) announced that it was redirecting a European liner to Shanghai to
capitalize on the growing Chinese market in cruises. The liner -
Costa Serena - which will sail all year round starting Apr 2015,
will help the company to tap into the demand surge in China which
is projected to become the world's second largest cruise market by
The 3,780-passenger Costa Serena joins Costa Victoria and Costa
Atlantica operational in China, in addition to the Sapphire
Princess under the Princess Cruises brand, to be launched later
this month. This redeployment will expand overall capacity of Costa
- one of Carnival's top brands - in Asia by 74%. In 2015, with four
ships based in China, Carnival's industry-leading capacity is
projected to leap 140% over a two-year period.
Carnival's decision to dispatch a fourth ship to China intensified
the competition in the fast-growing Chinese market. Last month,
reflecting the growing importance of Asia for the cruise industry,
Royal Caribbean Cruises Ltd.
) announced that the 4,180-passenger ship Quantum of the Seas will
sail from Shanghai to Japan and Korea next year.
China has emerged as a strong revenue generating market for the
cruiser lines. The vast population and a fast-growing middle class,
not yet familiar with cruising, make China an attractive bet for
these companies striving to make the most of the opportunity by
making an early entry. Additionally, Shanghai -- China's largest
city -- plans to invest substantially to develop its cruising
infrastructure, such as building larger ports.
Not only China, but the Asian continent is steadily emerging as a
major revenue generating market for the cruise companies. Carnival
is looking to tap into this demand by investing significantly in
other Asian growth markets like Japan, Singapore, Hong Kong, Taiwan
and Korea as well.
Carnival currently carries a Zacks Rank #3 (Hold). Better-ranked
stocks in the same sector include
Regal Entertainment Group
Speedway Motorsports Inc.
). Both these stocks sport a Zacks Rank #2 (Buy).
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