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Cruising along the Indian waters ..

February 13, 2013


The Indian travel market is slowly waking up to the ever-growing and lucrative cruise segment. A right mix of change in
perception about cruise holidays, educating the trade, favourable government policies, etc can create more than just ripples on
the shores of the Indian market.
The encouraging figures of inbound and outbound traffic in the Indian market in the recent times, against the backdrop of a not-
so-good global economy, have only prodded the Ministry of Tourism, the State Tourism Boards and other sections of the Indian
travel fraternity to introduce newer initiatives to boost and sustain tourism revenue. These developments may also be attributed
to the growing middle-class segment, better disposable income, increased media exposure and a desire for newer travel
experience.
The cruise sector, too, is no exception to these changes. In India, the idea of taking a cruise vacation seems to be slowly catching
up as cruising features a number of options all in one product multiple destinations, accommodation, meals, amenities and
activities, thus giving more value for money.
In case of India, we have an advantageous coastal topography to boast of; a coastline that has seen the evolution of trade,
economy and colonial regime from a historical perspective. The coastline of India stretches from the Gulf of Khambhat in the
west along the Arabian Sea down to Mangalore, Malabar and then Kanyakumari along the Indian Ocean and through the
Coromandel Coast along the Bay of Bengal jutting towards the eastern most area near the Sunderbans. This enables India to
command a strong position as a hub for international cruise liners. However, this travel product has only been able to create
ripples on the shores of the Indian market.
The cruise segment is still in its nascent stage, says Ratna Chadha, CEO, Tirun Marketing, while stating that the demand for
cruises will definitely grow with awareness and exposure. The cruise vacation segment will only grow in the Indian
marketplace as this option was non-existent till we pioneered the concept 20 years ago. Despite the fact that Indian travellers
have to fly overseas to take a cruise vacation due to the absence of ships sailing along our coastline, the India outbound story is
emerging. She added that the annual year-on-year growth at an average rate of 15-18% per annum has been noticed and over
70,000 Indians opt for cruise vacations annually and remains optimistic that the numbers will only grow based on various
factors including ships based in the Indian waters.
India has shown remarkable acceptance for a cruise holiday over the other forms of vacations. Annual estimated growth of
nearly 15% yoy for the last five years for outbound cruise business actually translates into doubling the numbers in five year.
While cruise representative companies, like Cruise Professionals, continue to spend considerable amount of time educating the
travel fraternity and creating awareness, the real heroes of this growth are the intermediary travel agents across India. About
40% of the cruise business is generated from Western belt, 30% from North, 20 from South and 10% from East, says Nishith
Saxena, Director, Cruise Professionals.
Ian Banerjee, CEO, Global Anchor Cruises, thinks that cruising as a vacation style has been growing at a very promising rate.
In today 's world hotels and planes are but a regular feature of one 's lifestyle, so the heart of experiencing something off the
block is where cruising is starting to gain its popularity. Cruising hotspots in the Indian market are most popularly the South-
East Asia routes, followed by Europe, Alaska, Baltic, Caribbean and South Americas. However this chronology is mainly due to
the cost factor, proximity and duration of vacations.
Sharing a similar opinion as Chadha, Tarique Hussain, CEO, Cruise Club, thinks that India and Asia as a whole are still at a
very nascent stage for cruising. Globally 20 million people cruised last year and India contributed around 100,000 cruisers.
Together all stakeholders need to join hands to create more awareness about cruising as a vacation option.
Vivek Jain, Griffon Cruises, too, thinks that India is a very young and growing market for cruise tourism. However, cruising is
now popular in the metro cities and there is a small spread into the semi-metro cities.
Customer segments in India
Says Naresh Rawal of Star Cruises: India is a huge market for Star Cruises and we have noticed a recorded encouraging growth
in recent years. There has been an increase of 45% with the share of Indian passengers. Guests from middle and upper
middleclass segment are frequent travellers experiencing cruising as a new alternative to their travel options.
Varadan, Comfort Leisure, tells us that the affluent and the High Net Worth Individuals (HNI) bracket account for the maximum
clients opting for cruise vacations. The order of demographics of Indians opting for cruises may be grouped as the Affluent
class :$ 200K HH Income; HNW: $2MM +; Mature: 50+; Married; Empty Nesters (with no children in household) and
professionals and retirees.
80% of the cruise travellers are from North and West India and the rest from south/east India. Apart from the major cities of
Delhi, Mumbai, Bangalore and Chennai etc., we see growing interest from tier 2 cities. However, there is still substantial
untapped potential in the major markets as cruise vacations are only just beginning to reach out to the new generation aspiring
and affording travelers, said Ratna. SuperStar Virgo, Star Cruises
Low penetration
In general, there is a question of whether the cause of low penetration of the cruise segment in the Indian market is due to step-
motherly treatment towards promoting cruises or a prevalent luxury prejudice about the concept.
Agreeing on the same, Ian said: Yes, cruising has seen a very step-motherly treatment in our market and this so mainly because
the untapped potential is yet to be seen. Also the concept of cruising is yet to sink in to the minds of an Indian tourist who looks
at cruises as a purely nautical experience rather than a style of vacation which is seeing the world in comfort and luxury, not to
mention packing & unpacking just once.
However, he maintains that the strength of a market is shaped by the economics of demand and supply, Ian says the trend has
been slow in India as the country had proven to be a potential market for outbound travel only in the recent years.
In the past cruise companies were saturated with their own base markets like the US, the UK and Europe so the effort was less
aggressive. Now that the companies are growing as well as their base markets are shrinking there is more visibility of cruise
products in our markets. The majority of the Indian market has some prejudices like luxury cruising is a very costly affair and
also as mentioned earlier that Indian tourists view cruising as only a nautical experience.
According to Nishith, Cruises have had a very slow and low penetration in the Indian market because in the beginning, cruises
were perceived to be expensive and elitist vacation product. The cost of promoting cruises in India too is extremely high.
Ratna thinks that the low penetration is due to both the luxury prejudice and inadequate marketing but the situation, in her
opinion, seems to be changing. Given that the tier 1 cities like Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Kolkata are
logical mature source markets and now the tier 2 and 3 cities are maturing to the concept of cruising with exposure.
She further stated that thus far, the Indian trade was focused on selling air tickets and in the current scenario needs to move
beyond the conventional travel bouquet and sell other products. In fact, the cruise product is the easiest to sell off-the shelf,
given the fact that it is inclusive and managed by a single entity which ensures greater standards of delivery and highest
customer satisfaction. It caters to a robust family holiday market.
Observing that there are two ways to the situation, Nishith states emphatically that there has been a step-motherly treatment in
the case of domestic cruise tourism and not for outbound cruise tourism. The reasons no progress on the domestic front is made
have been stated time and again but there seems to be no headway being made in this segment. Whether it is lack of
infrastructure, friendly Government policy, clearcut tourism policy- there is nothing which cannot be handled if there is a strong
will and long term vision among the stakeholders to make it happen.
On the other hand, Vivek does not think that there has been a step-motherly attitude towards the cruise segment in India.
Cruise companies are interested in Indian travellers and are also willing to do an extra service in welcoming them. However,
cruise is always not the first option for new travellers. It is for more matured traveller. Indian travellers have now reached this
stage hence there was low penetration in the past.
Despite the fact that we do not have any cruise ship based in India the market is still growing. Other countries in Asia such as
China, Singapore, Japan and Malaysia have ships based in their countries and they have also heavily invested in infrastructure
and built world-class cruise ports for passenger ships. This is a positive development and will grow cruising in the region. South
East Asia has got the potential to become the Caribbean of the East and India will continue to be important source market for the
region. From a travel agency perspective, it is easy and beneficial to sell cruises to clients. However, the knowledge is still quite
limited to a few cruise liners, and as the market grows, more and more specialist players will enter this segment, said
Tarique.
Recognising the importance of the geographical positioning of a country, Varadan says that the regions that have experienced
the highest growth in cruising are typically those markets where there is consistent visibility with cruise ships in port.
This visibility creates an overall awareness of cruising, and a sense of curiosity in the luxury consumer. What is that ship and
where is it going? That looks intriguing. The more brand awareness we can create for the overall value of cruising will lead us
to more success in cruise sales across a wide range of product offerings. Since cruising is relatively new still to the Indian
market, we have much education to do on mass market to luxury differentiating factors. Each cruise brand offers a range of
experience similar to cars or hotels.
Stating that any new concept takes time to develop and be accepted by the consumer, Naresh looks at the situation confidently.
Cruising has been growing steadily in India and we have experienced a positive growth year on year. We are very encouraged
with our growth and will continue with our activities to develop cruising as a holiday option.
I believe that there is a very compelling case for cruising as both a supplement and competition to land holidays. The concept
of cruising is very unique as it has something to offer to all age groups. Mass cruising will continue to grow and has tremendous
potential for volume. At the same time there is a growing interest in the premium and luxury cruise market and we have seen a
very encouraging response so far at the higher end of the segment, Tarique continued.
Varadan believes that more demand can be created by educating travellers and travel agents on the value of cruising. Indian
travellers are educated on Holidays through websites, for new destinations. We send cruise itineraries of specific destinations
like Crossing the Panama Canal, Arctic & Antarctic expeditions, by email to customers. The joy of experiencing a destination
without the hassle of having to pack and unpack, seek restaurants and do multiple methods of transportation makes cruising very
attractive. Also, for guests to know they have a wide selection of choices in destination, service and experience, that luxury is
available to fit their style.
Viability of the Indian coastline
On whether the Indian coastline is suitable for large cruise liners or sufficient only to serve as ports-of-call, Tarique says that
there is a lot that the Indian coastline can offer. Asian itineraries are very popular amongst Western cruisers. There is a lot more
than just the coastline that will bring the ships to our ports. The port infrastructure needs to be improved dramatically, and so
does air connectivity to the seaports. Currently, Mumbai is the only conceivable home port for a ship based in India in view of
its air connectivity globally, and with the rest of the country.
Ian points out that however this showcase should highlight exotic destinations rather than just South east Asia. I personally
believe that India has the potential of being Home ports for large liners given the right support from the Government; even if
logically viewed, India is centrally located between the Asian Nations and the Middle Eastern and South African Nations. This
strategic location has more potential compared to Dubai or Singapore which are on extreme ends. Home Ports prefer markets
which have huge traffic of cruise passengers, India has the potential to produce those numbers.
Commenting on the viability of the country 's coastline, Nishith says, While the entire Indian coastline has something or the
other to be offered, there seems to be no consensus as to what would be an ideal itinerary, what kind of onboard ambience and
what kind of ships would be ideal to handle vast mass and premium segment passengers available to be tapped."
It is here that India 's geography comes across as a beneficial factor. Her positioning in South East Asia and proximity to
famous cruise destinations like Phuket, Singapore, Penang and other places in the South East Asia belt are important to create
several short-haul cruise itineraries for the Indian market.
The ideal ports would be Kerala, Goa, Mumbai and Chennai, for further development of cruise tourism not only for
international cruises but also for the domestic segment.
In the current scenario, however, Ratna says that there is limited destination opportunity despite an extensive coastline. India
requires developing its coastline as cruise destinations which can then be marketed to the appropriate audiences. At present, the
existing ports can only continue to serve as ports of call.
Problems and prospects
Not withstanding the huge scope of cruise vacations in India, there still are a number of challenges to be addressed by all the
parties that have a vested interest in it, the government included. At the outset, there is a need for a comprehensive, sustainable
and smart development of infrastructure with a defined foresight for dedicated cruise terminals at prime harbours like Mumbai,
Kochi and Goa, in addition to upgrading smaller ports like the ones in Kandla, Vishakapatnam, Pardip and the Andamans.
A defined foresight is mentioned thus in order to keep pace with our international counterparts in terms of the global standards
for infrastructure, water laws, amenities and services akin to those offered at airports. This is because a cruise terminal forms a
point of entry for tourists, foreigners in particular, and creates a brand image for our country in a way. Provision of world-class
facilities at the terminal and excellent connectivity to nearby tourist destinations will aid in making the port as a destination by
itself. 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 '. However, these require huge manpower resources and investments that may not see returns immediately
but they are essential if India has to be projected as a Cruise destination '.
The government and all the related stakeholders should study the target markets domestically and abroad, not to forget, the
viability of the coastline for huge cruise liners. A thin coastal strip may not be suitable for huge cruise liners as it faces a danger
of shore erosion. Once the customer segments are identified, they need to undertake extensive marketing and promotion
activities to create better awareness among Indians based on their demographics and the region they belong to.
In a nutshell, a well-calculated development plan over the next five-10 years supplemented by prudent marketing can help
utilize India 's natural advantage and tourism strengths for establishing cruising as a holiday experience by itself