by CHEN Yixuan

China's domestic cruise operator Blue Dream Cruises has suspended passenger operations, highlighting the mounting pressure facing smaller, price-driven players as competition intensifies in a recovering market.

The company said on December 25 that its vessel Blue Dream Melody would undergo system-wide hardware upgrades and maintenance, with sales and sailings halted from January 4, 2026. Jiemian News learned from customer service channels that the firm's other ship, Blue Dream Star, has also entered dry dock, leaving the company with no active routes on sale and no confirmed timetable for resumption.

The move followed a sharp collapse in ticket prices in December. Industry sources said fares on some Vietnam itineraries fell to as low as 199 yuan, while previously promoted Korea routes struggled to attract demand. Several travel agents described the discounts as unsustainable inventory clearance rather than genuine promotions.

Cruise operations are highly cost-intensive, with crew, fuel, port fees, insurance and distribution expenses largely fixed before departure. Once ticket prices drop below cost, losses are effectively locked in. At that point, each additional booking only deepens the loss, industry executives said.

Blue Dream had hoped to offset cheap fares through onboard and shore-side spending, but that model has weakened as its core customer base—largely value-driven travelers—proved reluctant to spend on dining, entertainment and shopping.

Founded in 2016, Blue Dream was among the earlier domestic entrants to China's home-grown cruise market. Corporate registry filings show the company has registered capital of about 77 million yuan, with a mixed ownership background combining private and local state-backed capital. Its strategy centred on acquiring second-hand, mid-sized vessels at relatively low cost and selling heavily discounted itineraries from Chinese home ports.

Its first ship, Blue Dream Star, is a roughly 24,000-tonne vessel built in 2001 and refitted for short Japan and South Korea routes. The newer Blue Dream Melody, introduced in 2024, is larger at about 42,000 tonnes and was designed to support longer itineraries across Northeast and Southeast Asia. Even so, both ships remain small by industry standards.

Large international operators typically deploy vessels above 100,000 tonnes, carrying more than 4,000 passengers, allowing costs to be spread more efficiently. China's domestically built mega-ship Adora Magic City exceeds 135,000 tonnes, underscoring the scale gap facing smaller private operators.

An industry insider said Blue Dream's limited size left it heavily reliant on price-sensitive customers, while its smaller ships made costs harder to dilute. Lower ticket prices not only eroded fare revenue but also reduced onboard spending, further squeezing margins, he said.

As China's cruise market recovers, competition is becoming more structural. State-backed platforms are consolidating ports, routes and supply chains, while larger vessels dominate major home ports such as Shanghai.

Blue Dream had already shifted its operations from Shanghai to Beihai in Guangxi in the second half of 2024, a move widely seen as an attempt to escape saturated competition. Pressure has continued to build, however, including from newer private operators.

One such rival is Oriental Dream, operated by Tianjin Orient International Cruise, which began sailing from Tianjin in late 2023. The ship, a former Carnival Group vessel of about 77,000 tonnes, carries roughly twice as many passengers as Blue Dream Melody, giving it greater revenue resilience per voyage.

Market data show that China's cruise sector has largely recovered from the pandemic shock. In the first three quarters of 2025, international cruise passenger movements rose 28% year on year to just over 2 million, with full-year traffic expected to reach about 2.5 million, keeping China the largest cruise market in Asia.

Yet Blue Dream's suspension highlights a widening divide: while demand has returned, the room for smaller, low-cost domestic operators is shrinking fast—and a broader shake-up may be under way.