DRMumbai: For the last two years, the Government of India has appeared to be in a hurry to ensure that we, as a destination, do not miss the opportunity to be part of the big league in cruise tourism.
In November 2015, a Cruise Tourism Task Force was set up by the Government. By June 2016, the Ministry of Shipping began streamlining port facilities, removing ‘ousting’ charges and giving ‘berth-certainty’ to cruise ships. The Cruise Tourism Task Force released the first set of Standard Operating Procedures (SOPs) for all stakeholders in the same month.
By October 2016, Bermello and Ajamil (B&A) was appointed as a consultant to prepare a roadmap for India’s cruise tourism. B&A submitted its report in June 2017 which was circulated among all stakeholders – Ports, Customs, Immigration and Central Industrial Security Force (which protects all ports) and the tourism industry.
In November 2017, coinciding with the start of the cruise season, India extended e-Visa facility to international passengers travelling to India on cruise ships at five major Indian ports
In November 2017, coinciding with the start of the cruise season, India extended e-Visa facility to international passengers travelling to India on cruise ships at five major Indian ports – Mumbai, Kochi, Goa (Mormugao), Chennai and New Mangalore.To facilitate the liberalised visa regime at these ports, 65 additional immigration counters were opened too.
In January 2018, Nitin Gadkari, Union Minister for Shipping, laid the foundation stone for an international cruise terminal in Mumbai. The construction work of the new terminal having the size of Mumbai Airport T1 has already begun. Built with an investment of around Rs. 300 crore, the terminal is set to be completed by June 2019. Apart from Mumbai, five other ports – Kochi, Chennai, New Mangalore, Visakhapatnam and Goa – are also being re-developed currently for promoting cruise tourism.
The Mumbai Cruise Terminal project will be undertaken in two phases. By the end of 2018, it will be able to cater to two lakh passengers. The new terminal having a total area of 4,15,000 sq. ft. will have all the facilities available at airports. On completion, it will be able to handle 200 ships and up to seven lakh passengers annually. It will also replace the port’s current 40,000 sq. ft. facility, which received a total of 51 cruise ships carrying approximately 57,076 passengers between November 2016 and March 2017.
The new terminal will have restaurants and retail spaces. It will be open to local citizens for recreation, leisure and shopping. There will also be separate lounges for arrival and departure. Mumbai is expected to handle around 40 per cent of India’s cruise traffic and the country is expected to see an increase in both international and domestic cruise tourists.
In 2016-17, India’s share of global passenger count was less than one per cent. India needs concerted efforts and long-term commitment to harness the global wave in favour of cruise tourism. The Cruise Tourism Policy, which may have most of the tools to address this imminent opportunity, is expected to be released before the current cruise season ends in March 2018.
Despite having a vast shoreline of about 7,500 km, India has failed to harness the potential of cruise tourism. The Government plans to take cruise liner traffic to 700 a year from the current 158 and grow the passenger count to 1.5 million by 2031-32 from the current 1.91 lakh.
“A major hindrance to boosting cruise segment in the country has been the underlying perception that it is an expensive and elitist activity. However, the cruising sector in India is growing at a steady pace and attracting more Indians to cruise, with consumer preferences shifting from shorter to longer duration itineraries. There has been a significant shift in Indians opting for 7/8-night itineraries as opposed to 4/5-night itineraries. We have witnessed this trend across different age groups,” feels Manoj Singh, Country Manager – India, Norwegian Cruise Line Holdings Ltd.
Tourism offers the highest investment to employment multiplier. On an average, employment generation on a cruise ship is one job for 3-4 passengers. The cruise industry can generate more than 2.5 lakh jobs for every 1 million cruise passengers, and clock revenues of over Rs. 35,000 crore for the government, giving a big boost to the country’s economy. There are 12 major ports – Kandla, Mumbai, JNPT, Goa, New Mangalore, Kochi, Chennai, Ennore, VO Chidambaranar, Visakhapatnam, Paradip and Kolkata (including Haldia) – in the country and the cruise tourism facility is likely to be extended to all major ports in the future, considering its immense impact on economic resurgence.
Cruise tourism failed to flourish in India primarily due to poor infrastructure and irrational taxation. The passenger experience also needs a complete rethink. Myopic vision of various State Governments has played spoil sport too, be it reluctance to permit serving of liquor to on-board guests while the ships are anchored at Indian ports, or regulations that banned gambling (which affected the onboard casinos).
“Infrastructure upgradation is all that is required to promote cruise tourism. To start with, the cruise port terminals should look like at least tier II city airports and not railway stations. The best example of good basic facilities for cruise tourism would be Kochi. We need separate passenger and cargo terminals at our ports handling cruises, decent waiting areas, good baggage handling facilities, and more berths for cruise vessels so that they can come and berth whenever, instead of being asked to wait for days till the berth becomes vacant,” says Kiran Bhandari, Co-founder, Cruise Club.
Taxes levied on cruise operators are based on the tonnage rather than number of passengers. This has to change. While the port charges issue is likely to be addressed easily, it remains to be seen if the taxation issue is resolved quickly. For one, while airlines are required to pay only a five per cent tax on economy class airline tickets, with such taxes going up to the maximum of 12 per cent for Business and First Class tickets, all cruise passengers are required to pay the full tax of 15 per cent. Moreover, while the imposition of GST is fine for passengers boarding from a domestic port, should it apply to services, food and entertainment for passengers who board the ships from an international port and travel through international waters, except when they touch India’s shores? Also for provisions purchased overseas and used while travelling along India’s coast. The Government will have to do some quick amendment of laws relating to taxation for cruise tourists.
The Government has decided to give a 30 per cent rebate on all port charges, increase the number of dock-days permitted from one to three and not to levy any priority or shifting charges for berthing cruise vessels if informed 30 days in advance. The Government is also providing additional rebate of 25 per cent for coastal cruise movement and walk-in or preferential berthing to home port cruise without extra charge. The Centre has also done away with cabotage for foreign cruise ships till February 2024 allowing Indian passengers to board vessels at any port.
The Government also managed to operationalise e-Visas and e-Landing cards for tourists and cruise ship crew members by November 2017 when the tourism season began. Single-window system for all pre-cruise requirements, declaration of only limited items of inventory of the cruise ships, no face-to-face check after dis-embarking and SoPs for training and educating the personnel handling passengers have also been put in place.
“On the popularity radar, Indian travellers are opting for new cruise themes and specialty cruises such as Culinary-special Cruises, Cruises for Kids, Luxury Cruises and Polar Cruises. In addition, we have observed that many inbound travellers are opting for river cruising, which is again a small but growing market in India currently,” says Shravan Gupta, Executive Director – Leisure Businesses, FCM Travel Solutions India.
Myopic vision of some State Governments around issues like use of local language, beef and alcohol is adversely affecting cruise tourism. This is what could have happened to Goa’s cruise tourism as well. Even though Goa has remained tourist-friendly, the State witnessed a sharp decline in cruise ship arrivals from their peak in 2005 – 07. Hike in port charges and the perceived hostile environment felt by tourists on account of ban on beef should have been avoided. If tourism has to grow in India, the country must make tourists feel welcome.
According to the CLIA Asia Cruise Trends Report 2017, India only hosted 12 turnaround calls which is too insignificant. Having cruise lines use a local port as the start and end destination of the cruise is more attractive as the visitors will spend more locally, and an increase in this number would mean more Indians are cruising.
Home porting is a definite indicator of the clout displayed by any cruising market. In 2006, Star Cruises home-ported Super Star Libra in Mumbai for the October 2006 to March 2007 season. It is believed that unfavourable government policies forced Star Cruises to withdraw the ship from the Indian waters in 2008. Italian cruise liner Costa Cruises set its eyes on India home-porting Costa Neo Classica in Mumbai from November 2016 to March 2017, and again this year. But this is just not enough.
The cruise industry has come to Asia stronger than ever before, and 2017 has been no different. 66 ships were based in Asia for six months or more, calling into 293 destinations across18 countries. Given that Indians are more likely to use the hub of Singapore over Beijing and Shanghai, the news is positive in that Singapore is also hosting more itineraries and ships in 2018, meaning Indian travelers have never had so many choices, whether it is around their budget, type of cruising, itinerary and brand options.
“The cruise market in India has witnessed a slow but steady compound annual growth rate (CAGR) of 25 per cent in cruise passengers since 2012. Also, Indians are largely looking at South-East Asian destinations for taking their first cruise adventure, which is good for travel agents, because it allows us to cater to the larger volume of cruisers irrespective of the segments like FIT, MICE, Incentives, Groups, Honeymooners or Wedding. Indians are no more just wanting to be on a cruise, they demand shore-excursions, too. On-board spending has risen from $65 to $80 per person/per night,” informs Khalid Gori, COO, Ark Travels.
About 1,20,596 Indians cruised last year compared to 49,442 pax in 2012. Considering the vast potential India has, it is progressive, but disappointing. The new Cruise Tourism Policy, which should be out very soon, could well be a shot in the arm.
