The cruise industry is unable to tap the rich due to stagnant policies
Cruises are not just fun, they’re also good business. Internationally, over 20 million passengers took a cruise holiday in 2011. The sector is growing at an annual rate of 12 per cent globally. A World Tourism Organisation (WTO) study indicates that 1.4 per cent of all international arrivals worldwide are cruise tourists. Moreover, every cruise tourist stopping at a port brings in welcome cash in her wake—$94 per cruise tourist per port, according to one report.
So, why is India missing all this action, especially considering that around 80,000 Indian outbound passengers took cruises last year, spending an aggregate of $16 million for a five-night stay? “Cruise tourism in India has not been understood in its totality by policy makers,” said Nishith Saxena, director, Cruise Professionals. That’s the irony of the situation—that there was actually a comprehensive policy approved in June 2008 that outlined specific ways to increase infrastructure across ports. Yet, four years later, the policy seems to have run aground, with no mention of it on the websites of the shipping or the tourism ministry.
One reason for this stalled sector, say experts, is because of a lack of initiative from ports themselves. Luring cruise ships means building additional infrastructure. “For ports, revenue from freight is more important than revenue from a cruise ship. Ports need to have very specific infrastructure and facilities for cruise ships unlike cargo, such as coal and iron-ore,” said Gautam Chaddha, India representative of Royal Caribbean International.
These include state-of-the-art passenger terminals, baggage screening, customs clearance and immigration facilities, amongst other things—simply too much for many ports to grapple with, especially since revenues from freight tend to stream in on auto pilot. Tourism-related ancillaries—such as good hotels, airports, restaurants and related infrastructure—need to be in place so that Indian ports become truly world-class destinations, much like Singapore, Dubai and many Western European and Caribbean countries.
China seems to have had no problems in getting its act together. It has developed numerous cruise terminals and berths in Shanghai, Beijing and Hong Kong—all in the past six years. India, despite a long coastline of over 7,500 kms, much of it along states known for their cultural vibrancy and cuisine, has not. The bulk of the opportunity lies in the Mumbai- to-Gujarat belt, as well as the Mangalore-to-Cochin one and the adjoining areas since most international destinations are just three nights away. But there’s a problem: “For a person to prefer a cruise over a ferry from Mumbai to Goa, there has to be an attractive product which we lack,” Saxena added.
Yet, despite the industry’s many shortcomings, cruises are an opportunity begging to be exploited. Today there are over 300 vessels sailing around the world, of which 150 ships can easily ‘call’ at ports in India, bringing in armies of dollar-spending tourists. The shipping and tourism ministries seem to have woken up, again, and have identified five ports to be developed for cruise tourism. These are Goa, Cochin, Mumbai, Chennai and Mangalore. Also, the government has taken the initiative to form a steering committee to look into this sector with a secretary, shipping at the helm.
The cruise industry doesn’t seem impressed. “In the last few years, we have noticed that cruise tourism has been constantly toyed with as a brilliant idea but no cruise product has been developed which could effectively initiate India's story in this industry,” added Saxena.
The scramble to raise funds from the local bond market is set to intensify after Standard & Poor’s changed its outlook on India’s sovereign ...