South Korea's decision to deploy an anti-missile defense
system could curb cruises from China, Korea's biggest inbound market for cruise
The Chinese government has told travel agencies in China not
to sell travel to South Korea, following selection of a golf course in the
southeast of the Korean peninsula for deployment of the U.S.-designed Terminal
High Altitude Area Defense system.
The system is meant to defend against short- and medium-range
ballistic missiles. North Korea, whose most important ally is China, has been
increasingly active in testing new ballistic missiles.
According to the Korea Herald, South Korea's largest
English-language newspaper, of the 43 scheduled calls this year by cruise ships
at Incheon, South Korea, 30 originate in China.
The Chinese government has the power to order Chinese travel
companies to stop selling cruises to Korea. Major cruise companies such as
Royal Caribbean International and Costa Cruises sell mostly on a wholesale basis
in China to large travel agencies.
"There is a very tight licensing and regulatory control
over travel agencies [in China,]" said Dwain Wall, a travel agency
executive and consultant familiar with the Chinese market. In the short-term,
Wall said that Chinese agencies and their cruise line partners are revising
itineraries to shift ports of call from South Korea to Japan.
"It does impact cruise, but it's low season -- thank
God -- and they've been sort of able to regroup and change the ports to Japanese
ports," Wall said.
If the travel ban persists into the busier summer months, it
could reduce demand for cruises from northern China, which go mainly to Japan
and South Korea, Wall said.