Amid Asia tensions, uncertainty over expansion

Amid Asia tensions, uncertainty over expansion

By Tom Stieghorst
*InsightMaritime disputes in Asia have thrown a crimp into the cruise industry’s plans to expand in that fast-growing area of the world, and signs are the problem is growing worse.

The latest is a report in the Wall Street Journal that China is challenging archaeological exploration of hundreds of shipwrecks, many of them distant from its own shores.

The article says China views the wrecks as proof of Chinese exploration of islands in the South China Sea, in areas close to the Philippines, Malaysia, Vietnam and Brunei.

According to the report, of particular concern was an incident last year off the coast of the Philippines, when Chinese vessels forced a French archaeological team to abandon its exploration of a 13th century Chinese junk.*TomStieghorst

Already, China and Japan are in a standoff over disputed islands in the East China Sea. As a result, Royal Caribbean International and other cruise lines are not including Japan on their itineraries from China, opting for only Korean ports on cruises from northern Chinese cities.

The tensions in that area have escalated, too, with China claiming air rights over a wide swath of international ocean, including the disputed islands known as Diaoyu in China and Senkaku in Japan.

In its new air defense identification zone, China seeks to require all aircraft to file flight plans before entering the area. Japan and the U.S. immediately sent military planes into the space unannounced, to challenge the newly asserted Chinese zone.

None of this can improve the chance that China will get more big cruise ships. Until the uncertainty clears, the cruise industry’s Asia expansion, certainly in China, will not be full steam ahead.

Speaking on a third-quarter conference call to analysts, before China asserted its new air defense rights, Royal Caribbean International President Adam Goldstein said Royal had been hoping in 2013 to announce plans to resume calls in Japan on its China cruises aboard the Mariner and Voyager of the Seas. Instead, it has been forced to open 2014 bookings with only Korean destinations again.

“This is, of course, frustrating particularly since we do not see any signs of positive geopolitical change in the dynamic between China and Japan,” Goldstein said. “We continue to build our brand, our distribution and our management team in China with a view to making the best of the itinerary options that are available to us.”

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