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Cruising High: Cruise Tourism Scene in India

Travelers are seen opting & experimenting with cruise products by adding it   into their travel itinerary. It is fast emerging as a new marketable commodity/product. Growing at the rate of 12% per annum globally, this sector has witnessed some activity in India as well in recent times. However it is still in its infancy in India.

Cruise Ships are like moving township studded with state of art facilities and variety of recreational activities. The idea is fast catching, as journey on board cruise liners is not only pleasurable, but also comparatively free from sea travel health hazards. Experience in the Caribbean, Latin American and South-East Asian countries indicate that huge amount of foreign exchange can be earned and employment can be provided on shore by providing the right policy environment and infrastructure for the growth of cruise shipping.

Cruise liners are launching additional new ships to cater to the increasing passenger capacity and maintain its product pricing in order to remain in business. Cruises are no longer considered the privilege of the rich and the elderly and today more and more young tourists are cruising. This industry annually generates US$ 14 billion world-wide and enjoys a passenger base of over 10 million, which is expected to almost double by 2009. As regards number of cruise ships, projections/forecasts are that the number will increase. By the end of 2011, revenues are projected to increase 13.5% with cruise currently accounting for travel Two to Four percent of market share of the total vacation industry. Thus there remains plenty of room for growth. India tourism planners have noticed the potential in this sector and have accordingly putting greater emphasis for Cruise Tourism. Emphasis is also for its economic benefits which can accrue to country’s interest. “There is tremendous scope for cruise tourism in the country given India’s strong domestic tourism sector, growing middle class and the country’s 7517 km long coast time said Kumari Selja Union Minister for Tourism while launching Louis cruise Operation recently. 

The Principal beneficiary of the Cruise Shipping is the economy of the respective maritime nations where the cruise vessels call. Cruise Shipping world over, is seen as employment generating leisure activities. On an average about 1000 passengers travel on a vessel; (medium size). When such vessels arrive at a Port, automatically there is demand for a whole lot of services. Thus a cruise call results in gainful employment to a lot of people, and the earning could be in foreign currency if the tourists are foreigners. Cruise ships also require bunkers, provisions, bonds stores in large quantities agency service, crew etc. All these demands can be met locally. To that extent, there will be contribution to the Indian economy.

In respect of the current status of the cruise industry of India, it has been seen that while the growth rate witnessed globally in cruise shipping sector (in terms of cruise ship fleet and passengers carried) is in the range of 10% to 20%, Indian coastline is not witnessing the same growth pattern. At present, no Indian shipping line owns any luxury cruise liner. As regards the trend in Cruise (foreign lines) passengers landing at Indian ports, it may be seen from the Statement given below that the no. of cruise passengers have been increasing since 2004-2005

Year                     Number of Cruise tourists

2003-04               28000

2004-05               27760

2005-06               152827

2006-07               240307                              Source: Ministry of Shipping Govt. of India.

While on statistics; it is also learnt from other sources that a total number of 106 cruise ships called at Indian ports in 2008-09 as compared to 55 in 2003-04. Similarly the number of passengers increased from 34, 372 in 2003-04 to 2, 40,307 in 2006-07. It went down in 2008 due to global economic slowdown. The number it shows the possible rate of growth in cruises tourism sector in India. About five to six million people, out of which 60,000 people are from India. India thus holds 5% market share in the world wide cruises business. This was told by Mr. Ankur Bhatia Executive Director Bird group while talking about immense potential India holds while launching Silversea cruises operations recently in Dec, 2009.

The worldwide scenario on cruise tourism as per CRISIL report is as follows:

1. In 2004, there were 339 active Ocean Cruise vessel operated by cruise lines around the world, with the global fleet amounting to a total of 10.9 million gross tons.

2. Cruises carry 10.3 million passengers, which constituted 1.5% of global travelers who used cruise liners making it a US$15 billion industry and enjoys a passenger base of over 10 million, which is expected to almost double by 2009.

3. Globally the cruise industry is a horizontally concentrated market with 4 large players holding more than 81% of the world supply of berths, more than 17 brands and 114 ships. Cruise liners are regularly launching new ships and adding new destinations. Royal Caribbean’s have launched new ships recently and added new destinations. 

4. The cruise tourists represent a rich and demanding category with high expectations regarding comforts aboard the liner, variety of activities on board, a variety of destinations at every port, state of the art conveniences during transit and a seamless travel.

5. Cruise liners have equally high requirements from the ports at which they call, principal expectations being proximity of access to major markets, quality and availability of port infrastructure and services, competitive cost of port services, capacity of the port to accommodate and process high volumes of passengers efficiently and the quality of the destination in terms of shore based attractions available.

6. International ports have dedicated cruise terminals designed to satisfy the cruise liners and the cruise tourists. Dubai, Singapore, Hongkong are well-known for their state of art Cruise terminals.

7. As per research conducted by leading cruise industry associations, Cruise passengers are high spenders with international average working out to $ 94 per cruise tourists per port.

8. Sustained product development in line with global demand trends, strategic positioning and marketing backed by consolidated investment in infrastructure and a strong human resource network are sine-quo-non to success in the cruise sector.

9. It is a supply driven market because cruise liners are ever in search of new markets, new itineraries and new destinations. If adequate facilities, services and infrastructure are provided, they will in turn attract more and more cruise operators.

10. India’s reputation as an enchanting, exotic, historic and beautiful destination would enable the country to make an instant international cruise positioning and move into the cruise destination market. Cruise operators and liners are more than ever searching for new destinations and itineraries.

11.       India’s 7,517 Kms long coastling and strong port positioning imparts a natural advantage to the country to attract international cruise lines.

12. India’s positioning in South East Asia and its proximity to already popular cruise destinations would enable strong cruise circuits to be created over a period of time.

13.  India’s strong domestic tourism sector would enable the country to achieve a strong domestic cruise sector that could complement the growth and support viability.

14. India’s impressive growth in the tourism sector would impart an important advantage to its cruise tourism positioning mutually strengthening each other.

15. The cruise ports selected for development are also strong tourism states, especially Goa, Chennai, Kochi and Mumbai. This could provide an important platform for cruise tourism to takeoff.

16. While talking about recent developments in India, other than the back waters in Kerala and Motor launch services between kolkata (canning) and sunder bans, also there are other river cruise through the country’s innumerable water ways and among these, the unique river cruises run by the Assam Bengal Navigation company on the river Brahmaputra in Assam and Bengal is a success story. Assam cruises run by Assam - Bengal Navigation Company started their first river cruise on the Brahamputra in 2003 & subsequently pioneered the Hooghly cruises in west Bengal from 2006. Cruises operate in Assam from October to April and in Bengal virtually throughout and the year (For more information The sunder ban cruises take tourists into one of the world’s last great wildness areas and a vast tract of tribal creeks and mangrove swamps. Infact if properly organized, the cruises can be linked with cruises from the Bangladesh border up to the historic city of Patna. Potential is very much there in eastern India to boost cruise tourism. Madhya Pradesh & Goa are popular cruises destinations now.

17.  Silver sea cruises recently joined partnership with Bird Travels to attract high and luxury cruises market in India, Star cruises market in India, which played on important role star cruises now called Genting Hongkong Limited) have worked successfully toward catering to the up market cruises clients for quite some time in India and brought in good volume of tourists, Among the other leading cruises Liners bringing tourists to India carnival  Italy based Costa cruises, part of carnival corporation is soon going to start promoting Asian itineraries in India market by Jan 2010 and proposing  to add itineraries to Dubai – Mumbai – Maldives and Egypt – Yemen  - Oman – Dubai. The ship will dock in Mumbai over night cruising. These are very positive indication for future growth of cruise tourism in India.

To boost cruise tourism a Cruise Shipping Policy was formulated The Cruise Shipping Policy was approved by Government of India on June 26, 2008.

The objectives of the Cruise Shipping Policy is to give proper directives to the growth of this segment – keeping in view the growing popularity of cruise tourism, Government of India has taken an initiative for developing cruise shipping as one of the thrust areas and is working to formulate a Cruise Shipping Policy with the following objectives:-

I.          To develop India both as Source and Destination Market with the state of art infrastructure and appropriate marketing strategy.

II.       To increase the number of cruise ship calls and passenger arrivals in a sustainable manner.

III.      To achieve a target of 10 lakh cruise passenger landings per year by the end of 2010.

IV.      To strengthen inter-sectoral linkages, whereby cruise liners source the requisite supplies of goods and services from local Indian suppliers.

V.       To consolidate existing ports of call, explore other ports and suitable anchoring sites on the Indian coast with a view to making additional cruise ship calls to other areas of the country.

VI.      To operational appropriate promotional programme that would effectively convert cruise passengers to long stay visitors.

VII.     To maximize the benefits from the cruise industry and at the same time protect environment and sustain the natural resources of India.

VIII.    To ensure that the cruise shipping industry in India becomes internationally competitive with other destinations and contributes to the economy in terms of generation of foreign exchange, income, employment and business opportunities.

IX.      To attract the right segment of foreign tourists to cruise shipping in India.

X.       To popularize cruise shipping with Indian tourist.

XI.      To enhance absorptive capacity of the country by developing existing and new visitor attractions, including event attractions in line with India’s efforts to improve the tourism product.

Naturally Question arises into mind what steps are being taken by the Ministry of Tourism for development of Cruise Tourism in the country if there is so much potential. Ministry of Tourism is very proactive in this respect and Ministry of Tourism extends financial assistance to the State Government/ UT Administrations for development of tourism infrastructure including cruise tourism under Product/Infrastructure Development for Destinations & Circuits scheme and to Port Trust Authorities under the scheme of Assistance to Central Agencies for Infrastructure Development.

Ministry of Tourism had sanctioned Rs. 1450.00 lakh to Cochin Port Trust, Kochi for development of tourism infrastructure at the Cochin Port under scheme of Assistance to Central Agencies for Infrastructure Development in 2008-09.

Also Ministry of Tourism had sanctioned Rs. 52.70 lakh to Poompuhar Shipping Corporation Ltd. Chennai for purchase of ferries in Tamil Nadu in 2008-09.

Similarly the Ministry of Tourism has taken several steps to promote India as a Cruise Destination abroad, which include.

I.  Ministry of Tourism jointly with FICCI organized a Seminar Initiative on furthering Cruise Tourism in India on September 4, 2008  in  New Delhi.

II. Cruise tourism in India has been specifically promoted at various international platforms such as World Travel Mart, London, ITB Berlin and Arabian Travel Marts.

III.        Ministry of Tourism through its office at New York participated in the Sea – trade Cruise Shipping Convention, Miami held from 16th to 19th March, 2009.

IV.        M/s Ocean Cruise India P.Ltd., was operating cruise services from Goa to Lakshadweep via Cochin, since January 2007 and have stopped their services in 2009.

V. Leading Port Trusts have been requested to upgrade their cruise terminal infrastructures to world class standards.

VI.        The Proposals for developing cruise terminal infrastructural for New Mormugao Port Trust has been received in the Ministry for providing assistance under the scheme of assistance central agencies for infrastructure development and being processed for financial assistance as given to understand from Ministry’s Annual Report.

VII.       Hon’ble Minister of Tourism and Housing & Urban Poverty Alleviation has written letter to the Chief Minister of Goa for creating security arrangement around Mormugao Port and clearing of fishing jetty and slums at Kharewado which is close to Mormugao Port. Clean environment is essential for successful operation.

There are some bottleneck areas in the development and promotion of Cruise tourism in the country and for rapid growth urgent action is needed to streamline the operations. Despite the inherent advantages/economic benefits and tremendous potential of Cruise Shipping sector, the country has not witnessed any worthwhile growth, as compared to the growth withnessed in Latin America and South East Asia in this segment.

Cruise Shipping is an international industry and its efficiency judged by the contribution it makes to the country’s economy and is governed by the industry structure and policy package in place. Various relevant components are:

i.        Focused  Policy on Cruise Shipping covering various aspects,

ii.       Well developed port-infrastructure, cruise terminals etc,

iii.      Availability of cruise liners

iv.      Conductive Fiscal regime.

v.       Hassle free immigration and transit facilities,

vi.      Marketing strategy, focusing cruise lesson with promotional material in various languages and safety norms and trained manpower.

vii.     Connectivity to on-shore destinations by various modes (road, rail, air and inland water transport and support services.

viii.    Duty free bunkering and

ix.      Institutional framework for holistic development of Cruise Shipping.

Similarly there are the fiscal issues/deterrents that have de-motivated the Cruise liners from operating in India. The levy of tax on oil and other taxes act as a disincentive for international cruise wanting to operate in India. For providing a conducive fiscal regime to encourage cruise shipping, the following steps are needed.

Service Tax Levied by the central government on services like massage/beauty parlors, sauna bath etc, if the cruise ship is on a coastal circuit taking these activities out side the preview of service tax will be a minor concession which will promote cruise shipping.

a) Since states are direct beneficiary of cruise passengers consuming a Varity of services, the state government may not levy entertainment tax on the shows/ activities on the board a cruise ship by way of amendment in their respective statute. This is a small concession but good way to boost cruise        .

b) Duty free shops on board a foreign cruise vessel are required to be sealed when they convert to coastal leg such an act may become an irritant for passengers on board. It would be desirable that the shops are not sealed and duty free goods continue to be provided the passengers.

c) The custom duty on bunkering for coastal Cruise ship is presently around 33%. Therefore a foreign flag vessel if not engaged in coastal trade in India and purchase bunker in India. The bunkering is 33% cheaper as compare to the purchase of bunker by a vessel having an Indian flag or a foreign flag engaged in coastal trade of India. This makes cruise shipping operations in Indians water economically unviable. In view of this, it is proposed to provide duty free bunkering of cruise ship-Indian or foreign doing coastal runs, which will go long way providing fillip to cruise Tourism.

d) In every country, the international jurisdiction for any maritime business is 12 nautical miles. Beyond this is international waters and income earned or accrued outside of those 12 nautical miles will be tax free. The enhancement of EEZ from 12 nautical miles to 200 nautical miles by changing the definition of India’s territorial waters act as a deterrent for cruise liners.

There is always consistent effort to solve the taxation issue and Ministry of Tourism is seized with the matter. With regard to taxation issues relating to cruise shipping activities, it is understood that the Ministry of Tourism had already written to the department of Revenue requesting stimulus packages through appropriate budgetary measures for boosting cruise tourism in the country.

Similarly there are problems about hassle free, quick immigration clearance for cruise passengers and Cruise Shipping Policy have partially dealt of such issues. This is a continuous process. Based on  experience things can be revised from time to time.

Ministry of Tourism sanctions Central Financial Assistance to State Government/Union Territories for development of Tourist infrastructure and promotion of tourism including River and Backwater Cruise Tourism Products on the basis of the proposals received from them, subject to availability of funds and inter-se priority. These projects are sanctioned under “Product/Infrastructure Development Destinations and Circuits” Scheme. For promotion of river tourism financial assistance is given to states for procurement of cruise vessels, boats, catamaran, rice boats, houseboats, glass bottom boats, water sports equipment etc. The following are the main projects sanctioned for development of Cruise Tourism:-

i.        Development of Brahmaputra River front and Cruise vessels on Brahmaputra in Assam for Rs. 365.52 lakh in 2006-08.

ii.       Development of Circuit on river Godavari and Krishna in Andhra Pradesh for Rs. 425.95 lakh in 2007-08.

iii.      Ministry of Tourism has sanctioned an amount of Rs. 2042.35 lakh and released Rs. 1021.18 lakh for development of Ganga Heritage River Cruise in West Bengal in 2008-09.

iv.      Ministry of Tourism has sanctioned a mega project for integrated development of infrastructure for, Heritage and Hinterland Tourism in Goa including Mandovi and Zuari river with CFA of Rs. 4309.91 lakh to the State Government of Goa in the financial year 2008-09.

 Ministry’s Annual Report updates on all such activities.

 In the recent endeavors, we can talk about Volvo Ocean Race.  Volvo Ocean Race-India Stopover at Cochin was held from 3rd to 13th December 2008. Volvo Ocean Race is one of the most exciting adventure sporting events in the world, which stopped over in India for the first time in the 35 years history of the race. This spectacular Ocean marathon was in Cochin Port for 10 days from the 3rd to 13th December, 208 making it the first Asian different countries like the US, Ireland, Russia, Spain, Sweden etc. the event attracted hundreds of other luxury Yacht and sailing vessel. Five Luxury cruise ships were also present Cochin during the event.

A large contingent of international travel media, sailing enthusiasts, corporates and members of the business community converged in Cochin during the 10 day stopover when Cochin under the international spotlight. The event reached to more than 1.8 million viewers in more than 180 countries which put the Volvo Ocean Race among the worlds top most sports events in terms of Global Media Congress. Cochin port trust developed a state of the art media centre which accommodated about 200 media professionals from the national and international media and also organized a festival during this period.

The event was jointly hosted by the Cochin Port Trust and Department of Tourism ,Government of  Kerala special  events including regatta, food festival, open air concerts and cultural events which showcased our country in all its glory and colour, India’s people, art and culture. Ministry of tourism is also participated by taking five stalls in the festivals for showcasing rural art, craft and textiles from different rural tourism sites. River cruising in Madhya Pradesh or high sea cruising in Goa are well established very popular.

Future is great provided positive steps are taken. It is essential to restore services which were run earlier by M/s ocean cruises India P. ltd. which was operating cruise services from Goa to Lakshadweep via coachin and star cruise operating Mumbai – Goa etc – they really attracted lot of domestic tourists and tourists enjoyed cruising experience. These cruise operators be requested to restart their operation by giving suitable incentives from the Government In last account over 150,000 domestic tourists utilized the cruise services to their satisfaction. It created good number of jobs for locals.

Good news is that Myanmar based Pandaw River cruises will launch its maiden 15 day vayage sailinge the river Ganges between Kolkata and Varanasi named RVBengalpandaw, plans to operate 10 cruise journeys including upstream and downstream from March, 2010 as is known from various press reports.

Similarly Louis Cruises now comes to Kochi and becomes first company to tap new cruise policy of the Government of India. For cruises operations Louis has chosen Kochi as its home post in India and is offering services on two routes: Kochi – Maldives and Kochi - on both routes, the operator is offering four day itineraries and has deployed a large vassal christened Mr. Aquamarine. The vassal has 525 cabins with a maximum capacity of 1250 passengers, three restaurants, a swimming pool,    a discothèque, duty free & travel value shops, and dedicated space for outdoor spots etc. We need more such operations.

Thus cruises tourism is bringing in a new concept in the country. Professionals are involved, brands presence and they would obviously be very successful our professional tour operators are taking interest and after a fall in the tourism business, this is going to be the right step for them to boost earnings. With successful operations many new cruise operators will take  advantage of the cruise policy of Government of India and tourism will prosper though cruise tourism both in tourist volume and Foreign exchange earnings. Some of our ports like Mumbai and Kochi have world class facilities. We need to do enhanced publicity to attract more international cruise liners. India is undoubtedly the top most preferred market for giants cruise players but the only hurdle for the growth of India cruise sector is INFRASTRUCTURE, countries like Dubai, Singapore, Hong-Kong which are far smaller than India have invested in developing cruises infrastructure to generate demand and are very successful. We must make India - port of call by leading cruise lines. We need maintenance repair and operation facilities for cruise vessels and here private partnership is needed with good incentives. Once all the positive steps are taken, international liners will start coming to India. Almost all the giant cruise liners are eyeing India. We must take the advantage and business should not go to Dubai, Singapore, Hongkong sooner the bitter.  The decisions are taken and implemented we have mad a beginning and we will make it happen. I am very optimistic as I had seen cruise operations in Mumbai Port when I was posted there as Regional Director (West) India Tourism, Ministry of Tourism, Government of India. 


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