Globalization of the Cruise Industry: A Tale of Ships Part II - Asia Post 1994

Cruising has grown over 7% a year since 1980. Sustained rapid expansion in North America, followed by local expansion in Europe and Asia, has made cruising a global industry, with 365 ships and estimated sales of $37.8 US billion (CIN, 2017). This global development has been fueled by innovation and introduction of market changing resident ships appealing to the mass traveler which were quickly matched by competitors, establishment of industry and port marketing organizations, awareness of cruising as a vacation option, and availability of suitable port and berthing facilities. When these four conditions coexisted the industry experienced rapid growth. Since 1966, the cruise industry has developed from a Miami-centered industry to a global industry centered in North America, Europe, Asia, and Australia/New Zealand. Given the high cost of state-of-the-art ships, their deployment is a good indication of industry’s confidence in market growth. This chapter chronicles the development of the Asian cruise industry from 1994 through 2017. Data from Cruise Industry News Annual Reports (CIN) and Berlitz Complete Guide to Cruising and Cruise Ships (Ward) are examined and conclusions are drawn.


Introduction
Shipping by its nature has always been global. With the development of alternative means of transporting passengers and mail and the subsequent demise of national fleets (ships built in the owner's country, registered in that country, crewed by citizens of that country, and in some cases constructed in that country), shipping has become even more global. Owners (cruise companies) are incorporated in and ships registered in the best countries from taxation purposes. Ships are constructed on a worldwide basis based on which shipyard offers the best deal. Crews are sourced on a worldwide basis according to who is willing to work for the salaries and under the conditions offered by the owners. Specific to the cruise industry, Oivind Mathisen, Editor of Cruise Industry News Annual Report 2017-2018 (CIN 2017-2018) [1] writes: "Despite a variety of geopolitical events and incidents, the industry has prospered and grown with a nearly unbroken record of profitable years for the publicly traded companies.
Human Rights -An Epitome of Human Equality 2 The business model is unique. The cruise companies incorporate overseas as shipping companies to avoid U.S. corporate income tax; build ships in countries that have experienced shipyards and offer export financing; hire officers and crews from maritime nations and from an international labor pool; source passengers from different markets based on demand and ability to pay the highest rates; and deploy ships that generally follow the sun, all while delivering an exceptional product.
It is a formula that has worked successfully for 50 years, going on 51 (p. 6)." Cruising, unlike most shipping, including passenger shipping for transportation, is supply led versus demand led. In most shipping, demand grows and ship owners build new ships to meet that demand. In cruise shipping, the owners build new and innovative ships and then market them to create demand. Wood [2] writes "Definitions of globalization are legion and reflect the particular orientations and interests of researchers, as well as the complex and multidimensional nature of the phenomenon itself (p. 397)." He views the cruise industry from the perspective of deterritorialization in which "culture, social life and economic activity is no longer rooted primarily in the immediate physical geography of place (p. 398)." He sees cruise ships representing "a unique level of deterritorialization. Huge floating chunks of capital, they are intrinsically mobile and capable of being repositioned at a moment's notice. Unlike land resorts, cruise ships can change their locations to escape bad weather, political instability, or other things their owners may not like. Major events like September 11 can elicit massive redeployments of whole fleets (p. 398)." His article concentrates on the legal and regulatory aspects of this deterritorialization. Marti [3] also discusses globalization in the cruise industry. He writes, "Globalization is occurring due to a rising acceptance of the cruise product around the world as a tourism option. Cruise line strategies that promote globalization include: organic expansion, operating alliances, and mergers/takeovers. Organic expansion results when an established line places a vessel in a new regional market (other than North America) on a seasonal or permanent basis, while supporting the venture with its existing infrastructure. Operating alliances happen when two or more operators combine elements (usually marketing and sales) of their business with the joint aim of expanding into new regional markets. Mergers/takeovers occur when one company either takes a stake in another or assumes control, sometimes in stages and sometimes in one go [4]. According to Wood (2000), further evidence of globalization includes the following: an increasing internationalization of cruise company ownership, the use of flags of convenience (FOCs), registries that have no genuine link to the nationality of ownership, to circumvent home country labor laws, taxes, and maritime regulations and extremely heavy reliance on a global crew population, coming from 100 countries or more (p. 25)." Luthans and Doh [5] write "Globalization can be defined as the process of social, political, economic, cultural, and technological integration among countries around the world. Globalization is distinct from internationalization in that internationalization is the process of a business crossing national and cultural borders, while globalization is the vision of creating one world unit, a single market entity (p. 6)." "The vision of creating one world unit, a single market entity" is reflected in Cruise Lines International Association's (CLIA) [6] mission to "foster their members' success by advocating, educating and promoting the common interests of the cruise community." The community comprises cruise lines with over 95% of global capacity, key suppliers, ports, destinations, travel agencies, and travel agents. Initially focused on North America, CLIA has absorbed the regional cruise community organizations over the past

Development of the North American and European cruise industries
The modern cruise industry can be said to have begun with the sailing of the Sunward in 1966. Seeing her alongside the quay in Nassau late December 1966, her crisp modern lines and large windows accented with potted plants stood in sharp contrast to the aged former coastal liners that were characteristic of the Miami cruise trade. The modern cruise industry was concentrated in North America though the early 1990s. The geographical distribution of the industry in 1966 is illustrated in Figure 6.
Most of North America's growth followed Marti's [3] definition of organic expansion throughout the Caribbean and then to Alaska and the Mexican Riviera and eventually to Europe. The major exception was Princess Cruises. Their 1974 acquisition by London-based P&O Lines provided an infusion of capital leading  to a major upgrade of their fleet by the year's end. This pattern would be repeated between North America and Europe in the 1990s and between Asia and North America in 2000. In 1970, the industry carried 500,000 passengers. The major lines were Home Lines, Sitmar Cruises, Norwegian Caribbean Line (NCL), Cunard Line, Holland America Line (HAL), and Princess Cruises. In 1975, the TV series "Love Boat" started a 10+ year run that brought cruising into the living rooms of millions of Americans who had never seen the ocean. Royal Caribbean Cruises Limited started in 1971 with two new ships. Royal Viking Line (RVL) started with three new ships in the luxury segment and Carnival Cruise Line with the 1960-built ex-Empress of Canada as Mardi Gras. By 1980, the industry carried 1.4 million passengers, Carnival had three secondhand ships, Royal Viking and Royal Caribbean lengthen their ships to meet demand, and NCL proved the concept that a 2000-passenger ship could be successful in 1-week cruises with the converted ex-France operating in Norway. The early 1980s saw the advent of second-generation cruise ships with Carnival, Royal Caribbean, and HAL newbuilds. These were followed in quick succession by third-generation newbuilds from Carnival, Sitmar, and Princess in the mid-1980s. Ward [10] described the industry with this inflection point, "The first edition of this book, reviewing, testing, and evaluating 120 ships was published in 1985, when cruising was viewed as an expensive, rarefied experience." At the same time boutique cruise ships the size of large yachts appeared. In 1984, Seatrade held their first cruise shipping conference in New York City. In 1985, the industry carried 2.2 million passengers. In 1988, 3.2 million passengers were carried and the industry began to consolidate. HAL brought Home Lines and Carnival brought HAL. Princess brought Sitmar and Admiral Cruises was acquired by Royal Caribbean. NCL had brought RVL in 1984 but continued to operate it as a separate brand. That same year, fourth-generation cruise ships made their debut with Royal Caribbean's Sovereign of the Seas. Sporting multi-deck atriums and broadway-sized show theaters, these were the largest ships built since the 1930s. In 1990, there was a boutique ship proliferation and the industry carried 3.6 million passengers. By 1992, this was 4.1 and by 1994 the numbers were 4.5 million. Up to this point, the focus of statistics was North America. However, in 1995, North American passenger numbers declined to 4.1 million, the first decline since the start of record keeping.  A key factor in this growth was cruising's high customer satisfaction resulting in repeat cruisers. The industry continues to attract new cruisers but repeat passengers are important. Miller and Grazer [11] write, "Cruise lines have long recognized the importance of repeat passengers. According to ship personnel, many sailings have at least forty percent repeat customers. Cruise lines often sail with passengers who have 700 or more days with that particular line (p. 78)." In order to retain these passengers, cruise lines need to offer new experiences in terms of ships and ports. Gibson [12] writes "The success of a cruise business, in terms of securing repeat customers and capturing new business, is directly related to reputation. In turn, past and present customers and their perception of service and product quality directly inform that reputation (p. 169)." As mentioned earlier the cruise industry is supply led. A new ship rewards repeaters something different and entices new-to-cruising passengers with, what Richard Fain, Chairman of Royal Caribbean, calls the latest "Wow!" factor. According to the 1998 CLIA Industry report [13], 24% of perspective cruise passengers were repeat passengers. In surveys taken between 1990 and 1996, 59-70% of these passengers intended to definitely/probably take another cruise. This makes these passengers particularly important to a cruise line's profitability. In spite of all the bells and whistles added over the past 30 years, executives at cruise conferences often remark that passengers pick their cruise because of the destination. Newness in both destinations and hardware remains important in attracting and retaining passengers. Josiam et al. [14] discuss the pull factors in attracting passengers. They write "Prior research identifies five pull factors with respect to cruise travel motivation (Lu, 2001). These five pull factors are national environment and safety, entertainment and sports recreation, nature and wilderness, learning opportunity, and modernity and facilities. Lu also points out that 'nature & wilderness' is the main reason pulling travelers to take cruise ship tours (85)." These factors are all inherent characteristics of a destination. The need to offer new destinations in order to retain repeat passengers is another factor driving fleet expansion.
The stagnation of 1994/1995 led to an attention shift outside of North America to Europe and Asia. Globalization in Europe would be led by newbuildings in the UK and German markets, followed by an attempt at pan-European cruising by Festival Cruises. Festival was eventually forced into bankruptcy by the owner's financial problems with his tanker fleet. This globalization was characterized initially by Marti's [3] organic expansion which was followed by mergers and acquisitions as North America-based lines brought or merged with Europe-based lines. The major exception was MSC Cruises. Backed by the world's second largest container shipping company MSC, MSC Cruises was able to take advantage of Festival's demise and modernize their fleet overnight. Since then they have expanded into the Caribbean, South America, and Asia as well as being a dominant player in Europe. They are well along the way to overtaking Norwegian Cruise Line as the third largest cruise company.

Literature review
Josiam et al. [14] write, "There are only a few research studies on travelers' motivation to experience a cruise vacation and their subsequent satisfaction with that experience. Because Asian travelers are an emerging segment of the cruise industry, there is need for cruise operators to better understand the needs of the ethnic Chinese segment and the Taiwanese traveler in particular. The purpose of this article is to address this gap in the literature (p. 77)." In the years since this was written, Carnival, Royal Caribbean, and NCL have put major ships in Asia targeting the Chinese market. They've overcome cultural issues by recruiting their management teams from Asian hospitality, consumer goods, and marketing industries.
The cruise industry in general has not been the subject of many academic articles. A search of the topics cruise industry and repeat passengers, cruise industry and globalization, and cruise industry and repeat purchase behavior of the Academic Search Premier, Business Source Premier, and ABI Inform databases resulted in only 18 academic articles since 1997. Of these only four were relevant to this chapter. This is probably due to cruising's relative position in the hospitality, tourism, and shipping industries. There are two good resources from the textbook perspective. Mancini [15] approaches the industry from the view of the travel agency professional and is excellent for achieving CLIA certification. Gibson [12] gives a detailed comprehensive analysis of the industry from the operational perspective. In 2011 the Shanghai International Cruise Economy Research Center was established. Located in Shanghai's Baoshan District, the center has produced a body of work on the Chinese cruise industry. Since 2014, they have published an annual report on China's cruise industry. Titled The Green Book of the Cruise Industry, Annual Report on China's Cruise Industry [16], the collection of academic articles is published in both Chinese and English.

Methodology
Using a grounded theory approach, this chapter looks at changes in the quality, not necessarily the quantity of the supply (ships) as a leading indicator of an inflection point in demand and the emergence of a port or region as a major cruise center serving a largely indigenous market. This chapter covers the development of Asia into a global cruise center. The purpose of the research, initially conducted in 2013, was to examine the growth of the modern cruise industry from the viewpoint of the quality of the hardware, the ships, and to identify any patterns that could be applied to the rapidly evolving Asian market. Specifically, Asia had reached the inflection point similar to the late 1980s and early 1990s in North America when the industry moved rapidly through several generations and the late 1990s and early 2000s in Europe when the industry jumped from first-and second-generation ships to fifth and sixth generation and beyond. This development is described in depth in Coggins [9]. Data from Cruise Industry News Annual 1995-2017 [1,17,18] and Berlitz Guides to Cruising 1983-2017 [19][20][21][22][23] was examined to develop a chronicle of the industry's growth. Daymon and Holloway [24] quoting Pettigrew (1997) (p. 338) wrote "A grounded theory approach enables you to undertake processual research, that is, research that focuses on 'a sequence of individual and collective events, actions and activities unfolding over time in context.' For example, grounded theory studies have the potential to offer original insights into how things happen,…" (p. 118). In summary, they conclude, "Grounded theory is an under-utilized but potentially important research approach for public relations and marketing communications. It holds great potential for tracing social processes in their context. It begins without hypothesis and allows both the data and theoretical sampling to guide the choice of conceptual framework and emerging theory. Researchers follow a systematic, structured process of data collection and analysis" (p. 128).

Asia through 1995: green shoots
In regard to early growth in Asia, Coggins [9] writes: "The mid-1990s were times of surprise developments in the Asian market. Through Western eyes this region is often seen as a homogeneous market. However, it is

Market-wise the region is multi-tiered. The South Pacific region's growth has been driven by locally sourced passengers in Australia and New Zealand. Markets for the other regions can be divided into Western sourced and local sourced passengers. Traditionally, Western sourced passengers usually visited the region between January and early May as part of World and Circle-the-Pacific Grand cruises. These passengers trended to be affluent and travelled on premium and luxury lines such as Princess, HAL, Cunard, SilverSea, Seabourn, HAPAG, and P&O Cruises. However, all Western cruise lines now operating year-round in Asia also market those cruises to Western audiences. Prior to globalization of the industry in the
Asian region, the local sourced cruise market was concentrated in Japan. Many of these passengers were part of corporate charters. The rest were those wanting to travel in a Japanese culture cocoon provided by the market's ships. Geography and ships spending more than 4 months a year in the region are the determinants for which ships are included in this study.
Fueled by an increase in Japanese cruisers, industry expectations prior to 1994 were that Japan would lead Asia's breakout as the third global cruise region. This was encouraged by the 1989 maiden voyages of the boutique sized Oceanic Grace and the medium sized Fuji Maru. These were joined by similarly sized Orient Venus and Nippon Maru the following year. The world class Asuka debuted in 1991. The excitement generated by these five ships in a market known for its older and smaller ships convinced The Seatrade organisation to hold Cruise Forums in Yokohama in 1990. In 1992     There was a brief attempt at cruising out of the Philippines by Mabuhay Holiday Cruises. They operated the converted 1983-built Japanese ferry, Fuji Sunshine, as Mabuhay Sunshine on short cruises out of Manila. Operations ceased after 1 year, another victim of the financial crisis.
Siam Cruise Company operated the converted Stockholm-Helsinki ferry, 1962built Svea Jarl, as Andaman Princess out of Pattaya, Thailand, since the early 1980s. The December 2004 Indian Ocean Earthquake and Tsunami was disastrous for the company as many of its ports were severely impacted. Even though Andaman Princess was unscathed, the company went out of business in 2005.
The atmosphere in Asia 1996-1998 was one of optimism and expansion. Royal Caribbean operated Sun Viking out of Singapore for North American cruisers. Carnival was in discussions with Hyundai regarding a cruise joint venture, and Star was busy buying up high-quality secondhand cruise ships and introducing cruising throughout the region. All this changed as the Asian financial crisis, which began in 1997, caused a shakeout in the market. In 1997, Royal Caribbean sold Sun Viking to Star Cruises and left the market. Carnival's brief joint venture with Hyundai also ended that year before a ship could be put in operation. By 1998, Nautican had moved to one-night gaming cruises, and Renaissance had ceased Singapore operations. Star's Asian fleet had settled into its basic configuration for the next 5 years as the company's attention was focused on growing its NCL fleet. Virgo and Gemini were in Singapore, and Pisces and Leo were in Hong Kong. Gemini's size also made her an excellent market opener as Star tried various new markets around Asia. In 2003, the SARS epidemic struck Hong Kong and effectively shut down the tourism industry throughout Asia for the next several months. Leo was sent to Australia in early spring to ride out the downturn. Her southbound transit was used to thoroughly disinfect the ship and effectively quarantine the crew.

The Australian market: a long growing season
The development of the Australia/New Zealand/South Pacific cruise market goes back a long time. P&O Cruises and Sitmar Cruises had been sailing out of Sydney since the 1970s. In the 1980s, P&O Cruises operated the 1959-built Oriana and the smaller 1966-built Sea Princess out of Sydney. Sitmar competed with the 1957-built converted troopship Fairstar. In 1986 Oriana was retired, leaving Sea Princess to maintain the P&O presence. In 1988, Princess Cruises purchased Sitmar Cruises. Fairstar continued to sail under the P&O banner; however, the name was not changed in deference to Fairstar's many years of Australian service and reputation as "The Fun Ship." The following year, Sea Princess returned to Princess Cruises. In 1998 Australia relaxed its cabotage regulations, and Cruising Down Under, a port cooperative marketing association, was more than 2 years into its concerted effort to attract more cruise lines to the region. Given Australia's long coastline, this relaxation allowed non-Australian cruise lines to offer shorter cruises calling at Australian ports. That same year Fairstar was replaced by the 1956-built  Figure 10.
2013 was an important year for the question, "Is Asia the next global cruise center?" What was different from the mid to late 1990s, the last period of rapid growth? In the mid to late 1990s, Star Cruises was the only company introducing relatively new ships on a regular basis. Seasonal deployments by major cruise ships were pass-throughs as part of world or circle Pacific long cruises. The major cruise terminals were Singapore's Cruise Centre, Yokohama Cruise terminal, Hong Kong's Ocean Terminal, and Langkawi, Malaysia. While both Singapore and Hong Kong promoted their cruise facilities and location as cruise hubs, there were no regional cruise port organizations. Cruising Down Under was just getting started and writing the book on regional cruise port promotion. The Seatrade Organisation held a cruise tourism forum in Yokohama in 1993; cruise conferences in Singapore in 1994, 1996, and 1998; and cruise conferences in Cairns, Australia, in 1995 and 1997. These conferences/conventions provided an opportunity for cruise industry executives, tourism officials, and port authorities to get together. They also served to raise the industry's awareness as a vacation option through accompanying travel agent training sessions. The budding industry was hard hit by the Asian financial crisis toward the end of the decade and then again by the SARS epidemic in 2003. Star Cruises, with parent company Genting, was able to rationalize their fleet and persist.
While most of Asian tourism was suffering from the impact of the SARS crisis, Chinese tourism made a quick rebound in the second half of 2003 and into 2004. China Today [26] wrote "The 'Analysis of Functioning Characteristics of the 2003 Consumer Products Market and Prices and 2004 Development Trends' published by the China National Commercial information Center isolates five characteristics. The first is the rapid growth in commodity housing and tourism that kept the retail volume of consumer products at a stable rate of increase as hot consumer products like cars and IT electronic products continued to increase. The second is unbalanced development of urban and rural areas and of different regions. Third is the contribution of hot consumer products to the increase in the total retail volume of social consumer products. Fourth is substantial growth in the catering industry, and fifth, that the middle class is a main force in hiking up consumption growth." This was the same year that Costa Crociere opened its office in Hong Kong to prepare for Costa Allegra's China Debut in 2006. As the world's economies slipped into the Great Recession, China's continued with relatively robust growth. By 2008, Royal Caribbean was back in Asia on a seasonal basis. Saporito and Ramzy wrote "The world's largest multinational companies, many of them headquartered in the U.S., have been betting on the rise of the Chinese consumer for many years now. But as the economies in the U.S. and Europe have struggled to revive in the past few years, firms in nearly every sector, from automobiles to consumer goods to telecommunications, have placed a larger share of their chips on the Middle Kingdom. It is simply a matter of numbers: China's economy grew 9.1% in the last quarter, compared with <2% in most of the West. While incomes in the West are stagnant, individual Chinese are expected to get a lot richer [27]." The situation in 2013 was much different from in 1998. Instead of Star being the only major year-round cruise line, Costa Crociere and RCI were also operating frontline ships on a year-round basis. Seeking to take advantage of what Saporito and Ramzy (2011) termed China's shift toward consumerism "As for China, the numbers behind any big shift toward consumerism there are potentially world altering. China's 2011 GDP is roughly $6 trillion. If consumer spending goes up from the current 36% to reach 45% of GDP-the government's stated goal-$540 billion in spending would flow into consumer goods and services…." With regard to travel potential, they wrote "Boston consulting Group estimates there are 1 million millionaire households in China, When those folks start hitting the road, Bridle (Hong Kong-based luxury-hotel company New World Hospitality's Chief Operating Officer) wants to be ready, and so New World recently spent $230 million to acquire Rosewood hotels and resorts, to lure travelers…The exodus is already under way. There are an estimated 54 million outbound trips from China, a number that quadrupled in the past 10 years. By the end of the decade, the figure could easily reach 100 million… [27]".
By 2013, there were also a number of pan-Pacific ships seasonally rotating through the region. The world cruise and circle Pacific ships still passed through, but the pan-Pacific ships made concerted efforts to target the local source passenger. More importantly, the infrastructure for growth was in place. New dedicated cruise terminals had been constructed or were under construction in Singapore, Hong Kong, Shanghai, Xiamen, Sanya, Qingdao, Dalian, Tianjin, Busan, Keelung, and Kaohsiung, to name a few. Ports had formed alliances to promote cruise calls such as Japan-Korea Strait Coastal Region Tourism Promotion Network, Kyushu District Transport Bureau, Taiwan Strait Tourism Association, and Micronesian Cruise Association. In 2008, the Hong Kong Tourism Board (HKTB), in cooperation with CLIA, set up a program to train travel agents in selling cruises. The Chinese Government included cruise industry development in its Fifth Five-Year Plan (2011)(2012)(2013)(2014)(2015) and declared 2013 as marine tourism year [28]. Among measures to increase cruise tourism, China's Ministry of Transport and Communications has streamlined customs' procedures, permitted Chinese companies to form cruise lines, and eased cabotage 3 regulations so that foreign flag cruise ships can call at multiple Chinese ports on a single itinerary [29]. The cabotage issue was critical in the development of the China source market. China's long coastline makes short cruises, 3-5 days popular in the Asian market, difficult to operate without calls at Chinese ports. For example, Shanghai to Hong Kong is 824 nautical miles. 4  One can conclude that the hardware is in place, but the modern cruise operations are extremely complicated. With the average cruise ship carrying close to or more than 2000 passengers, and newbuildings (new ships) carrying 4000 plus, the software has become increasingly more important. Rapid clearance of customs, quarantine, and immigration (CQI) is important, as are sufficient tour options and language capable guides. Yap [30] questions the return on investment from the new terminals. It's very difficult for a cruise terminal to make money unless it's a mixed-use facility with multiple revenue generators. The value of a cruise terminal is its ability to increase the number of cruise calls. Using a conservative estimate of $100.00 US spent per passenger or crewmember, each call can be worth between $200,000 and $300,000 US. If the terminal can take yearly calls from 10 to 50, it may well be worth the cost. The number of ships trading in Asian waters has been rising steadily over the last few years.
When the bulk of this chapter was written, the question was "Is Asia the next global cruise hot spot?" By 2017 the answer was a firm "Yes!" From 2013 through 2017, major developments had taken place in the Asian operations of Star Cruises/ Genting Hong Kong, Costa Crociere, Royal Caribbean International (RCI), and Princess Cruises. Post 2017 these are being joined by global brands Norwegian Cruise Line, MSC Cruises, AIDA Cruises, and Carnival Cruise Line. Corben wrote  [31].
The growth of the low-cost carriers has been a boon to the pan-Asia ships by greatly reducing the cost of the air portion of a cruise.
In Of the 84 cruise ships on order as Cruise Industry News Annual 2017-2018 [1] went to press, seven were dedicated to the Asian (1) and Chinese (6) markets. Maybe more important than the number of ships being dedicated to the Asian market was the 2017 agreement, announced by Carnival Corporation press release on February 22, 2017 [32], between Carnival Corporation, Fincantieri S.p.A., and the China State Shipbuilding Corporation (CSSC). This brings together the world's largest cruise corporation, one of the world's most prolific cruise ship building yards and China's major shipbuilding corporation. The binding agreement called for the building of two 135,000 grt/4200-passenger cruise ships, with an option for 4 more, for the new Carnival China brand. The first ship is to be delivered in 2023. These will be the first major cruise ships constructed in China and may mark the emergence of China as a major player in cruise ship construction. Mitsubishi Heavy Industries is the only other Asian shipyard with major cruise ship construction experience. Their ships include Crystal Cruises' 1990-built Crystal Harmony, NYK Cruises' 1991-built Asuka, and Princess Cruises' 2004-built sisters, Diamond Princess and Sapphire Princess. However, they have been unsuccessful in obtaining continuous orders. The Carnival China ships may mark the emergence of China as a major player in cruise ship construction. Given the size of China's coastal middle class, the growth of cruising as a vacation option, and the low market penetration, the potential exists for China for China to be not just a major source of cruise passengers but a new major center for cruise ship construction. True globalization will be achieved when these yards are constructing ships for non-Asian brands for non-Asian deployment.
Meanwhile  Seas rotates between seasonal homeports of Sydney and Shanghai. 2010-built Celebrity Solstice flies the flag for Celebrity. Figures 11-13 show the growth in Asia/South Pacific cruise ships, berths, and number of cruise lines operating year-round, respectively.

Conclusions
Asia has long played a role in worldwide passenger shipping. Prior to the 1980s, Asia was part of international line voyages and seasonal world cruises and circles Asia/Pacific cruises for mostly North American and European sourced passengers. The cruises within the Japanese Islands were mostly corporate charters or targeted to national passengers. International cruise operations can be said to have begun in 1982 when the converted cruise ship ex-Finnstar began operations as Pearl of Scandinavia (12,456 grt/515 pax). Taking advantage of improvements in the US/China relations, the ship offered a way for Americans to visit several ports in China in comfort during the ship's 4-week round trip itinerary from Japan to Singapore. In 1988, following extensive renovations at Singapore's Sembawang Shipyard, she was renamed Ocean Pearl. Sold to Croisieres Paquet in 1994, she ceased Asian operations in 1995.
However, globalization, in terms of the modern cruise industry and transformation of Asia into the industry's third global center, reached Asia in 1993/1994 with the start of Star Cruises. A Malaysian leisure/gaming company, Genting Group, took a North American business model and adapted it to Asian tastes. This was the first indigenous cruise line in Asia with state-of-the-art ships. Marketing itself to the local population in Singapore and Hong Kong with short 2-4-day cruises, Star provided numerous dining venues with a pricing model that unbundled the cruise fare into included and extra-cost specialty dining. As chronicled in this chapter, Star Cruises rapidly expanded through the mid-1990s until the 1998 Asia financial crisis. Star persevered through the downturn maintaining a presence in Hong Kong and Singapore. With the Chinese Government's attention to the cruise industry in the mid-2000s, the industry resumed growth. Meanwhile, to the south, the Australia-South Pacific market continued slow but steady growth. In 2004, Italian cruise company, Costa Crociere, establish an office in Hong Kong and in 2006 began operations out of Hong Kong and Shanghai targeting the mainland China market. Growth continued with both Star and Costa increasing their fleets and Royal Caribbean International returning to Asia. The period from 2013 through 2015 marked a turning point in the rate of growth. With the development of cruise ship construction capabilities in China, Asia is poised to move from the cruise industry's third global center to a possible rival for second place or even eventually first place!