Monday marked the one-week anniversary of China’s worst marine disaster in decades, the capsizing of a cruise ship on the Yangtze River that killed over 400 people. The devastating human impact looks to be mirrored by an economic one as China’s river tourism industry on the Yangtze (and possibly elsewhere) braces itself for a substantial economic hit.
China had been working to bring its domestic cruise industry out of stagnation, the result of companies buying many more cruise ships just as tourism fell (this in the aftermath of the flooding of many cultural and scenic sites by the Three Gorges Dam in 2012). As a result, prices were slashed on average from around $400 a few years ago to currently about $160 for a 13-day cruise. These budget cruises cater in large part to elderly people, who are a growing proportion of China’s population and who have time and savings to spend on leisure traveling. The strategy was working: In 2014, the number of tourists on Chinese cruises shot up 43% from the year before to 862,000. Prior to the June 1 accident, cruise passengers on the Yangtze alone were predicted to hit 1 million this year, and China’s overall cruise ship industry was expected to expand from 1.5 million passengers per year in 2013 to 4.5 million by 2020, which could have had a local economic impact of $8 billion.
Now, however, two aspects will be of enduring concern for potential cruise passengers on the Yangtze: extreme weather and vessel safety. The Eastern Star capsized in part due to a sudden storm with torrential rain and hurricane-force winds. Stormy weather is not uncommon on the Yangtze, but the incident on June 1 was particularly ferocious. However, the huge cruise ships that travel the Yangtze are meant to withstand inclement weather, which makes vessel safety the more pressing issue.
The ship’s captain and chief engineer, two of the 14 survivors, were both taken into police custody for questioning. And after the accident, news broke that the Eastern Star had been cited for safety violations in 2013 by Marine Safety authorities in Nanjing. Aside from urging solidarity and citizens to support the search and rescue efforts, China has clamped down on the details of the investigation, which may very well see criminal charges brought against crew members.
Sadly, the Eastern Star was just the largest and most recent in a string of accidents on the Yangtze, often with deadly consequences. The Yangtze River Administration reported 18 accidents between October and December last year, including eight collisions, three strandings, five boats sunk, and two other accidents, which killed as many as ten people. This January a tugboat capsized, killing 22 people. And in February, a passenger ship and a cargo ship collided in the same area where the Eastern Star sank, leaving eight people dead. The Yangtze River Administration had announced plans this spring to re-inspect all the ships operating through its waterways, but had yet to do so before the June disaster.
It is too early to tell how much the accident will dent Yangtze tourism, but early signs are not good. “More than 400 customers booked our Yangtze River cruise tours in June and July,” said Huang He, a tour agency manager in Suzhou. “By Thursday, more than 50 had canceled, and we think more people will come to withdraw from their trips.” It doesn’t help that the rainy season coincides with the beginning of summer there. Some agencies have canceled scheduled trips entirely or changed them to land-based sightseeing at customers’ insistence.
But after some time, and particularly after thorough safety inspections, the industry is likely to recover. It is hard for other forms of extended traveling to match the cheap price and convenience of cruises for retirees. Unfortunately it took a tragedy to set the industry’s future on the right course.