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
of Cruise tourists
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
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
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
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
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
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 assambengalnavigation.com) 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
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
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
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
i. Focused Policy on Cruise Shipping covering various
ii. Well developed
port-infrastructure, cruise terminals etc,
iii. Availability of
iv. Conductive Fiscal
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
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
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
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
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
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
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.