Line joint venture, while Carnival’s Princess Cruises has already relocated two ships from China to Europe and Australia.
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