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Cruise tourism: Awaiting ballast

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Even after numerous discussions and symposiums, India has not progressed far from where it was a few years ago in cashing in on domestic and international cruise tourism. India’s legacy ports still fail to look at cruise ships with the same seriousness as they do towards freight ships. The Cruise Tourism Policy which was approved by the Union Cabinet in 2008 has no absolute clarity on what the real benefits are, and if any have been reaped from the policy. The contribution of cruise tourism to the country’s tourism exchequer therefore remains hazy. According to estimates from industry sources, not more than one lakh cruise ship passengers disembarked at Indian ports in 2010-2011. Compare this with data released by the European Cruise Council (ECC), which said that the total contribution of the cruise tourism industry to the European economy was GBP 29.66 billion in 2011. In addition, the cruise tourism industry provided employment to 63, 834 people in the UK.In India, cruise tourism is still spoken of as ‘having great potential’ but going beyond the talk, the real action remains sluggish. When the world began to talk of a cruise holiday as an alternative to land-based vacation, it was expected to take off in a big way particularly because of its all-inclusive appeal. In many ways, Indians have begun to take to cruising, but there is immense opportunity still to be tapped. Star Cruises provided a taste of what a cruise holiday is when they began operations in India. That coupled with the desire to travel has meant that Indians are experimenting with cruises in other parts of the world, including the Mediterranean region, Alaska and the South East Asian circuit.

But the country has fallen behind in attracting cruise ships to its own ports. A complex tax regime coupled with tedious immigration processes is costing the Indian government precious foreign exchange. According to a report published by the UNWTO, as the cruise business has continued to grow in the past few years, four clear segments have emerged; luxury, premium, budget and contemporary. The fastest growing has been the contemporary segment which has been defined as the ‘large-scale consumption’ or the most popular segment. But even as cruise ship companies have been increasing capacity to cope with this demand, India has adopted a lukewarm approach in welcoming them to its legacy ports including Mumbai, Goa, Kochi and Mangalore.Gautam Chadha, chief executive, TIRUN Travel Marketing, which represents Royal Caribbean Cruises, Azamara Club Cruises and Celebrity Cruises says, “Since the past 15 years, cruise holidays have been the new holiday opportunity. Earlier it was resorts and spas and then cruise ships came along. We are seeing five-six per cent growth since the past five years, but it is still a challenge marketing them in India.”He points out that the closest ship to India sails from Singapore and this gives people lesser opportunity to opt for a cruise holiday than if an Indian port was used as a turnaround port. Already, UAE is racing ahead in the cruise tourism sector and is expecting a 50 per cent growth in 2012, according to the Sharjah Commerce and Tourism Development Authority. Meanwhile, according to the Dubai Tourism Development Company (DTDC), Dubai welcomed some 420,000 cruise passengers in 2012. The newly developed cruise terminal welcomed some 108 cruise ships last year. Compare this with India’s paltry figure and it becomes evident how behind we are.

Looking at it from an inbound perspective, Keki Master, VP, JM Baxi Shipping Corporation, who is passionate about India’s potential as a cruise tourism destination says that there is a 10-12 per cent increase year on year in the number of international vessels calling at Indian ports. “If comparing India to Dubai of Singapore, one must remember that we have financial constraints. The various issues are being addressed by the ministry Of Shipping, but it is a long process given the bureaucratic procedures. The political situation in Dubai and Singapore is quite different from the way things are run in India. The various ports have raised their concerns, but they are slow in being implemented.”

Grim reality

So why are many of the big international ships giving India a miss? Michael Haidar Ali, Micato Tours, whose guests sail on Royal Caribbean Cruises, Azamara Club Cruises, Silver Sea Cruises, Crystal Cruises, Cunard Cruise Line and Carnival Cruise Lines says, “There are a lot of ships calling in India, but there is too much bureaucracy and it dissuades them from coming back. For example a 3000 passenger capacity ship has to provide four to five passport copies of each passenger at each port.” This is in stark contrast with international air travel. He points out that international air carriers only have to provide the flight manifest to the authorities.In addition, there is the recurring issue of high port charges. It may be remembered that Louis Cruises which ventured into the Indian market two years ago with sailings from Kochi eventually stalled operations. According to representatives of the company, the charges for a single call at Kochi port were US$ 25,000. Compare this with the fee at Maldives – US$ 2,500 for 24 hours or Colombo – US$ 4,000.

Going beyond, when you compare port charges in India with other ports in South East Asia, the fee is quite high. The argument here is that ports make far higher revenue from freight ships and that from the macro perspective, cruise ships hardly contribute to the overall profits of the ports. Chadha contradicts this view. According to him, ports were never meant to operate as commercial enterprises. The purpose of port trusts was twofold; Firstly, the profits made were to be used to continually upgrade the port infrastructure and secondly, they should contribute to the economic development of the community. “This is the sole purpose why port trusts were set up. It has been forgotten. A mindset change is required. Also, for the first time the legacy ports have realised that they are facing competition from the smaller ports and that they have to re-invent themselves.”

Getting our act together

Haidar Ali adds, “To give you an idea, last season (Between October-April 2011) 45-50 ships called at Mumbai Port and the capacity ranged from 100 to 3000 guests. Most ships end up stopping in India only if they are passing through. In many cases, they use Indian ports as the turnaround port, where passengers disembark and catch a flight back home and a new set of passengers get onboard the ship. We need to develop itineraries which encourage ships to sail for a month or two in India. We are trying hard with several US cruise lines and targeting westerners to go on a cruise in India. Last year, we had a ship in India and it was full. We want them to spend more time here. Earlier Mumbai was a turnaround port, but we lost out to Dubai which developed a very good cruise terminal.”The cruise tourism workshop which concluded in Goa recently saw participation from port authorities, the ministry of Shipping, ministry of Tourism and private stakeholders in the industry. One of the objectives of the workshop was to provide training to immigration and other front-line staff. The workshop also drew up recommendations to develop India as a cruise tourism destination. Speaking to Express TravelWorld about the outcome of the workshop in Goa, Yashveer Singh, director, India Tourism, Government of India said that there was a need for state governments to be more proactive in this regard. “Recommendations were made at the workshop. We recognise that infrastructure is a major impediment, whether for international cruises or domestic. Marketing of port destinations and tourist spots is also extremely important and passenger facilitation, through coaches, taxis, guides and restaurants.”According to Chadha, there was also a strong need to standardise procedures at all ports including immigration and customs. After the 26/11 attacks in Mumbai, ports began to operate on heightened security, but Chadha points out that we should not go overboard and turn ships away under the guise of security. “Guest satisfaction determines how a destination will be rated,” he says. Haider Ali agrees about standardisation of procedures at all ports. “This meeting in Goa was very important. I don’t blame the authorities, we understand that every port has different security procedures, but most countries follow standard procedures at all of their ports. With the world changing, cruise tourism is going to grow. Things slowed down after 9/11 and then again after the terror attacks in Mumbai. But this is slowly changing, ships are coming back with high occupancy,” he says.

Master says, “The culture and heritage that we have in India is unmatched when compared to Dubai. Each port has something different to offer to a passenger, but unfortunately we have not been able to package it and present it to foreign cruise lines in a composite manner.”

Already, revenues are being lost on Indians spending on cruising abroad. AmaWaterways, a company which operates small luxury cruises in Europe, Africa and parts of South East Asia, has appointed a local representative here in India to market the cruises to outbound travellers. Unless the Ministries of Tourism and Shipping in conjunction with the ports, decide to convert the recommendations made into actual deliverables, more international cruise lines will, recognising India’s potential as an emerging middle-class market, cash in on the lucrative opportunity. Situational factors should also be looked at closely. Piracy in the Suez Canal has meant that many cruise ships are exploring sailing through other waters. The Indian Ocean is waiting to be tapped. As Chadha aptly pointed out, “Cruise shipping is India’s best kept secret,” and it’s quite certain that if its potential as a revenue generator is not taken seriously, cruise shipping will continue to remain India’s best kept secret.

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