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Cruise and Art Industries to Thrive Together in Asian Market

The cruise industry continues to lay the foundation for sailing in China, but surprisingly, the global art industry may benefit just as much from this expansion into the Asian market.
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The cruise industry continues to lay the foundation for sailing in China, but surprisingly, the global art industry may benefit just as much from this expansion into the Asian market.

Some of the cruise industry's most modern ships are heading to China in the next few years to capitalize on the demands of a growing middle-class seeking leisure. This move into the region may also expose residents to a slew of western art as intrigued cruisers are introduced to art auctions at sea.

According to the Cruise Line International Association, the Chinese cruise market from 2012 to 2014 expanded by 79 percent each year. While the U.S. is still the top market in the cruise industry, experts say that China could become the second-largest market by 2017.

Royal Caribbean International dedicated one of its newest ships, Quantum of the Seas, to China, and is already set to send another of its Quantum-class ships, Ovation of the Seas, to service the region as well. In addition to typical features like spas and art galleries, these ships are loaded with extras such as a sky diving simulator, bumper cars, and robot bartenders.

"Cruising has become very popular for Chinese consumers and Royal Caribbean is already capturing their imaginations with our industry-leading cruise ships," said Royal Caribbean President and CEO Michael Bayley. "We are furthering our commitment by bringing two of the world's newest and most advanced Quantum-class cruise ships to the region."

Meanwhile, Carnival Cruise Line announced that it would send two ships, Carnival Miracle and Carnival Splendor, to the Chinese market in 2017 and 2018, respectively. Carnival expects that one out of five of its cruisers will be Asian by the end of 2020.

The driving force behind the cruise industry's growth is China's expanding middle class. According to Credit Suisse, the number of middle class adults in China (109 million) overtook the U.S. numbers in 2015 (92 million). In addition, the majority of Chinese cruisers are aged 35 or below, and experts say that China's younger generation of middle class members are more prone to Westernized consumer habits.

This growing middle class in China may be an untapped potential for the art world as well. Park West Gallery, the largest art gallery that hosts onboard art auctions, is found aboard six ships among the 56 that set sail in China in 2015 and is expecting to be on more of them in the coming year.

Park West Gallery Founder and CEO Albert Scaglione says that the gallery offers artwork to new and experienced art collectors alike, and a growing Chinese middle class interested in starting their own collections may be the shot in the arm that the Chinese art industry needs.

"In the short time we've been conducting auctions in the Asian market, we've seen an extremely favorable response," said Scaglione. "We're providing access to fresh, vibrant, engaging artwork from world-class artists who have never been made available in Asia."

In the last few years, wealthy Chinese art collectors have influenced the global art market, such as billionaire Liu Yiqian purchasing "Reclining Nude" by Modigliani for $170.4 million, making it the second-largest amount ever paid for a work of art.

Despite this, the Chinese art market has seen its fair share of lows. The Global Chinese Art Auction Market Report, released in 2015 by the China Association of Auctioneers, reported that worldwide sales fell to $7.9 billion, a 31.3 percent decline since 2011 at the market's peak.

Even so, auction houses like Sotheby's saw record-setting auctions in October 2015 in the Chinese market, while Park West is sending nearly triple the amount of artwork to Asian clients as compared to 2010. In addition, the number of clients living in Asia who collect with Park West has grown by 114 percent.

Just as Chinese cruisers are seeking more options, Scaglione believes that new and seasoned collectors - including those in China and Japan - are developing a thirst for contemporary art that could be quenched by the cruise industry's expansion into Asia.

"There is a growing demand for high-quality art, and the Chinese market is showing signs of long-term growth, so I imagine this will continue into the future," Scaglione said.

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