Professional Documents
Culture Documents
Cruise Tourism
Potential & Strategy Study
Final Report
December 2005
CRISIL Limited
CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
TABLE OF CONTENTS
PREFACE.............................................................................................................................................. 9
ACKNOWLEDGEMENTS ............................................................................................................... 12
TABLE OF EXHIBITS
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Exhibit 4 : Stakeholder Responsibilities ............................................................................................... 21
Exhibit 5 : Region-wise Statistics ......................................................................................................... 25
Exhibit 6 : Growth Trend in the North American Cruise Market ......................................................... 26
Exhibit 7 : Accommodation capacity measured in thousands of berths ............................................... 26
Exhibit 8 : Market Share of the four major Cruise Operators............................................................... 26
Exhibit 9 : Global Seasonal Trends – October to March ...................................................................... 27
Exhibit 10 : Global Seasonal Trends – April to September .................................................................. 27
Exhibit 11 : International Arrivals vis-s-vis Cruise Arrivals ................................................................ 28
Exhibit 12 : Main Cruise Liners that offer Sea Cruises (January 2002) ............................................... 28
Exhibit 13 : Horizontal concentration of 4 key players ........................................................................ 29
Exhibit 14 : Market Share (%) of Big Four in destination regions ....................................................... 29
Exhibit 15 : Distribution of Ocean going fleets as on January 2002 .................................................... 30
Exhibit 16 : Demographic Profile of the North American Cruise Market ............................................ 30
Exhibit 17 : Study of cruise passengers in the European and Asia-Pacific market .............................. 32
Exhibit 18 : Trends in Duration of Cruise (Passengers) in the N American market............................. 32
Exhibit 19 : Trends in Duration of Cruise (Market Share) in the N American market......................... 32
Exhibit 20 : Trends in Cruise duration in the European markets .......................................................... 33
Exhibit 21 : Global Fleet Deployment .................................................................................................. 34
Exhibit 22 : Global fleet deployment, 2002.......................................................................................... 36
Exhibit 23 : Viking River Cruise .......................................................................................................... 45
Exhibit 24 : Profile of the Segments Targeted ...................................................................................... 49
Exhibit 25 : Profile of Destinations....................................................................................................... 50
Exhibit 26 : Profile of Accommodation Facilities ................................................................................ 51
Exhibit 27 : Cruise Passenger Traffic in the main Asian Ports in 2001................................................ 53
Exhibit 28 : Dubai Cruise Tourism Market .......................................................................................... 53
Exhibit 29 : Statistics of Indian Tourists : 1999-2003 .......................................................................... 56
Exhibit 30 : Trip purpose of outbound travel by major generating regions, 1996-97 (% Of total) ...... 57
Exhibit 31 : Top 5 Overseas destinations for Indian Tourists............................................................... 63
Exhibit 32 : Top 5 Foreign Destinations for Foreign Tourists in India ................................................ 63
Exhibit 33 : Attractiveness of different Holidays for Foreign and Domestic Tourists ......................... 64
Exhibit 34 : Actual Cruisers among Domestic and Foreign Tourists ................................................... 64
Exhibit 35 : Intention to go on a Cruise among Domestic and Foreign Tourists.................................. 65
Exhibit 36 : Popular Cruise Destinations for Domestic Tourist ........................................................... 66
Exhibit 37 : What attracts tourists while on a Cruise............................................................................ 66
Exhibit 38 : Relative importance of different aspects........................................................................... 67
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Exhibit 39 : Rating of the Ports by Domestic Tourists ......................................................................... 68
Exhibit 40 : Rating of Ports by Foreign Tourists .................................................................................. 68
Exhibit 41 : Aspects considered important while disembarking from the Cruise................................. 69
Exhibit 42 : Initiatives rated important to develop Cruise Tourism in India ........................................ 70
Exhibit 43 : Rating Cruise Circuits in India.......................................................................................... 70
Exhibit 44 : Rating Cruise Circuits by Foreign Tourists....................................................................... 71
Exhibit 45 : Does India have good River Cruises to offer? .................................................................. 71
Exhibit 46 : Rating Indian Cruises by Domestic Tourists..................................................................... 72
Exhibit 47 : Rating Indian Cruises by Foreign Tourists ....................................................................... 72
Exhibit 48 : Cruise Tourists Arrivals in India – 1999:2005.................................................................. 73
Exhibit 49 : Some Cruise Vessels that visited Indian Ports (2004-05) ................................................. 74
Exhibit 50 : Cruise Arrivals and Tourist Statistics at different Ports : 1996-2005 ............................... 75
Exhibit 51 : Number of Cruise Tourist arrivals in India (1996-2001) .................................................. 77
Exhibit 52 : Cruise Tourist Trend in India during 1996-2001 .............................................................. 77
Exhibit 53 : Potential Cruise Tourist Forecasts (2003-2031)................................................................ 78
Exhibit 54 : Cruise Tourist Trend Forecast for 2001-2031................................................................... 78
Exhibit 55 : Number of Cruise Tourists in North America................................................................... 78
Exhibit 56 : Table – Number of Cruise Tourists in Europe .................................................................. 79
Exhibit 57 : Forecast of Cruise Tourists in India (2003-2031) ............................................................. 79
Exhibit 58 : Forecast of Cruise Tourist in India.................................................................................... 80
Exhibit 59 : Table – Number of International Tourist arrivals in India ................................................ 80
Exhibit 60 : WTO forecast for International arrivals ............................................................................ 81
Exhibit 61 : Forecast of International Tourist arrivals (2003-2031) In Millions .................................. 81
Exhibit 62 Forecast of International Tourist arrivals in India taking cruises (2003-2031)................... 82
Exhibit 63 : Projected potential Cruise market arising from International Tourist arrivals in India .... 82
Exhibit 64 : Data for Domestic Indian Tourists (2001-2003) ............................................................... 82
Exhibit 65 : Demographic Segmentation of Domestic Indian Tourists ................................................ 83
Exhibit 66 : Table – Projection of Cruise tourism market within Domestic Indian Travellers (2003-
2031) ..................................................................................................................................................... 83
Exhibit 67 : Number of Cruise Tourists within Domestic Indian Travellers (2003-2031) ................... 83
Exhibit 68 : Number of Cruise Tourists within Domestic Indian Travellers ........................................ 84
Exhibit 69 : Indian Outbound Tourists (1999-2003)............................................................................. 84
Exhibit 70 : Forecast of Indian Outbound Tourists enjoying leisure facilities abroad (2003-2031)..... 85
Exhibit 71 : Forecast of Indian Outbound Tourists taking cruises from Indian Ports (2003-2031)...... 85
Exhibit 72 : Projected Indian Outbound tourists cruising from India ................................................... 86
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Exhibit 73 : Total Cruise Tourism Potential ......................................................................................... 86
Exhibit 74 : Performance of Star Cruises in India ................................................................................ 87
Exhibit 75 : Impact of Cruise Shipping Services .................................................................................. 88
Exhibit 76 : Analysis of Mumbai Port .................................................................................................. 93
Exhibit 77 : Analysis of Goa Port ......................................................................................................... 94
Exhibit 78 : Analysis of Cochin Port .................................................................................................... 95
Exhibit 79 : Analysis of New Mangalore Port ...................................................................................... 96
Exhibit 80 : Analysis of Tuticorin Port................................................................................................. 97
Exhibit 81 : Analysis of Chennai Port .................................................................................................. 98
Exhibit 82 : Infrastructure Facilities at identified Cruise Ports............................................................. 99
Exhibit 83 : Benchmarking of Facilities at the identified Cruise Ports............................................... 100
Exhibit 84 : Infrastructure Facilities at Key International Ports ......................................................... 101
Exhibit 85 : Primary facilities for Cruise Tourists .............................................................................. 102
Exhibit 86 : Secondary facilities for Cruise Tourists .......................................................................... 102
Exhibit 87 : Facilities for Cruise Vessels............................................................................................ 103
Exhibit 88 : Port & Port related infrastructural facilities .................................................................... 103
Exhibit 89 : Facilities for Entry-Exit Checks/Clearances ................................................................... 103
Exhibit 90 : Facilities & Services at the Port Rashid Cruise Terminal, Dubai ................................... 106
Exhibit 91 : Services and facilities at the Singapore Cruise Centre.................................................... 109
Exhibit 92 : Broad Estimates for developing a cruise terminal .......................................................... 112
Exhibit 93 : Cost Estimates for each Cruise Terminal........................................................................ 112
Exhibit 94 : Average spends per cruise tourist per port ...................................................................... 114
Exhibit 95 : Cruise Passenger Spending at Base Port ......................................................................... 115
Exhibit 96 : Cruise Passenger Spending at Secondary Port................................................................ 115
Exhibit 97 : Estimation of total cruise tourist & crew spending for 2010-11 and 2030-31 ................ 116
Exhibit 98 : Project Cost for a Cruise Terminal.................................................................................. 117
Exhibit 99 : Key Viability Parameters (Base case)............................................................................. 118
Exhibit 100 : Sensitivity of a Cruise Terminal constructed on Renovated Berth ............................... 118
Exhibit 101 : Sensitivity of a Cruise Terminal constructed on New Berth......................................... 119
Exhibit 102 : Broad Funding Approach .............................................................................................. 121
Exhibit 103 : PSP Models ................................................................................................................... 122
Exhibit 104 : PSP Structure vis-à-vis Government objectives............................................................ 123
Exhibit 105 : Map showing Cruise Destinations in the South East Asia ............................................ 129
Exhibit 106 : Map of Cruise Destinations in the Indian Ocean .......................................................... 129
Exhibit 107 : Map of Ports of South Asia ........................................................................................... 130
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Exhibit 108 : Distance Time Matrix between Key Cruise Ports ......................................................... 131
Exhibit 109 : Discover India Circuit Itinerary .................................................................................... 131
Exhibit 110 : Distance Time Matrix between Mumbai-Porbander-Dubai.......................................... 132
Exhibit 111 : Eco Cruise across high seas .......................................................................................... 135
Exhibit 112 : Long shopping Cruise to Mumbai, Dubai, Singapore................................................... 136
Exhibit 113 : Heritage Cruise ............................................................................................................. 137
Exhibit 114: Statement of Taxes Impacting the Tourism Industry ..................................................... 145
Exhibit 115: Tax Rates on Tourism in Competing Destinations ........................................................ 147
Exhibit 116: Corporate Taxes in competing tourist destinations ........................................................ 148
Exhibit 117 : Other Taxes in competing tourist destinations.............................................................. 148
Exhibit 118 : Benchmarking tourism related taxes to taxes across comparable tourist destinations .. 148
Exhibit 119 : Activity interactions of the Cruise Industry with the Government agencies................. 151
Exhibit 120 : Laws & regulations governing the cruise industry........................................................ 152
Exhibit 121 : Pre Berthing Activities.................................................................................................. 153
Exhibit 122 : Activities related to Port Call and Ships at Berth.......................................................... 154
Exhibit 123 : Applications related to Cruise Operations .................................................................... 156
Exhibit 124 : Stakeholder Vs Training Required................................................................................ 159
Exhibit 125 : Short, medium and long term Development Plan ......................................................... 174
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
PREFACE
The potential of the tourism sector to stimulate economic and social development thereby
transforming economies has been internationally acknowledged. Tourism has been placed on a
priority platform in India with the Governments at the centre and the states making directed efforts to
exploit the tourism resources offered at the national and local level.
However, in exploring avenues for consolidating the tourism strengths of the country, it would be
vital that India be sensitive to global developments and demands, responsive to changing international
trends and tourist perceptions.
‘Cruise Tourism’ represents one such avenue where far reaching developments have been witnessed
worldwide with India having no claim to even a marginal positioning. In 2002 North America, which
forms around 71% of the international cruise demand, had 7.64 million cruise travellers while the
same period saw only 0.012 million cruise tourists in India, representing less than 0.16%.
It is thus clear that, despite its position on the south pacific international sea-route, an impressive 7516
km coastline, several natural ports and breathtaking destinations, India has continued to miss out on
the cruise tourism potential.
It is in realization of this that the Ministry of Tourism has initiated a study of the market and potential
for Cruise tourism in India with the objective of evolving strategies towards an effective exploitation
of its global possibilities.
The Terms of Reference of the study are as follows.
- To assess the potential and to recommend various steps to develop India into a major cruise
market for Domestic, Regional and International Cruise.
- To study the existing scenario world wise – number of cruise ships, their ownership, funding
pattern, trips made, destinations covered with frequency, present demand, financial viability,
State support available, facilities offered into the ship and at ports, year-wise volume of traffic
handled and total berths available in the last, say 5years.
- To study the future demand – world wide and financial viability of creating infrastructure in
India at a few selected ports;
- To identify the ports which need be linked/ developed for cruise tourism in India; existing
facilities at those ports; and facilities required to be created to make them International
standards, including financial implications for up gradation / creation of facilities and number
of ships required, to begin with.
- Carry out necessary primary and secondary survey to establish the data
- To study the procedural requirement for Customs and Immigration at such ports
- To identify the private sectors which may be interested in such a project and State support
required in the form of finances, tax holidays etc..
- To analyse as to how to take up the project, i.e., as a joint venture of GOI with private sector
or public – private partnership with public ownership and private running / management on
lease basis or any other mode;
- To assess the feasibility / demand of both domestic and foreign tourists coming to the ports by
other means of transport like air / rail / road; and then availing the Cruise facilities for an
Indian Cruise Circuit;
- To assess the infrastructure demand for such a cruise tourism, including the cost factor;
- To assess the feasibility of Cruise Toursm from Indian ports to selected foreign destinations
(to also identify foreign cruise circuit with reasons for such a circuit); demand for the same
from and to India;
- Marketing strategies – both nationally and internationally required to capture / create the
market
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
- Reviewing, identifying and justifying the cruise routes of importance at National and
International Level w.r.t. Indian Tourism and its territory as base point.
- Assess the future cruise tourism trend and impact of growth of shipping services in India for
next 26 years.
- Assess the gap in tourism facilities and services in existing and proposed terminals.
- To identify gaps in the infrastructure in the ports for promoting cruise passenger lines.
- To assess infrastructure facilities available and required at designation seaports as per the
International standard.
- Strategies to develop and market cruise tourism and action plan for future development.
- Availability of promotional brochure on cruise tourism.
- To identify the Human Resources required, assess the present training facilities available and
to recommend a strategy for developing the required trained personnel.
- To suggest alternatives and recommendations to convert cruise terminals into major
destinations by themselves
- To suggest measures to simplify Taxation on Cruise vessel and make clear the position
regarding applicability of different types of taxes at Union / State / Municipal level.
- To study the feasibility of conceptualizing tourist cruise as a floating hotel
- To estimate the share of cruise holiday among the world wide market of international holidays
and the average duration of stay of a cruise passenger.
- To study the social – demographic profile of a cruise passenger
- To prepare products to be offered to potential cruise tourists which includes specific,
structured itineraries, Port Infrastructure, the ship and the distribution channels.
- To assess the effect on marine life due to disposal of high level of waste products
- To study the aspects of safety against accidental risks and the threat of external forces.
This study report has analysed all elements of the cruise tourism sector as set forth in the TOR above,
duly consolidating the elements into the relevant macro aspects. The objective has been to develop an
understanding of the features, characteristics, demands and trends related to the cruise tourism market
so as to be able to develop appropriate strategies for developing the Indian Cruise Tourism market
The Executive Summary presents an overall view of the report and the main recommendations.
Chapter 1 focuses on a macro level analysis to enable a close understanding of the dynamics and
demands of Cruise Tourism in the context of international developments, precedents and trends
leading to an appreciation of the developments in the Indian cruise market that have implications for
the development of the sector.
Chapter 2 takes a close look at the Indian cruise tourism scenario with the objective of understanding
the nature and direction of developments that have taken place and initiatives that have been taken at
the government level to stimulate the sector. Assessment of the potential that cruise tourism holds for
India forms an important part of this chapter. A primary survey of high value domestic and
international tourists has also been undertaken to obtain direct feedback on certain critical and ‘soft’
aspects of cruise tourism. The results of this survey as also an analysis of the tourists’ perception and
feedback have been presented as part of Chapter 2.
Chapter 3 is in the nature of a critical appraisal of the preparedness of the Indian Cruise Tourism
industry to respond and meet the demand potential as assessed. It essentially examines the practical
aspects of developing cruise tourism market in the country such as developing the ports, the linkages
and connectivity that necessarily needs to precede any cruise tourism development initiatives. The
chapter presents an exclusive study of the key ports identified for cruise tourism in India to highlight
the current status vis-à-vis the cruise tourism objectives and draw the development imperatives
including the financial implications.
Chapter 4 analyses the strategic aspects related to the development of cruise tourism in India
emerging from an understanding of the international trends as well as the gaps identified in the efforts
being made in the country. The objective of this would be to evolve recommendations towards an
effective growth of this tourism sector in the country.
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
The learning and conclusions that has emerged from the study has been summarized in Chapter 5 in
the form of salient and specific recommendations imperative for positioning India as a key cruise Port
of call’ as well as a ‘home port’ catering to global as well as domestic cruise tourists. The
recommendations are based on the studies made and conclusions drawn through the study and drawn
from international understanding and precedents.
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
ACKNOWLEDGEMENTS
At the outset, we would like to express our thanks to the Ministry of Tourism, especially the
Secretary, Mr.A.K.Mishra and Joint Secretary, Mr. Amitabh Kant for the valuable inputs given during
the presentation of our draft report.
The prepration of our report was invaluably aided by our interactions with the industry stakeholders
and participants. In particular, we would like to record our appreciation to officials of the Mumbai
Ports Trust including the Chairman, Ms.Rani Jadhav, Secretary, Ms.S.G. Tahiliani, Mr.Gautam De
and Mr.Sunil Deshmukh, Asst Docks Managers, for time they took off from their busy schedule to
share with us their invaluable experience and perceptions. It has enabled us to develop a complete
understanding of the Cruise tourism sector its status today and future potential in India.
We would also like to specially appreciate the inputs given by the Cochin Port Trust personnel
including Mr.Jacob Thomas, Chairman, Mr.Vipin R Menoth, Deputy Secretary, Mr.K.C.Kuncheria,
Traffic Manager.
Special thanks are also due to Mr Keki.M.Master, Vice President for J.M. Baxi & Co for providing us
support with all the ports related aspects and issues including the procedural aspect.
On the marketing front, important insight and understanding of the international and domestic cruise
market and the perceptions of the key tour and cruise operators were given to us by Mr Jimmy Sarbh
Chairman & MD South-Asia & Middle East for P&O Ports, Mr.Aakash Sheth, Director, Raj Travels
& Tours Limited, Mr.Gopi Iyengar Sr. Gen Manager of SOTC, Mr.Subair and Ms.Samira Ravel,
Sales Manager of Royal Caribbean International, Mr.Santosh Sukumaran, Sectional Head of
Marketing and Product Development of Travel Corporation (India) Pvt. Ltd., Ms. Sadhana Seth,
Manager of Thomas Cook and Mr. Jamon of Interglobe Cruises. Mr Anto T Joseph of The Economic
Times gave us important insight into the media side of the industry. We are thankful to them for
sharing so clearly their understanding of market developments in the cruise industry.
We would also like to place on record the support provided by Mr N.S.Rathor, Executive Committee
Member & Chairman, IATO Maharashtra and Goa Chapter for giving us an overview of the entire
procedural aspects, which helped us in identifying the impediments and providing recommendations
for the same.
We would like to give a special word of appreciation for the AC Nielsen ORG Marg Team for
undertaking the primary survey and providing the results with great efficiency.
Last but not the least, we would like to thank all the other industry participants with whom we
interacted during the field study, including government officials, travel agents, tour operators, media
for their perceptions and feedback.
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
EXECUTIVE SUMMARY
• As per the office of Statistical and Economic Analysis, US Department of Transportation the cruise
industry tripled in size during the course of 1990’s. As of January 1st 2004 there were 339 active
ocean cruise vessels operated by cruise lines around the world, with the global fleet amounting to a
total of 10.9 million gross tons.
• Statistics given by the Lloyds Shipping Economists, March 2002, reveal that by the year 2000, the
cruise sector alone was carrying an estimated nine million passengers on 243 vessels. By 2001, it
was carrying 10.3 million passengers, which constituted 1.5% of global travellers who used cruise
liners making it a $15 Bn industry.
• Cruise Lines International Association (CLIA) reported an unprecedented 16.8 per cent annual
growth in passenger numbers in the US market alone.
• WTO reported that cruise ship passengers currently represent 1.4 percent of international arrivals
and are producing increasing amounts of revenues in all locations.
• Singapore became one of the fastest growing ports in the world through positioning its new Cruise
Centre and international airport as a real connecting hub for the region. In 1998, it opened its
cruise terminal, with a total investment of 13.8 million dollars for accommodating cruise ships of
up to 300 metres total length.
• The Middle East/Arabian Gulf/Indian Ocean represent the strongly emerging regions, marking a
growth of 88% in 2000, though it only represents 0.38% of world night stays growing from around
0.10% in 1992. Dubal is the leader in this region, having opened its new cruise terminal in March
2001 at a cost of 2.8 million dollars. Its major international airport and its close links with
Cunard/Seabourn are playing a major role in its development.
• Another important destination is Oman, with ports in Muscat, Salalah and Khasab in the
Musandam, which has had a cash injection of 26 million dollars.
• Asia’s strength lies in its many destinations and it is estimated that in the near future it will have the
critical mass of world category ports, enough to be able to offer its great cultural diversity. Other
significant investments in this region include the ports of Port Klang (Kuala Lumpur), Penang
(Malaysia) and Langkawi (Malaysia).
• Star Cruises, headquartered at Singapore, dominates the Asian market, with an order book of 1.28
billion dollars & exceeding 34,000 berths in 2004.
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
India has a negligible share of this rapidly growing market
Internationally cruise tourist arrivals constitute 1.4 % of
2% of India’s Int’l Tourists,
the international arrivals. In India in the year 2000 we 0.6% of World Cruise Tourists
had around 0.056 million cruise visitors representing
2.11% of the 2.65 million international tourists who 56
visited India. This was an impressive increase of 133%
19 12 11 25 22
in cruise tourist arrivals in India in that year. However
2000 2001 2002 2003 2004 2005
the 9/11 WTC incident in the US and the SARS incident Indian Cruise Arrivals In ‘000s
in S.E.Asia saw a marked fall in cruise tourist arrivals
for the years 2001 and 2002. Cruise ship arrivals a tour
ports also significantly dipped. Today cruise arrivals 0.56x
constitute less than 0.5% of the country’s foreign
arrivals though the fact that international tourist arrivals 30 17
in India have shown a steady increase over the years 1996- 2001 2001 & 2002
proves that India has a lot of appeal in the international Average Cruise Liner calls at Indian Ports
market.
• 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.
• India’s long coast line and strong port positioning imparts a natural advantage to the country to
attract international cruise lines.
• 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.
• 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.
• India’s impressive growth in the tourism sector would impart an important advantage to its cruise
tourism positioning mutually strengthening each other.
• The cruise ports selected for development are also strong tourism states, especially Kerala, Goa
and Chennai. This could provide an important platform for cruise tourism to takeoff.
- 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.
- The cruise tourists represent a rich and demanding category with high expectation 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.
- Short 2 to 5 days cruise have growth 7.5 times in the period between 1980 and 2003, showing the
highest growth trend internationally
- 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.
- International ports have dedicated cruise terminals designed to satisfy the cruise liners and the
cruise tourists.
- As per research conducted by leading cruise industry associations, Cruise passengers are high
spenders with international average working out to $ 94 per cruise tourist per port.
- 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
- It is a ‘supply driven’ market with capacity driving the market, because cruise liners are ever in
search of new markets, new itineraries and new destinations. If adequate facilities, services and
infrastructure are provided, that will in turn attract more and more cruise operators to the shores
- Internationally aviation developments are impacting positively on cruise tourism with air gateways
impacting on time & accessibility, easy connectivity to regional tourism destinations and variety
and brand
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
◊ The Indian Outbound Tourists who travel out of India also offer a high potential because of
their interest in foreign travel and would be very open to the idea of taking a cruise from India
that visits foreign destinations.
◊ The Indian Domestic Leisure Tourists, represent active high value domestic leisure travellers
who are active travellers inside the country and can be effectively targeted to take a cruise.
◊ The current Cruise Tourists, both International and Indian, would be good targets. It is known
that cruise tourists are repeat travellers and therefore offer a great potential. Current cruise
tourists, who form part of the existing & future cruise tourism market, can be attracted by
creating new itineraries and destinations in India.
Assessing the potential from each of these segments based on current trends and forecasts it is
estimated that by the year 2010-2011 India can expect a market size of 184,710 cruise tourists and by
the year 2030-31 a market size of 1.2 million cruise tourists. These are conservative estimates and the
actual potential may be much higher depending on the infrastructure developed and the marketing
efforts undertaken.
Taking a conservative estimate of each tourist spending 2710
US$ 45 per port (as against the international average of 6.59 x
US$ 94 per tourist per port), it is estimated that this
cruise potential will translate to an earning of Rs. 411.
44 million in the year 2010-2011 and Rs. 2710.37
million in the year 2030-2031. The cumulative total 411
earnings from cruise tourists & crew during the period
from 2005-06 to 2030-31 is estimated at US$ 599
million (Rs. 26980 millions). 2010-11 2030-31
Rs In million
Considering the tremendous boost that cruise activity
would provide to the domestic GDP through increased CUMULATIV E TOTAL EARNINGS FROM
spending on various aspects, the one-time investment on CRUISE TOURISTS & CREW DURING THE
creation of cruise facility would be justifiable. PERIOD FROM 2005-06 TO 2030-31 IS
ESTIMATED AT US$ 599 MILLION (RS. 26980
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Plan river cruises in sync with the larger Inland Water Transport development
plan of the Ministry of Shipping
Link river cruises with ecotourism and rural tourism, both of which form a
priority area for tourism development in India & are great attraction for foreign
tourists.
3. Create the positioning : India as a ‘MUST SEA’ destination
◊ Develop Brand Cruise India as an umbrella brand
o The key ‘brand message’ underpinning the Indian brand will be ‘diversity in
harmony’, ‘more for less’, ‘value for money’ must ‘sea’ destination underlining
Value for money, for both cruise lines and passengers, given the $ and Rs
exchange rates
Safe and friendly
Exotic, offering a blend of heritage, natural beauty, art, culture, cuisine &
adventure
o Build destination brands into the core brand
◊ Position theme based circuits targeting niche segments
o For domestic/outbound tourists – highlight foreign/exotic destinations
o For foreign tourists – highlight world heritage, history, health
◊ Recommendations to reinforce positioning
o Develop an effective media campaign
Audio-visual presentations and films, out-door advertising, organizing events &
exhibitions, preparing attractive brochures, leaflets, posters, hand-outs, TV inserts
etc.
o Participate and create visibility in International forums
Road shows, trade fairs, exhibitions, seminars etc and entering into tie-ups with
proper bodies, participation in International Sea trade Shipping conferences,
conventions, trade shows, promotional fairs
o Establish dialogue with all the four key players
o Develop a greater ‘ Indo-Asian’ alliance to attract cruise shipping to the region
Access to different tourism product to incorporate into regional packages
Access to other expertise and processes in Port management and services
Development of consistent management policies and quality assurance processes
across key regional ports to control the cruise line experience enroute.
4. Create the Experience
◊ Create ‘cruise friendly’ ports
o Position cruise ports as the entry points, promotional platform and first experience of
India;
Ensure positive, memorable ‘port experience’ hassle free ‘seamless’ travel
◊ Recommendations to reinforce experience
o Simplify procedures to reduce harassment at Ports
Streamline clearance of tourist and baggage at Customs, using electronic
machines wherever possible.
Immigration officers can board at previous port of call and finish formalities en
route
Visa requirements may be done away with – eg Colombo, Singapore
Expedite issue of passes
Simplify health checks and clearances
o Develop a ‘tourism’ approach (‘6S’) at ports
Swagat, Soochna, Suvidha, Suraksha, Sahyog, Sanrachna – ports authorities
would need to address and underline these six aspects while undertaking cruise
terminal development and maintenance.
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
5. Build the capacity
◊ Focus on ‘Software’ & ‘hospitality’ face of cruise tourism
o Identify personnel to be trained would have to be identified such as:
Ground Staff including baggage handling staff and officials in charge of various
procedures
Other Terminal staff including shopkeepers, staff at information kiosks, tour
guides, travel agents etc
Other interface personnel especially the police and taxi drivers
o Formulate programmes covering the key training areas relating to:
• Awareness of cruise tourism & tourist
• Communication & hospitality
• Tourist safety & security
• Services Management
• Environmental aspects
◊ Recommendations to reinforce capacity building
o Training responsibility may be given to the tourism department
o Structure focused programmes aimed at awareness building and skill development
• Training for immigration and customs officials
• Communication programmes for all
• General awareness building and sensitization campaigns
• Workshops to police, taxi drivers, security personnel
o Contact Foreign Universities conducting training for approach & structure
• Southern New Hampshire University and the Bremerhaven University
o Consider ‘accreditation’ as a tool to improve quality and surveillance
6. Create the Policy and Institutions to support development
◊ Evolve a ‘national policy’ for cruise shipping.
◊ Establish a ‘national agency’ to spearhead the Initiative
o Cruise Tourism Council/Board
• Having representatives from major ports, department of shipping, Department of
Tourism, industry stakeholders to represent all interests
• Dedicated to the promotion of cruise tourism
• Equitably representing interests & concerns of all the agencies
• Discharging multi-disciplinary and coordinative functions
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2. Developing River cruises to support cruise tourism
Like Europe India has destinations in its interiors many of them which are connected by beautiful
rivers. Developing River cruises that connect these destinations would not only create the access
that is so important for cruise tourism, but would also enable India to strongly position its tourism
destinations and its exotic heritage.
India’s strategy in creating river cruises would lie in
o Linking cruise terminals to river cruises that connect significant destinations would
stimulate cruise ships to touch India for the sake of the destination. For example, Sarnath,
the key Buddhist pilgrimage destination, lies on river Ganges. Offering this as a river
cruise would be a powerful stimulus to the large base of Buddhist tourists who come to
India from Asia. Linking this to one of the cruise terminals would ensure that the cruise
ships from the Buddhist countries – especially Japan, China - come to India.
o Planning river cruise development in sync with the larger Inland Waterways Transport
development plan of the Ministry of Shipping while also relating it to the larger tourism
potential and proposed cruise terminal development.
o Linking River cruises in India to ecotourism and rural tourism, both of which form a
priority area for tourism development as many of the rivers in India link to interior
villages, rural areas, exotic locations, forests, sanctuaries etc.
Some of the river cruises could be linked to adventure activities like rafting, sailing, river crossing
etc. while certain other river cruises could offer other entertainment elements, refreshment,
pleasure trips, floating restaurants or guesthouses, local sightseeing, nature watching, safaris
across forests, sanctuaries etc.
3. Making Cruise terminals into vibrant destinations
India should develop cruise terminals that not only provide positive experience to the passengers
but also act as ‘gateways’ to the wider tourism offering in the hinterland/region. The more tourism
product a cruise terminal is able to offer within the shortest possible time, the more successful it
can be as a ‘port destinations’.
The first imperative is that world-class facilities cruise tourists are used to and look forward to be
made available at Indian Ports. Despite the fact that the investment may not yield adequate returns
in the near future, it is felt that unless this is done, it will not be possible to promote and market
India as a cruise destination. Huge investments required to develop requisite cruise infrastructure
at ports can be justified on grounds of broader economic benefits to the nation.
Secondly, Cruise terminals should be made into mini tourism destinations much like a tourist
village showcasing India’s art and handicrafts, ethnic bazaars, a small museum offering a birds
eye view of the tourist attractions of the region, food stalls with typical Indian cuisine, children’s
play area etc. It should effectively promote the ‘India Brand’ while simultaneously increasing
commercial and business potential of the terminal.
Thirdly, the cruise terminal should also act as a gateway to the tourism offering of the region, thus
becoming a destination in itself. Thus, for the cruise traveler, in addition to the cruising
experience and the infrastructure and facilities at ports during port visits, the destinations covered
and the general experience within the country/destinations visited would form a critical part of the
overall product expectation. Hence it would be important to create links to significant
destinations, heritage locations and natural features with the port so as to enable a special and
varied experience that is holistically ‘Indian’. This would also help to link the development of
tourism in India to the development of cruise tourism, helping to synergize each with the other.
The following would be essentially to provide the connectivity required to link to tourism
offerings to cruise ports:
Connectivity through small and feeder aircrafts
Connectivity through river cruises and exploiting inland waterways
Connectivity through road transport where distances are not prohibitive
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Ministry of Tourism, Government of India
4. Fulfilling of responsibilities by Stakeholders
The responsibility for developing Cruise tourism is spread over various agencies. Unless the
commitment is also shared among these agencies Cruise Tourism development will not take off in
India.
Exhibit 4 : Stakeholder Responsibilities
The Ministry of Shipping, being the apex body, would need to look at the macro level
policy/approvals/incentives issues, its role essentially being to develop proactive policies to simplify
procedures while looking at pioneering initiatives to develop new products like river cruises to
support the overall development.
The Port Authorities would be directly responsible for all aspects related to the development and
operations of the Cruise Terminals, including initiating suitable/positive measures to initiate bankable
Private Sector Participation in the development of Cruise terminals.
The Ministry of Tourism should act in its areas of strengths which would include synergistic
hinterland/regional tourism development to support cruise terminal development as well as giving
financial support where necessary, creating tourism related infrastructure and linkages and enabling
the necessary capacity creation to service the sector.
The State departments of tourism would have responsibility for tourism development within the State
including State level marketing efforts & coordination for creation of circuits.
The private sector would bring in the typical efficiencies related to the sector for successfully funding
and managing the cruise terminals, operating & managing all facilities, tourism related infrastructure
in the hinterland & the tourism related services – restaurants, hotels, other accommodation, travel and
trade, communication, publicity & marketing
The Ministry of Environment and Forests would play proactive role to enable the development of
Cruise tourism in environmentally sensitive areas including sound policy measures,
framework/guidelines for environmental compliance, provide approvals etc subject to meeting certain
basic environmental standards & stipulations and other quality certification measures etc.
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Ministry of Tourism, Government of India
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1
Source: Office of Statistical and Economic Analysis Maritime Administration, US Department of Transportation
2
Source: Lloyds Shipping Economists, March 2002
3
Source: CRISIL Analysis
4
Source: WTO Report
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Ministry of Tourism, Government of India
• The cruising market is still in its infancy in an essentially developing phase that offers major
prospects for growth as it reaches maturity. The longer-term outlook for the industry is robust.
• A key feature of importance is that the size of the cruise vessels is becoming larger, in part to
augment the capacity and the other to replace older vessels with high operating costs to cash in on
the economies of scale.
• Europe is one of the fastest growing markets, offering larger population base yet to reach the
levels achieved in North America.
• Asia is the fastest growing region in terms of cruising industry. The origin of these passengers
shows a dominance of the ASEAN passengers in cruising vis-a-vis that of other markets.
• Between 1997 and 1999, the world’s major cruise lines had reportedly committed to investing
US$ 7 billion on 27 new ships which was more than the industry’s annual worldwide revenues
then, thus showing a positive growth trend ever since.
1.2.3 Recent Growth Trends
Although relatively young, the cruise industry is currently valued at US$15.3 billion. The industry is
expected to carry in excess of 17 million passengers by 2010; an increase of 70% on 2000 and 54% on
2002. This huge growth in the market over the last two years is due to continued expansion, with
berth numbers ballooning 77% over the last four years. 5
Region -wise Demand Trend
In 2000 the worldwide demand had reached 9.61 million passengers. Exhibit 5 details the evolution in
the period between 1989-2000 indicating a clear increase in the growth of these holidays with the
demand growing by as much as 50%.
Exhibit 5 : Region-wise Statistics
As per WTO estimates, it is expected that this trend would be maintained in the future with the
demand from North America and Europe poised to surpass 13 million passengers towards the end of
the first decade of the 21st century.
One of the key features of the demand trend for cruises, as highlighted by WTO, is that it is supply
oriented, thus demand being driven by supply and growing in response to supply increases.
Passenger Growth Trend
Exhibit 6 shows the growth trend of the North American cruise industry in terms of passengers over
10 years from 1994 to 2003. The North American industry forms 71% of the worldwide cruise
demand (as seen in the earlier table) and is consequently an important indicator of world trends. The
average growth rate from 1980 to 2003 is 8.1%, thus throwing light on the potential that exists in this
sector.
5
Source: WTO Report
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Ministry of Tourism, Government of India
Exhibit 6 : Growth Trend in the North American Cruise Market
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Carnival 37.8 38.5 31.2 31.0 23.6 19.1 0.4 4.5
RCC 25.7 24.0 23.7 25.0 4.1 3.8 0.2 0.5
P&O Princess 5.9 5.5 29.0 32.0 9.1 5.8 3.5 3.5
Star Cruises 7.5 7.0 12.9 9.0 4.3 3.1 74.4 66.0
Total Share 76.9 75.0 96.8 97.0 41.1 31.8 78.5 74.5
Source: WTO Report
Seasonal Trends
Cruising seasons form an important aspect of the cruise industry, being as or more important a
determining factor just as it is for tourism at land destinations. Exhibit 9 and Exhibit 10 outline the
key seasonal trends in the major world cruise regions.
Exhibit 9 : Global Seasonal Trends – October to March
October-March
The Mediterranean
Western Mexico
Asia-Pacific
Caribbean
Indian Ocean
South America
April-September
Asia Pacific
Caribbean
Atlantic Europe
Mediterranean
Alaska
Western
Mexico
The following observations can be made from the exhibits given above:
◊ The Caribbean is the busiest cruise region especially during the winter months in the northern
hemisphere.
◊ Following the Caribbean, the Mediterranean region is important from April to September
◊ Atlantic and Alaska also experience a surge during April to September, but to a lesser degree
◊ The share in the Asia Pacific region is also significant indicating the potential and the
foundations for strong developments in the region.
Order Book
As per WTO estimates, on 31st January 2001 the order book was at its highest figure at 18.5 billion
dollars, 53 new ships and 98,162 additional berths. However, despite the September 11 attack later the
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Ministry of Tourism, Government of India
same year and an economic downturn, there was only a slight reduction in the same quantities in
November 2001 where the order book stood at 14.8 billion dollars, 41 new ships and 79,658
additional berths thus indicating the strong business commitment towards this particular sector.
1.2.4 Market Share vis-à-vis Tourism Industry
The world demand for international trips during the period of 1990-2000 grew at an annual
cumulative rate of 4.3%. During the same period the cruise market grew at 7.9%. The capacity of sea
cruises measured in berths is 0.6% of the whole of available hotel space worldwide.
Exhibit 11 shows that the cruise industry arrivals form 1.4 % of the international arrivals. It throws
light on the economic weightage in terms of potential for growth of sea cruises rather than just their
relative weight in the tourism Sector.
Exhibit 11 : International Arrivals vis-s-vis Cruise Arrivals
Others
Carnival Corporation
RCC
P&O Princess
Star Cruises
11% 19%
17%
21% 32%
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Ministry of Tourism, Government of India
P&O Princess 5.9 5.5 29.0 32.0 9.1 5.8 3.5 3.5
Star Cruises 7.5 7.0 12.9 9.0 4.3 3.1 74.4 66.0
Total 76.9 75.0 96.8 97.0 41.1 31.8 78.5 74.5
Source: Christiania Bank of Kreditkasse ASA
Exhibit 15 shows the supply, which is characterised by a situation that is close to oligopoly, wherein
the majority of the share, which is 72% of the global supply of berths, is dominated by the Big Four.
‘Minor Cruise Lines’, as shown in the Exhibit, demonstrate those players that are specialised in the
niche markets and mainly aim at the North American clientele.
The supply of cruise lines in the European and the Asia –Pacific markets equals the demand in these
regions, which is starting to take off.
Exhibit 15 : Distribution of Ocean going fleets as on January 2002
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
Type % Of % Of % Of Age Median Features
Cruisers Cruising First Income
Days Timers (Us$)
mass and premium markets
Luxury 14 18 30 95000 Willing to spend for luxurious
Seeker available accommodations and
service, sophisticated in world
travel and experiences, travels in
luxury and other class markets,
books the suites and penthouses
for the highest service and
accommodations in each class
Explorer 11 18 20 64 81000 Intellectually motivated, travels to
remote places of scientific and
historical interest, Cost not a
factor in quest for adventure, used
to Spartan accommodations and
not interested in relaxing or
securing luxurious
accommodations and service,
travels on specialty cruise lines
and premium and mass market
ships
Ship Buff 6 11 13 68 78000 Extremely knowledgeable of ship
design, accommodations and
service and has a special
attachment to the ships he sails,
cruises more for the ship rather
than its itinerary and has cruised an
average of 6.3 times representing
all market segments
Source: CRISIL Research and CLIA
The CLIA studies also uncover several findings common to all segments that would be extremely
significant for cruise tourism elsewhere in the world:
• Frequent travellers are frequent cruisers and a cruise represents about one of every three
vacations they have taken in the past six years.
• Cruisers possess a degree of curiosity and flare for adventure as indicated by the majority
saying they like to experiment with new and different things.
• Three of the most mentioned factors used to arrive at a decision to take a particular cruise
were the itinerary's ports of call, the price of the cruise and the season of the year, followed by
the cruise line or ship.
• The five top benefits of cruising listed were:
◊ provides relaxation away from the home and office
◊ allows one to be pampered
◊ gives the opportunity to visit several places
◊ offers good value for the price
◊ enables a choice of many shipboard activities.
• Cruisers enjoyed their cruise experiences with 93% of frequent cruisers and 83% of first time
cruisers reporting high levels of satisfaction.
• 69% of frequent cruisers and 63% of first time cruisers rated their cruise vacation as better
than other vacations.
• 95% of frequent cruisers and 82% of first time cruisers said they intend to cruise again.
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Ministry of Tourism, Government of India
Exhibit 17 details the passenger profile in the European and Asia Pacific market as given in the WTO
Report.
Exhibit 17 : Study of cruise passengers in the European and Asia-Pacific market
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Ministry of Tourism, Government of India
As per WTO report, statistics point out favourably towards short duration cruises in the European
market too, as shown in Exhibit 20 below. An important feature to be noted in this market is how the
duration trends are different for different seasons. Thus, in 2000, almost 14% of cruise holidays were
over 15 days in length between October and March whereas in April-September, the same category
had a 7% share. Studies have revealed that retired people constitute the major proportion of cruise
travellers and they prefer cruising during October-March period.
Exhibit 20 : Trends in Cruise duration in the European markets
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Ministry of Tourism, Government of India
Others
South Pacific/Austarlia
Mediterranean/Caribbean/Alaska
Asia
World
17% 20%
7% 3%
53%
Source: Seatrade Cruise Review, March 2001 (courtesy Victoria Cruise Ship Stategy)
6
Source: Victoria Cruise Ship Strategy, 2002-2005
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Ministry of Tourism, Government of India
Source: Cruise Industry News, 2002 (courtesy Victoria Cruise Ship Strategy, 2002-2005)
When confronted with political unrest and fundamental shifts in market conditions, some cruise lines
are forced to seek new markets in other parts of the world.
1.3.5 Capacity Drives the Market
The planning cycle for this industry is continually driven by the need to generate demand, thereby
continuously forcing the industry to increase the size and number of new cruise ships being built.
Over the period of 2002-2006, 45 new cruise ships are scheduled for completion. This would generate
an additional 87,000-passenger capacity. These forward deliverables have not been impacted on by
the downturn in demand but rather maintained by the buoyancy in the long-term projections for the
industry in the USA and Europe. The industry’s short-term response to the downturn in demand was
reliance on the price discounting mechanism to bring demand and supply into equilibrium.
1.3.6 Sensitivity to global security issues
Cruises are highly sensitive to security issues, as demonstrated by the events of September 11. Cruises
demand heightened levels of security that provide a safe and secure passenger and vessel
ingress/egress environment. Cruise ships attract public interest that presents important marketing
opportunities. However global terrorists’ trends require an appropriate balance between security and
public interest and access.
1.3.7 Strict Environmental Standards
The International Council of Cruise Lines (ICCL) members have unanimously adopted mandatory
environmental standards for all of their cruise ships. These standards are based on principles that
include: designing and constructing cruise ships to be as environmentally friendly as possible,
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Ministry of Tourism, Government of India
embracing new technology, complying fully with international and U.S. environmental laws,
minimizing waste production, and maintaining cooperative relationships with the regulatory
community.
All ICCL member cruise ship operators implement the adopted standards, which include effectively
dealing with the following areas:
◊ Graywater and Blackwater discharge.
◊ Hazardous chemical waste such as photo processing fluid and dry-cleaning
chemicals.
◊ Unused and outdated pharmaceuticals.
◊ Used batteries
◊ Burned out fluorescent and mercury vapor lamps.
The cruise industry’s commitment to protecting the environment is demonstrated by the
comprehensive spectrum of waste management technologies and procedures employed on its vessels.
ICCL members are committed to:
◊ Designing, constructing and operating vessels so as to minimize their impact on the
environment;
◊ Developing improved technologies to exceed current requirements for protection of
the environment;
◊ Implementing a policy goal of zero discharge of MARPOL, Annex V solid waste
products (garbage) by use of more comprehensive waste minimization procedures to
significantly reduce shipboard generated waste;
◊ Expanding waste reduction strategies to include reuse and recycling to the maximum
extent possible so as to land ashore even smaller quantities of waste products;
◊ Improving processes and procedures for collection and transfer of hazardous waste
◊ Strengthening comprehensive programs for monitoring and auditing of onboard
environmental practices and procedures in accordance with the International Safety
Management Code for the Safe Operation of Ships and for Pollution Prevention
(ISMCode).
Each ICCL cruise vessel operator has agreed to utilize one or more of the practices and procedures
contained in the attached “Cruise Industry Waste Management Practices and Procedures” in the
management of their shipboard waste streams. Recognizing that technology is progressing at a rapid
rate, any new equipment or management practices that are equivalent to or better than those described,
and which are shown to meet or exceed international and federal environmental standards, will also be
acceptable. Member lines have agreed to communicate to ICCL the use of equivalent or other
acceptable practices and procedures. As appropriate, such practices and procedures shall be included
as a revision to the attached document. As an example, when improved systems for treating
blackwater and graywater are perfected and shown to meet the requirements for MSDs and accepted
by appropriate authorities, the new systems and associated technology will be included in the
attachment as a revision.
1.3.8 International Aviation Developments
Time and accessibility are major issues as cruise line passengers typically move towards shorter but
more frequent vacations. The pressure of time means that the extended air travel to or from a cruise
ship is a deterrent for potential customers.
However the recent developments in aircraft design indicate that the distances are closing and are no
longer a deterrent. New designs fro sonic aircrafts promise to make serious inroads into long distance
flight times.
This development could enhance the attractiveness of ‘exotic’ cruise locations, such as Australia.
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1.4 PRODUCTS AND SERVICES OFFERED
1.4.1 What makes Cruising unique
Cruising is a unique tourism product, a blend of the 5A’s: attractions, 5 A’s of Cruising
activities, access, accommodation, amenities. The words "luxury" and •Attraction
"pampering" are found in all cruise brochures, and every cruise line •Activities
•Access
proudly highlights these five aspects to market its product. Cruising is now
•Accommodation
well established as one of the most service-intensive sectors in the world, •Amenities
with ever more incredible state-of-the-art vessels being built each year.
‘Pampered in luxury" accurately describes the cruise experience. We
capture below what makes a cruise a unique tourism product.
◊ Cruising is intensively service-oriented. Most ships provide a 24-hour Room service.
New ships are adding 24-hour pizzerias. Other facilities include casino, pool, jacuzzi,
sauna, gym, on-board lectures, card rooms, an unending variety of organized games and
contests, supervised children's activities and entertainment including Broadway and Las
Vegas-style shows, lounges, nightclubs, movies, dancing and more. Cruise ships are more
like mini cities providing most of what such a city has to offer.
◊ Cruise ships are destinations in themselves, with features and amenities comparable or
superior to land-based resorts. This can be particularly attractive in destinations that lack
high quality hotels or "creature comforts." Onboard facilities such as spas, pool and open
deck areas, jacuzzi, lounges, casino, shipboard activities, spacious accommodations and
legendary service make the ship a great place to relax, retreat, rejuvenate and play. The
Seabourn Pride, Legend and Spirit as well as several Radisson Seven Seas ships have
platforms that drop off the back to create a private water sports area when the vessels are
at anchor.
◊ Modern cruise ships have state-of-the-art telecommunications equipment, including in-
cabin ship-to-shore phones. Yet they enable the passenger to feel secluded and "out of
time." You have the illusion of getting away from it all.
◊ Cruising is remarkably affordable. The following is typically what is included in the cost
of the cruise, at a price that is generally lower than a comparable land-based vacation:
• Round-trip airfare.
• Transfers from airport to ship and from ship to airport.
• Three main meals per day (breakfast, lunch and dinner). Special children's menus
are available if children are present or three buffet meals per day (breakfast, lunch
and midnight). Some ships add a fourth buffet for late-nighters at around 1:30
a.m. Many ships also have afternoon snacks or traditional high teas.
◊ Cruising offers multiple destinations, without the hassles of packing and unpacking.
Itineraries include visits to three or more ports of call (depending on length of cruise).
◊ Cruises are floating resorts. Cruising presents a unique competition feature, with the
main competitors of cruise liners being the land resorts rather than the other cruise line
companies. Thus a cruise ships are increasingly looked upon as a floating resort than a
mere means of transport. The amenities offered on board are a result of popularising
cruising with this concept of a floating resort.
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River/Canal Cruises
River and canal cruises are closely linked to the culture and heritage of the country being toured.
Along the journey, the waterway's villages, town and cities offers particular appeal to scenery buffs
and those who enjoy ever-changing landscape. Travellers choosing river and canal cruises are
interested in and attracted to the destinations as well as the cruising experience. The ships most used
for river and canal cruises are yacht-style ships, river ships, barges and private yachts.
Destination / Expedition Cruises
Destination and expedition cruises are selected, just as river cruises, based on the destination to be
visited. Travellers are attracted by the unique, out-of-the-way, remote or exotic ports of call. These
cruises offer the stimulation of exploring new territories while in the company of like-minded
travellers. The ships most used for destination and expedition cruises are yacht-style ships, river ships,
and private yachts.
Day Cruises
Day cruises are typically a cruise experience of 15 hours or less. Passengers choose this method of
cruising, as a day's outing or combined with a longer vacation. These cruises may be geared to
gambling, whale watching, dinner, etc. The ships most used for day cruises are cruise ships,
steamboats, ferries, river ships, and private yachts.
Contemporary Cruises
These are the most popular and recognized cruise lines, having the following key features:
◊ These cruise serves the most popular segment, the mass market or first class cruisers
◊ These cruise lines typically have resort-style facilities with heavy emphasis on ship-
board activities.
◊ Most of these lines have both shorter itineraries that are closer to home and longer
ones that may require international travel.
◊ These cruises tend to have newer and larger cruise ships with lots of amenities
including lavish show rooms, extensive spa facilities, expansive children's programs,
televisions and in-room movies in all cabins, double/queen beds, etc.
◊ Often have something for everybody - all age groups. These lines are typically the
best for families and kids of all ages.
The most famous examples of these cruise lines are Carnival Cruises, Celebrity Cruises, Costa
Cruises, Disney Cruises, Holland America Cruises, Norwegian Cruises, Royal Caribbean
International Cruises, Princess Cruises
Luxury Cruises
These constitute the ultimate cruise experience, taking service to a different level. The following
features define luxury cruise:
◊ The highest quality of cruises available, offering high style luxury with emphasis on
destinations and ship-board amenities.
◊ Most sailings tend to be significantly more formal than first class cruise lines.
◊ Luxury ships tend to be exclusive carrying far fewer passengers. Accommodations
are often more spacious with a very high percentage of ocean-view staterooms and
suites.
◊ These cruise lines are more itinerary-oriented, often featuring longer cruises and
international travel.
◊ Luxury cruises cater to the mature, experienced audience with very few first time
cruisers. Accordingly the cruise tends to be less "entertainment-oriented" and more
"experience-oriented", less suitable for young children or the first choice for families.
Most popular luxury cruises are Cunard Cruises, Oceania Cruises, Crystal Cruises, Radisson Seven
Seas, Silver Star Cruises, and Windstar Cruises.
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Ministry of Tourism, Government of India
Specialty Cruises
Specialty cruises, as the name implies, are special destination oriented cruises offering unique
experiences. The main features include:
◊ Adventure-style cruising with a heavy emphasis on destination, education, and off
ship activities, sometimes offering the only way to see a certain area of the world that
the large first class cruise lines can't visit.
◊ Quality on these cruises varies from very modest to very deluxe, being more of an
experience than a cruise. Accommodations and amenities vary greatly by cruise line
and product.
◊ Types of ships vary from Sailing Ships, Paddle Wheelers, Cargo Vessels, River
Barges, and Yacht-like Ships.
◊ Speciality cruises, like luxury cruises, are not a good choice for children or families.
◊ Pricing is flexible and varies by product.
1.4.4 Onboard Entertainment Facilities
Present-day cruise ships are organized much like “floating hotels”, with a complete "hospitality staff"
in addition to the usual ship's crew. There is a variety of full fleged entertainment activities for all the
age groups, with the concept varying from one cruise line to another depending on how the business
model is built.
There is an endless chain of entertainment activities on these ships, the range including dance classes,
classical music, casino lessons, shopping, cabaret shows, bridge, spa treatments (massages,
manicures, pedicures, facials), health clubs, wine testing, golf chipping, skeet shooting, cooking
demonstrations, ping pong, fashion shows, acts by jugglers and magicians, galley (the kitchen) and
bridge (where the navigators work) tours, lectures, crafts, movies, reading and eating at least six times
a day. Captured below are the variety of entertainment on board.
Sports Oriented Facilities
◊ Rock walls 200 ft above the ocean level giving an adventurous mountaineering thrill
among the seawaters, with professional trainers to encourage passengers.
◊ Mini Golf rinks for golf lovers
◊ Basketball or volleyball on full-size courts
◊ Ice Skating Rings with professional trainers for all ages and skill levels and world
class ice skating shows
◊ Innovative self-levelling pool tables
◊ Juggling lessons, backgammon, chess, scrabble, bridge and many other board/card
games.
◊ Scavenger hunts
Theatre
The theatre is the oldest and the most popular forms of entertainment, showcases a variety of
performances from a contemporary musical stage production to a comedy act to a Las Vegas-inspired
floorshow. Some production shows are produced exclusively for a particular ship e.g. for Royal
Caribbean. Fashion shows are also being hosted on certain occasions. Full-service bar, stadium
seating, state-of-the-art sound system and theatre lighting is set up for a multipurpose studio complex
for just about anything.
Rejuvenation
Most cruise ships have spas that offer a luxurious range of relaxing massage techniques and treatment
programmes from oxygenating facials, detoxifying seaweed wraps, aromatherapy and reflexology
massages to exotic treatments like Chakra Stone therapy or Rasul. These are delivered by highly
trained experts who also give initial to determine and customize the treatment needed. They also host
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health, fitness and beauty demonstrations and educational seminars where experts offer advice on a
variety of exercise options and healthy dining possibilities.
Audience Participation
In order to give the entertainment a creative angle and a more exciting feel there are some activities
that are designed to encourage Audience Participation. Some of these participatory activities may be:
◊ Karaoke contests
◊ Trivia contests
◊ Game shows
◊ Guest talent Shows
◊ Parties like '50s and '60s Night, Masquerade Ball, Toga Party and Pirate Theme Night
◊ Wine testing and classes
◊ Cooking demonstrations
◊ Casino and card game lessons
◊ Ice-carving instruction
◊ Jewellery seminars
◊ Latin dance schools that teach Cha-cha, rumba, merengue, waltz, two-step, tango,
swing, foxtrot, jitterbug, line dancing, country, caribbean, hula, cha-cha slide and '70s
Disco.
Tournaments
Tournaments like Ping-pong, floating golf green, billiards, shuffleboard, ring toss are organized
specially on long cruises to bring healthy competition, for example on ‘Voyager and Radiance-family
ships’ you have basketball and volleyball tournaments, and on Splendour of the Seas, Legend of the
Seas, and all of Voyager and Radiance-family ships there are mini-golf tournaments too.
Library
Reading being one of the favourite indulgences on the cruise, cruise ships are stocked with an
impressive and wide range of subjects which are available starting from topics like travel, art,
biography, fiction, non-fiction, science fiction, beauty, health and many more.
Other Activities and Facilities
A list of some more activities in addition to the above are:
◊ Sun soaking in the Solarium, which is basically a room, built largely of glass to afford
exposure to the sun. There are also sunbeds which is a device emitting radiation
(usually UVA, but recently also UVB) used for cosmetic reasons (to induce an
artificial tanning) but also for medical reasons.
◊ Casinos, with games like Poker slots or blackjack. Some cruises also offer casino
classes
◊ Dance floors, wine bars, night clubs/lounges for pub-goers. There are theme pubs
with live bands and shows.
1.4.5 Accommodation
Cruise accommodation is targeted for different categories of people and their preferences. These
accommodation facilitates and categories vary from cruise to cruise, however captured below is the
most common and standard type.
◊ Superior Ocean View Staterooms : offer a gorgeous view often with a mini bar and private
balcony among their amenities. With an area of 188 sq. ft., balcony 50 sq. ft, these staterooms,
consists of two twin beds (can convert into queen-size), private balcony, sitting area (some with
sofa bed) and a private bathroom.
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◊ Ocean View Staterooms : offer all of the amenities of a star hotel added to a magnificent view of
the ocean. Generally covering an area of 180 sq. ft. these staterooms have two twin beds (can
convert into queen-size bed), sitting area with sofa, vanity area, and a private bathroom.
◊ Deluxe Ocean View Staterooms : offer an ocean view with mini bar and private balcony among
their amenities. Measuring 173 sq. ft., balcony 47 sq. ft., they consist of two twin beds (can
convert into queen-size), private balcony, some offer Pullman beds, sitting area with sofa, and a
private bathroom.
◊ Family Ocean View Staterooms : accommodate up to six people, with family oriented amenities,
including a mini bar and sitting area. Measuring 265 sq. ft., these family rooms have two twin
beds (can convert into queen-size), sofa bed and/or bunk beds, separate sitting area, and a private
bathroom with shower. Such family rooms may be large ocean view staterooms also.
◊ Promenade Staterooms : are unique, for e.g. the Royal Caribbean International Cruise Line has
bowed windows overlooking the Royal Promenade, creating an interior room with a view, and
they offer the amenities of a standard stateroom. Measuring 167 sq. ft. these rooms, which are
also called the Atrium Stateroom, have two twin beds (can convert into queen-size), sitting area
with sofa, vanity area, and a private bathroom.
◊ Interior Staterooms : which are on the interior of the ship, offer all of the amenities for comfort.
Generallt measuring 160 sq. ft. these rooms have two twin beds (can convert into queen-size),
some offer Pullman beds, sitting area with sofa, vanity area, and a private bathroom.
◊ Royal Family Suites : have a whirlpool bathtub, entertainment center, a separate living area with
refrigerator and wet bar, and complimentary concierge service, which includes access to a private
lounge as well as personalized service to help make reservations or other arrangements. Most
Royal Suites have a separate bedroom with a king-size bed and some even have a baby grand
piano. These large rooms measure 1,188 sq. ft., with a balcony of 170 sq. ft.
◊ Owners Suites : have a queen-size bed, separate living area with large sofa bed, bathtub, and
refrigerator and mini bar, among their amenities. With an area of 506 sq. ft., they have a private
balcony of 64 sq. ft, private bathroom and concierge service.
◊ Grand Suites : generally come with a private balcony, sitting area, bathtub, a mini bar and
complimentary concierge service with an area of 381 sq. ft., balcony 95 sq. ft.
◊ Junior Suites : offers a private balcony sitting area, refrigerator and bathtub. With an area of 277
sq. ft., balcony 69 sq. ft, these suites, also called Superior Ocean View Suite, have two twin beds
(can convert into queen-size), private balcony, private bathroom with bathtub and a sitting area,
sometimes with a sofa bed).
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Viking River Cruise's is recognised as the world's largest river cruise line, it has added about 7 new
ships in the last 3 years and 10 new ships in the last 5 years (base year is 2002). Viking has about 24
ships with over 3,700 berths. Viking has also acquired KD River Cruises, Europe's oldest passenger
line.
River cruising in particular is in the midst of a major expansion boom. In the past two years cruise
lines have introduced new ships, and 2003 saw the introduction of a brand new cruise line, the MS
Artistry by Avalon Waterways, one of the newer companies on the scene, which already has three
ships and big plans. Itineraries may incorporate major cities as cornerstones, but the experience will
focus more on smaller towns/villages, natural features and local experiences.
Today coming out of Europe, we have cruise travellers also sailing on America's Mississippi,
Columbia, and Tennessee rivers. In Asia, one of the fastest growing destinations for riverboats, in
particular, is China's Yangtze.
Product Design
River/canal cruise ships, are essentially smaller versions of cruise ships, rarely holding more than
200-plus passengers, and generally carrying less. The river/canal barges are even smaller, carrying
between six and fifty passengers. The entertainment on broad is also much simpler. Beyond
mealtimes, entertainment onboard may be limited to shuffle-board or book-reading. River cruise ships
do not provide a range of experiences as happens aboard a large ship. These ships carry no casinos
and offer little in the way of evening entertainment.
River cruises range from a couple of hours cruising along a city’s shoreline for a romantic dinner to a
full blown week or month-long cruise experience in some of the world’s most exotic locations. There
are dining or party river cruise boats that sail for a few hours. These offer fine dining, professional
entertainment, music and dancing while cruising up and down the city’s waterways. They often cater
to romantic occasions, large parties and business dinners and itineraries that are normally offered
could be dinner cruise, lunch cruise, Christmas cruise, New Year eve, conference & meetings, floating
restaurant and cruises targeted to specific events. Also, many of them offer special holiday packages.
On the other hand, there are long river cruises that cover theme-based destinations like rural
exploration or pilgrimage destinations on holy rivers. For example, the Columbia River Cruise plies
on the Columbia River running through seven states of the US, offering magnificent views of river
while allowing the passenger to visit national parks, cities, and towns en-route. Some river cruises
also offer adventuresome activities such as kayaking and white water rafting.
The season for river cruises
River and canal cruise ships do not demonstrate the same sharp seasonality patterns as do larger cruise
ships. While their operations do fluctuate, showing greater activity during spring, summer and fall
months with a hiatus during December, January and February, many Asian operators go year-round
taking advantage of the varying offerings of different seasons. Another fabulous exception is the
Christmas season in Europe, where, despite the cold and the snow, several river cruise operators offer
voyages that stop in towns and cities with Christmas markets. Latin America-based voyages are fairly
limited though good for wintertime. The cruise on River Yangtze is fairly all through the year.
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Trends in River Cruising
Over the period, river cruise industry has shown following
trends:
In Europe, the most established river cruising
destination, the biggest trend is the continued
evolution in ship design. Ship design is focusing
particularly on staterooms providing more
contemporary technology like television, internet
connections, bathrooms, fashionable french windows
offering clear river and scenery views.
China has emerged as a very hot destination,
appealing to both cruise line operators and
passengers. Not only is the Yangtze a most-exotic
trip for even well travelled cruise travellers, it also Exhibit 23 : Viking River Cruise
lacks limitations -- such as low bridges and offers
The ship Viking Century Sky of Viking River
opportunity for plying large ships. Cruise sails the Yangtze River in China. The ship
Operators tend to traditionalise both itineraries and features 153 all-balcony cabins, a restaurant,
observation lounge & bar, coffee bar, gym, sauna,
onboard environment apparently targeting an older, business centre, sun deck, shops, and a beauty
more sedentary traveller. salon.
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scheduled for delivery by mid- 2006. With 123,000 berths and almost 55,000 crewmembers, there is
roughly 175,000 people at sea with Carnival at any given time.
History
The history of the Carnival Corporation begins in 1972, when Ted Arison set up Carnival Cruise
Lines as a subsidiary of the American International Travel Service. The first ship ran aground, but
Arison remained steadfast in achieving his vision of a cruise line offering affordable vacation
packages to middle-income consumers.
By 1977, Carnival had three ships, and ten years later, as the industry leader, the company went
public. In the early 1990s, Carnival began to diversify into land-based entertainment, thus changing its
name to Carnival Corp. The company is the world's largest cruise operator with about a third of the
market.
In 1988 Carnival was able to increase profits through the acquisition of Holland America Line and
consequently Carnival expanded its cruise lines to a broader market, however Carnival experienced a
loss of $135 million from disposal of the Crystal Palace Resort & Casino in 1991.
Carnival also operates 14 hotels in Alaska and Canada and runs Holland America Westours, which
markets sightseeing tours. Carnival has a 29.5% stake in Airtours, one of the UK's largest tour
operators, and is bidding for control of cruise line NCL. CEO Micky Arison and family control
Carnival.
Some Facts and Figures
Carnival Corporation & plc is the largest cruise vacation group in the world, with a portfolio of 12
cruise brands in North America, Europe and Australia, comprised of Carnival Cruise Lines, Holland
America Line, Princess Cruises, Seabourn Cruise Line, Windstar Cruises, AIDA, Costa Cruises,
Cunard Line, Ocean Village, P&O Cruises, Swan Hellenic, and P&O Cruises Australia.
Carnival Corporation & plc also operates the leading tour companies in Alaska and the Canadian
Yukon, Holland America Tours and Princess Tours. Traded on both the New York and London Stock
Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P
500 and the FTSE 100 indices.
Its Carnival Cruise Lines offers affordable vacation packages primarily to Caribbean locations on
about 20 ships, while Holland America offers more luxury-oriented cruises to Alaska, Europe, and
South America and is an upscale line targeting the older, more sophisticated cruisers with fewer
youth-oriented activities and emphasizes on the beauty of the Alaskan wilderness. Further Holland
America Westours operates various tours targeting different markets. Seabourn, known as the "Rolls
Royce" of the industry, targets the luxury market
Carnival Corp. basically has three market segments: Contemporary, Premium and Luxury.
The Market Cap (intraday): 45.78B
Company Strategy
Carnival is considered the cruise industry’s leader, and in the past few years, Carnival has increased
its market share through acquisition and joint venture. In terms of targeting international cruisers,
Carnival has purchased 29.5% equity interest in Airtours to enter into the European and Canadian
markets.
Carnival’s strategy focused on the "Fun Ship" concept, beginning with the Mardi Gras, which targeted
people of all ages. In recent years the driving force behind why a person needs to take a vacation has
changed. Today vacationers look to get away from everyday stress, and opt for a stress-relieving
cruise.
The Company’s current strategy is to attract more repeat cruisers and new cruisers of different
segments by offering different types of packages. Such differences include choice of shorter or longer
cruises, a low to moderate price for affordable cruises for middle class, and longer luxury cruises for
affluent classes. As part of the company’s plan, Carnival is "going global" through a joint venture
with Hyundai Merchant Marine to the Asia market.
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Carnival entered into the Asian market through a 50-50 joint venture with Hyundai Merchant Marine,
one of the world’s leading marine shipping companies with knowledge of Asian Market, in order to
expand its market worldwide.
1.6.2 Royal Caribbean
Founded by three Norwegian shipping companies in 1969 as Royal Caribbean Cruise Line, this
company is one of two affiliates of Royal Caribbean Cruises, the second-largest cruise operator in the
world. The line's first new build, Song of Norway, entered service in 1970, and today, RCI operates a
fleet of modern super and mega-liners, among them the three largest passenger ships ever built, the
137,300 gt Voyager of the Seas, Explorer of the Seas and Adventure of the Seas. Royal Caribbean's
signature Viking Crown Lounge is a familiar sight in almost all parts of the world, and the company
has a strong presence not only in the Caribbean, but also in Europe, Alaska, and other "exotic"
destinations.
History
Royal Caribbean Cruise Line (RCCL) has been around since 1969 and currently operates 17 ships. In
1997, Royal Caribbean purchased Celebrity Cruises—a premium line to appeal to an upscale
audience— with a fleet of 29 modern ships and a passenger capacity of approximately 60,500. Royal
Caribbean is a moderately priced cruise line, and rates vary by itinerary.
Royal Caribbean's 142,000-tons Voyager-class ships are some of the largest passengers ships in the
world. The cruise line has 3 classes of ship to suit all tastes, from the smaller intimate super-yachts of
Vision Class and Radiance Class to Voyager Class which has some of the best equipped cruise ships
in the world. It represents a sound middle America, middle-brow choice, particularly for active
travellers.
The company plans to introduce 2 more ship by the end of 2007, when it will have a total passenger
capacity of approximately 66,800. The ships operate worldwide with a selection of itineraries that call
on approximately 160 destinations.
Royal Caribbean typically appeals to couples and singles in their 30's to 50's as well as families of all
ages. The median age is in the low 40's on seven-night cruises and in the 30's on three-and four-night
cruises, passengers 50-55 and over tend to dominate ten day and longer cruises. Royal Caribbean
attracts passengers that are looking for an affordable, active vacation.
Some Facts and Figures
The sales figure of Royal Caribbean Cruise Ltd for the year 2004 was $ 4.555.4 million with a 1-year
sales growth of 20.4 %. In 2004 the net income was $ 474.7 million with a 1 year net income growth
of 60.1 %. The employee strength for 2004 was 38,870 with a one year employee growth of 6.1 %
1.6.3 Star Cruises
Star Cruises was incorporated in September 1993, representing a bold initiative to tap Asia-Pacific’s
potential as an international cruise destination. Today, Star Cruises has fulfilled regional aspirations to
establish the cruise industry in the Asia-Pacific region, bringing increased tourism traffic into the
countries around Asia-Pacific. Asian holidaymakers now see cruising as an exciting and value-for-
money vacation. Simultaneously, it also started the influx of travellers from North America, Europe
and Australia, who joined Star Cruises holidays for a glimpse of the various sights and sounds of
Asia-Pacific. Within 10 years since its inception, Star Cruises has become the world’s third largest
cruise company.
History
Star Cruises was incorporated in September 1993, representing a bold initiative to tap Asia-Pacific’s
potential as an intern offering three classes of ship to suit all tastes, from the smaller intimate super-
yachts of Vision Class and Radiance Class to Voyager Class which has some of the best equipped
cruise ships in the world.
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Today, Star Cruises epitomizes the fulfilment of regional aspirations to establish the cruise industry in
the Asia-Pacific region, bringing increased tourism traffic into the countries around Asia-Pacific.
Asian holiday-makers now see cruising as an exciting and value-for-money vacation. Simultaneously,
it also started the influx of travellers from North America, Europe and Australia, who joined Star
Cruises holidays for a glimpse of the various sights and sounds of Asia-Pacific.
Within 10 years since its inception, Star Cruises has become the world’s third largest cruise company.
The Fleet
Star Cruises is a global cruise brand with a combined fleet of 20 ships in service and under
construction, with approximately 29,000 lower berths, cruising to destinations and islands in Asia-
Pacific, North and South America, Hawaii, Caribbean, Alaska, Europe, Mediterranean, Bermuda and
the Antarctica under the Star Cruises, Norwegian Cruise Line, NCL America, Orient Lines and Cruise
Ferries brands.
Vessels operated under the Star Cruises' brand in Asia-Pacific are SuperStar Virgo, SuperStar Gemini,
Star Pisces, MegaStar Aries and MegaStar Taurus.
The NCL group has a fleet of sixteen ships in service and under construction under three brands:
Norwegian Cruise Line, Orient Lines and NCL America. The NCL fleet includes the Norwegian
Dream, Norwegian Majesty, Norwegian Sea, Norwegian Wind, Norwegian Sun, Norwegian Dawn,
Norwegian Star, Norwegian Crown and Norwegian Spirit. NCL America currently operates the Pride
of Aloha, which will subsequently be joined by the Pride of America in June 2005. The Norwegian
Jewel and the Pride of Hawaii are scheduled to be delivered in August 2005 and April 2006
respectively with two more newbuilds presently under construction. Orient Lines is an award-winning
single ship line with the Marco Polo offering niche destination-focused cruises.
Both NCL and Orient Lines market primarily in North America but also extensively in the UK,
Europe, South America and Asia whilst NCL America offers inter island cruises in Hawaii.
The Cruise Ferries brand, which was launched in 2001 presently, comprises the m.v. Wasa Queen.
A World-Class Brand
Star Cruises has played the leading role in shaping the cruise industry in Asia-Pacific by offering new
and luxurious megaships and exciting itineraries. The company also made important investments in
marketing, operations, information technology, reservations systems, safety and infrastructure.
Star Cruises made it to the Top 50 Asian Brands in 1999 and is the second leading brand that has the
“Greatest Upward Movement Potential”. It achieved the top brand name in the leisure category for
“Top 50 Asian Brands League”. (Source: Top Asian Brands, Asian Brand News, March 1999)
New and enhanced products and services provided by Star Cruises have set new standards of cruising
in Asia-Pacific. Ships like SuperStar Virgo now represent the best and most exciting vacation
experience option to both the Asian holiday maker and experienced cruiser from America, Europe and
Australia.
Star Cruises is also committed to developing the growing meetings and incentive segment of the
cruise MICE market in Asia-Pacific. SuperStar Virgo is able to cater to meeting and incentive groups
of various sizes with their world-class food and beverage, entertainment and recreation facilities.
Fly cruise programmes will be intensified to capture the medium to long haul markets, and provide
wider marketing opportunities. Currently, Star Cruises is developing its fly cruise hubs located in
Singapore, Port Klang (Malaysia), Hong Kong and Bangkok (Thailand).
Star Cruises' award-winning product is noted for its excellent service standards and the highest crew-
to-passenger ratio (1:2) of any major cruise line, reflecting the high standards of the hospitality
industry in Asia-Pacific.
Star Cruises is represented in more than 20 locations worldwide with offices in Australia, China,
Germany, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Norway, Philippines,
Singapore, Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, United Kingdom and the
United States of America.
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In addition the Star Cruises Terminal in Port Klang and the Jetty Terminal on Langkawi Island,
Malaysia have been awarded Statements of Compliance under the ISPS Code. The code, which came
into mandatory effect in July 2004, sets out a framework involving cooperation between contracting
governments, government agencies, local authorities as well as members of the shipping and port
fraternity to detect and assess security threats and to take preventive measures.
Star Cruises Limited, a member of Genting Group, is listed on the Hong Kong Stock Exchange with a
market capitalisation of over US$1 billion as at 31 January 2005.
One of the top cruise ship operators in the world, the company offers cruises to more than 200
destinations worldwide on its fleet of 20 ships (which operate under the Star Cruises, Norwegian
Cruise Line, and Orient Lines names). Ships range from the "SuperStar Virgo" (2,000-passenger
capacity) to the "MegaStar Taurus," designed for private charters.
The family of Lim Goh Tong, head of Malaysian conglomerate Genting, controls nearly 55% of the
company, which was founded in 1993.
1.6.4 Disney Cruise
The Disney Cruise combines the magic of a Walt Disney resort vacation with the romance of a sea
voyage. Reminiscent of classic ocean liners, Disney vessels have two stacks and interiors that follow
an Art Deco theme. Whimsical accents cleverly incorporate the images of Mickey Mouse.
Disney genuinely offers one of the most unique cruise experiences afloat. The two-ship Disney Cruise
Line is the ultimate family option. The 1,750-passenger Disney Magic and Disney Wonder (that's a
double occupancy figure, by the way; a truer head count is its maximum, which can handle up to
3,325 folks if every berth is occupied) are sister ships and carry the same basic themes throughout
with different individual touches along the way. Disney Magic, for instance, has an art-deco theme
while Disney Wonder is more art-nouveau.
Both ships are based in Port Canaveral Florida but offer very different itinerary options. Disney
Magic sails seven night Caribbean trips (alternating Eastern and Western); Disney Wonder handles
the three-and four-day trips and limits its forays to the Bahamas. Both stop at Castaway Cay, Disney's
fabulous private island, complete with family -- and adult-only beaches. Passengers have the option to
include a land-stay at the theme resort.
With these ships, Disney has introduced a number of innovations. Chief among them is its cabins with
a bath-and-a-half, a rotating dining room schedule in which passengers eat at three different
restaurants, albeit with the same table-mates and wait-staff. It was the first cruise line to launch the
"soda card concept," an idea that has been picked up by competitors. Equally distinctive is what
Disney ships don't have: neither a casino nor a library.
Disney has said it plans to expand its line beyond the original two ships.
The following section studies the main features of the mentioned Cruise Operators.
Target Segments
Exhibit 24 : Profile of the Segments Targeted
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40
Destinations
Exhibit 25 : Profile of Destinations
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Ministry of Tourism, Government of India
Accommodation Facilities
Exhibit 26 : Profile of Accommodation Facilities
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1.7 ASIA CRUISE TOURISM MARKET
While global trends are relevant, the developments in the neighbouring regions would be much more
relevant to India. In this Section we present an overview of the cruise sector in Asia, duly highlighting
some key developments.
1.7.1 Growth in the region
The Asia-Pacific region experienced a growth of 134% during the 1992-2001 period. In 2001 it
reached a figure of 2.1 million nights and a global market share of 3.5%. Traditionally the region is
divided into four sectors: South Pacific (Australia, New Zealand, Solomon Islands, Indonesia, Papua
Asia and New Guinea, etc.), Southeast Asia (Malaysia, Philippines, Singapore, Vietnam, Cambodia,
Thailand, etc.), Far East (Japan, Republic of Korea, Democratic People's Republic of Korea, China,
etc.) and Trans-Pacific (Hawaii, Guam, Fiji, French Polynesia, etc.). The distribution in 2001 by sub-
region was as follows: Far East (0.215 million nights), Southeast Asia (0.430 million), Trans Pacific
(0.067 million) and South Pacific (1.16 million). In spite of its distance from the US, the effects of
September 11th were noticed briefly, given the high demand from the US. Nevertheless, the local
source market was hardly affected by the events.
According to the WTO, the real potential for the Asian market lies in selling products designed by
Asians for Asians. It is very different from the European market, especially with regard to the
demographic profile of demand, however, increasingly young Asians are following the example of
their US counterparts when it comes to lifestyle, which is a guarantee of success for cruise holidays.
1.7.2 Market Highlights
The potential of the Asian cruise market is amply demonstrated by the following facts:
Singapore is one of the fastest growing ports in the world. The increase in cruise visitors in the
period from 1991 to 1996 was spectacular, going from 130,000 to 750,000 cruise passengers,
thanks to the new Singapore Cruise Centre and its international airport, which acts as a real
connecting hub for the whole of the region. If one takes into account regional cruises of only one
night, the figure exceeded the one million cruise passenger mark in 2001, in spite of the Asian
economic crisis.
Singapore has been investing heavily in new facilities. In 1998 its new cruise centre opened. The
total investment was 13.8 million dollars and it can accommodate cruise ships of up to 300 metres
total length. The work undertaken included: the extension of three mooring docks (from 245 to
300 m, from 190 to 250 m, from 150 to 180 m), and the high-quality regeneration of the cruise
and regional ferry terminals. Combined with Thailand and Bangkok it offers itineraries for the
Conferences and Incentives segment, with short three-day cruises.
The Middle East/Arabian Gulf/Indian Ocean represent the strongly emerging regions, marking a
growth of 88% in 200, though it only represents 0.38% of world night stays growing from around
0.10% in 1992. The main port is Dubal (United Arab Emirates); from where 7-day and 14-day
cruises set sail. It has a new cruise terminal measuring 3,300 sq meter, which was opened in
March 2001 at a cost of 2.8 million dollars. Its major international airport and its close links with
Cunard/Seabourn are playing a major role in its development. Another important destination is
Oman, with ports in Muscat, Salalah and Khasab in the Musandam, which has had a cash
injection of 26 million dollars.
Asia’s strength lies in its many destinations and it is estimated that in the near future it will have
the critical mass of world category ports, enough to be able to offer its great cultural diversity.
Apart from the previously mentioned multi-million dollar investment in the Port of Singapore,
other notable investments include the ports of Port Klang (Kuala Lumpur), Penang (Malaysia) and
Langkawi (Malaysia). In addition to the diversity of destinations, Southeast Asia also has a
temperate climate, which allows it to offer cruises throughout the year.
Star Cruises, with its headquarters in Singapore, absolutely dominates the Asian market. With an
order book of 1.28 billion dollars, it is expected to have exceeded 34,000 berths in 2004, taking its
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place as fourth in the world. It’s the main operator in Asia, with NYK, Princess, RCI and Cunard
some way behind.
1.7.3 Cruise passenger traffic at key ports
The following Exhibit captures the Cruise passenger traffic in the key Asian ports in 2001:
Exhibit 27 : Cruise Passenger Traffic in the main Asian Ports in 2001
Port Sector Port Calls Cruise Passengers*
Singapore SE Asia 168 231,522
Hong Kong (China) Far East 106 179,158
Port Kelang SE Asia 110 139,510
Phuket SE Asia 114 132,516
Bangkok SE Asia 85 61.016
*Does not include very short cruises and regional cruises Source: WTO Report
According to the WTO Tourism 2020 vision, “… the tourist demand in Eastern Asia and the Pacific is
that which exhibits the highest growth levels of all” stating that "there are three key development
areas within the sphere of transportation", with air traffic being the obvious one, but another being
"the growth of the cruise business, not only in the Caribbean but throughout the world, and above all
in the Far East and Europe".
Exhibit 28 : Dubai Cruise Tourism Market
Dubai has always had a strong marine positioning thanks to its excellent location on the southern Arabian
Gulf. Its shores has for generations attracted seafarers and traders for commerce, being a principal Gulf Coast
port and an important Trading Centre called the City of Merchants and famous throughout the region for its
courtesy and hospitality.
With over 282 hotels, more than 91 airlines connecting to over 132 destinations, experienced ground
operators, modern seaports and most importantly a government dedicated to creating a sound social and
economic infrastructure for the tourism industry, Dubai integrated its strengths by creating a cruise terminal
of international quality standards and is a relatively new entrant into the cruise market.
Opened in 2001 at Port Rashid and able to handle up to two ships simultaneously, the Dubai Cruise terminal
has an unique 'mobile' design to enable customization of passenger and baggage flows, with other thoughtful
features including special facilities for the physically challenged like electric golf carts for transportation,
duty-free shops, internet access, money exchanges, information centre, beautiful palm gardens, Arabian
heritage and cultural exhibits, a Cafe and much more.
Its interesting that it cruise market is spearheaded by its Department of Tourism and Commerce Marketing
(DTCM) with the objective of making Dubai the favorite tourist sport of the millennium. An increasing
number of cruise ships are already choosing Dubai as an ideal and unique destination.
Dubai offers the following to its tourists:
Classic Golf on its carefully designed golf courses
Bird watching especially on the Dubai Creek
Arabian Experiences, including
o Desert Safaris, dune driving and wadi-bashing.
o Moonlight Arabian barbecues in thr street complete with traditional entertainment.
o Camel Racing and falconry.
o Cruises exotic of traditional wooden dhow or modern cabin cruiser on the Dubai Creek and
into the Gulf.
o The exotic sights and sounds of traditional commerce in the bustling souks and on the
Quays of the Creek.
Photographic opportunities galore, elegant mosques, sumptuous palaces, brightly dressed children,
majestic camels, ancient windtowers, dusty villages and dramatic sunsets.
Historical Sites especially the Dubai Museum
Shoppers malls & experiences which make Dubai a shoppers paradise
Archaeological sites
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1.8 FUTURE GLOBAL GROWTH TRENDS
With some 339 cruise ships plying the international waters, competition remains fierce in the cruise
industry. That means ships and their products are in a constant state of evolution. We summarize
below some of the key expected trends in 2005:
◊ Increasing embarkations from “close-to-home” ports : The market is expected to see a
marked increase in the number of ports playing an active role as embarkation terminals.
This would imply that, in addition to the main cruise ports, the other domestic ports
would also play supportive roles. This would make access more convenient and cheaper
for tourists to drive instead of fly to the nearest port. For eg. where Florida once reigned
supreme as home port of choice, now more than 30 North American cities like Norfolk,
Tampa, Baltimore, Boston, Philadelphia and San Diego boast cruise ship embarkation
terminals.
◊ Greater focus on family and family travel : Cruise ships reportedly carried more than one
million children last year. This has led to increasing focus on children in the upgradation
and expansion of kids’ facilities on cruise ships. For eg. Holland America offers “kids-
only” shore excursions in Alaska that include treasure hunts, tram rides and hikes. The
Disney Magic and Disney Wonder have all-new teen-dedicated spaces in addition to age
specific programmes for the very young and the pre-teens.
◊ Increase in choices & flexibilities offered to passengers: Cruise ships are moving away
from rigidity offering flexible dining times, open seating, alternative restaurants. Carnival
“Fun Ships” have expanded dining options to include 24-hour pizzerias, New York-style
delis, sushi bars and steakhouse-style supper clubs. A few cruise lines also allow guests to
pre-reserve shore excursions and spa treatments online. Holland America is adding a
couple’s massage room to all its ships. Princess has taken its new custom-developed
Lotus Spa program fleetwide, with new treatment options such as Chakra Stone Therapy
and Wild Strawberry Back Cleanse. Several Carnival ships have installed “virtual
bicycles” allowing road warriors to “tour” various routes such as mountain pathways or
snow-covered trails. Products are being made increasing exclusive and tailored for each
tourists preferences.
◊ Exotic locales and itineraries: In response to passengers continued demand for more and
more new places to visit, cruise lines are looking for new and exotic locales to woo their
customers. This has resulted in an explosion in itineraries with the cruise-lines today
vying with one another in offering exotic cruise destinations. Radisson Seven Seas
Cruises visit remote islands in Micronesia and Husavik in Iceland, whale-watching capital
of Europe. Crystal Cruises can take you to Ho Chi Minh City or Split, Croatia. Cunard’s
Queen Elizabeth 2 docks at the Canary Islands and Dakar, Senegal.
◊ Growing Variety of Ships: While on the one hand several mega-monster cruise ships
carrying as many as 2,600 passengers apiece have been launched, there is also a trend
towards a wave of small ships limited to between 100 and 250 passengers, such as
“exploration” cruise-ships (capable of entering small coves), sleek vessels such as of the
Windstar Cruises, and a number of other smaller and elite ships. Though the small new
ships aren’t very competitive in pricing, they’re generally less expensive than the larger
luxury ships whose standards they emulate. Thus, the trend is now moving towards a
choice of tiny, small, medium-sized, large, and monstrous vessels in just about any
reasonable price range.
◊ Growth in Drive Market Cruises: Following 9/11 many cruise lines have adjusted their
itineraries to allow more ships to depart from drive-friendly ports to accommodate
travellers who prefer not to fly. This has enabled the cruise lines to tap into an eager
market who’d rather drive over than fly before hopping aboard a ship.
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◊ Rebirth Of The Passenger-Carrying Freighter: There’s yet another cruise alternative.
Having all but disappeared about a decade ago, freighter sailings have made a remarkable
comeback and are now available on no fewer than forty vessels going to all inhabited
areas of the world. The reason behind this is increasing computerization of freighter
operation that has lessened the need for crew and made their cabins available for
passengers, at rates that can run as low as $80 a day per person, but more usually hover
around $100 to $110 still making it attractive for passengers.
◊ Boom in Theme Cruises: Along with the expansion in itineraries has come a vastly
greater schedule of activities at sea, almost always at no extra charge to the basic tariff.
Movies have been joined by full-scale stage shows; ocean skeet shooting now takes a rear
seat to spa-style aerobics and yoga meditation; and “theme” cruises—extra heavy
attention to styles of music, historical periods, food specialties, murder-mystery, square
dancing, lectures by athletes, chefs, poets, and inspirational psychologists—are numbered
in the dozens.
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India today presents a largely unexplored cruise tourism market with almost 100% of its potential
waiting to be explored. With new itineraries and exotic locales becoming more and more important
for the survival of competing cruise lines, a country like India with its globally recognized heritage
and natural wealth, its exotic and attractive locations, its beautiful destinations can strategize to
position itself on the itinerary of most cruise companies.
In this section we have analyzed the Indian cruise tourism market to see the trends, the potential and
the possible growth direction.
Region of Leisure/ Joining Visiting Employ- Business Religion Studies Other Total
origin Holiday family friends ment
Maharashtra 26.8 12.7 18.2 13.4 21.6 1.4 3.3 2.6 100.0
Delhi 16.8 7.6 24.0 9.4 34.8 1.5 4.1 1.8 100.0
Kerala 7.5 21.9 20.9 20.7 21.4 3.2 1.4 3.0 100.0
Tamil Nadu 14.7 13.4 10.7 12.0 31.8 0.6 1.6 15.2 100.0
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West Bengal 29.7 7.9 32.9 3.5 20.9 2.6 0.0 2.5 100.0
Assam 7.6 4.5 20.6 5.0 60.3 0.3 1.4 0.3 100.0
Karnataka 14.6 11.0 13.4 11.3 43.0 1.5 2.4 2.8 100.0
Punjab 8.0 8.8 38.9 15.5 26.9 0.0 1.3 0.6 100.0
Uttar 18.1 5.9 25.4 17.8 22.9 2.1 2.7 5.1 100.0
Pradesh
Gujarat 10.1 18.2 15.0 19.1 34.1 1.1 0.8 1.6 100.0
All regions 17.0 12.7 20.3 13.4 29.1 1.5 2.4 3.6 100.0
Source: Crisil Research and Times Research Group
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reward for meeting or surpassing sales targets and staff incentives to motivate performance and build
loyalty are concepts that are getting more popular by the day.
Leisure Travel is becoming an increasing preference among Indians
Increase in foreign exchange allowance, economic boom, increased salaries and the emergence of
nuclear/ double-income families led to a rapid rise in the demand for leisure travel overseas which
was previously confined to the very rich.
This segment depicts a set pattern. First time travellers generally prefer destinations that offer greater
degree of familiarity and comfort in terms of culture, food and drink and recreation. Going forward,
they are more willing to explore destinations with probably a lesser extent but still some degree of
similarity as their resident country. Thus, countries in South East Asia become a preferred choice in
this stage. After a couple of trips, travellers feel comfortable enough to venture out to countries like
USA, Europe or Australia and New Zealand. Experienced travellers venture out to unconventional
destinations like Israel, Netherlands or go in for niche tourism products like soft adventure or cruising
in Alaska.
Most travellers go in for package tours wherein they can cover different countries or most prime
tourist hubs in a single tour.
This segment can be further divided into the following categories:
◊ Family market : Indian families being more tightly-knit than their Western counterparts,
family travel includes not only the immediate family but also the extended family or close
family friends. Also, with rise in incomes and with the youngest end of the consumer
market having a fair say, more parents are including children in overseas travel. In fact,
quite a few travel circuits are determined, keeping in mind the preferences of children.
◊ Double-income families : Quite a few couples have started following the Western trend
of concentrating on their careers and delaying the start of a family until their early 30s.
This group tends to be more sophisticated, well-educated with good pay packages and
have generally had an experience of travelling abroad for work purposes. This group
termed as “dinks” i.e. double income-no kids, originates from the commercial hubs of
Mumbai, Bangalore, Hyderabad, Chennai and Delhi.
◊ Single, well-educated women : Rise in the number of women professionals with jobs in
good management positions and good pay packages as well as a shift from the regular
school of thought that ‘marriage before the age of 25 is necessary to attain a respectable
social status’ has led to the emergence of this segment. Currently, such groups are in the
first or the second stage of the leisure travel concept. Thus, they are more into quasi-
domestic destinations. However, it will not be long before they start exploring
destinations like the USA, Australia or New Zealand. Interestingly, no such group of
single male travellers appear to have made a mark on the travel circuits.
◊ Retired couples : Though this segment ideally fits into the category detailed below i.e.
‘Travel to visit friends and relatives’, a growth has been seen in the Leisure travel
segment too. This comes from retired couples who have sufficient savings to indulge in
such travel and are encouraged by their children (who fit into the other travel segments).
They generally opt for package holidays.
◊ Honeymooners :It is becoming increasingly fashionable to go for an overseas
honeymoon. This category tends to opt for single destinations.
Travel to visit friends and relatives an important motivation
With a large number of Indians settling abroad permanently and with a growing tribe of professionals
working abroad on long-term contracts, there are now large Indian communities in countries like UK,
USA, Middle East, Canada and South Africa. Thus overseas travel to visit friends and relatives has
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Ministry of Tourism, Government of India
been on the rise, especially among the senior citizen class. Such travel tends to be of a longer duration
and invariably, a leisure travel package gets added on to the main purpose of travel.
Travel for educational purposes
Education abroad, being a matter of great prestige, there are quite a few students who go in for post-
graduate studies in the USA, UK and Australia. While this segment was previously dominated by the
ultra-rich, availability of grants and student loans has seen a rise in the proportion of children from
middle-class families. Currently, Indians constitute the largest number of foreign students in USA.
Also, the student population grows on to form part of the professional tribe working abroad and in
many cases, settling abroad permanently.
In conclusion while the above-mentioned characteristics talk about the demographic profile of
outbound tourists in totality, cruise tourists, more or less, follow a similar pattern. Thus we have an
increasing number of corporates organizing conferences on board cruise ships as also motivating/
rewarding employees and dealers in the form of cruise tours. We have a growing population of cruise
tourists in the leisure travel segment. In fact, Star Cruises, which caters to the cruise segment in Asia,
designs its itineraries including on-board activities keeping in mind the South-East Asian culture.
Thus, casinos and cabaret shows are not as prominently included as they are in cruise ships catering to
the North American/ European market. On the same lines, the concept of Disney Cruises will generate
more audience in the Indian market.
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infrastructure and destinations, other cruise liners will come to India bringing enhanced
levels of cruise tourist
Thus it must be underlined that, in addition to international arrivals the outbound tourists as well as
the domestic tourists (both of which have been steadily rising over the past decade) also present a
key potential segment for cruise tourism. Cruises being a substitute tourism choice to any other
tourism product, its availability, accessibility and affordability in India itself will be key factors in
enabling a choice in its favour being made both by the current outbound tourists and by the domestic
tourists
2.2.2 Current Trends of Indian Cruise Tourists
It is understood that approximately 50,000 Indians set sail every year on different cruises every year7.
Nishit Saxena, country head, Princess Cruises quoted “Cruise vacation concept is being accepted very
quickly in India, with the growth rate of 20-25 per cent year-on-year boasted by most cruise
companies being represented in India”. The following section gives an overview of the trends in the
Indian Cruise market currently and in the recent past.
Cruising –‘Picking up with Indians’
Credit for increased awareness about cruises in India is attributed to Star Cruises. Star Cruises booked
8,000 Indians in 1999, and around 20,000 Indians cruised with them by the end of 2000 marking an
increase of 150% in a single year. Singapore remains the top destination of the first-time traveller,
who is attracted by the Star Cruises' $390 three-night, four-day packages. Royal Caribbean Cruises
also plans to open sales offices in Asia. The group is reportedly looking at introducing a ship on Asian
seas to tap into this new and lucrative market. Cruises do not generally form a sole-vacation for the
Indian heading to a specific destination. They tend to get clubbed with a land holiday, as airfares to
the United States and Europe are expensive.
Booking Patterns
Indians do not like to book far in advance of taking a holiday, partly through an innate tendency not to
commit themselves until they need to and partly through a desire not to commit resources before
absolutely necessary. For travel to Singapore in 1999, for example, Indians booked just 3.6 weeks in
advance and to Hong Kong the equivalent figure was 1.2 months. A decision to make a trip may in
fact be made up to a year in advance, but still it is likely that the booking will not be made until a
month of two before the time of travel.
Recent booking trends have reflected a positive increase in demand. In 2004 Princess Cruises had
seen 80 per cent of its enquiries being converted to bookings. Nishith Saxena, country head, Princess
Cruises said “The first quarter booking pattern of 2004 has shown a clear sign that passengers are
inclined to book longer duration cruises in exotic destinations like Alaska, Mediterranean, Baltic,
Panama Canal etc”. Further, Gautam Chadha, India representative of Royal Caribbean Cruises said,
“This year during January 1- May 15, we have booked more passengers than we had in the entire
calendar year of 2003”.
Awareness, availability, affordability - key deterrents for Cruises among Indians
Out of the total outbound travellers estimated at around 5.8 million annually (2004 saw a 20-25 per
cent growth in outbound travel), only around 40,000 travellers take cruise vacations, despite the fact
that Royal Caribbean entered the market a decade ago. According to Naresh Rawal, senior manager
marketing, Star Cruises India, "The slow growth is due to the fact that cruising is still a developing
holiday option in India and the gap will reduce as people become aware of the benefits of a cruise
vacation." While Nishith Saxena, country head, Princess Cruises attributes the absence of an
affordable cruise along the Indian coastline to be definitely be a reason for the lack of popularity of
cruises among masses. Others are of the opinion that the availability crunch is a factor because
7
Source: CRISIL Market interactions
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Ministry of Tourism, Government of India
Europe, Alaska and Mediterranean cruises are seasonal - only five months a year. In fact, Star Cruise
owes its popularity in India because it is the only cruise liner that offers a year-round itinerary. Three
critical factors – awareness, availability, affordability – have all be identified as reasons why cruising
has been relatively low key tourism activity among Indians thus far & which is being changed by Star
Cruises.
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Exhibit 31 : Top 5 Overseas destinations for Indian Tourists
%
47
38
27
17 15
% 100 100
28
21 16
Foreign Domestic
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Ministry of Tourism, Government of India
The trend among foreign tourists in India reflected that 46 % of them would like to go on a cruise
holiday while 19% were not sure and the remaining 33 % were not interested at all.
The above finding reveal that while 46 % of the international arrivals in India are interested in going
on a cruise, only 3 % of them had actually been on a cruise, thus leaving us with a great potential of
foreign tourists who could be tapped for a cruise holiday. Within the domestic market it was clear that
81 % of them would like to on a cruise vacation while only 22 % of them had actually been on one.
There is a small section of both markets that is not very sure on whether they would like to go on a
cruise, so the main aim should be :
- Providing the ones that want to go with opportunity to cruise while appealing to their taste
and class
- Converting the ones that are not sure towards attractive packages so that they would want to
cruise
- Make the ones that are not interested aware of the attractiveness and the appeal of cruise as a
vacation option so that they atleast think twice before saying a ‘NO”
The above can be achieved through making them aware of the existing circuits, facilitates,
connectivity, activities through various promoting and marketing strategies, through tour operators
and other government initiatives. Also building a brand, emphasizing quality assurances, providing
demand driven information, competing at a global level, collaborating on international and regional
platforms to create a highly visible platform for this industry would play an important role.
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Ministry of Tourism, Government of India
Exhibit 36 : Popular Cruise Destinations for Domestic Tourist
Foreign Domestic
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Ministry of Tourism, Government of India
Aspects considered important while on a Cruise
On the dimension covering the importance of different aspects while going on a cruise, survey results
showed that the two market segments i.e. Domestic Tourists and the Foreign Tourists had a striking
difference in their list of priorities, thus bringing out the Indian likes and their market preferences.
Foreign Domestic
Source: CRISIL - AC Nielsen ORG-MARG Survey, 2005
It is clear that for domestic tourists the food/cuisine rates on top of the list. Accommodation,
entertainment/ leisure facilities and ship liner more or less have been given the same importance while
informality onboard and convenience while disembarking hold least priority confirming the fact that
Indians tourists do not give too much priority to the port facilities. This would be particularly of use
while formulating the marketing and promoting strategies that are suitable for the Indian markets.
On the other hand the foreign tourists in India give the ship liner itself top priority followed closely by
food, accommodation, informality on board and convenience while disembarking, which hold more or
less the same rating. It is therefore important that if we want to convert the foreign tourists visiting
India to cruisers then we have to get more ship liners that have an international grading, improve our
port facilities and work toward making India a hub for cruise tourism.
Rating of Ports by Domestic Tourists
The respondents were asked to rate the ports that have been selected for cruise tourism in India.
Results reveal that Goa got the highest rating wherein 57 of them found it excellent 34 found it good
and only a minimal number rated it as average. Mumbai followed closely after Goa with 30 giving it
an excellent rating and 40 a good rating. The other ports that were rated in the order of priority were
Cochin, Chennai, Mangalore and Tuticorin.
As seen earlier the domestic tourists give least preferences to the ports, so the rating here mostly
reveals the destination popularity rather than in terms of the port infrastructure facility. Nevertheless,
if domestic tourists are to be converted to cruise tourists then these factors need to be considered
strongly from all aspects of the ports including the infrastructure facilities, wherein some ports which
have got a poor rating, like Tuticorin and Mangalore need to be upgraded.
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Ministry of Tourism, Government of India
Exhibit 39 : Rating of the Ports by Domestic Tourists
GOA 57 34 6 3
M UM BAI 30 40 23 3 4
C O C H IN 18 38 32 10 11
CHENN AI 13 27 38 17 5
M ANG ALO R E 12 34 37 7 9 1
T U T IC O R IN 3 32 41 14 6 4
C O C H IN 36 50 12 11
GOA 30 37 17 11 14
M UM BAI 14 48 23 3 7 5
CHENN AI 1 12 29 11 5 42
M ANG ALO RE 3 13 1 5 78
T U T IC O R IN 21 4 5 88
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
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Importance when Disembarking from a Cruise
The survey sought to find out which services and facilities at the ports hold importance while
disembarking from a cruise. The Exhibit below shows the results graphically.
4.24
3.88
3.96
4.16
4.36
3.96
B u ild in te r n a tio n a l c r u is e 75
te r m in a ls 37
M a k e In d ia m o r e to u r is t 64
fr ie n d ly 14
C r e a te g o o d d e s tin a tio n s a t 52
p o r t o f c a ll 44
M a r k e t In d ia n c r u is e
to u r is m to d o m e s tic &
38
fo r e ig n to u r is ts 23
P u t in p la c e fa s t lin k a g e s &
c o n n e c tivity to fa c ilita te 37
in te r n a l tr a ve l 37
B r in g in in te r n a tio n a l c r u is e 27
bra nds 16
H a ve s ta te -o f-th e -a r t c r u is e 26
lin e r s 35
Foreign Domestic
-100%
-10
-17
-27 -23
-31 -31
-80%
-44
-60% -46
-50
-52 -45 -41
-40%
-36
-20% -30
-23 -23
-18 -22
-7
--21 --31 -4 -6
-0% -2 -1 -1 -3
-Cochin-Goa- -Mumbai-Colombo--Mumbai-Chennai- -Mumbai-Cochin- -Cochin-Kerala -Mumbai-Colombo-
-Lakshadweep- -Singapore -Colombo- -Goa-Gujarat -Backwaters-Goa- -Cochin-Maldives 70
-Male -Andamans -Mangalore
-100%
-7 -11 -11
-15 -18
-33
-80%
-27 -27
-21
-35
-61
-60%
-36
-37 -38 -42
-40%
-42
-20% -19 -23 -11 -10
-8
-7 -5 -7 -5
-6 -2
--23 -5 -8 -7 -7
-0% -3 -1
-Cochin-Kerala -Mumbai-Cochin- -Cochin-Goa- -Mumbai-Colombo--Mumbai-Colombo--Mumbai-Chennai-
-Backwaters-Goa- -Goa-Gujarat -Lakshadweep- -Cochin-Maldives -Singapore -Colombo-
-Mangalore -Male -Andamans
-Don't Know / Can't Say -Not Attractive At All -Not Very Attractive
No
39% No
Yes 9%
86% DK/CS
5%
Yes
61%
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
-100%
-12 -9 -12
-15
-24 -25
-80%
-52 -31
-39 -41
-40
-60% -34
-55
-40%
-25 -29 -40
-38 -29
-28
-20%
-14 -18 -15
-10 -10
-10
-10 -5 -2 -5 -3 -4
-2 --12 -4 -1 -3 -3
-0%
-Goa Sea & -Kerala -Sundarbans -Ganges Cruise -Gujarat Coastal -Godavari -Mangalore
-River Cruises -Backwater -Cruise -Cruise -Cruise -Coastal Cruise
-Cruise
-Don't Know / Can't Say -Not Attractive At All -Not Very Attractive
-100% -4 -2 -3 --12 -4
-7 -3 -3 -3
-8 --21
-2 -9
--11
-80% -18
-42
-63 --22
-60%
-28
-20% --22
-15
-6
-0% --21
-Kerala -Goa Sea & -Ganges Cruise -Sundarbans -Gujarat Coastal -Godavari -Mangalore
-Backwater -River Cruises -Cruise -Cruise -Cruise -Coastal Cruise
-Cruise
-Don't Know / Can't Say -Not Attractive At All -Not Very Attractive
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Ministry of Tourism, Government of India
Source: CRISIL - AC Nielsen ORG-MARG Survey, 2005
The most striking fact that emerges is that Foreign Tourists are mostly unaware of the Indian Coastal
and river because, with the exception of the Kerala Backwater cruise their response has been ‘Don’t
know-Cant say’ for most of the other circuits. Form the 63% who have rated Kerala Backwaters as
‘extremely attractive’ it can be seen that the other circuits also have the potential to be well positioned
among Foreign Tourists if the right initiatives are taken.
In respect of Indian tourists the Goa Sea and River cruise finds the top place followed by the Kerala
Backwater Cruise. Here too it is clear that lack of proper positioning and marketing has led to the
relative lower interest in the other crusies.
^ Based on information available for Mumbai, Cochin and Goa Port only
* Based on information available of 1555883 foreign tourist arrivals in the first five months of 2005
The year 2000-01 shows an impressive increase of 70.83% in cruise tourist arrivals in India with
cruise tourists being around 1.61% of International Arrivals. The next two years results are largely
linked to the events in South East Asia since cruises are headed to most South East Asian destinations
and, to some extent, events happening in North America/ Europe since most of the cruise traffic
originates from that part of the globe. Thus the 9/11 effect and the SARS effect can be seen very
clearly in the fall in cruise tourist arrivals for the years 2001-02 and 2002-03. However, it is
heartening to note the process of reversal happening in the year 2003-04 which saw a positive trend.
The fact that international tourist arrivals in India have shown a steady increase over the years proves
that India has a lot of appeal in the international market. It is indisputable that this would have a
favourable impact on the Indian cruise tourism market.
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2.4.2 Indian Cruise market scenario
We highlight below the main aspects of the Indian cruise market scenario.
India as a Port of Call
In the Cruise Industry, India presently serves essentially as Port of Call, which is port wherein ships
call in their schedule and which usually serves as an attraction for marketing of their respective
cruises. The following five ports usually receive ships during the months October to May:
◊ Mumbai
◊ Cochin
◊ Mormugao
◊ New Mangalore
◊ Tutitcorin
India as a Turnaround Port
A turnaround port is essentially a port where the cruise ship, either on its onward or return journey,
allows its passengers to embark or disembark. Sometimes all the passengers disembark and the ship
picks up the passengers who had disembarked during the previous call. Thus, a cruise ship at a
turnaround ports sees a change in its passenger profile.
There are very few ships that use the Indian port as a Turnaround Port. A few examples of ships
taking world cruises wherein regional passenger board the ship at an India port. Sometimes the Indian
Ports have been used as turnaround ports for winter deployment options, or to take seasonal advantage
mainly for the world cruises.
Vessels Visiting Indian Ports
Exhibit 49 shows details of some of the cruise vessels that visited the Indian Ports during 2004-2005
Exhibit 49 : Some Cruise Vessels that visited Indian Ports (2004-05)
Name of the Cruise Ship
Star Flyer
TSS the Topaz
Silver Cloud
Minerva II
Black watch
Oriana
The World
Aid Acara
Royal Princess
Hebridean Spirit
Island Sky
Astoria
Seven Seas Voyager
M.V Deutschland
Source: Mumbai Port Trust
Current Demand Trends at Indian Ports
Currently the Cruise vessels call at the Indian Ports only between October and May each year. As a
result of the short stay of these cruise vessels the occupancy of berths is as low as 8% to 12 %.
Statistics of cruise arrivals has been detailed in Exhibit 50 below.
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Ministry of Tourism, Government of India
segment would comprise a significant percentage of the cruise tourists, with primary interests in
undertaking both domestic and international cruise circuits.
D. Indian Outbound Tourists: Recent progress in the economic indicators of the country has given
rise to a category of upper class Indians visiting international destinations regularly for leisure
purposes. This category offers an attractive potential for cruising through Indian ports, with their
interests primarily centred around cruise circuits that include international destinations.
In the following sections, we extrapolate the potential demand from each of the above tourist
segments.
2.6.1 Potential arising from Cruise Tourist arrivals in India
Although lacking even basic Cruise-related Infrastructure, Indian ports have been able to attract
substantial number of cruise vessels and tourists in recent years.
This trend of cruise tourist arrivals, mainly since 1996, has grown each year. However, the years
immediately after year 2000-01 show a marked decline. This is similar to trends observed
internationally. This sharp drop is attributable to a socio-political event, the terrorist attack on World
Trade Centre in New York that rendered widespread uncertainty and spoiled the overall tourism
sentiment. Other less important but factors that contributed to this fall were spread of SARS disease
and Iraq war.
It is in light of these circumstances that we analyse and apply the past growth trends to forecast the
prospective cruise tourists coming into the country
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
Ministry of Tourism, Government of India
expectedly would not occur again.
- The growth % thus calculated is employed on the total Cruise tourist data for all Indian ports,
considering 2002-03 as the base year.
Based on the above the potential arising from the cruise tourist arrivals in India has been forecast as
shown in Exhibit 53 & Exhibit 54 below:
Exhibit 53 : Potential Cruise Tourist Forecasts (2003-2031)
700000
600000
500000
400000
300000
200000
100000
0
2002- 2005- 2010- 2015- 2020- 2025- 2030-
2003 2006 2011 2016 2021 2026 2031
India
From the above analysis, it can be concluded that India will have nearly 0.6 million-cruise tourist
arrivals at its ports by the year 2030-2031.
Approach 2 – The above cruise tourist arrivals is also forecasted in the following manner utilising
international cruise industry growth rates.
- Cruise Tourists data for North America is considered for the period 1989-2000. The compounded
annual growth rate for the period is calculated. The benefit such long term data offers is that it
includes minor declines and sudden peaks attributable to reasons other than ‘real’ growth. The
CAGR for N. America during the period was 6.94%.
Exhibit 55 : Number of Cruise Tourists in North America
Cruise Tourists in
Year
N. America 8000000
7000000
6000000
4000000
1991 4,000,000 3000000
1000000
1995 4,400,000 0
1989 1991 1993 1995 1997 1999 2000
1997 5,050,000
North America
1999 5,890,000
2000 6,880,000
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CAGR (%) 6.94 %
Source: WTO Report on Worldwide Cruise Ship Activity
- Similarly, Cruise Tourists data for Europe too was considered for the period 1989-2000. The
CAGR for growth in number of cruise tourists for Europe during the period was 12.57%.
Cruise Tourists in
Year
Europe
2500000
2000000
1989 530,000
1991 700,000 1500000
1995 970,000
500000
1997 1,360,000
0
1999 1,790,000 1989 1991 1993 1995 1997 1999 2000
- Thus we see that the growth trend over the period 1989-2000 in North America and Europe was
6.94% and 12.57% respectively.
- N. America is the world’s largest and most mature market with respect to the cruise tourism
industry. At the same time, Europe is a developing market in the cruise industry terms. It can be
expected that India too would follow a similar growth pattern as exhibited by the cruise industry
in Europe. But to be on the conservative side, we assume a lower growth rate arrived at by using
an average of the CAGR for N. America and Europe. This growth rate will be 9.76% (average of
6.94% & 12.57%).
• The growth % thus arrived at is employed on the total Cruise tourist data for all Indian ports. The
base year is considered 2000-01 because the decline and increase trends even out over a longer
period, as considered herein. Now applying this compound annual growth rate to the Indian
Cruise Market, the forecast of the future cruise passengers has been presented below:
Number of
49,160 78,295 124,697 198,599 316,299 503,755 802,308
Cruise Tourists
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Exhibit 58 : Forecast of Cruise Tourist in India
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
2000-2001 2005-2006 2010-2011 2015-2016 2020-2021 2025-2026 2030-2031
India
From the above approach, it can be concluded that India will have nearly 0.8 million-cruise tourist
arrivals at its ports by the year 2030-2031.
• Hence, even on a conservative basis India will have approximately 0.6 million dedicated cruise
tourist arrivals at its ports by the year 2030-2031.
• The total cruise tourist numbers estimated above reflect only the increases estimated from
increased demand resulting into increased port-calls at Indian Ports. In case an Indian Port
emerges as a ‘Home Port’ or ‘Turnaround Port’, the number of cruise tourist would increase
substantially.
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2002 2.384
2003 2.726
Source: Indian Tourism Statistics 2003: Report of Ministry of Tourism, Government of India & Times Research Group
Report
• At present India’s share of International Arrivals is 2.726 million as against the 694 million
international arrivals worldwide.
• ‘Tourism 2020 Vision’ is the World Tourism Organization's (WTO) long-term forecast and
assessment of the development of tourism in the first 20 years of the new millennium. An
essential outcome of the Tourism 2020 Vision are quantitative forecasts covering a 25 years
period, with 1995 as the base year and forecasts for 2000, 2010 and 2020. In-spite of the irregular
evolution of tourism in the last few years due to international developments that affected the
travel, WTO maintains its long-term forecast and believes that the underlying structural trends of
the forecast have not significantly changed.
• WTO forecasts that international arrivals are expected to reach 1.0 billion by 2010 and over 1.5
billion by the year 2020. We have applied a similar growth rate to project the International
arrivals at the World level till 2030-31.
• In the Tourism 2020 Vision document, WTO forecasts for India that India has the potential to
reach nearly 8.9 million by 2020. In our analysis, we continue the trend observed from 2002-03 to
2020-21 to arrive at projections for 2030-31.
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Exhibit 62 Forecast of International Tourist arrivals in India taking cruises (2003-2031)
Exhibit 63 : Projected potential Cruise market arising from International Tourist arrivals in India
300000
250000
200000
150000
100000
50000
0
2003 2006 2011 2016 2021 2026 2031
India
From the above projections, it can be estimated that India will host 17.2 million International tourist
arrivals by 2030-31, of which about 2.4 million tourists will cruise from Indian ports.
2.6.3 Potential arising from Domestic Indian Tourists
A large population of Indians undertake annual vacations primarily to Indian destinations. This travel
is due to variety of reasons including business& trade, social, religious pilgrimage & Leisure &
Holiday activity. In the absence of infrastructure and facilities, these tourists have hardly been
exposed to the concept of ‘cruise tourism’. With development in infrastructure, this segment would
comprise a significant percentage of the cruise tourists in India.
Considering the diverse demographic profile of Indian domestic tourists, it can be assumed that the
tourists would be interested both domestic and international cruise circuits. To arrive at the percentage
of such domestic tourists interested in cruise activity the following methodology is applied:
• The data for total domestic Indian tourists is given below. The working group on tourism for the
Ninth Plan had projected domestic tourism to grow at 9.5% over the period 1997-2002. Although
exceeded in recent years, for analysis we consider the same growth figure.
• Cruise tourism is an expensive activity and hence in our analysis, we consider only the higher
income urban tourists who travel for Leisure & Holiday purposes.
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• A demographic survey undertaken by NCAER in 2002 indicates that of the total domestic
tourists, about 27% comprised urban residents while the rest were rural residents. This is in line
with the India’s urban-rural divide, with urban households contributing to about 27% of all Indian
households and the rest being rural. However, as urbanisation in India is growing, number of
urban travellers is expected to increase too. Considering past decadal urban growth numbers &
future projections by NCAER, the urban tourists as % to overall tourists is taken as 30% & 33%
for the decade starting 2010-11 and 2020-21.
• Currently, only about 5% of the tourists were from the higher income brackets while the rest were
either from middle income or lower income groups. With growth in Indian economy and higher
disposable incomes, the higher and middle-income households are increasing. Thus, the number
of tourists in higher income bracket is taken as 7.5% & 10% for the decade starting 2010-11 and
2020-21.
• Furthermore, as per the NCAER study only about 8.7% tourists undertake travel for Leisure &
Holiday purposes. This filtered segment forms the target market for the cruise industry.
Exhibit 66 : Table – Projection of Cruise tourism market within Domestic Indian Travellers (2003-2031)
• Taking into account the WTO study indicating that about 1.4% are cruise tourists we have
considered the same to arrive at the Domestic Cruise Tourist numbers.
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
2003 2006 2011 2016 2021 2026 2031
India
• From the above approach, it can be concluded that India will have about 11 million domestic
Indian tourists travelling for Leisure & Holiday purposes. The cruise tourist potential that can be
realised would be 157,677 in 2030-31.
• This number of tourists travelling abroad is extrapolated till the year 2030-31, using the CAGR of
6.79%. However, within this group, only tourists travelling for Leisure & Holiday purposes would
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form the market for cruise tourism. As per a PATA report - Indian Outbound, about 17% of
outbound tourists undertook travel for Leisure & Holiday purposes.
• Also, a noticeable trend in Indian outbound business travellers is their combining business and
leisure. Conferences aboard cruise ships form a substantive percentage of such leisure-cum-
business activity. As per the PATA report, about 29.1% of outbound tourists undertook travel for
Business purposes. For our analysis, we apply a factor of 0.5 to arrive at the potential outbound
market undertaking leisure activity.
Exhibit 70 : Forecast of Indian Outbound Tourists enjoying leisure facilities abroad (2003-2031)
1. Indian Outbound
5.35 6.51 9.05 12.6 17.45 24.23 33.65
Tourists
2. Leisure & Holiday
0.91 1.11 1.54 2.14 2.96 4.12 5.72
Tourists (17%)
3. Business Tourist
1.56 1.90 2.63 3.66 5.08 7.05 9.79
(29.1%)
4. Considering only
50% of Business 0.78 0.95 1.32 1.83 2.54 3.53 4.90
Tourist for analysis
5. Outbound tourists
enjoying leisure
1.69 2.06 2.85 3.96 5.51 7.64 10.62
facilities abroad
(2+4)
• Of these outbound tourists enjoying leisure facilities abroad, we estimate that about 10% would
be interested in undertaking cruising. Of this percentage, the Indian cruise market is estimated to
attract 1/5th of the tourists ie. a mere 2% of Indians travelling abroad for leisure related activity.
This number is quite conservative and would be potentially much higher with development of
infrastructure for Cruise tourism in the country.
Exhibit 71 : Forecast of Indian Outbound Tourists taking cruises from Indian Ports (2003-2031)
250000
200000
150000
100000
50000
0
2003 2006 2011 2016 2021 2026 2031
India
• From the above analysis, it can be concluded that there will be about 33.65 million Outbound
tourists by the year 2030-31, of which 212,317 will undertake cruise activity from Indian ports.
^ Since Star Cruises are in the very nascent stages of their operations in India and consequently information
on their performance or strategy is considered extremely confidential and not readily shared.
8
WTO estimates
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Cruise Lines
•Terminal Hire
•Berth Fees Public Transport Urban Services
•Customs •Buses •Electricity
•Other Fees •Taxis •Cleaning
•Trams •Communications
•Rails •Escalator/lifts
•Airways •Air-conditioning
•Management
•Others
Passenger Operations Ship Services
Transit Passengers Post/Pre Cruise Navigation Supplies Passenger Services Other Services
•Tours •Hotels •Pilots •Pilots •Security •Agents
•Shopping •Tours •Tugs •Tugs •Luggage handling •Crew handling
•Meals •Shopping •Boats •Boats •Medical
•Entertainment •Meals •Mooring •Mooring •Telephones
•Entrance Fees •Air Fares •Gangways •Gangways
•Miscellaneous •Entertainment
•Miscellaneous
The economic benefits derived would be from cruise ships and shipping services in the form of
expenditure by the cruise line, passengers and crew on goods and services once in port leading to the
creation of jobs, new local business and rejuvenation of the local economy The most significant areas
of expenditure would include
- Shore excursion product
- Retail
- Ship Supplies and bunkers
- Transport
- Ancillary services
When a cruise ship arrives at a Port of Call several services are put into order and each one of them
has a revenue implication. These may be in the nature of direct charges that the cruise lines are
required to pay to the port authorities or may arise from the activities of the passengers in transit or in
the pre-post cruise phase outside the port. Several shipping & related services would also come into
play. Port based ancillary services provided by the urban local government would also be demanded
and paid for. These together would create an economic activity that would intensify with the arrival of
every Cruise ship at Port. In case of a Home Port, the impact in terms of local employment would be
greater because the Cruise ship would be anchored at the would require repairs, servicing and other
miscellaneous services during this time.
2.7.2 Environmental Impact
As detailed in Section 1.3.2, environmental aspects form a key concern when dealing with Cruise
Ships. Apart from the several hazardous impact of the cruise ships while on high seas, cruise ships
which are anchored at the port give equal cause for concern. The negative impact may arise due to one
or more of the following:
- Concern arising from increase in air pollution, damage to local fish, shellfish and water
mammal populations
- Concern regarding unloading and disposal of solid waste
- Concern over the impact of the cruise ship’s discharges and their cumulative effect
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- Concern that smaller pocket cruise vessels may pose greater environmental threats than larger
ships
As pointed out in Section 1.3.2, internationally a severe view it taken of such negative environmental
impact and global environmental interests are protected by organizations such as the International
Council of Cruise Lines (ICCL) whose members have unanimously adopted mandatory environmental
standards for all of their cruise ships. These standards are based on principles that include: designing
and constructing cruise ships to be as environmentally friendly as possible, embracing new
technology, complying fully with international and U.S. environmental laws, minimizing waste
production, and maintaining cooperative relationships with the regulatory community.
All ICCL member cruise ship operators implement the adopted standards, which include effectively
dealing with the following areas:
◊ Graywater and Blackwater discharge.
◊ Hazardous chemical waste such as photo processing fluid and dry-
◊ Cleaning chemicals.
◊ Unused and outdated pharmaceuticals.
◊ Used batteries
◊ Burned out fluorescent and mercury vapor lamps.
The cruise industry’s commitment to protecting the environment is demonstrated by the
comprehensive spectrum of waste management technologies and procedures employed on its vessels.
ICCL members are committed to:
◊ Designing, constructing and operating vessels so as to minimize their impact on the
environment;
◊ Developing improved technologies to exceed current requirements for protection of
the environment;
◊ Implementing a policy goal of zero discharge of MARPOL, Annex V solid waste
products (garbage) by use of more comprehensive waste minimization procedures to
significantly reduce shipboard generated waste;
◊ Expanding waste reduction strategies to include reuse and recycling to the maximum
extent possible so as to land ashore even smaller quantities of waste products;
◊ Improving processes and procedures for collection and transfer of hazardous waste
◊ Strengthening comprehensive programs for monitoring and auditing of onboard
environmental practices and procedures in accordance with the International Safety
Management Code for the Safe Operation of Ships and for Pollution Prevention
(ISMCode).
Each ICCL cruise vessel operator has agreed to utilize one or more of the practices and procedures
contained in the attached “Cruise Industry Waste Management Practices and Procedures” in the
management of their shipboard waste streams. Recognizing that technology is progressing at a rapid
rate, any new equipment or management practices that are equivalent to or better than those described,
and which are shown to meet or exceed international and federal environmental standards, will also be
acceptable. Member lines have agreed to communicate to ICCL the use of equivalent or other
acceptable practices and procedures. As appropriate, such practices and procedures shall be included
as a revision to the attached document. As an example, when improved systems for treating
blackwater and graywater are perfected and shown to meet the requirements for MSDs and accepted
by appropriate authorities, the new systems and associated technology will be included in the
attachment as a revision.
Thus, India would need to insist that cruise lines operating in the country and touching the Indian
ports are compliant with such guidelines and have adopted the internationally accepted environmental
practices. This may form part of the stipulations for granting permission for cruise vessels to land at
Indian ports.
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2.7.3 Socio-Cultural Impact
As in all other tourism activity Cruise Tourism too would have a striking socio-cultural impact on the
local community. While the immediate impact will be the form of increased revenue generation for
the local communities, the impact would continue to be in the form of strong opportunities for the
business communities, the local artisans, the self employed etc to grow, job opportunities for the local
communities and women, increased awareness among the local population arising out of interactions
with the foreign and domestic tourists.
As against the positive impact, certain negative aspects have also been perceived such as:
- Increase in migration to port communities, creating problems associated with
overcrowding and congestion
- Increased noise pollution
- Increasing exposure of the local communities to large amounts of tourists on a consistent
basis thus creating tension among locals who feel they have lost their privacy.
- A feeling of alienation among the local community who feel threatened by the large
influx of outsiders
- Loss of ability to preserve traditional cultural behaviour.
- Perceived health risks caused by cumulative legal discharging.
However, the benefits far outweigh the disadvantages, which would need to be strategically managed
through effective education and interaction with the local community who are the principal
stakeholders of this development.
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Development of tourism is closely involved with the providing of the necessary core infrastructure &
ensuring that all linkage infrastructure is in place. The development of Cruise tourism would place
additional demands for dedicated infrastructural support especially in terms of the critical Port related
infrastructure which would form the nucleus infrastructure imperative.
This chapter deals with the critical appraisal of the preparedness of the Indian port industry to respond
and meet the demand potential for cruise tourism assessed in the previous chapter. The module
focuses on a micro level analysis of the proposed ports and their infrastructure, of the facilities
available and the gaps vis-à-vis the expected facilities to enable a closer understanding of the practical
aspects of developing a vibrant cruise tourism market in the country.
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◊ Excellent linkages, especially air, with Indian & international cities is a pre-requisite to enable
cruise tourists the option of touring the country prior to / after their cruise.
◊ The port should be in proximity to international sea routes, so that cruise ships do not have to take
a big detour in the course of their voyage between international destinations.
Considerations for a Home Port
As a Home port the following would the important considerations
◊ The port should have proximity to major/attractive tourism markets so as to offer attractive cruise
circuits. Ability to link a few foreign destinations along with domestic destinations would be an
added attraction
◊ Accessibility to the rest of the country in terms of fast and effective road & airline connectivity to
be attractive both to ‘drive in’ and ‘fly in’ cruise component.
◊ Quality and availability of port infrastructure and services including capacity of the port to
accommodate and process high volumes of passengers efficiently, space to accommodate support
services such as transport to and from the ship and other amenities, provisioning and bunkering
capability etc.
3.1.2 Identified Ports for Cruise Tourism in India
India is ranked as the ninth most popular tourist
destinations9 in the world and is today considered as a
preferred cruise destination. The government of India
has recognized Cruise tourism as a thrust area and
initiated a number of positive measures to promote the
cruise industry and position India as a global cruise
destination.
India has over 7,500 km of coastline, peppered with
places of great interest for the cruise guest. Along the
coastline, India also has 12 Major Ports and 184 minor
ports. To encourage cruise shipping, Major ports, which
are managed by the Central Government, have been
encouraged to create facilities for cruise shipping.
Since most major ports on the western coast in India
meet the requisites of a port of call, a nascent trend of
cruise ships calling at Indian ports at regular intervals
has started recently in the cruise industry. This has led to
the ports of western coast of India figuring on the
itineraries of International Cruise Ships.
Government of India, as part of its Cruise Tourism development initiatives has identified 6 Indian
ports to be developed as ‘world class cruise terminals’ and to be promoted as ‘integrated Indian cruise
circuit.’10 These identified Ports include
◊ Mumbai
◊ Goa
◊ Cochin
◊ New Mangalore
◊ Tuticorin
◊ Chennai (added recently in January 2005)
It would therefore be relevant to focus on these ports and analyse their preparedness for fulfilling the
role identified for their development.
9
Report of the Committee constituted to Review Rules & Regulations applicable to Cruise Vessels & Cruise Tourists in India
10
Report of the Committee constituted to Review Rules & Regulations applicable to Cruise Vessels & Cruise Tourists in India
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3.1.3 Analysis of the key Cruise Tourism Ports
We present below an analysis of the key ports identified for development as cruise terminals in India
with a view to understanding their readiness.
Mumbai Port
Exhibit 76 : Analysis of Mumbai Port
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tourists • Passenger Lounge for resting with modern amenities and piped music
• Toilets, drinking water, car parking, etc.
• Counters for baggage handling, foreign currency exchange counters,
tour operators, taxi services, etc
• Internet, telephone, email, fax, net-phone communication facilities
• Tourist Information Centre
• Stalls for curios & artefacts, carpets, handicraft items
Traditional Indian style welcome
Services for • Separate counters for customs examination, immigration procedures
providing clearances
• Police & security arrangement at terminal
/ approvals
Uninterrupted entry / exit permitted at gates
Airport accessibility Mumbai is the main International Gateway of India.
& Linkages
• It has both domestic and international airports with excellent
connectivity to major international and Indian cities
• Mumbai is well connected by Railways & National Highways to the
rest of the country
• Local Taxi services and City Bus services enable movement between
port and various places within city.
Places of tourist The Gateway of India, Marine Drive (Queen’s Necklace), Elephanta
interest in vicinity Caves, CST Station Heritage Building, Home to Bollywood: Indian
Cinema Industry, Juhu Beach, Chowpatty Beach, Karnala Bird Sanctuary,
Harbour cruises, Ajanta & Ellora Caves etc.
Goa Port
Exhibit 77 : Analysis of Goa Port
Cochin Port
Exhibit 78 : Analysis of Cochin Port
Tuticorin Port
Exhibit 80 : Analysis of Tuticorin Port
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Brief details of Port Tuticorin Port lies at latitude 8 45’N and longitude 78o13’E on the South
o
Chennai Port
Exhibit 81 : Analysis of Chennai Port
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CRUISE TOURISM – POTENTIAL & STRATEGY STUDY
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Mumbai 243 10 9.6 Km 8.5 350 500 4.4/2.28 5.94/4.8
Mormugao 250 10 5.0 Km 13.7 250 480 2.3/1.1 -
New 200 10.3 7.5 Km 15.40 245 570 1.50 3.25
Mangalore
Cochin 350 10.75 10.5 Km 13.20 200 500 1.00 1.00
Tuticorin 340 11.9 4.0 Km 12.80 183 488 2.58 3.35
New
No. Facilities Mumbai Goa Cochin Tuticorin Chennai
Mangalore
1 Berth
2 Gangway
3 Terminal Building
Traditional Indian
4 welcome
5 Passenger Lounge
6 Luggage Counter
7 Tourist information centre
8 Drinking water
9 Toilets/ Showers / Lockers
Foreign Exchange Counter
10 / Bank / ATM
11 Medical Aid
Internet Café /
12 Communication Centre
13 Cafeteria / Restaurant
14 Duty free / souvenir shops
Excursion facility / Tour
15 Operator
16 Taxi service
Coach transfers / shuttle
17 bus service
18 Parking space for vehicles
19 Domestic Airport
20 International Airport
21 Custom clearance counter
22 Immigration check
23 Security check counter
24 Port Health Officer
Local police / Terminal
25 Security
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Secondary Facilities: These facilities within the terminal are desirable for creating an ambience to
international standards. Many of these facilities being commercial, in addition to lending a class to the
terminal, can also possibly act as money-spinners for the port.
Exhibit 86 : Secondary facilities for Cruise Tourists
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These facilities are desired by cruise vessels so that they can extend safety and convenience for their
passengers and crew. Supplies to cruise vessels are generally a premium activity, which enhance the
commercial viability for the ports.
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◊ Some ports lack even core facilities such as cruise berths, terminal buildings, gangways and
passenger & luggage-handling areas. Mumbai Port has taken a lead by provisioning dedicated
facilities for cruise tourism. Tuticorin & Chennai too have opened new passenger terminals.
◊ The facilities provisioned by Indian ports do not meet even the basic standards, less the amenities
expected from a cruise terminal. Many ports lack drinking water fountains, toilets, tourist
information centres, medical aid, communication centres & money exchange counters.
◊ Cruise tourists prefer to shop at the ports-of-call during their stopovers. This shopping mainly
comprises artefacts, gift articles, curios and local specialties. Many ports do not have facilities for
shopping or restaurant / cafeteria within the terminal areas.
◊ City sightseeing and excursion trips to tourist centres around ports form an integral part of the
cruising experience. Tour operators, taxi services, airport accessibility and shuttle transfers are
hence an important requirement. The Indian ports do not fully meet the infrastructural
requirements on these accounts.
◊ Although, Indian ports have created some facilities for clearances required by the cruise tourists,
no attention is paid to the provisioning of a hassle-free experience for the tourist. The
infrastructure for security checks, baggage clearance needs to be suitably enhanced.
◊ It is important to understand that although Indian ports have created make-shift or basic facilities,
these are far below the standards set by even minor cruise ports or passenger ferry piers. Cruise
passengers generally comprise higher socio-economic tourist groups with expectations for more
than basic facilities. To truly market the ports as a preferred port-of-call, amenities and facilities
far exceeding the basic aspects should be provisioned.
◊ It is however, important to realise that whilst international ports are far higher on the maturity
cycle of the cruise industry, the Indian cruise industry would be nascent. Hence, infrastructure
development at Indian ports needs to precede demand to provide an impetus to the industry.
◊ Indian Ports have been handling passenger vessels and cruise liners for many years. However, at
none of the ports there is provision for a passenger aero-bridge that can allow direct
disembarkation from the ship into the terminal. This causes great inconvenience to the tourists,
particularly the aged, whose percentage within cruise tourists is quite high.
◊ A major impediment in the growth of cruise passenger traffic is lack of world-class physical
infrastructure for passenger cruise lines and passengers. Being high-class passengers they are
quite demanding and choosy. They not only need convenience by way of passenger amenities but
also expect courteous, facilitating and hassle free environment.
◊ In line with leading international cruise terminals, air-conditioning within the terminal building
area would be desirable. This is more so considering the warm / tropical Indian climate.
Following basic infrastructure is required in Phase I development of cruise terminals:
◊ Clean berth with length about 250 to 300 m and draft about 8 to 10 m
◊ Telescopic gangways, aerobridge
◊ Air-conditioned passenger lounge for cruise tourists with clean environment, furniture, toilets,
drinking water fountains, public address system, comfortable ambience etc
◊ Lounge for customs, immigration clearance & security check area
◊ Counters for baggage, currency exchange, bank counters, tourist information, tour operators,
Internet café etc.
◊ Stalls selling curios, carpets, handicraft items, duty free shops, Restaurants, Communication
centre with facilities for STD, ISD phone etc.
◊ Shuttle service from port to important destinations such as airport / railway / hotels etc. and
adequate Parking space for coaches, taxi service etc.
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We have in this report recommended that cruise terminals should be developed as destinations by
themselves going beyond the mere amenities to become a centre where the heritage and culture of
India would be showcased. The cruise terminals would have comprehensive tourism related facilities
like food courts, bazaars and shopping malls, entertainment facilities, landscaping and gardens etc.
While estimating the financial requirements we have assumed some tourist related facilities at cruise
terminals but not comprehensive facilities. These would be business decisions that would be taken by
the investor based on his business model.
Based on an analysis of the present facilities at the respective ports and the standard facilities
desirable at a port, financial estimations have been worked out as set out in Section 3.2.
Key Features
Located on the southern shore of the Gulf, between 55° 16 East and 25°16 North, Dubai's strategic
location midway between Europe and Asia, makes for easy accessibility. London is seven hours away
by air, Frankfurt six, Cairo four and Hong Kong eighThe Dubai Cruise Terminal at Port Rashid has
the following notable features:
Designed to handle up to two ships simultaneously with a unique 'mobile' design to enable
customization of passenger and baggage flows.
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The deep basin gives cruise lines the option of bringing in larger ships that can look at a
destination other than Europe or the Mediterranean that is perfect year round.
Supported by other key tourism infrastructure - over 282 hotels and more than 91 airlines
connecting to over 132 destinations
Exhibit 90 : Facilities & Services at the Port Rashid Cruise Terminal, Dubai
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Procedures
The procedures at the Dubai Cruise Terminal are extremely friendly and convenient, with minimum
bureaucracy, easy immigration, clearing of passengers by manifests, professional ground handling
with excellent tourist support infrastructure.
Visa requirement
All visitors except AGCC nationals (Bahrain, Kuwait, Qatar, Oman and Saudi Arabia) require a visa
sponsored by a local entity such as a hotel or tour company. There are two types: transit visas for 14
days and visit visas for 30 days (renewable). Airlines may require confirmation that the sponsor is
holding a valid visa for incoming visitors. Visas are easily obtainable for other visitors except Israelis
and travellers whose passports bear Israeli stamps. There are several types of visas for visitors to
Dubai:
Entry Service Permit, for commercial purposes, valid for use within 14 days from the date of
issue, non-renewable, permitting holder to enter and depart the U.A.E through any airport.
Visit Visas, for tourists who wish to spend more than 14 days in Dubai, requiring the
sponsorship of any U.A.E. resident or any company or hotel licensed, valid for 60 days and is
renewable for a total stay of up to 90 days.
Tourist Visas, for individual tourists, entitling its holder to a 30 day stay and is non-
renewable. Multiple-Entry Visas, availed to business visitors who have a relationship with
either a multinational or other reputable local establishments, and who are frequent visitors to
the UAE. Valid for six months the duration of each stay is upto 30 days.
96-hour Visa for Transit Passengers : Transit passengers stopping at Dubai International
Airport for a minimum of 8 hours are eligible for obtaining a 96-hour transit visa.
Health Requirements
No health certificates are normally required for entry to Dubai.
Customs
No customs duty is levied on personal effects entering Dubai. Dubai Duty Free has a sales outlet in
the Arrivals Hall (but alcohol may only be purchased on departure).
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3.2.2 Singapore Cruise Terminal
Singapore, the third busiest shipping port in the world, has been built and positioned to attract large
cruise vessels that use the island-state as a year-round hub for voyages to Indonesia, Malaysia,
Thailand and other parts of the Asia- Pacific region. The increase in cruise visitors in the period from
1991 to 1996 was spectacular, going from 130,000 to 750,000 cruise passengers, thanks to the new
Singapore Cruise Centre and its international airport, which acted as a real connecting hub for the
whole of the region. When the cruise terminal was opened, the Port of Singapore Authority recorded
more than 190,000 cruise passengers passing through its international terminal with 350 ship calls in
1992, a substantial increase over 1991. WTO reports an arrival of 168 international vessels with
231,522 international cruise tourists (not taking into account the very short cruises and regional
cruises) in 2001.
The cruise terminal at Singapore called the ‘Singapore Cruise Centre’ was built and developed by the
Port of Singapore Authority (PSA) at a cost of $50 million to promote Singapore as the Cruise
Gateway to the Asia-Pacific.
The Singapore Cruise Centre was officially opened on 18 June 1992, comprising two
terminals.
The International Passenger Terminal (IPT) with two berths of lengths measuring 300 metres
and 250 metres respectively and with drafts of up to 12 metres, catering to international sea-
borne travelling.
Regional Ferry Terminal (RFT) with six berths for regional ferries plying between Singapore
and the Indonesian Riau Islands, and Malaysia.
Recently the Singapore Cruise Centre (SCC) was upgraded at a cost of S$22.5 million. The
completion of the upgrading coincided with the 5th Seatrade Asia Cruise Convention 1998. Delegates
had the golden opportunity to view the new facilities in December 1998, which spearheaded the SCC
into the Mega Ship era. At the same time, the SCC also launched its new logo, which visually
expresses a strong directional movement, symbolising SCC's thrust towards success in the next
millennium and to promote a whole new image as the number one Asian port destination for
international cruising. The Singapore Cruise Centre clinched a record of three awards for 2003 as the:
Best Turnaround Port Operations
Most Efficient Terminal Operator
Most Efficient Port Services
The Singapore Cruise Centre has grown from just another interesting "port of call" to become the
most important international cruise destination and hub in the Asia Pacific region.
To additional to its international cruise terminal, Singapore has established the Tanah Merah Ferry
Terminal (TMFT) in August 1995 to cater the regional passenger traffic between Singapore,
Indonesia (Batam and Bintan), and Malaysia ( Sebana Cove). Facilities at this terminal include 4
berths, a computerised check-in system, air-conditioned arrival and departure halls, baggage check-in
and porterage services and a public information display system. Passengers have an interesting time
exploring the many stores TMFT has to offer. The duty-free shops, sundry goods shops, money
changer, cafeteria and travel/resort agencies are all strategically located at the terminal for the
convenience of arriving and departing visitors alike.
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Procedures
Most of the procedures required for entry into the Singapore Cruise Centre can be filled on-line via
the internet. Such completion of procedures on line enables both the cruise ship and the passengers to
enter the port with minimum harassment and delay. It also facilitates the procedures to be completed
much before the ships arrival, thus making it convenient for the port authorities to complete the
formalities with minimum delay.
Singapore also has mutual understanding with certain other countries such as Thailand, Bangkok etc
wherein visa requirement has been done away with, to ease and facilitate seamless travel.
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◊ The berth is assumed to have adequate back-up land for development of the terminal
building. Upfront land costs or lease rentals due to the port authority have not been
considered as part of the capital expenditure estimation.
2. At present, most ports identified for development of cruise facilities do not have much passenger
traffic. To enhance feasibility of the cruise terminal projects, instead of developing new berths,
renovation of existing berths can be undertaken as a short-term option. This coupled with
development of a basic terminal building will go a long way in providing at least comfortable
facilities for cruise travelers, if not, amenities.
3. For the model cruise terminal plan, a terminal building with facility area measuring 15,000 sq.
mts is proposed.
◊ Since, the facilities provisioned at a modern cruise terminal are same as at airport
terminals; hence, a standard aviation norm of 15 sq. mts. per person has been considered
for planning the terminal building.
◊ Thus, the model cruise terminal would be able to cater to 1,000 cruise tourists at a time.
This would be exclusive of all peak tourist, visitor and service personnel movements.
This building size would be required at the initial stage itself considering that larger cruise ships
are being built and commissioned. In case a port develops into a ‘home port’, an even larger
facility would be required to cater to total number of disembarking / embarking, tourists and crew.
4. Public address system, Escalators / Elevators, signboards, terminal map, wheel chairs have been
factored in the cost estimation. Although costing a fraction of the overall costs, they provide
enhanced comfort and ambience within the terminal building to cruise tourists, thus creating a
good image for the port.
5. The service counters for providing various facilities such as Bank services, foreign exchange
services, communication areas, tourist information centre, baggage counter, security check, agents
office etc. have been considered in the cost estimation exercise.
◊ The counters are considered to vary in size and furnishing details. Only services required
by large percentage of tourists would require large areas.
6. The furnishing costs for various facility areas have been considered at different scales. This is
considering the fact that not all areas would require a high degree of furnishing. Areas not in
direct contact with tourists may not require a high degree of furnishing as opposed to direct
interaction areas. Implementing such aspects at the design stage would help the ports in lowering
the development cost of the terminal building considerably.
7. The area split-up between the Lounge areas, Service counters and Commercial and shopping areas
has been split up on the ratio of 50%, 25% and 25%. The facility areas thus created at the terminal
would lend an ideal combination of quality service and attractive ambience. The Commercial and
shopping areas will also yield additional revenues as lease rentals for the port, enhancing the
viability of the terminal project. A larger terminal building size if developed, could increase the %
dedicated to commercial areas but would require a higher tourist throughput to render the
shopping areas viable for investment by private players.
8. A detailed design and estimation study based on fieldwork needs to be undertaken to assess the
cost estimates, which would vary widely for the different locations. Keeping all dimensions
parameters same, even the quality of facilities provisioned can have a significant bearing.
9. All facilities desirable for cruise activity have been considered as integral to the model cruise
terminal, and the cost estimation is based thereupon. However, the Port may implement many of
the facilities through Private Sector Participation (PSP). Facilities implemented through PSP
means would lower the costs incurred by the Port. The various models for PSP have been
discussed as part of Module 3 of this report. In case of the entire terminal being developed
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through PSP, land area and waterfront rights could potentially be the contribution of the port
authority.
Broad Estimates for development of a model cruise terminal
Exhibit 92 : Broad Estimates for developing a cruise terminal
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The total investment required is approximately Rs. 95 crores for a cruise terminal with
development of new berth and approximately Rs. 61 crores, in case of renovation of an
existing berth.
The approximate earnings from the activity have been studied under the spending estimate
patterns of cruise tourists and crew. Considering the tremendous boost that cruise activity
would provide to the domestic GDP through increased spending on various aspects, the one-
time investment on creation of cruise facility would be truly viable.
To provide impetus to the Indian Cruise Shipping Industry investment in dedicated facilities
at the six identified ports of Mumbai, Mormugao, New Mangalore, Cochin, Tuticorin &
Chennai is required. Additional basic facilities may also be developed at minor but important
centres such as Porbander, Vishakapatnam & Calcutta. India should also consider providing
the necessary infrastructure in exotic Indian locations like Andamans & Nicobar Islands and
in Lakshadweep which present ideal cruise destinations.
3.3.2 Earnings from passenger spends:
Cruise Tourists coming into a country provide an impetus to the local economy by availing of services
and in return spending on local activities. The country benefits from receipts in form of various taxes,
charges / levies and goods & services sales.
In the following analysis, we attempt to project spends that may accrue to the country as a result of
development of cruise facilities. Although, even the World Tourism Organisation (WTO) recognises
that great disparity between figures published by ports and tourist organisation along with lack of
sufficient information causes such an exercise to be non-definitive. The exercise herein merely
attempts to provide an approximate basis for undertaking financial assessment of the industry.
Spending category grouped by heads
The WTO defines the total spending by the Cruise Industry through the following equation
STOTAL = (SPORT) + (SSUPPLIES) + (SON-LAND) + (SCREW) … … … … … … … … … … … (1)
Where,
• STOTAL is the total spending by cruise tourist, and
• SPORT - Spending attributable to port services
• SSUPPLIES - Spending on supplies
• SON-LAND - On-Land passenger spending
• SCREW - On-Land crew spending
S
◊ Spending attributable to port services ( PORT)
This head includes all charges paid for by the cruise vessel and its agency for the basic services
provisioned by the port. This would include berthing charges, pilotage & towage dues and other port
dues. These dues are often subsidised / discounted to make the port a preferred port-of-call by the
cruise line.
The head also includes the various taxes paid for by the cruise vessel or its tourists for entry-exit
procedures, Customs levy, light house dues etc. Some destinations internationally have also started
levying cruise tax, a small per passenger fee to enhance their earnings from the cruise industry. The
amount collated would vary for different ports depending on their tariff structures.
S
◊ Spending on supplies ( SUPPLIES)
This head includes service dues paid by the cruise vessel and its agency for value added services
provisioned by the port. Spending under this head would include the dues paid to ship chandellers,
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provisions suppliers, water, fuel bunkers & other services provided by local agencies to cruise ship
operators. Spends under this head would depend on the quality of services & supplied provisioned at
the port, and may vary as many of these products are acquired abroad and therefore do not have an
effect locally.
◊ On-Land passenger spending (SON-LAND)
This head includes the estimated average spending by cruise tourists at a port. This includes the
spending on various activities, which a cruise tourist may participate in such as on-land restaurants,
sightseeing trips & excursion, accommodation, shopping & other miscellaneous activities.
To understand the spending per tourist per port, we have considered the outcomes of similar exercises
conducted by leading cruise industry associations presented as Exhibit 94.
Exhibit 94 : Average spends per cruise tourist per port
Port & Country Spending Year Study Undertaken by
per tourist
per port
US$
Miami Port (USA) 89 2004 Business Research Economic Advisor (BREA)
$ 94
Average
Source : CRISIL Analysis
The cumulative average of these previous studies is calculated to arrive at an approximate spending
by cruise tourists at a port, around the world. The international average works out to $ 94 per cruise
tourist per port. However, an analysis of cruise tourist spends at Cochin Port for the period from 2000-
01 to 2003-04 yields an average spend of $ 45. This may be primarily due to two reasons – higher
Purchasing Power Parity (PPP) or lesser avenues for spending by cruise tourists.
In the analysis, it is worthwhile considering that the number would vary widely depending on whether
the port is a ‘home port’ or ‘secondary port’. A cruise tourist at a secondary port-of-call would not
spend on accommodation, thus reducing the total spending considerably.
To better understand the key spending areas, we analyse the spending pattern of cruise tourists at base
ports and secondary ports. We look at the average data for USA & Europe. It is expected that
spending patterns at Indian ports too would remain same, depending on whether they are base ports or
secondary ports.
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Exhibit 95 : Cruise Passenger Spending at Base Port
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• The number of cruise tourists arrivals as projected in Section 2.6 has been is considered to arrive
at total spends by cruise tourist and crew.
• Crew are estimated at 15% of cruise tourists.
Exhibit 97 : Estimation of total cruise tourist & crew spending for 2010-11 and 2030-31
Conclusions
• On extrapolating the numbers, for the entire period from 2005-06 to 2030-31 the total spending by
cruise tourists is estimated at US$ 545 million (Rs. 2452.66 crores) and by cruise crew at US$
54.5 million (Rs. 245.27 crores).
• The total earnings from cruise tourists & crew during the period from 2005-06 to 2030-31 is
estimated at US$ 599 million (Rs. 2698 crores).
• Considering the world average spending of US$ 94 per tourist per port, India’s average at US$ 45
is extremely low. There is immense scope for increasing the average spends & total spends by
providing facilities for cruise and allied activities.
• The Terminal facility area is proposed to comprise an area of 15,000 sqm. For this the standard
aviation norm of 15 sqm per person has been assumed, as a terminal would resemble an airport
largely. For the purpose of this analysis it is assumed that the Terminal would cater to a volume of
1,000 cruise tourists at a time. Passenger amenities, service counters, shopping areas, restaurants,
cafeteria, medical clinic, Internet café, Laundromat, Entertainment centres, tour operators/ship
agents offices , miscellaneous facilities & parking have been considered as part of the terminal
development.
• The tourist numbers has been assumed as per the market potential forecast presented in Section
2.6. Taking into account the fact that each ship may touch at-least 2 to 3 Indian ports, it is
assumed that atleast 45% of the potential traffic will be attracted to a particular terminal in the
initial years. The number of tourists is expected to increase as per the projections from 185205 in
2010 to 1217103 in 2031, at annual compounded growth rate of 9.4%. The completion of the
cruise terminal will be close to 2009. Hence the arrivals figures pertaining to the corresponding
year have been taken into account.
• The passenger spending is as per the estimations presented in Section 3.2.2, wherein it has been
considered that a cruise tourist will spend an average US$ 45 per day per port in India and the
crew member will spend on average US$ 30 per day. However, it has been assumed that, out of
total tourist spend, only 40% will accrue to the concerned port terminal. Accordingly, the tourist
spend per day is assumed at Rs. 984 and crew spend per day is Rs.656. The terminal owner will
realize this revenue from facilities like hotels & restaurants, shopping malls & complexes and rent
by sub-letting of infrastructure & facilities. Annual escalation of 5% is used for estimating tourist
spend in the future years.
• Other sources of income from commercialization of space available like advertising, lease
rental of sub-letting the berth facilities, sale of goods & merchandise, supplies to the ship has
been considered at around 15% of the income form tourists.
• The financing of the terminal facility has been assumed through a mix of Debt and Equity in the
proportion of 30:70. The interest rate on debt raised is assumed at 12% and the loan is assumed to
be repaid in ten equal annual instalments, with an initial moratorium period of 2 years.
• The Operating & administration expenses would include staff expense, repairs & maintenance
expenses, services & utilities and rents & insurances. As per the annual reports of Munich
Airport, Greater Toronto Airports Authority, Narita (Japan) Airport and Sydney Airport,
operating and administration expenses as percentage of operating revenue ranges from 20% to
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76%. Taking an average of operating expenses of all these four airports, it has been assumed that
operating and administration expenses will be 44%.
• The commercial useful of the cruise ship, berth and terminal is assumed to be 50 years and project
cost of these components has been amortised uniformly over over either the useful life or the
concession period, whichever is less. Depreciation rate for income tax purposes has been assumed
to be 10% under written down value method.
• Corporate tax rate of 33.66% (30% plus surcharge plus education cess) and Minimum Alternate
Tax rate of 8.42% (7.5% plus surcharge plus education cess) has been assumed. Also, as the
Cruise terminal would be an infrastructure project, tax benefit under Section 80IA has also been
taken into considerations.
Financial Analysis Output
Based on the assumptions outlined above, the results of the financial viability analysis, undertaken for
a period of 30 years (till 2035), are summarized in the following table.
Exhibit 99 : Key Viability Parameters (Base case)
Sensitivity Analysis
The sensitivity scenarios for the above have been undertaken to assess the robustness of the project
cash flows to sustain unforeseen setbacks. Sensitivity analysis has been conducted for changes in the
following parameters.
• Ten, twenty and thirty percent increase in Base Project Cost
• Ten, twenty and thirty percent reduction in Tourist Numbers affecting project revenues
We have also presented the viability gap funding (subsidy) that may be required under each of the
sensitivity scenario to bring the project back to acceptable level of viability. The results of the
sensitivity analysis are presented in the following Exhibit:
Exhibit 100 : Sensitivity of a Cruise Terminal constructed on Renovated Berth
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Equity IRR 17.06% 16.00% 14.83%
Average DSCR 3.23 2.87 2.52
Subsidy requirement for concession period of 30 years
for change in Capex (renovated berth)11
10% increase 20% increase 30% increase
11
Introduction of subsidy will result in reduction of outflow from equity sources of fund, while the debt will remain at 30% of the project
cost.
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funding for these projects. The exact percentage of this assistance may be arrived at after port specific
feasibility has been undertaken and arrived at.
While the key responsibility would lie with the stakeholder as shown above, it need not be underlined
that each Government Stakeholder can explore the involvement of the last group viz the private
sector. For example, the port authorities could seriously explore the development of off shore cruise
port/berth related infrastructure development to be bundled into the cruise terminal development as
part of the privatization structure. Similarly, ministry of tourism could bundle the hinterland tourism
related infrastructure development with large commercially viable projects in the region to be
developed by the private sector under a suitable PPP structure. This will essentially depend on the cost
of development vis-à-vis the viability of the concerned cruise terminal development which will in turn
depend on its commercial potential. Where the cruise terminal is strongly viable all key components
can be bundled into the privatization initiative whereas were viability is an issue, the MOT will have
to step in with viability gap funding or the port authority will have to take responsibility for the core
berth development. The nature and extent of private sector participation which can be explored in
each of these cases has been in Section 3.4.3.
3.4.3 Options for ‘Private Sector Participation’
The development of cruise terminals and dedicated facility required thereon can ideally be achieved
through effective private sector participation. Such private participation could be for the entire
terminal or for individual facility / infrastructure packages. The structure, nature and extent of the
private participation could also be strategically structured taking into account aspects such as
development requirements, viability of the development, security & clearances considerations, land
availability and status etc.
Private Sector Participation (PSP) Options:
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There are many well know models for ‘public-private partnerships’ (PPP) including the JV (joint
Venture), the build-operate-transfer (BOT), build-own-operate-transfer (BOOT), build-operate-lease-
transfer (BOLT) and design-build-finance-operate-transfer (DBFOT). Each model varies depending
upon the extent of sharing of risk and returns along with ownership rights as defined in the
‘concession agreement’ entered into between the Government and the private developer.
Generally in most of these structures, financing and construction is the sole responsibility of the
private developer. Equally all these structures pre-supposes the charging of ‘user fee’ by the developer
as return for his investment.
Some of the alternative PSP structures have been shown in Exhibit 103 below:
Exhibit 103 : PSP Models
Contractual Description
Arrangeme
nt
Build Own In the ‘BOO’ concession structure, privatisation is total with the onus for investment &
Operate operation along with asset rights being handed over to the private operator. Government
(BOO) would have no financial or commercial obligations. Essentailly the transfer back of the land
to the government does not take place, and the project company continues to operate the
facility as though owned by it. The underlying land is either sold or leased to the project
company (with a continuous roll-over option for extension of lease).
Build Own The ‘BOOT’ structure varies from ‘BOO’ only to the extent that the concession would be
Operate for a specified period at the end of which the land and the assets thereon would ‘transferred’
and back to the Government at the end of the concession period as per the terms of the
Transfer concession contract. As such Government’s interest in the land would be protected. The
(BOOT) onus for investment & operation would be with the private operator with Government
having no financial or commercial obligations. However, ownership rights during the
concession would rest with the operator and he would be in a position to securitize these for
raising finances – with the attendant risk that in case of default the financiers would have the
right take over the facility including the land.
Build and In the ‘BT’ structure the construction of the facility would be financed and carried out by
Transfer the private sector after which the entire facility would be handed over to the Government.
Hence, it would be very limited privatisation, and the entire ownership with responsibility
for operations, management and marketing would rest with the Government. This would
imply that the consequent commercial and marketing risk would lie with the Government.
Build The ‘BTO’ structure would differ from the ‘BT’ structure in that the facility would be
Transfer financed and constructed by the private sector and handed back to the Government after
and which the operational rights would be given either to the same private developer or to some
Operate other operator depending on the structure of the contract. This structure may be relevant in
(BTO) cases where the Government ownership of the land and assets thereon may be crucial and
statutorily required such as in projects implemented on reserved forestland. The private
operator would have only operational rights with responsibility for operations, management
and marketing and would bear the related risk thereon.
Build The ‘BOT’ is the typical and most widely used concession contract and offers the flexibility
Operate to be structured either on the basis of a lease or a license. The facility is financed, designed
and and built by the private operator in return for which he is given the ‘concession’ to operate
Transfer the project, either on the basis of a lease of land or a license to operate, for a specified
(BOT) number of years. The private developer operates the project for a specified period bearing
all the commercial and marketing risks and at the end of concession he is required to hand
over the facility to the government as per the terms of the contract. Ownership remains with
the Government during and after the concession period.
Build Lease In the ‘BLT’ structure the construction of the facility would be financed and carried out by
and the private sector after which the entire facility would be given on lease to the Government
Transfer for the purpose of operations. This structure is used in sectors where the operations of a
(BLT) certain service have not been fully privatized, such as in the Railways. Hence only finance
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Contractual Description
Arrangeme
nt
& technical expertise would be sourced from the private sector with responsibility for
operations, management and marketing resting with the Government. This would imply that
the consequent commercial and marketing risk would lie with the Government. At the end
of the concession the facility would be transferred back to the government as per the terms
of the concession contract.
Build The ‘BTL’ offers great flexibility in structuring a project such that the two phases –
Transfer construction and operations – are bifurcated. In this structure the facility would be financed,
and Lease constructed and pre-marketed by the private sector and handed back to the Government - the
(BTL) facility would then be leased out to the various operators on terms decided in the contract.
The operators would have only operational rights with responsibility for operations,
management and marketing and would bear the related commercial risk thereon.
Joint In a ‘JV’ structure, the project would be implemented by a Joint Venture Company, (JVC),
Venture in which both the private developer and the Government would have shareholding. The
(JV) Government would invest in the project and, as shareholder, would be part owner and
consequently bear all the related commercial and marketing risk arising out of the project.
The financial returns to the Government would accrue in the form of ‘dividends’ and exit
option would be available only through the divesting of Government shareholding in the
JVC.
In determining the privatization mode for the cruise terminal, the option of entering into sub-
concessions will be explored. In all cases, flexibility will be given to the private developer to structure
and arrange for sub-concessions, to enable the development of the project sub-components such as
provision of linkages, better airline connections and good hotels. The appropriate variant would be
selected, which addresses the twin issues of risk mitigation and Government objectives. Equally
critical in designing a PSP framework would be bankability and clarity on financial and other State
Support obligations.
Government Objectives vis-à-vis PSP
PSP in a cruise terminal can exist at various levels:
1. Concession for undertaking development & operations of the terminal on a BOOT / BOT /
DBO basis etc.
2. Concession to undertake operations of the terminal
3. Joint Venture arrangements between Port Authorities and cruise liners/operators who are
major stakeholders
4. Port authority to build and manage the terminal through an SPV, with areas leased to private
players for development of hospitality related facilities
While identifying the policy for PSP, the Government would ideally aim to achieve its pre-defined
objectives. An indicative list of such objectives associated with the various contractual structures is
presented in Exhibit 104 below:
Exhibit 104 : PSP Structure vis-à-vis Government objectives
Elements of the Government Objectives
PSP Structure
Build / Finance • Overcome financial constraint on the State Government / Agency
• Exploit private sector design and technology capabilities
• Exploit private sector financing and risk taking ability
Operate/Manage • Introduce efficient & high standard of operating procedures & practices
• Bring in private sector operational efficiencies
Transfer • Assets being of a strategic nature, to revert to government
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• Government desires to retain flexibility to re-bid project at a later time
• Introduces the element of efficiency as the private operator has limited time to
recover his investment
Joint Venture • Land value significant constituting a key component of project cost
• Assets being of a strategic nature, preference to hold majority stake, yet allowing
flexibility
• Private sector desirous of reducing risks through introduction of government as
partner
• Sector is a politically sensitive issue, requiring token participation of government
Although the structure would be project specific based on the infrastructure / facility to be developed,
Build Own Operate Transfer (BOOT) seems as an appropriate implementation structure in the context
of development of port infrastructure. The advantages of a BOOT type of structure is that the port can
benefit from advances in construction technology and modern management through O&M practices
introduced by the private sector. From the private developer’s perspective, the BOOT structure would
enable complete control over the project, by reducing the risk profile of the venture. The structure
also, would probably be more acceptable to financiers and tenants. The structure might however
require government’s intervention in evolving regulatory mechanisms to ensure that the private
partner fulfils his commitments.
Till date, three ports namely, Mumbai, Mormugao and New Mangalore have initiated & finalized
their plans to develop additional / greenfield facilities for cruise industry by involving private sector
participation. Cochin, too has made some progress in this area with about 5 entrepreneurs filing their
expression of interest to develop the terminal. These plans have been made for development on a BOT
basis for a concession / lease period of 30 years.
Creating a ‘bankable’ PSP framework
While creating a robust PSP framework, Government should ensure that the privatization structure is
bankable (ie acceptable to financiers and bankers) wherein the concerns and risks of all the parties –
the Government, the private sector & the lenders – are suitably addressed. The private partner should
be able to deliver the expected requirements of the concession agreement. One alternative is that the
government adequately addresses the concerns of the prospective bidders through an acceptable bid
structure which addresses the following aspects:
Commercial terms of the bid
The various means of selecting a preferred bidder for participation in the project include:
1. Bidder who agrees to pay the highest royalty on an NPV basis
2. Bidder who requests the lowest (or highest negative) viability gap funding from the port
authority
In the above two methods, the port may lose out on the opportunity that it may expect from
the business while the bidders too maybe very conservative due to the nascent nature of the
crusie industry in India. An option for avoiding this would be for the government to specify
sharing of revenue based on a certain minimum number of passenger – ship movements. In
this scenario the bidder will define a base amount payable to the port authority for a specified
number of tourist movements through the terminal. If there is an increase in the number of
tourist movements, the port receives a higher share of the revenue and if there is a lower
movement the port receives a specified ‘floor’ payment or alternatively shares in the loss.
This enhances the viability of the facility for the private sector at the same time ensuring the
port authority’s objective of having created a bankable and viable PSP structure.
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investors and lenders. The viability gap funding support could hence be provided to the
project to enhance viability of the project / package, which may not be financially viable in
the absence of such support. The ‘viability gap funding’ would essentially refer to the
financial support through ‘capital subsidy’ that would be required to ensure the desired level
of returns to the investor within a stipulated period. In case of developing cruise terminals,
provision for viability gap funding should be the responsibility of the tourism department.
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Parties who have set up cruise terminals in other countries could also be interested in exploring
the potential in India. For example the Dubai Cruise Terminal would benefit from setting up of a
cruise terminal in India which could synergise with its own operations in Dubai
Port Operators
Operators of private sector ports in India could also be keen to explore the synergy of having a
cruise terminal. For example, Adani Ports which has a base in Gujarat may look at a container
terminal opportunity there or anywhere else.
Hoteliers/hospitality players
Big groups engaged in hotels/ hospitality business, like the Taj Group, the Oberoi Group, Leela
Palaces and Resorts etc. would explore the synergies of building cruise terminals in the region in
which there presence is the strongest.
Private Airlines
There are a large number of private airlines in India operating in many regions. Each of these may
be interested in exploring the potential of cruise tourism and using their position in the cruise
ports as terminal operators to create backward integration & captive passenger base for their
suitably positioned airlines operations. For example the Sahara Group/Kingfisher Group may
be interested in setting up cruise terminals
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This section covers the strategies and imperatives necessary to develop the cruise tourism sector in
India. The critical areas for success would include the following:
◊ Creating an appropriate positioning for cruise tourism and marketing the product effectively so as
to create the awareness and generate necessary interest among the domestic and foreign tourist
◊ Developing the product offerings that India may put on its cruise tourism platter so as to position
India as an exotic and unique cruise tourism destination
◊ Creating an enabling environment in terms of the taxes and other procedural aspects so as to
improve the ease and efficiency of the system and provide necessary incentives to the sector
◊ Provide the training and institutional facilities to create the human resource necessary to support
the development of the sector
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Exhibit 105 : Map showing Cruise Destinations in the South East Asia
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Based on the market demand, the itinerary could be remodelled working out a number of
permutations and combinations on the stopover time at each destination as also the destinations to be
included in the circuit.
The other cruise ports at Mangalore and Chennai could also be included to create new themes.
Concept
The Government of India has successfully launched its ‘Incredible India’ campaign. This has brought
India into the limelight as an exotic destination. Taking this one step ahead, it could come out with a
‘Discover India’ cruise theme. This would target an itinerary with major Indian ports as port of call.
Thus, the cruise ship could have stopovers at Mumbai, Mormugoa, New Mangalore, Cochin,
Tuticorin and Chennai. Shore/land excursions to places of interest around each port would form an
intrinsic part of the itinerary. Ministry of Tourism should also look at developing the required
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infrastructure at more exotic Indian locales like Lakshadweep or Andaman & Nicobar Islands. Cruise
operators are keen on including these destinations as port of call; however in absence of basic
infrastructure it is impossible to do so.
This would be an ideal package for travellers who would like to visit different Indian destinations and
also experience the novelty of a cruise and can typically be targeted at the foreign tourist.
4.3.3 ‘Shopper’s Bonanza’ Cruise
4. Mumbai-Porbander-Dubai
5. Cochin-Mumbai-Dubai
From the time and distance matrix given below and itineraries can be designed to suit the time frame.
Concept
This theme could be built in an itinerary that would have stopovers at Dubai, Porbander and Mumbai
especially designed for Dubai shopping Festival period.
The Dubai shopping festival lasts for a month from January to February. Over 2,300 retail outlets
participate in this festival, offering goods and services ranging from gold, jewellery, electronics, and
cars to cosmetics, textiles and handicrafts, at big cash discounts.
From Porbunder the passengers can take land excursion packages to Jaipur, which would add variety
into the shopping by giving it an ethnic touch. Some of them could also opt for an Agra visit for the
Taj Mahal.
The State Tourism departments could organise similar shopping festivals in and around the port areas.
Handmade artefacts, hand-embroidered garments, ethnic Indian jewellery are a rage in markets
abroad. Foreign tourists visiting Mumbai generally go to Chor Bazaar – an antique hunter’s delight.
The Zaveri bazaar nearby famous for its gold, silver and diamond jewellery, Colaba Causeway – a
good bargain for clothes, Breach Candy and Kemps corner – for more trendy and slightly expensive
clothes are areas frequented by foreign tourists.
In Goa, the Anjuna flea market, the Mapusa Friday market, the Arpora Saturday night bazaar and
Ingo’s Saturday night market at Haystack are bazaars visited by tourists. Cochin is well known for
handicrafts like camel-bone carvings, woodcarvings, articles made of coconut shells, ethnic hand-
woven textiles and the very famous Spice market. Chennai is famous for its silks and traditional
merchandise like bronze and brass castings, traditional jewellery, metal works and stone carvings.
4.3.4 Heritage Cruise
6. Mumbai-Goa-Cochin-Colombo
7. Mumbai-Mangalore-Cochin-Columbo
Heritage destinations have been a source of attraction for most tourists. Some monuments in India fall
under the World Heritage List. Few among them like Elephanta caves and Chhatrapati Shivaji
terminus, churches and convents of Goa, monuments at Mahabalipuram and Hampi are quite
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accessible from the ports of Mumbai, Mormugoa and Cochin respectively. One-day excursions can
also be arranged to other famous Indian heritage sites like Taj Mahal, Humayun’s tomb, Qutb Minar.
In Colombo there are many significant places of historical an archaeological interest which should not
be missed; for e.g a visit of Sri Maha Bodhi (Sacred Bo-Tree), which is the city's holiest site, and was
grown from the tree under which Buddha achieved enlightenment, then there is city tour of Kandy,
the last capital of Sri Lankan kings and is a World Heritage Site, then there is also the Nuwara Eliya
which is called - The "Little England" of Sri Lanka and many more destinations of this nature.
Other international regional destinations like Malaysia, Thailand also have monuments included in the
World Heritage list can also be included in this itinerary at a little later probably in the stage 2 of
cruise circuit development, when the cruise tourism has set off in India.
4.3.5 Sunshine Cruise to Beaches
8. Cochin-Goa-Lakshadweep-Male
9. Chennai-Colombo-Andaman–Chennai
10. Chennai-Colombo –Male –Cochin-Dubai
11. Cochin-Lakshadweep-Mangalore-Dubai
12. Chennai-Andamans-Vishakapatnam-Paradip
13. Vishakapatnam-Calcutta- Andamans
Concept
This cruise has been specially designed after a survey was conducted of 200 people, on which was the
most attractive type of holiday. The survey revealed that 69 foreign tourists and 92 domestic tourists
rated beach holiday as being the most attractive, thus proving that this could be very popular theme if
combined with a cruise itinerary
Concept of this cruise itinerary is to market the cruise based on the season, which is most appropriate
for the sea-dipping and beach activities. This cruise basically targets those people who are the beach
goers and want to visit different types of beaches along the Indian coast, bask in the sun, just relax in
special message centres on the beach or go for land excursions.
The beaches of Goa are the highlights of travel in this state, making Goa the premier beach vacation
destination. The first beach stop over in Goa is Anjuna beach also famous for its flea market and rave
parties, then visit Baga and Dona Paula beaches that can make any beach holiday a memorable one.
All in all Goa's 100-km long coastline gives an enthusiastic beach lover an opportunity to discover
new secluded beach sites every day. In addition there is also a traditional carnival, which is a part of
Goa’s rich Potuguese heritage
900-km length of the Kerala coast is lined with sandy beaches, rocky promontories and coconut palms
that definitely merit a visit in every tourist itinerary
The beaches of Lakshadweep are a paradise for divers offering exotic diving spots. Male too has its
own beauty and charm to offer.
Concept
India, being a peninsular country is endowed with a seaboard of 8,129 km around the mainland and
the many large and small islands in the Bay of Bengal and the Arabian Sea. The coasts are
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intercepted with several bays, back and brackish waters, lagoons, mudflats, tidal creeks and estuaries
making it most suitable for nature and eco cruises.
As the name suggests this cruise itinerary is designed for nature lovers. Indian geography has a
continental spread, with varied and diversified ocean and coastal ecology. Those interested can
actually study and see these eco systems on this cruise. Learning these can be made fun by combining
them with various activities
Snorkel over some unique corals in Lakshadweep
Paddle Canoes around the shallow foreshores rich in marine-life
Ride the boats into the rich backwaters of Kerala
Explore the wilderness of uninhabited islands, secluded bays & aqua waters, home to dolphins,
dugongs & turtles in Goa
History and Commentary about the Local Marine Life, Aboriginal Culture, and Sailing
Adventures
At the same time coastal ecology of coastal areas can be learnt.
4.3.7 Party Cruise
16. Goa (Sea and river Cruises) –Cochin (Kerala Backwaters)-Goa
17. Vishakapatnam-Kolkatta-Sundarbans River Cruise
Concept
A survey conducted on attractiveness of cruise destinations and circuits revealed that Goa and Kerala
appeared to be the most popular and got the highest rating among both markets i.e., domestic tourists
and foreign tourists.
As per the primary survey 63% foreign tourists and 52% domestic tourists found Kerala Backwaters
extremely attractive, rating it as one of the top destinations. Keeping these preferences in mind this
special cruise has been designed to specially cater to very short duration cruise of 2-3 days, having the
‘Party’ theme. The cruise would be have various theme parties on board as well as at these
destinations on beaches like the Goan Carnival theme and cruising in moonlight on Kerala
backwaters.
4.3.8 High seas cruise or ‘Cruise to Nowhere’
18. Chennai –Andaman- High Seas
19. Cochin-Lakshadweep-High Seas
20. Vishakapatnam-Paradeep-Andamans-Highseas
A popular type of cruise in the Southeast Asian market is a ‘no where cruise’ where the itinerary is
designed purely for the pleasure of cruising with no stopovers at any port of call. Thus, tourists who
have already visited destinations in and around India but who have not yet experienced the novelty of
a cruise would be the target audience. This could be an ideal weekend cruise. Here, the emphasis
would be on the on-board facilities and entertainment offered in the cruise ship.
It must be emphasized that while each of these themes could be promoted as an exclusive package,
there could also be a combination of different themes, which probably might attract more cruise
tourists. For example, a rejuvenation cruise by itself might not find many takers. However, if a high
seas cruise with just one stopover in, say Cochin, is planned or if a rejuvenation and heritage theme is
combined, more tourists would like to go in for it. Similarly, a high seas cruise could be combined
with the Kerala backwater river cruise to give an exotic experience.
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4.4 CRUISES TO FOREIGN DESTINATIONS
Following from our study of the Indian Tourism market the potential for outbound tourism is high and
this can be taken advantage of in promoting cruise tourism. As detailed in Section 2.1.2 and Section
2.6.4 the outbound tourists represent a very attractive segment being nearly double of our
international arrivals and showing an impressive growth of 6.79% between 1999 and 2003. While
these numbers represent the historical fact, the future for outbound and foreign travel is blooming
given the various demographic and other trend that have been elaborated in the Indian tourism market
dynamic detailed in Section 2.1.2.
Linking foreign destinations would be both desirable and the final objective of any cruise tourism
development. However, in the first phase of development, the primary objective of developing cruise
tourism in India would be to position India as a cruise destination so as to increase tourism arrivals to
the country and bring in the attendant benefits of tourism growth and the multiplier growth effects
within the country. To that extent, we would first focus on developing the Indian cruise circuits,
probably exploring the option of linking a couple of close by foreign destinations to increase
attractiveness.
Long cruises to foreign destinations from India can only be targeted in the second phase of cruise
tourism development, when the market has grown sufficiently to justify long travel and a greater than
10 days cruise programme. It would also demand an increasing shifting of domestic tourists to opting
for foreign travel which can happen if the cost of cruising to foreign destinations is hugely cost-
competitive when compared to the more traditional modes of travel. One approach to creating cruise
circuits to foreign destinations would lie in developing synergistic relationships with out neighbouring
cruise destinations such as Singapore and Dubai which would facilitate mutually beneficial cruise
circuits to be developed between and among the countries.
In this connection the following international cruise circuits may be proposed:
4.4.1 Eco Cruise across high seas
21. Mumbai-Cochin-Colombo-Maldives-Mumbai
22. Kolkatta-Paradeep-Chennai-Colombo
This cruise would enable the full benefits of cruising on the high seas to be enjoyed along with
ecotourism in Colombo and Maldives. Both these are very attractive foreign destinations which are
also sufficiently close by so as to be linked competitively without unduly increasing operational costs.
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4.4.2 Shoppers’ Bonanza
23. Dubai-Mumbai-Hong Kong
24. Mumbai-Dubai-Singapore-Mumbai
25. Cochin – Dubai - Singapore
These circuits would be very attractive circuits duly organized taking into account the shopping
festival organized at these destinations. These would be itineraries designed for the ‘Shopper’s
Bonanza’ theme. Owing to the considerable distances between each of the three ports, the duration
would be slightly longer. Thus a nineteen day cruise would be as scheduled. If market survey reveals
that a nineteen-day itinerary would have no takers, operators may design the itinerary such that the
tourists can fly back from Singapore to their respective destinations.
Exhibit 112 : Long shopping Cruise to Mumbai, Dubai, Singapore
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- The MoT should extend its ‘Incredible India’ campaign to promote India as an integrated
brand offering diverse cruise destination and encourage home porting.
- All cruise ports in India should be projected as a single package to cruise operators and
their major attractions showcased in such a manner that they complement each other. A
central marketing body for all ports should be set up for developing strategies, liaisoning
with cruise operators, working on promotional requirements etc.
- An officer should be appointed as the nodal contact point at each port so cruise operators
have an interface to direct their queries and can receive prompt response.
- The major Indian ports should enter into tie-ups with neighbouring ports so a circuit
comprising of Indian and international ports can be developed.
- The MoT should appoint a good marketing agency to work on promotional requirements.
It should develop a web-site providing information about destinations and itinerary
planning. Other promotional materials like CDs, brochures and selection of media – TV,
Radio, Newspapers, Magazines etc. should be worked at.
- A committee comprising of representatives of major Indian ports and authorities from
State and Central Tourism departments should be formed to work exclusively on the
cruise tourism segment. They should attend international Seatrade Shipping conferences
and conventions, trade shows and organise promotional fairs to promote India to the
cruise-line industry. A presentation showcasing the diverse nature of India and its
coastline can be made and promotional material like brochures and CDs can be
distributed at such venues.
- The committee should make separate representations to leading cruise lines like Carnival
Corporation, Royal Caribbean, Star Cruises etc.
- The MoT should explore the possibility of private participation from the leading cruise
liners. Since Star Cruise is currently the only operator catering to the Asian market, the
MoT should also look at the possibilities of collaborating with them to develop cruise
terminals and related projects.
- A familiarity tour should be arranged for representatives of these leading cruise liners.
This would help them to get a first hand feel of Indian ports and the circuits being
suggested.
- The MoT/Port Authorities should actively participate in international exhibitions,
conferences and tradeshows to showcase Indian Ports and Cruise destinations as well as
communicate India’s readiness to send and receive cruise tourists. For example the
Annual Seatrade Cruise Conference at Miami or the bi-annual Cruise Conference at
Singapore would provide an ideal forum for launching India’s marketing efforts.
- Indian Government, in the long run, should aim to develop a greater ‘ Indo-Asian’
alliance to attract cruise shipping to the region and enhance the marketability of India. A
sustained objective should be to create a larger ‘Indo-Asian’ cruise product that combines
the Indian cruise experience with the experiences of strategically valuable neighbouring
countries. To this end feasibility of establishing formal alliances should be explored. The
benefits of regional partnerships would include access to different tourism products to
incorporate into regional packages, access to other expertise and processes in Port
management and services, development of consistent management policies and quality
assurance processes across key regional ports to control the cruise line experience. Such
an experience will have considerable positive branding implications.
Strategy by the Major ‘Cruise’ Ports Trust Authorities
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The next lead should be taken up by the major Port Trust Authorities to showcase the
infrastructural strength and various amenities available at their respective ports. The Port
Trust Authorities can work on the lines of the ‘Six S’ framework of India’s National Tourism
Policy i.e.
- Swagat : Create a good first impression by having a unique traditional welcome at each
port. Maintain clean and hygienic surroundings. Train manpower on efficient discharge of
duties.
- Soochna : Develop and maintain a separate web-site to highlight the port strengths.
Provide detailed information on land excursions from that port showcasing the uniqueness
of tourist hubs nearby – heritage sites, shopping areas, scenic beauty etc. Also, maintain
tourist kiosks at each terminal where tourists can receive information in English and other
major European languages.
- Suvidha : Work on a unified tariff scheme and a One-stop clearance for all Indian ports
so the cruise ship can be saved the bother of paper work at different ports. Provide
services like pre-paid taxi counters, curio stalls, restaurants and rest rooms at all
terminals.
- Suraksha: Deploy Tourism police at each terminal and at every tourist hub (especially
those included as part of land excursion in the itinerary). Have well trained guides who
can take the cruise tourists on land excursions.
- Sahyog: Co-ordinate with State Authorities and other local bodies including tour
operators, hoteliers, taxi operators and tour guides. Work on local community
involvement at each port area.
- Sanrachna: Explore various strategies for infrastructure development including proactive
private sector participation strategies.
Strategy by Cruise Operators for Cruise Tourists
Cruise tourists need to be wooed on to Indian destination based cruise ships and also to
disembark at different Indian ports and participate in land excursions.
The groundwork to be done by the Tourism authorities would be to first develop a prioritised
list of target consumer markets both in India and abroad. Once the target audience has been
identified, they have to be made aware of the product and its features. This can be done by
tapping the media – TV, Radio, Newspapers, Magazines and the Internet. Brochures could be
mailed to potential clientele identified after undertaking a survey. While on board, separate
brochures describing the USP of the port of call and its surrounding regions, cultural shows/
exhibitions arranged near the port area should be distributed to induce the cruise tourist to
disembark.
The main job of luring cruise tourists to India would be that of the cruise operator. Cruise
operators would basically need to update their travel agents about India and the diversity it
offers and supply them with promotional material on the same, since travel agents sell at least
90% of all cruise vacations and on-line bookings are a novelty in this segment.
Though most cruise operators are well-established in the market and have their own
marketing strategies, they would need to follow a multi-pronged approach to lure potential
Indian cruise tourists. India, being a vast and varied country, one has to be sensitive to the
needs of each region individually. Different initiatives produce different results in different
regions. Thus, one cannot opt for a single national strategy on marketing.
Also, a potential target group in the Indian market would be corporates. The concept of
rewarding employees/ dealers with packaged cruise tours, organising conferences on board
cruise ships is fast becoming popular. Cruise ships have itineraries exclusively designed for
this MICE clientele. Advertisements for this segment should be done in relevant newspapers,
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magazines and TV channels. Special brochures should be sent out to identified corporate
organizations with discount offers for bulk bookings.
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expectation. Hence it would be important to create links to significant destinations, heritage locations
and natural features with the port so as to enable a special and varied experience that is holistically
‘Indian’. This would also help to link the development of tourism in India to the development of
cruise tourism, helping to synergize each with the other.
For example, Mumbai port could arrange for a quick trip Agra so that the cruise visitors could also see
Taj, the world heritage monument while Cochin port could take its visitors to the Hampi heritage site
in Karnataka. While this is only an isolated example, what is important is to efficiently connect
cruises with sight seeing within the country and this should not be limited only to the nearby
destinations. Options & connectivity should be provided to link the country’s major offerings with the
visiting cruises.
The following would be essentially to provide the connectivity required to link to tourism offerings to
cruise ports:
Connectivity through small and feeder aircrafts
Connectivity through river cruises and exploiting inland waterways
Connectivity through road transport where distances are not prohibitive
12
Source: FHRAI
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Tax Particulars Sector of State/ Issues
Levy Centre
Property Tax-Hotels Hotels State/ NA
Local
Stamp Duties on land Hotels State/ NA
purchased for hotels Local
Bar License Fee/Permit Food & State/ NA
Fee paid by Hotels Beverages Local
Corporate taxes paid by Hotels Centre NA
Hotels
A comparative statement of applicable tax rates in India’s competing destinations is presented in the
Exhibits below and, as can be inferred, India’s tax rates are substantially higher than the other
competing destinations. Both the central and state governments need to address this issue and bring
the tax rates to comparable levels.
Exhibit 115: Tax Rates on Tourism in Competing Destinations
Hong India
Head Singapore Malaysia Thailand Kong (High)
Accommodation 4% 5% 7% 3% 30%
Meals 4% 5% 7% 0% 17%
F&B 4% 5% 7% 0% 20%
Car Rentals 3% 5% 7% 0% 5%
35%
30%
25%
20%
15%
10%
5%
0%
Singapore Malaysia Thailand Hong India
Kong (High)
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30
25
20
15
10
5
0
Hongkong
Philippines
Indonesia
Thailand
Seychelles
Japan
India
Taiwan
Vietnam
China
Myanmar
Singapore
Malaysia
Indirect Taxes in Tourism
On the indirect taxes front also, India fairs poorly as compared to competing destinations. The
following exhibit showcases tourism related major indirect taxes benchmarked across comparable
locations. (Exhibit 117 provides a comparative statement of applicable tax rates to various sub-
products of tourism sector).
Exhibit 117 : Other Taxes in competing tourist destinations13
TO U R I S M R E L A TE D TA X E S I N C O M P E TI N G D E S TI N A TI O N S K u a la L u m p u r
2 0 .0 0 %
18 .0 0 % Bangk ok
16 .0 0 %
14 .0 0 %
12 .0 0 % Ho n g K o n g
10 .0 0 %
8 .0 0 %
S in g a p o re
6 .0 0 %
4 .0 0 %
2 .0 0 % N e w De lh i
0 .0 0 %
Exhibit 118 describes the tax rates prevalent in competing tourist destinations.
Exhibit 118 : Benchmarking tourism related taxes14 to taxes across comparable tourist destinations
Cities/Taxes Airport Accommodation Food & Beverage Car rentals Total Rank
related related related related Taxes
Kuala Lumpur 1.70% 4.76% 4.76% 4.76% 6.46% 7
Bangkok 1.26% 6.54% 6.54% 6.54% 7.80% 8
Hong Kong 0.72% 2.91% 0.00% 0.00% 2.18% 2
Singapore 0.94% 3.85% 3.85% 4.38% 4.98% 3
New Delhi 0.94% 16.67% 6.54% 4.76% 13.18% 19
13
Source: WTTC Tax Barometer
14
All tax percentages are percentages of the total item cost.
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Cities/Taxes Airport Accommodation Food & Beverage Car rentals Total Rank
related related related related Taxes
Mumbai 0.90% 13.79% 19.03% 4.76% 13.90% 21
Lowest rates 0.53% 0.25% 0.00% 0.00% 0.97% 1
15
Highest rates 7.66% 20.00% 20.00% 33.22% 24.25% 52
Source: WTTC Tax Barometer
The findings of the World Travel & Tourism Tax Barometer16 clearly indicate that among the
constituents of taxation in tourism viz. Meal taxes, Lodging taxes, Car rental taxes and Airport
arrival/departure taxes, India is clearly a high cost destination in respect of accommodation related
taxes and food and beverage tax, particularly in comparison with the competing neighbours.
As can be inferred from the above, accommodation and food and beverage related taxes contribute to
a large tax burden for tourists and are almost 2-3 times higher than competing destinations. Moreover,
on analysing the various sub-components, the following points clearly emerge:
◊ Tax burden in respect of accommodation and food and beverages on tourists to India are
higher than comparable destinations, reflecting in the ranking amongst destinations. The
result is higher prices and a consequent reduction in duration of stay by an average tourist.
◊ Taxes on car rentals, though comparable as a % of item costs vis-à-vis most destinations, this
has been increasing at a rapid pace. New Delhi and Mumbai have experienced 400% car
rental tax amount in US dollars since June 1994.
◊ New Delhi has the third highest tax rate on accommodation at 16.67% just behind
Copenhagen and Buenos Aires at 20.00% and 17.35% respectively.
◊ New Delhi and Mumbai score poorly on the lodging barometer with both of them being in the
top 5 highest tax charging destinations in US dollar terms.
The World Travel & Tourism Council, in its report ‘India: The Tourism Imperative’, August 2001,
has recommended, “Both Central and State governments should evolve a taxation regime, which
yields revenue but is not unduly harsh. Tourism cannot be ‘flogged’ till it becomes unremunerative.
The WTTC would like to point out that New York City has recently brought down its taxation levels
and actually sizeably increased revenues from heightened tourism activity.”
As is well known tourism supply, in the long run, is highly elastic with respect to total tourism costs.
There have been several studies on the price elasticity of taxation and tourism in several countries and
most point to price elasticity of greater than one. The price elasticity manifests itself either in the form
of greater tourist volume, higher spending or increased duration of stay or a mix of the same.
By rationalisation of the tax structure in the Indian tourism sector, the following outcome is expected:
1. Increase tourist arrivals to India.
2. Increase average expenditure by tourists visiting India.
3. Increase average duration of stay of tourist visiting India.
4. Encourage domestic tourism by adopting measures to augment average expenditure levels of
domestic tourists
5. Creation of an enabling environment for investments in tourism infrastructure
While these measures would benefit the entire tourism sector, they would be especially significant for
a nascent segment such as cruise tourism wherein any positive measures would go a long way in
creating a competitive and motivating environment.
4.9.2 Procedural Aspects impacting Cruise Tourism
Since Cruise Tourism involves travel over seas and foreign tourist arrivals, the sector is subject to
international safety regulations and other travel considerations. The procedural aspects are
15
The sample contains 52 cities with 1 being most competitive and 52 being least competitive.
16
Developed by the World Travel Tourism Tax Policy Centre
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consequently much similar to the airline industry. Since cruise tourism deals with tourists/visitors in a
sector where hospitality and tourist facilitation are considered imperative for success, it would be
important to make the tourist entry into the country as simple as possible.
In this section, we review the procedural aspects impinging on cruise tourism and assess in what
manner these may be rationalized/simplified.
Government Agencies & their activity
The regulatory role for the cruise industry is mainly assumed by the following relevant government
agencies. We describe, herein, their functions and roles:
- Port Authorities
The port authorities provide infrastructural support to cruise vessels and cruise tourists
- Customs
The Customs authorities represent the revenue department and maintain a check on the vessel,
baggage, cargo & passengers to ensure that laws related to payment of duty with respect to
bringing in of certain items are fulfilled.
At the same time they also keep a check towards preventing entry of items on the restricted
lists including contraband, arms & ammunition, drugs etc or movement of illegal items such
as endangered wildlife species, antiques. Customs clearance of all passengers & crew and
their baggage prior to entry into the country and finally when leaving a port.
- Baggage
Visitors are required to make an oral baggage declaration in respect of baggage and foreign
currency in their possession. There are two channels for clearance:
• Green Channel : For passengers not in possession of any dutiable articles or
unaccompanied baggage.
• Red Channel : For passengers with dutiable articles or unaccompanied baggage or
high value articles to be entered on the Tourist Baggage Re-Export Form (TBRE).
These articles must be re-exported at time of departure. A failure to re-export
anything listed on the TBRE becomes a payable duty levied for each missing item.
Certain routine use / tourist related items are permissible duty-free.
- Foreign Currency
Tourists are required to obtain the Currency Declaration Form from the Customs. There is no
restriction on the amount of foreign currency or travellers' cheques a tourist may bring into
India provided he makes a declaration in the Currency Declaration Form given to him on
arrival. This will enable him not only to exchange the currency bought in, but also to take the
unspent currency out of India on departure. Cash, bank notes and travellers' cheques up to
US$ 1,000 or equivalent, need not be declared at the time of entry. Conversion of currency
should be undertaken only through authorized money changers and banks.
- Immigration Check
Immigration Check is done for all passengers, Indians or foreigners, both at the time of arrival
and departure. The passports are duly stamped to mark the arrival as well as departure. No fee
is charged for the immigration check.
The process for immigration check is as under:
• Step 1: Foreign Nationals desirous of coming into India are required to possess valid
passport of their country and a valid Indian Visa. Foreign passengers should ensure that
they are in possession of valid Indian Visa before they start their journey to India.
There is no provision of 'Visa on Arrival' in India. However, there is a provision of
granting TLF (Temporary Landing Facility) / TLP (Temporary Landing Permit) to allow
entry of foreigners arriving in emergent situations like death / serious illness in the family,
without an Indian Visa on cash payment of US$ 40/- (Indian Rupee equivalent i.e. Rs.
1935/-). This facility can also be extended to transiting foreigners having confirmed
onward journey tickets within 72 hours.
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Apart from this, foreign tourists in groups of four or more arriving by Air or Sea,
sponsored by recognized Indian Travel Agencies and with a pre-drawn itinerary can be
granted collective landing permit for a specified period of time on the written request of
the Travel Agencies to the Immigration officer giving full personal and passport details of
the group members and undertaking to conduct the group as per the itinerary and an
assurance that no individual would be allowed to drop out from the group at any place.
The above mentioned provisions of TLF/TLP, however, are not available to the nationals
of Sri Lanka, Bangladesh, Pakistan, Iran, Afghanistan, Somalia, Nigeria, Ethiopia and
Algeria.
• Step 2: The immigration checks procedure requires passengers coming to India or
departing from India to fill-up D (Disembarkation) Card and E (Embarkation) Cards on
arrival and departure respectively. The following information is required to be provided
by the passengers in these cards:
i. Name and Sex
ii. Date of birth, Place of Birth, Nationality
iii. Passport details viz. number, place and dates of issue/expiry.
iv. Visa details viz. number, place and dates of issue/expiry (for arriving foreigners
only)
v. Address in India
vi. Flight number / Ship details and date of arrival / departure
vii. Occupation
viii. Purpose of visit to/from India
- Port Health Officer (PHO)
The port health officer ensures fulfillment of all Health Requirements by cruise tourists. The
checks carried out by PHO are as per World Health Organisation (WHO) guidelines.
Procedures include checking if ship has come from or through yellow fever countries / zones,
tourist must possess a valid vaccination certificate.
- Directorate General of Shipping
The DG Shipping undertakes checks to ensure that all cruise vessels visiting Indian ports
adhere to Port State Control (PSC). Port State Control (PSC) is the inspection of foreign ships
in national ports to verify that the condition of the ship and its equipment comply with the
requirements of international regulations and that the ship is manned and operated in
compliance with these rules. Many of International Maritime Organization’s (IMO's) most
important technical conventions contain provisions for ships to be inspected when they visit
foreign ports to ensure that they meet IMO requirements.
The DG Shipping also ensures that cabotage laws are complied with. The laws stipulate that
only Indian vessels with Indian crew can ply between two Indian ports before proceding to an
International port. Exceptions, require permits and licences from the DG Shipping. To
promote cruise tourism, in the absence of Indian flags sailing in this segment, the Shipping
Ministry has altered cabotage laws to allow foreign flag cruise vessels calling at more than
one Indian port to sail without obtaining permits or licences.
Interactions of Cruise Industry with the Government agencies
Exhibit 119 details the areas of activity where the cruise industry interacts with the regulatory
government agencies:
Exhibit 119 : Activity interactions of the Cruise Industry with the Government agencies
Authority Activity interactions with the cruise industry
Port authorities • Berthing for cruise vessels and facilities for embarking, disembarking
• Collection of port charges & dues
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Authority Activity interactions with the cruise industry
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Exhibit 122 : Activities related to Port Call and Ships at Berth
Continued
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Continued
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- Immigration
Various changes in the existing delegations of powers and procedures are considered
necessary to streamline immigration activities. This being a sensitive area with direct
implications for national security, prudent exercise of powers keeping in view the security
concerns can be introduced for quick, easy and smooth disembarking and embarking of
tourists.
• Considering that ships’ stay at Ports for short periods, between 8 hours to half a day, the
immigration clearance and issue of passes should be without any delay.
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• Immigration officers should be posted at the cruise ports and be available for the period of
stay of the cruise vessel. Immigration officials should be allowed to board vessels at
previous ports-of-call similar to customs officials and complete formalities en route
• Visa requirements
- Need to obtain visas prior to taking cruise should be done away with. Provision for
issue of visa on arrival be introduced as is being done at other cruise destinations such
as Colombo, Singapore etc.
- Immigration officers should be permitted to issue Temporary Landing Permits (TLPs)
on arrival at Port in exceptional situations depending on the merits of the case. The
formalities, procedures and fee should be made uniform at all ports and informed to
all related persons in advance.
- Although TLPs for a maximum period of 15 days are issued only under special
conditions for a charge of US$ 40, the charges should be correspondingly reduced for
TLPs of lower duration.
- Existing practice of insisting of visas should be done away with and group landing
permits be issued to tourists who undertake only day sight-seeing trips
- Currently TLPs are required to be obtained at each Port of Call. A single TLP should
be made valid for all Ports of call on the Indian circuit if the total period of stay on
the shore is less than 15 days.
- Electronic screening devices for passengers installed at cruise terminals would speed
up the screening process as also avoid the need to physically screen the passengers.
• Following are some of the measures to speed up the processes for issue of passes:
- Yellow or day passes are issued to disembarking tourists after the ship has berthed. It
should be explored if passes can be kept ready prior to arrival of ship at berth
- Issue of passes should take into consideration the status of the passengers ie. day
tourists, disembarking tourists or embarking tourists.
Ð Disembarking tourists may be issued day shore passes which are unique from
TLP
Ð Day passes or Dock entry permits are issued to cruise tourists at entry gates to
port premises. The need for issue of day passes to embarking tourists should
be done away with as they come straight to the terminal as a group and
boarding clearance and immigration clearance is done immediately on arrival
at the terminal. List of embarking passengers may be provided at entry gates
to address concerns.
Ð The need for shore passes be done away with for tourists disembarking /
embarking for day tours/ sight seeing trips as they already have visas, and
they are escorted in and out of the port premises by the tour operators
- Transit passes be issued to cruise tourists for entire duration of stay of cruise ship at
Port. Special permits be issued covering entire period of travel of that ship in the
country with permission to join the ship at any port of call in India in respect of
passengers taking over land / fly-cruise tours
- In case of group visits, Immigration officers should follow the rules identified for
visitors coming in groups provided the tour operators furnish the required
undertakings and other documentation.
In addition to the various measures stated above, it would also be important to impart training and
awareness programmes to the various officials involved in the immigration and clearances with the
objective of reducing the red-tape and corruption that is currently reported at many cruise ports.
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4.10 HR & TRAINING
Human Resource represents the backbone and core network to support cruise tourism growth. While
the ‘hardware’ of cruise tourism in the form of port infrastructure and cruise lines is important, the
‘software’ in the form of human resources is equally vital. The ‘software’ of tourism encompasses the
entire array of tourism services, tour operators, taxi drivers, local police, travel agents, tourist guides
and tourist information officers and form an important aspect of tourism development. It would be
important to focus on the creation of human resources as the ‘hospitality face’ of the cruise sector
through the creation of proper training institutions and programmes. Without this it would be
impossible to sustain the growth of the industry in the long run.
Within India, governmental laxity and corporate profit-conscious attitudes towards tourism education
and training, as well as lack of trainers and teaching staff, have been identified as some of the factors
responsible for inadequate professionalism in its tourism industry.
This section sets forth some strategies to be adopted if Indian Cruise tourism is to be in a position to
face the challenges posed by the expected growth rates and also take advantage of the market potential
as assessed.
4.10.1 Need for Training
"Training programmes are directed towards maintaining and improving job performance, while
development programmes seek to develop skills for future jobs"
Training has to start with the identification of training needs through job analysis, job description,
training areas, performance evaluation, and organizational development.
Training is a vital investment in staff. It should be strategically planned in order to provide a
meaningful learning experience for new or current employees and volunteers. Training and
development should be focused on developing the individual employee’s fundamental competencies,
so that he or she can perform current and future jobs to the highest standards.
Training should result in the development of the knowledge, skills and attitudes towards the cruise
tourism industry. Training is not only necessary at the beginning of an employment contract, but must
accompany the job throughout. Developing employees’ skills not only helps to improve performance
but it also increases the likelihood that jobs remain interesting and challenging. Training programmes
should be designed to cover all aspects of management required in cruise tourism industry. However
in these guidelines on tourism we emphasise the particular importance of training in following
broadly classified areas:
• Awareness in the field of cruise tourism
• Communication and hospitality skills
• Food & beverages etc.
• First aid
• Management & Public relations skills
• Management skills and public relation skills
• Computer literacy
• Security and law enforcement rules
• Environmental aspect
Job Analysis
The job assigned to each employee at the port must have specified and detailed job description. The
purpose of delineating each work assignment is to ensure job satisfaction for the individual and an
efficient and effective organisation overall.
Job analysis is a commonly used strategy for identifying organisational human needs and is
recommended here. It is a systematic process of determining the nature or content of a work
assignment through the collection and organisation of relevant information. The characteristics that
are typically analysed in a job analysis are listed in table below. Job analyses provide the foundation
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for most human resource management activities because they are used as reference points for various
other functions.
Human resource planning must start from the present situation. An understanding of current staffing
needs forms a baseline for determining future requirements as changes occur in the management
strategy. So, in view of this and based on the training areas listed in introduction, we have broadly
listed out the human needs based on the various stakeholders and identified the type of training
required by them in Exhibit 124 below:
Awareness
STAKEHOLDERS Case First
of the Soft Management Public F&B
Computer Security Hospitality Study Aid
Cruise Skill Skills Relation Training
Training Training
Industry
MINISTRY OF
TOURISM
State
Central
MINISTRY OF
SHIPPING
Port Authority
Baggage Handler
Ticket Counter
Executive
Tourist Info.
Centre executive
Dock Manager
Help Desk
Executive
Private Guards
Tour Guide
Cruise Director
Shop Staff
Entertainment
Staff
Cruise Facility
Consultant
Marketer
Immigration &
Custom
Shipping Agents
LOCAL
BODIES
Municipal
bodies
Local Police
Taxi Operators
Hotels/
Restaurants
Tour guides
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TRAINING
Awareness
STAKEHOLDERS Case First
of the Soft Management Public F&B
Computer Security Hospitality Study Aid
Cruise Skill Skills Relation Training
Training Training
Industry
Media
Interface
person
Job Description
A job description is a generic written summary of the essential duties and responsibilities required of
the position. It is not intended, and should not be construed, to be an exhaustive list of all duties and
responsibilities of any position.
Thus keeping in mind the various duties and responsibilities required to be performed by the different
stakeholders in the cruise tourism industry, we try to describe the needs of proposed trainings and
what these trainings imply in our next section.
Training areas
Considering the various training areas listed earlier in this chapter, we give a general description of
each training area mentioned in the introduction.
Awareness in the field of cruise tourism : The stakeholders enlisted in the matrix under this head are
required to be provided training about the history and background of the cruise tourism industry. A
general introduction to the industry covering market structures, relationships and definitions; supply
and demand and the balance between them, globalisation, pricing and discounting and the economic
impact of cruising. They should be made aware about the international market, that is the international
cruise ports and the facilities being provided at those ports and the working style at these international
cruise ports must be taught to them. This will help these employees in understanding the cruise
tourism industry better and would mould there thought process in the same lines, for developing the
Indian Cruise Tourism industry.
Communication and hospitality skills : The employees must be training in the areas of soft
communication skills and conflict resolution skills. They should also be provided with hospitality
skills because they are going to deal with tourists of Indian and Foreign nationality. And in such
industries the better you treat your customers the more business you generate and more popularity you
gain.
Management skills and public relation skills: Management skills are required by mostly by managers
or senior level personnel for managing the varied problems arising in the course or work and taking
appropriate decision as the situation demands. These are the personnel who will be responsible for
project conceptualization, design, execution, relationship with private sector and marketing. Hence the
topics on which training should stress area project management, marketing effective communication,
tourism management, port management and specialized tourism project. When we say marketing, the
focus areas should be principles of cruise marketing and looks at ways in which the various marketing
profiles of the cruise product must be developed to best meet market needs.
Computer literacy: The computer knowledge as we know has become a basic requirement in the
current scenario. Thus, the personnel who operate computer in there regular course of work such as at
ticket counter, tourist information centre, help desks etc are required to be provided with the computer
trainings. Thus majority of the stakeholders require the computer training.
Security and law enforcement rules : The training areas should cover crisis/emergency management,
security survey, cruise terminal security, security plan preparation, disaster recovery plan, terrorism,
etc. This is required to maintain a safe and sound working environment at ports. In such trainings the
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staffs must be told how to implement these safety rules and how to react when an unsafe situation
arises.
Environmental aspect : The port staffs must be given training on how to maintain an environment
friendly atmosphere at ports. Environment has become one of the major concern areas in any industry.
Each and every industry is expected to operate in a manner that they do not pollute the environment.
Hence keeping in view the environmental aspect the staffs must also be taught the environmental laws
laid down by Indian govt.
First aid : The port employees must be given training on first aid, so that during a crisis situation the
employees would be capable enough to provide with the bear minimum first aid facility as required by
the patient.
Food & Beverages Service : The employees imbibe the art of serving food and beverages, in
combination with good grooming and social etiquettes. The work area could be a restaurant, a bar or a
banquet hall. Employees have a direct access to cost control methods and effective customer-staff
relationships.
The cruise line/port relationship: This training should discuss the nature of a deployment and market
interest in itineraries, whilst looking at a region's ability to create a worthwhile itinerary and related
topics such as port facilities, tourism opportunities, and transportation infrastructure, the role of the
pilot and the ship agent and possible marketing partnerships.
Other Training Approaches
Apart from the direct trainings as listed above, there are other methods by which training /
information can be provided to the cruise port personnel’s. These methods are:
• Cruise Workshop
• Seminars
• Trade Fairs
• International Conferences
The main focus area in these workshops, seminars, trade fair and conferences should be:
• Emerging trends for cruise lines
• Effective cruise/port partnerships
• Update on environmental issues
• Developing cruise facilities for multiple uses
• Dealing with regulatory requirements at cruise facilities
• Promoting the destination
Training Institute
The training institute available in India, which can cater the needs have been listed as followed:
• National Institute of Port Management, Chennai
• Indian Institute of Port Management, Kolkata
• Maritime training institute IMTC – The institute has variety of courses ranging from
general courses to job specific courses
• The Indira Gandhi National Open University
• Indus Cruising, Bangalore
• Food Craft Institute, Chandigarh
• Bhartiya Vidya Bhawan, Delhi – It cater the hotel & tour & travel management
• Institute of Hotel management, Bangalore
• Saptagiri College of Hotel Management, Mangalore
Some of these institutes listed above are related to port management and some of them are related to
hotel management. There can be a more exhaustive list of institute available in India, which impart
hotel management education. The reason for considering hotel management institute is that the sort of
trainings required by the various stakeholders at port matches with the type of training being provided
to hotel management students, because if we look at a broader picture both the cruise port and hotel
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industry are targeting the hospitality aspect. But, still there are few training areas which are not being
covered by these institute and which are specific to the cruise industry. These are:
• Dimensions of Services Management
• Cruise Line Management
• Leisure and Recreation Management
• Managing Cultural Diversity through Geography of Global Cultures
• Leadership in Hospitality and Tourism
• Sustainable Tourism
• Casino and Gaming Operations
Various foreign institutes are providing the above listed trainings. List of some of these foreign
institute are:
• Southern New Hampshire University
• Bremerhaven University
Hence these institutes can be referred to for laying out of the course curriculum or can even be used
for getting visiting faculties, or sending the employees for a training of short duration.
4.10.2 Performance Evaluation
Performance evaluations or appraisals provide essential information for making strategic management
decisions related to HR. The information gained through the collection, analysis and evaluation of
employees’ performance enables managers to communicate how well staff are doing, and – if
necessary – provides the reasons why changes should be made. An effective evaluation system can be
used to determine if human resource management is helping to achieve the cruise tourism aims.
The data collected for a period of six months or one year can also be used to identify future human
resource development needs, and would also validate the ways the staff are recruited, selected, trained
and paid, and generally evaluate the success of human resource training programmes.
4.10.3 Organizational Development
Organisational development is about improving the energy generated when employees work together.
Programmes that contribute to improving the quality of work life, team building and similar
objectives produce a loyal and committed employment environment. Again, while the advice given
here is general, it is also especially relevant to the challenge of dealing with tourist to cruise ports.
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5 RECOMMENDATIONS
This study has made a comprehensive analysis of the Cruise Tourism sector at the global level as well
as the Indian scenario. While the industry has reached a fair level of maturity globally it is as yet in its
infancy in India. As such India would be entering into a market already dominated by strong cruise
tourism players and markets.
However, India even as a late entrant would have important advantages:
◊ 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.
◊ India’s long coast line and strong port positioning imparts a natural advantage to the
country to attract international cruise lines.
◊ India’s positioning in South East Asia and its proximity to already popular cruise
destinations like Singapore, Thailand, Bangkok, Colombo etc. would enable strong cruise
circuits to be created over a period of time.
◊ 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.
◊ India’s impressive growth in the tourism sector would impart an important advantage to
its cruise tourism positioning. It would be important to remember that these two would
mutually strengthen each other enormously.
◊ The cruise ports selected for development are also strong tourism states, especially
Kerala, Goa and Chennai. This could provide an important platform for cruise tourism to
takeoff.
However, to benefit from the strengths as outlined above, it would be crucial for India to learn
important lessons from global precedents in the cruise sector as well as integrate this learning with
the tourism sector lessons we have derived over the past decade.
In this section we summarize the key recommendations for development of cruise tourism in India.
These have emerged from our market interactions and also from the learning we have derived from
the study.
o Focus on the ‘Drive In’ Market equally with the ‘Fly in’ Market
Increasing world over the ‘drive in’ cruise market is gaining in importance unlike the previous trends
where cruise tourist had to ‘fly in’ to take the cruise from the designated ports. This essentially means
that in addition to the main cruise ports, we would need to focus closely on the other ports along the
Indian coast which may be developed as cruise ports which may become the starting or transit stop for
cruise vessels to pick up ‘drive in’ cruisers.
It has been seen that accessibility and availability form critical aspects to popularize cruises.
Accordingly the drive in market would be extremely important for India for the following two
reasons:
- To tap the huge potential of the domestic tourists
- To make the cruises accessible to the foreign tourists who may be visiting other Indian
destinations
5.1.2 Create the Product
3. Design attractive cruise circuits
Government should design theme based cruise circuits
o Exploiting existing tourism/coastal destinations
o Linking foreign destinations depending on cruise design, theme and logistics
In developing the Indian cruise circuits the four tourists segments would need to be actively
targetted and exploited
- The Foreign Tourists who represent the International Arrivals into India
- The Indian Outbound Tourists who travel out of India.
- The Indian Domestic Leisure Tourists
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- The current Cruise Tourists (International and Indian)
The primary survey has thrown up interesting difference in perceptions, preferences and views of
the Indian and Foreign tourists. These may be used to develop suitable products and position and
market them so that India may address the demands and expectations of each of these segments
towards creating cruise itineraries and products.
This report has identified interesting cruise circuits that may be developed. Examples of key
circuits that Government should focus on would be :
o Rejuvenation Cruise : Goa- Mangalore-Cochin (Kerala Backwaters)-Male
o Discover India’ Cruise : Mumbai-Goa-Cochin-Tuticorin /Cochin –Goa- Mumbai-
Porbander
o ‘Shopper’s Bonanza’ Cruise : Mumbai-Porbander-Dubai
o Sunshine Cruise to Beaches : Cochin-Goa-Lakshadweep-Male/ Chennai-Colombo –
Andaman/ Chennai-Colombo –Male -Cochin
o Nature Lovers Cruise : Mumbai –Goa- Mangalore- Lakshadweep-Mumbai
o Goa-Kerala Party Cruise : Goa (Sea and river Cruises)–Cochin (Kerala Backwaters)- Goa
o High seas cruise : Chennai –Andaman- Open Seas
o Create and position river cruises to complement and strengthen cruise tourism development
Like Europe, India has destinations in its interiors many of them which are connected by beautiful
rivers. Developing River cruises that connect these destinations would not only create the access
that is so important for cruise tourism, but would also enable India to strongly position its tourism
destinations and its exotic heritage.
In developing River Cruise the following points may be noted:
o Linking cruise terminals to river cruises that connect significant destinations would
stimulate cruise ships to touch India for the sake of the destination. For example, Sarnath,
the key Buddhist pilgrimage destination, lies on river Ganges. Offering this as a river
cruise would be a powerful stimulus to the large base of Buddhist tourists who come to
India from Asia. Linking this to one of the cruise terminals would ensure that the cruise
ships from the Buddhist countries – especially Japan, China - come to India.
o The development of river Cruises in India will have to be planned in sync with the larger
IWT development plan of the Ministry of Shipping. However, the development will have
to be related to the lager tourism potential and proposed cruise terminal development.
o As many of the rivers in India link to interior villages, rural areas, exotic locations,
forests, sanctuaries etc. River cruises in India must be linked to ecotourism and rural
tourism, both of which form a priority area for tourism development in India and form
great attractions for foreign tourists.
5.1.3 Create the positioning : India as a ‘MUST SEA’ destination
4. Develop Brand Cruise India as an umbrella brand
India offers relatively a small market compared to the global industry. Accordingly, there
would be considerable merit in positioning India as a single India-branded cruise experience
that fully integrates and complements the relative strengths and distinctive value propositions
of each of the states. This will enable the country to sell a strong integrated brand while at the
same time by selling India as the principal destinations all the states will benefit as cruise
lines seek diversity in itineraries. This would also help the Ports to work as complementary to
each rather than as competitors.
o The key ‘brand message’ underpinning the Indian brand will be ‘diversity in
harmony’, ‘more for less’, ‘value for money’ must ‘sea’ destination underlining
Value for money, for both cruise lines and passengers, given the $ and Rs
exchange rates
Safe and friendly
Exotic, offering a blend of heritage, natural beauty, art, culture, cuisine &
adventure
o Build destination brands into the core brand
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Sanrachna – would be extremely meaningful at the Ports. Ports authorities would need to address
and underline these six aspects while undertaking cruise terminal development and maintenance.
The National Agency identified above should be the focal point for representing the interests of these
agencies as well as coordinating the responsibilities identified.
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The Development Plan in the short, medium and long term has been identified as follows:
Exhibit 125 : Short, medium and long term Development Plan
Activity Short Medium Long
1 - 5 years 6 - 10 years 11 -15 years
Development of Cruise Ports
Development of Mumbai, Goa,
Cochin*
Development of Chennai, Mangalore,
Tuticorin*
Development of Lakshadeep, A&N*
Development of other Cruise
terminals/facilities
Focus on ports as ports of call
Build capacity to become Home Ports
Explore cruise operations
Development of Cruise Circuits
Circuits connecting ports developed
in Phase 1
Circuits connecting ports developed
in Phase 2
Circuits connecting foreign
destinations
Marketing & Positioning
Appoint brand promotion agency
Initiate discussions with key players
Attend international meets,
conferences
Participate in international cruise
shows
Policy & procedure
Hold workshops to elicit industry
opinion
Formulate Cruise Policy
Form Separate Cruise Agency
Rationalize procedural/tax issues
Build the capacity
Formulate a training programme and
calender
Commence training of Port based
staff
Commence workshops for other
interface people
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Details of Cruise Ship Costs presented below have been taken from Cruise2.com web site
2002
2002 Cape Cod Light Delta Queen Coastal 1,580 224 42 Mil
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2003
2003 Queen of the Americas American Classic 72,000 1,900 440 Mil
2004
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Ministry of Tourism, Government of India
2005
2005 Project America 2 United States Lines 72,000 1,900 459 Mil
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Ministry of Tourism, Government of India
2006
2007
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India is blessed with many rivers, canals, backwaters, lakes and creeks on which inland water
transport has flourished in the past. Sadly, however, the potential and the development need of the
sector was overlooked as a result of which, and with the advent of rail and road modes of transport,
IWT mode declined. In a way there had not been requisite development of infrastructure in the other
modes of transport also to the extent heeded to sustain the full development needs of the country. The
present Government, under the Prime Ministership of Shri Vajpayee, has however, taken determined
decisions to strengthen infrastructure in the transport sector. A series of decisions have been taken
regarding the development of roadways from east to west and north to south. I am here, happy to
announce to you and to share with you that the Cabinet has approved a package of policies and
decisions aimed at resurgence of inland water transport system with a view to make it an efficient and
reliable system of transportation and to supplement other modes such as road and rail. Inland Water
transport is fuel efficient, economic and environment friendly mode of transport. Development of this
mode greatly relieves pressure on other modes which face constraints of their own. One 600 T, IWT
cargo vessel can replace 60 trucks from the road. IWT also provide port-hinterland connectivity as
most of the rivers connect hinterland to ports. The Government's new policy is to create highways on
water and to maintain them. In fact the waterways are gifts of nature whereas other modes of transport
like road and rail network have to be created. Here we have god-given fairways, which need only to
be properly maintained and kept navigable in safe and efficient manner for most part of the year.
Considering this, inland water transport requires considerably lesser investment than other modes of
transport.
2. At present three waterways have been notified as National Waterways, namely, the Ganga as
national Waterway No. 1(1986), the Brahmaputra the National Waterway No.2 (1988) and the West
Coast canal as National waterway No.3 (1993). Apart from development of three National
Waterways, IWAI has conducted techno-economic studies on several other waterways, namely, East
Coast Canal integrated with Brahmani river, Kakinanda-Mercaunam Canal integrated with Godavari
and Krishna rivers, Barak river, DVC canal, extension of NW-3, Sunderbans waterways. All these
waterways have the potential of IWT infrastructure development.
3. Several small rivers of the country have the potential of developing small length waterways. Rivers
and canals can also provide alternative mode of transport in cities and metros. In addition, various
riverine states such as, Assam, Andhra Pradesh, Bihar, Orissa, Tamilnadu, Uttar Pradesh, West
Bengal etc., have tremendous potential for IWT development. North-eastern states with several
tributaries of Brahmaputra and various other rivers have to be given special emphasis for development
of inland water transport infrastructure. States like Jharkhand, which has huge mineral resources, can
utilize river Ganga as an outlet for its natural resources. Besides development for cargo transport,
waterways can also developed for passenger ferries, river cruises, water sport and tourism related
activities.
4. The new Inland Water Transport Policy approved by the Cabinet has several thrust areas. The first
one is to invite and facilitate active participation of the private sector. It has been decided to enlarge
the role of IWAI to enter into commercial / joint ventures to encourage investment in his sector. In
principle approval has been given to the policy guidelines for private sector participation subject to
the equity participation by Government/ IWAI being limited to a ceiling of 40% for BOT projects to
be worked out on case basis. Such participation will be for areas like fairway development and
maintenance, construction and operation of terminals, provision and operation of mechanized cargo
handling system, storage facilities, provision of navigational aids, pilotage and setting up and running
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up of IWT training institutions. Guidelines for private investment in IWT Sector have been
developed, a copy of which has been given to all of you.
5. One of the important policy decisions is to grant a tax holiday of ten years to this sector to be
availed of during the initial 15 years as in the case of National Highways so as to enable this sector
develop. The rate of depreciation for all vessels ordinarily operating on inland waterways is being
fixed at par with the rate of depreciation applicable to ocean going vessels (at present 25%) from time
to time.
6. In order to make optimum use of our inland waterways we need to have a fleet of vessels to operate
on a regular basis. Therefore, with a view to encouraging IWT fleet expansion, a scheme will be
operationalised providing for vessel building subsidy for ship owners for inland vessels built in Indian
shipyards. This will also enhance the capability of our shipyards to construct modern vessels. Ministry
of Shipping is in the process of formulating the vessel building subsidy scheme in consultation with
the Ministry of Finance.
7. With a view to provide relief on account of customs duty, in principle approval has bee given in
levying minimum customs duty on imported machinery for development of inland waterways to be
identified by IWAI. Details of the scheme will be finalized in consultation with the Ministry of
Finance.
8. Various countries of the world have made optimum use of their waterway but for this they have
invested over decades very substantially, which has paid them rich dividends. Private sector has
played a very meaningful role in such development and it is hoped that with the implementation of the
package of policies promoting private sector investment inland water transport, the overall investment
in this sector will increase. Inland Waterways Authority of India is also being authorized to raise
bonds to enable IWAI to borrow from the market and mobilize funds as provided for in other
infrastructure sectors.
9. In order to permit Private Foreign Direct Investment into the sector, the Government has decided to
permit automatically for direct investment up to 100% equity as applicable in other infrastructure
sectors. Apart from funds from outside the country this should also bring modern technology to up-
grade our own indigenous capabilities. IWT presents itself as an eminently suitable sector for Foreign
Direct Investment with long term benefits and I am optimistic that the sector will attract such
investment.
10. Another important initiative is to involve more actively state governments in the development of
inland water transport. Centrally Sponsored Schemes will be implemented and projects identified by
the State Governments will be extended assistance by way of loan to the extent 50% of the project
cost. I am happy at the presence of the representatives of State Governments here. This exercise can
be carried out further in the regional meeting, which are to be held shortly. Through this process
inland water transport can be developed in small segments and sectors which will be directly
beneficial for the states. One area where priority attention can be given is development of IWT for
attracting tourists through river cruises etc. We have such places of natural beauty as backwaters of
Kerala, the Sunderbans and indeed the entire streches of our rivers.
11. Some of the identified areas where private sector can invest are ownership and operation of
vessels for cargo and passengers, fairway development and maintenance, construction and operation
of river terminals or river ports, provision and operation of mechanized cargo handling system,
putting up and maintenance of navigational aids, provision of pilotage services, setting up and running
of IWT training institutions etc.
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12. There is substantial scope for technical collaboration and technical assistance with the countries
having developed IWT system. We will look forward to such technical collaboration and assistance.
This exercise can be carried forward on bilateral basis. Another important avenue, which will be
explored as a source of funding for the IWT projects, would be external funding. Development of
IWT will promote economic activities in less developed hinterland areas and will help in poverty
alleviation. This will promote trade and commerce in such areas. External funding from international
funding agencies will boost and accelerate the development of IWT sector.
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