China Merchants exits luxury cruise business as Zhao Shang Yi Dun goes up fo...

by CHEN Yixuan

China Merchants Group is selling Zhao Shang Yi Dun for about 2.9 billion yuan (about US$420 million), retreating from what was once seen as a landmark attempt to build a homegrown high-end cruise market in China.

The vessel, formerly Viking Sun, was built by Fincantieri in 2017. In 2021, China Merchants and Viking acquired it through a joint venture, renamed it Zhao Shang Yi Dun and reflagged it under the Chinese flag.

That bet has unraveled quickly. Since the second half of 2024, the ship has gradually moved away from China-based home ports, first by introducing Japan itineraries and then by largely disappearing from China routes altogether. Its sale would complete China Merchants' exit from direct cruise-ship ownership.

Industry participants say Viking is widely seen as the most likely buyer, with the ship expected to return to Europe this summer.

The problem was less the onboard experience than the difficulty of building steady demand. Yi Dun was built around an all-inclusive, quiet and culturally oriented luxury experience, but struggled to attract enough Chinese travelers willing to pay around 15,000 to 20,000 yuan per person for an eight-day, seven-night cruise along China’s coast. Unlike mass-market cruise operators, it offered no low-cost inside cabins, sticking instead to Viking's all-veranda model to emphasize privacy and reinforce its upscale positioning.

That left the ship reliant on a narrow pool of affluent travelers. A cruise industry sales agent told Jiemian News that Yi Dun was aimed at affluent travelers seeking a slower, more leisure-oriented cruise experience, but that customer base remains too small in China to support the model at scale.

Passengers told Jiemian News that some sailings felt lightly booked. In one extreme case, a voyage reportedly carried only 82 passengers, less than one-ninth of capacity. For many affluent Chinese travelers, a similar budget could pay for a trip to Europe instead.

In its early years, Yi Dun focused on coastal China itineraries, a strategy that industry participants said made sense only when outbound travel remained restricted.

A later shift to longer Japan and South Korea routes out of Shanghai was better received, as Yi Dun's smaller size allowed it to reach ports and offer shore experiences less accessible to larger cruise ships.

Even so, the pivot came late. By the time Yi Dun changed course, major foreign cruise operators had already returned to Shanghai, intensifying competition. Without a clear pricing advantage, the ship still struggled to attract enough passengers.

A person close to the operation told Jiemian News that the venture effectively followed a model in which the Chinese side held the license while the foreign partner ran day-to-day operations. That limited the venture's ability to adapt its product to local demand. Yi Dun maintained a crew-to-passenger ratio of about 1:2, far more service-intensive than mass-market cruise ships and a costly model when cabins were not full.

Sales pressure led to more aggressive discounting, which undermined Yi Dun's premium positioning. China Merchants at times tied cruise tickets to property promotions, and some of those tickets later appeared on resale platforms at a fraction of official prices.

Pressure is not limited to the premium end: Blue Dream Cruises, which targeted budget travelers, has also sold a core vessel, suggesting that both upscale and budget operators are struggling to make the economics work in China's cruise market.

For a ship built around Viking's European-style luxury formula, returning to the Mediterranean may prove a better fit than trying to transplant that model into China's still nascent high-end cruise market.