Beruflich Dokumente
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Final Report
December 2005
CRISIL Limited
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
TABLE OF CONTENTS
PREFACE.............................................................................................................................................. 9 ACKNOWLEDGEMENTS ............................................................................................................... 12 EXECUTIVE SUMMARY ................................................................................................................ 13 1 GLOBAL CRUISE TOURISM INDUSTRY PROFILE......................................................... 23
1.1 HISTORICAL BACKGROUND ..........................................................................................................23 1.2 MARKET GROWTH AND DIRECTION............................................................................................ 24 1.2.1 Statistical Highlights ......................................................................................................................... 24 1.2.2 WTO Market Trends .......................................................................................................................... 24 1.2.3 Recent Growth Trends ....................................................................................................................... 25 1.2.4 Market Share vis--vis Tourism Industry.......................................................................................... 28 1.2.5 Global /Regional Players .................................................................................................................. 28 1.2.6 Passenger Demographic Profile ....................................................................................................... 30 1.2.7 Trends in Duration of Cruises........................................................................................................... 32 1.3 INDUSTRY KEY DRIVERS ................................................................................................................ 33 1.3.1 Strategic deployment to maximize yield ............................................................................................ 33 1.3.2 Itineraries that satisfy key passenger requirements.......................................................................... 34 1.3.3 Home Porting Advantage .................................................................................................................. 35 1.3.4 Flexibility in repositioning ................................................................................................................ 35 1.3.5 Capacity Drives the Market............................................................................................................... 36 1.3.6 Sensitivity to global security issues ................................................................................................... 36 1.3.7 Strict Environmental Standards ........................................................................................................ 36 1.3.8 International Aviation Developments................................................................................................ 37 1.4 PRODUCTS AND SERVICES OFFERED .......................................................................................... 38 1.4.1 What makes Cruising unique............................................................................................................. 38 1.4.2 Niche cruise tourism markets ............................................................................................................ 38 1.4.3 Types of cruises.................................................................................................................................. 39 1.4.4 Onboard Entertainment Facilities..................................................................................................... 41 1.4.5 Accommodation ................................................................................................................................. 42 1.5 RIVER & CANAL CRUISES ............................................................................................................... 43 1.6 PROFILING OF CRUISE LINERS ...................................................................................................... 45 1.6.1 Carnival ............................................................................................................................................. 45 1.6.2 Royal Caribbean ................................................................................................................................ 47 1.6.3 Star Cruises........................................................................................................................................ 47 1.6.4 Disney Cruise..................................................................................................................................... 49 1.7 ASIA CRUISE TOURISM MARKET.................................................................................................. 52 1.7.1 Growth in the region.......................................................................................................................... 52 1.7.2 Market Highlights .............................................................................................................................. 52 1.7.3 Cruise passenger traffic at key ports................................................................................................. 53 1.8 FUTURE GLOBAL GROWTH TRENDS ........................................................................................... 54
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
2.3.2 Profile of Respondents....................................................................................................................... 62 2.3.3 Primary Survey Response.................................................................................................................. 62 2.4 INDIA AS A CRUISE DESTINATION ............................................................................................... 73 2.4.1 Cruise Tourist arrivals in India......................................................................................................... 73 2.4.2 Indian Cruise market scenario .......................................................................................................... 74 2.5 GOVERNMENT INTIATIVES ............................................................................................................ 75 2.6 CRUISE MARKET POTENTIAL ........................................................................................................ 76 2.6.1 Potential arising from Cruise Tourist arrivals in India ................................................................... 77 2.6.2 Potential arising from International Tourist arrivals in India......................................................... 80 2.6.3 Potential arising from Domestic Indian Tourists ............................................................................. 82 2.6.4 Potential arising from Indian Outbound Tourists............................................................................. 84 2.6.5 Total Cruise Tourism Potential ......................................................................................................... 86 2.7 IMPACT OF GROWTH IN CRUISE SHIPPING SERVICES............................................................ 87 2.7.1 Economic Impact ............................................................................................................................... 87 2.7.2 Environmental Impact ....................................................................................................................... 88 2.7.3 Socio-Cultural Impact ....................................................................................................................... 90
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
4.3.6 Nature Lovers Cruise....................................................................................................................... 133 4.3.7 Party Cruise ..................................................................................................................................... 134 4.3.8 High seas cruise or Cruise to Nowhere........................................................................................134 4.4 CRUISES TO FOREIGN DESTINATIONS ...................................................................................... 135 4.4.1 Eco Cruise across high seas............................................................................................................ 135 4.4.2 Shoppers Bonanza .......................................................................................................................... 136 4.4.3 International Heritage Cruise ......................................................................................................... 136 4.5 DEVELOPING RIVER CRUISES ................................................................................................... 137 4.5.1 Potential River Cruises.................................................................................................................... 138 4.6 MARKETING CRUISE TOURISM ................................................................................................... 138 4.6.1 Marketing Approach........................................................................................................................ 139 4.6.2 Strategy by the Apex Tourism Bodies for Cruise Operators .......................................................... 139 4.7 DEVELOPING CRUISE TERMINALS............................................................................................. 142 4.7.1 Developing Cruise terminals into Destinations ........................................................................... 142 4.7.2 Strategizing Cruise Operations ....................................................................................................... 143 4.8 ADDRESSING ENVIRONMENTAL ISSUES.................................................................................. 144 4.8.1 Role of Ministry of Environment and Forests ................................................................................. 145 4.9 TAXES & PROCEDURES.................................................................................................................. 145 4.9.1 Taxation Aspects impacting on Cruise Tourism ............................................................................. 145 4.9.2 Procedural Aspects impacting Cruise Tourism .............................................................................. 149 4.10 HR & TRAINING................................................................................................................................ 158 4.10.1 Need for Training ........................................................................................................................ 158 4.10.2 Performance Evaluation ............................................................................................................. 162 4.10.3 Organizational Development ...................................................................................................... 162
RECOMMENDATIONS.......................................................................................................... 163
5.1 KEY RECOMMENDATIONS TO MAKE INDIA A STRONG CRUISE DESTINATION........... 163 5.1.1 Create the Cruise Terminals ........................................................................................................... 163 5.1.2 Create the Product........................................................................................................................... 165 5.1.3 Create the positioning : India as a MUST SEA destination ........................................................ 167 5.1.4 Create the Experience...................................................................................................................... 169 5.1.5 Build the capacity ............................................................................................................................ 170 5.1.6 Create the Policy and Institutions to support development............................................................ 171 5.2 AREAS OF RESPONSIBILITY ......................................................................................................... 172 5.2.1 Ministry of Shipping ........................................................................................................................ 172 5.2.2 Port Authorities................................................................................................................................ 172 5.2.3 Ministry of Tourism ......................................................................................................................... 172 5.2.4 State Department of Tourism........................................................................................................... 172 5.2.5 Private Sector................................................................................................................................... 173 5.2.6 Ministry of Environment & Forests................................................................................................. 173 5.3 ACTION PLAN ................................................................................................................................... 173
GLOSSARY OF INFRASTRUCTURAL FACILITIES AT PORTS .......... 175 DETAILS OF CRUISE PURCHASING COSTS .......................................... 177 DEVELOPMENT OF INLAND WATER TRANSPORT .......................... 181
TABLE OF EXHIBITS
Exhibit 1 : Cruise Tourism : Significant Growth Worldwide ............................................................... 13 Exhibit 2 : Positive response to Global Opportunities .......................................................................... 13 Exhibit 3 : Global Lessons .................................................................................................................... 15
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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 (20032031) ..................................................................................................................................................... 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--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
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--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
Cruise Tourism is becoming an increasingly popular leisure choice worldwide Cruises, which were at one time considered the prerogative of the rich, the only option for the aged and the natural choice for honeymooners, is today fast reaching the wider leisure market. Representing one of the fastest growing sectors worldwide, cruise market trends indicate a qualitative as well as quantitative consolidation in the industry, with cruising gaining greater significance in the global tourism pie and successful seizing a significant niche market. Consider the following significant facts
Exhibit 1 : Cruise Tourism : Significant Growth Worldwide As per the office of Statistical and Economic Analysis, US Department of Transportation the cruise industry tripled in size during the course of 1990s. 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.
Asia has responded proactively to the global cruise tourism developments The response of Asia to the global cruise tourism activity has been significant and very meaningful. The Asia-Pacific region, which includes South Pacific, Southeast Asia, Far East & Trans-Pacific, experienced a growth of 134% during the 1992-2001 period reaching a figure of 2.1 million nights and a global market share of 3.5%. The heightened activity in Asia in building cruise ports and terminals demonstrates the positive market trends and potential for cruise tourism in the region.
Exhibit 2 : Positive response to Global Opportunities 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. Asias 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 Indias Intl 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 56 2.11% of the 2.65 million international tourists who visited India. This was an impressive increase of 133% 19 12 11 25 22 in cruise tourist arrivals in India in that year. However 2003 2004 2005 2000 2001 2002 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 constitute less than 0.5% of the countrys foreign 30 arrivals though the fact that international tourist arrivals 17 in India have shown a steady increase over the years 1996- 2001 2001 & 2002 Average Cruise Liner calls at Indian Ports proves that India has a lot of appeal in the international market.
0.56x
Cruise tourism potential for India is high India today is poised for making a significant mark in the international tourism scenario. WTTC projects Indias travel and tourism industry to grow at CAGR of 7.5% upto 2014 much above the expected growth in South East Asia and the world aggregate level. The WTO projects an annual average growth rate of 6.2% in South Asia over a larger timeframe till 2020. To realise this growth target, it would be essential for India to explore all avenues escalating tourism activity in the country including the extremely attractive area of cruise tourism in which the country has much to offer.
Indias vibrant economy supports growth in cruising Buoyant disposable incomes Increasing outbound travel 6.8% cagr in last 5 years Business travel important part of outbound travel 29% # Indias 309 million domestic tourists formed 43.9% of global tourist arrivals in 2003 Indias Demographic features significant Middle class over 150 Mn in 2004 Rupee Millionaires > 2,00,000 22% Indians spend > USD 2000 per trip abroad Indians rank 9th on Singapore's visitor arrivals, are 3rd highest revenue-generating market
Indias 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. Indias long coast line and strong port positioning imparts a natural advantage to the country to attract international cruise lines. Indias 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. Indias strong domestic tourism sector would enable the country to achieve a strong domestic cruise sector that could complement the growth and support viability. Indias 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.
India has many lessons to learn To benefit from her natural strengths, 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 derived over the past decade.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Exhibit 3 : Global Lessons 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
Indian Ports would need to gear up for the challenge Ports constitute the core infrastructure requirement of the cruise sector. If India wishes to integrate her position in this market Indian ports would have to meet internationally accepted standards of port infrastructure, passenger services, linkages, other conveniences and amenities. Internationally, cruise terminals are similar in facilities and services offered to tourist at airports. Whereas the major airports in India are designed to international standards, most of the Indian ports lack dedicated facilities for cruise tourism and do not offer the basic standards or the amenities expected. Cruise terminals represent the entry point of the cruise tourists into various tourism locations and offer important opportunity to market the countrys brand, its culture, heritage, cuisine and other offerings. Cruise tourism development would be impossible without all strategies being preceded by an integrated and sustained development of the identified cruise ports. Examples from Singapore and Dubai have shown that developing quality cruise terminals are imperative for stimulating growth in cruise tourism. As per estimates developed the total investment required would be approximately Rs. 105 crores for each cruise terminal with development of new berth and approximately Rs. 70 crores, in case of renovation of an existing berth. Market Trends indicate sound potential for Indian Cruise Tourism Demand for Indian Cruise tourism would arise from 4 segments The Foreign Tourists who represent the International Arrivals into India would offer the greatest potential representing tourists who are already interested in India as a destination and for whom the Cruise would be another mode of seeing the country.
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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. 2710 Taking a conservative estimate of each tourist spending 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 2010-11 2030-31 million (Rs. 26980 millions). Rs In million Considering the tremendous boost that cruise activity would provide to the domestic GDP through increased CUMULATIV E TOTAL EARNINGS FROM CRUISE TOURISTS & CREW DURING THE spending on various aspects, the one-time investment on PERIOD FROM 2005-06 TO 2030-31 IS creation of cruise facility would be justifiable.
ESTIMATED AT US$ 599 MILLION (RS. 26980
Indian Cruise Terminals would need to be viable The preliminary viability analysis carried out for cruise terminals in India show that viability is highly sensitive to the levels of tourist traffic as also the tourist spend. This makes the viability marginal especially in the initial years, leading to the conclusion that cruise terminals may require financial support in the form of subsidy or other viability gap funding measures. This would essentially be a project to project decision arising out of the detailed feasibility carried out for each of the terminals prior to initiating privatization measures. Feedback from our domestic and foreign tourists The market survey undertaken among Indian and visiting foreign tourists has given important feedback on the market perceptions, chief among which are Both domestic and foreign tourists find the chance to see many places to be the most attractive thing about going on a cruise. Domestic tourist are keen to include foreign destinations in the cruise circuit whereas foreign tourist are satisfied to see India through India Cruises. Goa, Cochin and Mumbai are the three ports that are considered best for cruise tourism in India. Goa is the most attractive destination amongst Domestic Tourists & Cochin is the most attractive amongst Foreign Tourists While on a cruise, foreign tourists give utmost importance to the food & cuisine, where as, for Indian tourists the cruise liner itself is the most important. Fast immigration & transit through the port is the topmost priority for both foreign and domestic tourists.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
The most preferred cruise circuits among the tourists are: Mumbai- Cochin Kerala Backwaters, for Foreign Tourists Cochin - Goa - Lakshadweep Male, for Domestic Tourists. Foreign tourists consider building international cruise terminals & making India more tourist friendly to be the most important initiatives to position India as a cruise destination, while Domestic tourists give importance to creating good destinations at the ports of call. Among domestic cruises, Goa Sea & River Cruises are perceived to be the most attractive by the domestic tourists whereas the Kerala Backwaters cruise is most highly rated by the foreign tourists. The tourist feedback on these and other aspects may be taken into account in designing the circuits Key Strategic Imperatives : What India would need to do While the cruise 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. Summarized below are 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. 1. Create the Cruise Terminals Develop good infrastructure at identified Ports o Phase 1 : Create dedicated cruise terminals at Mumbai, Cochin and Goa & Upgrade port facilities at exotic locales like Lakshadweep & Andamans and Chennai o Phase 2 : Create dedicated cruise terminals at Chennai, Mangalore and Tuticorin and Explore potential of other ports like Porbandar & Kandla in the West Coast: and Vishakapatnam, Calcutta & Paradeep in the East Coast Recommendations to reinforce port development o Cruise Terminals should be an integral part of Port Master Plans o Dedicated terminals would need to address security concerns and facilitation o Terminal Plans would need to be developed in consultation with key players o Initiate Feasibility Studies o Structure bankable PPP Options 2. Create the Product Design attractive cruise circuits o Design theme based cruise circuits Exploiting existing tourism/coastal destinations Linking foreign destinations depending on cruise design, theme and logistics Recommendations to reinforce cruise design o Select circuits related to port development should be responsibility of Ministry of Tourism. The Ministry of Tourism, should earmark a dedicated fund towards Hinterland tourism development Tourism related Infrastructure and linkages Viability gap funding o Quick connectivity to other destinations/ attractions/ tourism locations to increase choices Access to heritage locations, monuments, natural features, tourism destinations that lie in proximity to the cruise ports such as linking Mumbai Port to the Taj, Mangalore/Cochin Port to Hampi, Goa Port to Somnath/Dwarka etc. o Creating port wise & region wise destinations o Create and position river cruises to complement and strengthen cruise tourism development Link cruise terminals to river cruises that connect significant destinations
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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 Key Success Factors for India The following are the bottom-line factors which would determine success for India: 1. Bringing cruise ships to Indian shores It would be imperative for India to attract the existing cruise ships to India. Today there are around 315 vessels cruising around the world. Taking the routes into consideration, there are around 150 ships which can call at India ports, during the off-season in their typical routes, such as vessels plying from US West coast to Hong Kong, Singapore to SE Asia & Gulf/Mediterranean, South Africa to US East Coast. Indias strategy would lie in pulling these cruise vessels to our shores by creating the necessary infrastructure & attractions, positioning, linkages and affiliations. Similarly, India can also try to woo the cruise operators position one or two of their cruise ships in India, using the Indian Ports as home ports. The example of Star Cruise proves that rather than bringing new cruise ships, the objective would be to attract existing cruise ships, cruise operators and cruise lines to adopt India either as a turnaround port or as a home port.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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. Indias 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 Indias 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, childrens 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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.
5. Making Private participation happen Like the new civil aviation policy, the cruise Possible private developers who would be tourism policy of India should stress the ready to get involved in developing cruise need to change the traditional concept of terminals, may be any one or a combination of terminal development, ownership and the following: operations and underline active Cruise Lines/Cruise Operators participation of all private stakeholders. Cruise Terminal Operators Since the development of the cruise Port Operators terminals in each region would be closely Hoteliers/hospitality players linked to tourism development and circuits Large entrepreneurs in Tourism/other businesses in the region, it would be possible to develop Private Airlines a viable model wherein development of the Other private stakeholders cruise terminals could happen through participation of the stakeholders. Smaller stakeholders like tour operators, travels agents, shipping services agent etc would also be interested in participating in cruise terminal development, however, they may not have the finance to take it up independently. Accordingly, their participation must be explored in a consortium model where they tie up with the larger player in the investment while gaining special privileges in the development.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
6. Carefully resolving Cruise tourism development in environmentally sensitive areas Since many of the interior beautiful areas in India are sensitive areas such as sanctuaries, Drawing up plans for development of cruise coral islands, forests, mangroves etc, it is tourism, ecotourism, rural tourism in imperative that India should have a clear policy environmentally sensitive areas on developing cruise terminals & hinterland Drawing up guidelines for the reference of tourism products in environmentally sensitive other agencies which could be used in the areas, such as Lakshadweep, Andamans & implementation of all projects related to Nicobar, Sundarbans etc. while ensuring cruise tourism environmentally protective measures within the Drawing up a system of quality certifications Indian territorial coastal limits. In this regard the providing the minimum compliances for Ministry of Environment and Forests would play basic certification and right to operate and an important role in conjunction with the other further higher levels of compliances to agencies responsible for cruise tourism obtain quality certifications development. 7. Making cruise Ports & terminals tourist friendly Last but not the least, it would be imperative for India to simplify procedures to reduce harassment at Ports through a few focused measures: Streamline clearance of tourist and baggage at Customs Immigration officers can board at previous port of call and finish formalities enroute Visa requirements may be done away with eg Colombo, Singapore Expedite issue of passes Simplify health clearances The cruise ports would need to develop a tourism approach at ports duly stressing the 6S of tourism development which would include Swagat, Soochna, Suvidha, Suraksha, Sahyog, Sanrachna Way Forward : The immediate steps While detailed action plan has been proposed in the report the following would constitute the immediate steps: Evolve a comprehensive cruise policy Develop the Institutions needed to support initiatives Undertake pilot feasibility studies for identified cruise terminal development Develop Phase 1 projects along with cruise circuits Initiate dialogue with four key players involve the players in policy and planning decisions
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
crossing market. The technological revolution of the jet airliner was the next event that importantly changed the nature and clientele of the exclusive world and exotic area cruise markets. Knute Kloster, a Norwegian, was one of the first to recognize this fact and established Norwegian Caribbean Line (NCL), later renamed Norwegian Cruise Line. Cunard and Holland America were providing regularly scheduled world cruises in the 1960's and were beginning to develop certain regional areas for seasonal trade, for instance, Alaska. Cunard's Queen Elizabeth 2, and Holland America's Rotterdam V christened in 1965, sail popular annual world cruises with a faithful clientele often repeating this three-month voyage again and again. Today several cruise lines have their fleets deployed seasonally in both hemispheres to provide annual fair weather cruises in all global tourist regions. More ships and lines In response to the growing market demand, the ships grew in size as well as number with the result that the number of lines and ships gradually outgrew existing port capacities leading to the growth of new sister ports. For example, to supplement the port capacity of Miami, Fort Lauderdale developed as a sister cruise embarkation port. San Juan in Puerto Rico became the centre for the Southern Caribbean and Panama Canal cruises. World cruising and cruises to Alaska, Hawaii, the South Pacific, Europe, and the Orient expanded rapidly along with the Caribbean.
Source: Office of Statistical and Economic Analysis Maritime Administration, US Department of Transportation Source: Lloyds Shipping Economists, March 2002 Source: CRISIL Analysis Source: WTO Report
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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 worlds major cruise lines had reportedly committed to investing US$ 7 billion on 27 new ships which was more than the industrys annual worldwide revenues then, thus showing a positive growth trend ever since.
1989
1991
1999
2000
TOTAL
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.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Exhibit 6 : Growth Trend in the North American Cruise Market Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 No. Of Cruise Travelers (000s) 4448 4378 4656 5051 5428 5894 6882 6906 7640 8195
Source : CLIA
Region wise Supply Trend Exhibit 7 shows the accommodation capacity provided by the cruise sector. From the figures given below, it can be seen that the cruise industry represents just 0.6% of the worlds accommodation capacity. In order to understand the importance of the cruise sector, the following aspects other than the figures must also be considered. The optimism that the operators have demonstrated is reflected in their order books that stood at over 14 billion dollars approximately. The present and expected growth rate stands at 8% per year approximately Consumptions by tourists at respective destinations High value addition of cruises Development of new destinations of land based tourism due to a trend towards returning to the destination.
Exhibit 7 : Accommodation capacity measured in thousands of berths Region Europe America East Asia & the Pacific Africa Middle East South Asia Total Cruises (*) 1980 8,542 6,436 763 269 141 126 16,277 45 1990 9,824 8,616 4,798 665 319 222 24,444 93 1998 11,869 10,329 6,974 855 442 343 30,812 177
Market Share (%) of the Four Majors in destination regions Exhibit 8 shows that there is a trend towards horizontal concentration with the process of globalisation. Europe is the only region in which the four main cruise line groups do not control 50% of the market share.
Exhibit 8 : Market Share of the four major Cruise Operators Group Caribbean 2000 1999 2000 Alaska 1999 Europe 2000 1999 Far East 2000 1999
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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
April-September
Asia Pacific Atlantic Europe
Caribbean
Mediterranean
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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.
P&O Princess
P&O
Europe
Asia
Louis Cruises
Celebrity Cruises
sea
Festival Cruises
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India Seabourn Cruise Line Residen Sea Fred Olsen Page and Moy Hapag Lloyd Peter Deilmann Club Mediterranee Nouvelles Frontieres Mediterranean Shipping Cruises Valtur Spanish Cruise Line Pullmantur Cruises Vistamar Canarias
Source: WTO Report
Carnival Corporation has a market capitalisation of over 15 billion dollars (2001), which gives us an insight into the economic magnitude of the company. Carnival is one of the worlds largest tourism companies with a fleet of 46 ships, with more than 60,000 berths, and annual revenues of 3.78 billion dollars. With the increasing globalization of cruise tourism, there is a growing trend towards horizontal concentration. Europe is the only region where the four main groups Carnival Corporation, Royal Caribbean Cruises, P&O Princess and Star Cruises do not control more than 50 % of the market share. As seen in the chart below they hold 81% of the world supply of berths. These multibrand companies are known as the Big Four.
Exhibit 13 : Horizontal concentration of 4 key players
Others Carnival Corporation RCC P&O Princess Star Cruises 11% 17% 19%
21%
32%
Exhibit 14 : Market Share (%) of Big Four in destination regions Group Carnival RCC Caribbean 2000 37.8 25.7 1999 38.5 24.0 2000 31.2 23.7 Alaska 1999 31.0 25.0 23.6 4.1 Europe 2000 1999 19.1 3.8 0.4 0.2 Far East 2000 1999 4.5 0.5
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 Group/Cruise Lines NS Minor Cruise Lines Big Four Europe Asia Pacific Total 18 106 49 10 183 Total Fleet GT 508,944 6,152,670 926,188 252,133 7,839,935 GT/Berth 52.3 38.1 26.8 35 36.8 Berths 9,728 161,411 34,512 7,206 212,857 3 31 3 0 37 NS Order Book GT 203,000 3,006,656 178,600 0 3,388,256 GT/Berth 66.7 41.7 37.6 42.4 Berths 3,044 72,046 4,746 0 79,836
Source: WTO Report
Restless Boomer
25 to 50
Interested in experiencing different types of vacations, wants a family planned, fun filled vacation, travels mostly in the mass cruise market Interested in being comfortable, having someone wait on him, fine dining, some romance, participating in sports, socializing and learning something new, travels principally in the mass cruise market Looking for the best cruise value, taken an average of five cruises, knows the cruise lines and their ships, wants fun, relaxation, pampering, comfort and fine dining, travels principally in the
30
Enthusiastic Boomer
20
15
46
25 to 50
55000
Consummate Shopper
16
20
20
55
60000
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Type
% Of Cruisers
% Of Cruising Days 18
% Of First Timers 30
Age
Features
mass and premium markets Luxury Seeker 14 Willing to spend for luxurious 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 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 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
Explorer
11
18
20
64
81000
Ship Buff
11
13
68
78000
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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 GERMANY Age Group (years) 20-40 40-60 >60 2000 (%) 10 52 38 UNITED KINGDOM Age Group (years) <25 25-34 35-44 45-54 55-64 >65 2000 (%) 4 6 11 23 26 30 ASIA-PACIFIC Age Group (years) <25 25-39 >40 2000 (%) 20 40 40
Exhibit 19 : Trends in Duration of Cruise (Market Share) in the N American market Category Shares 2-5 days 6-8days 9-17days 18+ days Total 1980 24.3% 59.1% 15.4% 1.2% 100% 2003 32.9% 56.3% 10.4% 0.4% 100% %Point change 8.6 -2.8 -5.0 -0.8 0.0
CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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 FRANCE Nights <7 7 8-12 >12 Average = 7.2 nights % 26 50 19 5 UNITED KINGDOM Days <5 5-7 8-14 15-21 >22 Average = 9.3 days Source: WTO Report % 18 36 37 7 2
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
53%
Source: Seatrade Cruise Review, March 2001 (courtesy Victoria Cruise Ship Stategy)
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Destinations should offer a range of attractions to induce a high passenger take up Development of high quality shore excursion product by inbound tour operators Competition for cruise lines from competitively priced independent tour products available at ports is a disincentive for that ports inclusion in a cruise itinerary. Market Competition: It consists of the number and passenger capacity of cruise lines already servicing the port. Given the range of variables, vessel deployment planning can extend over a five-year period with itenaries fixed 12-18 months before, strongly underlining that the nature of the cruising experience is multi-faceted and multi-dimensional - a result of synergy of many destinations coming together for collective attractiveness. o o o
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Caribbean Mexico Transatlantic/Europe Alaska North America Hawaii Transcanal Asia/Pacific South America Africa World Cruise Indian Ocean
44 14 4.5 26 2.5 2 3 3 1
58 0.5 3 11 4 20 0.5 1 2
74 3.5 14 2 3.5 3
100
100
100
100
100
100
100
100
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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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 industrys 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.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
discounts for the under 12s and free flights for children under 2 years of age are a common feature of such packages. Special offers are available during the school holiday season. Of the major cruise operators, Carnival carries the most children and is the Number One family cruise line. Though it has entered the market late in 1998, Disney is also one of the most popular cruise line amongst this segment. The Senior Citizen Segment This is the largest growing niche with senior citizens having considerable purchasing power and a great affinity with the product. A study done by Travel and Tourism Analyst in 1996 shows that 10% of the senior citizen segment in the European Union used cruise as mode of transport for international trips. Certain cruise lines like the British tour operator Saga and Swan Hellenic cater to this class exclusively. Some cruise lines like Fred & Olsen, P&O also offer cruises with no flights involved. The Conferences and Incentives Segment With the increasing combination of business with leisure, cruise ships are wooing the business segment with well equipped with state-of-the-art features that can house all delegates within a closed space facilitating the holding of conferences and seminars with an element of novelty thrown in. Most large ships have 700 to 800 capacity assembly, the largest hall being one with a capacity of 1,350 in Royal Caribbean Internationals Voyageur of the Seas. Cunard estimates that 15% of its business is from incentives and conferences. Cruises organized by large companies are also widely approved of in Japan. Such cruises are generally short in duration. Theme Cruises Themes are built by offering new itineraries or by adding specialized products. The best example of such types of cruise is the Disney Cruise. Thus, Carnival has the Paradise ship exclusively for nonsmokers, HAL offers a Caribbean cruise with a screening of films from the forties, there are cruises dedicated to wine tasting and such other exotic themes added to exotic locales. Adventure Cruises Expedition cruises have a modest, though not insignificant, demand. Most companies that operate this market do not belong to the big groups. Some notable cruise operators in this category are The World Cruise Company and Abercrombie & Kent with ships like Explorer, Clipper, Marine Expeditions and Quark Expeditions with the total fleet being 63 ships and around 5,500 berths. There are also other liners like the Swan Hellenic and Orient Lines with a strong educational element.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 shipboard 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 citys shoreline for a romantic dinner to a full blown week or month-long cruise experience in some of the worlds 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 citys 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 lacks limitations -- such as low bridges and offers opportunity for plying large ships. Operators tend to traditionalise both itineraries and onboard environment apparently targeting an older, more sedentary traveller.
1.6.1 Carnival
Carnival is a global cruise company and one of the largest vacation companies in the world. Their portfolio of 12 leading cruise brands includes Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line and Windstar Cruises in North America; P & O Cruises, Cunard Line, Ocean Village and Swan Hellenic in the United Kingdom; AIDA in Germany; Costa Cruises in Southern Europe; and P & O Cruises in Australia. These brands, which comprise the most recognized cruise brands in North America, the United Kingdom, Germany and Italy, offer a wide range of holiday and vacation products to a customer base that is broadly varied in terms of cultures, languages and leisure-time preferences. They also own two tour companies that complement their cruise operations, Holland America Tours and Princess Tours in Alaska and the Canadian Yukon. Their combined vacation companies attract 5.4 million guests annually. Carnival Corp is the most profitable company in the leisure travel industry. They operate a fleet of 75 ships, and they have another 9 ships
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 industrys 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. Carnivals 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 Companys 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 companys plan, Carnival is "going global" through a joint venture with Hyundai Merchant Marine to the Asia market.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Carnival entered into the Asian market through a 50-50 joint venture with Hyundai Merchant Marine, one of the worlds leading marine shipping companies with knowledge of Asian Market, in order to expand its market worldwide.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 worlds 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 AsiaPacific, 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 crewto-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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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.
Royal Caribbean International Royal Caribbean is a moderately priced cruise line, and rates vary by itinerary. In 1997, Royal Caribbean purchased Celebrity Cruisesa premium line to appeal to an upscale audiencefor a total fleet of 25 ships and a capacity of more than 40,000 berths. Royal Caribbean is a good middle America, middlebrow choice, particularly if for active travellers.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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Star Cruises Good option for family cruising Short-length itinerary segment Majority passengers are Asian and Australian
Disney Cruises The two-ship Disney Cruise Line is the ultimate family option and is basically targeted towards family vacations. Singles, couples, and families of all ages find Disney Cruises appealing.
Destinations
Exhibit 25 : Profile of Destinations Carnival Corp Bahamas Canada Caribbean Mexican Riviera New England Panama Canal Alaska Hawaii Europe South Pacific South America Asia Central America Mediterranean Baltic Norwegian Fjords Atlantic Islands Indian Ocean Far East Canary Islands New Caledonia Vanuatu Fiji Alaska Bahamas Bermuda Canada/ New England Caribbean Europe Pacific Northwest Mexico Panama Canal Transatlantic Royal Caribbean International
Star Cruises Malaysia Thailand Singapore Hong Kong Nassau, Bahamas Castaway Cay Caribbean Mexico
Disney Cruises
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Accommodation Facilities
Exhibit 26 : Profile of Accommodation Facilities Carnival Corp Grand Suite with a Private Balcony Suite with Private Balcony Mini-Suite with Private Balcony Outside Double with private balcony Standard Outside Stateroom Standard Inside Stateroom Suite Royal Caribbean International
Royal Suite Owners Suite Royal Family suite Grand Suite Junior suite Superior Oceanview Stateroom Deluxe Ocean View Staterooms Superior Interior Stateroom Promenade Stateroom Family Inside Stateroom Large Interior Stateroom Family Oceanview Stateroom Large Oceanview Stateroom Oceanview Stateroom
Disney Cruises
Balcony
Interior
Oceanview
Executive Suite Junior Suite Ocean view Stateroom with Balcony Oceanview Stateroom with Windows Inside Stateroom
Royal Suite with Verandah Two Bedroom suite with Verandah One Bedroom Suite with Verandah
Deluxe family staterooms with verandah: Deluxe stateroom with verandah Deluxe ocean view stateroom
Executive Suite Deluxe inside stateroom Junior Suite Standard Inside stateroom Ocean view Stateroom with window (Double) Ocean view Stateroom with Window (Twin) Inside Stateroom Executive Suite Junior Suite Admiral suite Deluxe Stateroom Inside Stateroom- 8.2sq meters Inside Stateroom 6.8sq meters
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
place as fourth in the world. Its the main operator in Asia, with NYK, Princess, RCI and Cunard some way behind.
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Rebirth Of The Passenger-Carrying Freighter: Theres 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 cruisesextra heavy attention to styles of music, historical periods, food specialties, murder-mystery, square dancing, lectures by athletes, chefs, poets, and inspirational psychologistsare numbered in the dozens.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
(in millions)
Period 1999 2000 2001 2002 2003 2004 International Arrivals 2.48 2.65 2.54 2.38 2.73 3.36 Outbound Tourists 4.11 4.42 4.56 4.94 5.35 N/a Domestic Tourists 190.67 220.11 236.47 269.60 309.03 N/a
Source: www.indiastat.com
The period 1999 to 2003 has shown an impressive Compounded Annual Growth Rate of 12.83% for domestic tourists and a CAGR of 6.79% for outbound tourists. In respect of International arrivals, it is well known that this is largely linked to global event especially events in South East Asia and to some extent, events happening in North America/ Europe since most of the tourist 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 tourist arrivals for the years 2001 and 2002. However, total international tourist arrivals in India has bounced back in 2003 and steadily increasing over the past decade which proves that India has a lot of appeal in the international market. WTTC projects Indias travel and tourism industry to grow at CAGR of 7.5% upto 2014 much above the expected growth in South East Asia and the world aggregate level. The WTO projects an annual average growth rate of 6.2% in South Asia over a larger timeframe till 2020. The buoyancy in the Indian Tourism market will undoubtedly have a positive impact on the cruise tourism potential in the country, as cruise tourism forms one of the very attractive tourism options and would compete favourably with the other offerings.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Buoyant economy has contributed to larger disposable incomes among Indians Indias economy has been one of the fastest growing in the world during the last 13 years. Economic progress has helped to create a proportionately small but absolutely quite large middle class estimated at a number between 75 and 150 million people in 2004. Of these, research suggests that around 25 million have incomes which are sufficient for them to travel abroad should they wish to do so, and it also appears that this group in increasing numerically quite rapidly. An important driving force has been the steady move towards economic liberalisation in India. There have been considerable foreign investment; some high technology industries have made substantial inroads into Indias employment scene, especially in the area of information technology but also in areas such as communications and pharmaceuticals. Such developments have resulted in an emergence of a well-educated and well-remunerated young technocrats of the IT industry. In addition there has also been an upsurge in prosperity on the part of other groups such as small, selfemployed businessmen and traders who have benefited directly from economic liberalisation. This latter category has emerged as a key element in Indian tourism circuit, both to short- and long-haul destinations reflecting the potential in the Indian markets for the tourism sector. With this background, India presents a tremendous potential for a sizable segment that would venture into different facets of the tourism industry, including the latest Cruise Tourism sensation. Positive social & demographic factors are creating an avid travel segment in India Economic liberalisation and other economic drivers mentioned earlier have had a remarkable effect on the social profile of Indians. Some of the factors that have positively influenced travel abroad include the following: A steady rise in personal incomes, due to the booming economy and a rise in dual income families. This has led to a rise in outbound travel, which is increasing by nearly 20% every year. There are around 25 million people in India with incomes sufficient for them to travel abroad. Educated professionals, self-employed businessmen & traders are now indulging in overseas travel, which was once considered to be the domain of the very rich. Young Indians are exposed to much greater degree of international influences, especially through television with an increasing exposure to international brands and consumer products. This has brought with it demand for and an increased awareness of such brands and lifestyles within India itself. As a country of 1 billion people, even a small percentage of rich Indians make a sizeable figure in absolute terms. It is estimated that the number of rupee millionaires in India exceeds 2,00,000. With Indias close knit family society this is creating a demand for more family leisure travel. The double income households, where the raising of a family is postponed and two people are able to generate income, has created a new category of leisure travellers. Exhibit 30 gives a profile of the outbound travellers in India. The greatest volume of travel abroad is generated by the main metropolitan cities coupled with upcoming metros like Bangalore and Hyderabad. Substantial number of travellers also belongs to the trader community from Gujarat and Rajasthan, who combine business and leisure travel.
Exhibit 30 : Trip purpose of outbound travel by major generating regions, 1996-97 (% Of total) Region of origin Maharashtra Delhi Kerala Tamil Nadu Leisure/ Holiday 26.8 16.8 7.5 14.7 Joining family 12.7 7.6 21.9 13.4 Visiting friends 18.2 24.0 20.9 10.7 Employment 13.4 9.4 20.7 12.0 Business 21.6 34.8 21.4 31.8 Religion 1.4 1.5 3.2 0.6 Studies 3.3 4.1 1.4 1.6 Other 2.6 1.8 3.0 15.2 Total 100.0 100.0 100.0 100.0
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
West Bengal Assam Karnataka Punjab Uttar Pradesh Gujarat All regions
Indian travel trends point towards a healthy rise in outbound travel Trends suggest outbound travel in India has not suffered from the turmoil of recent political uncertainties, including the ongoing conflict with Pakistan. The following trends are significant : The average length of stay of Indians for long haul is 21 days, while short-haul travel to Thailand and Singapore is 11 days, up from the previous six days. Indians travelling abroad spent around $1.15 billion in 1998, up an average of 10 percent during each of the past four years. Business travel has notched a steady 40 percent growth rate. According to American Express, of the Indians travelling, 71 percent list shopping a priority, while 22 percent spend more than $2,000 per trip. While Indians rank ninth on Singapore's visitor arrivals chart, they are the third highest revenue-generating market. As avid shoppers, Indians comprised the highest per capita visitor spend in 1998 at S$1,713 (US$1,000). Trends in shopping have changed. Designer goods, crystal, specialty foods and latest electronic gadgets are in vogue as against low-value items popular earlier. Arctic cruises and other forms of "soft adventure" travel, such as white-water rafting and hotair ballooning, are fast becoming favourites. In Thailand, spas are becoming more popular among the upper-income Indians India's corporate incentives and conferences business travel to Thailand also are on rise. As per a leading National Tourism Organization present in India, following trends are seen among Indian travellers: First time travellers prefer short- to medium-haul destinations. Southeast Asian countries including Thailand, Singapore and Malaysia appear predominantly on itineraries. First time travellers prefer cheap packaged holidays. Frequent travellers prefer long-haul destinations, such as the United States and Europe. There has been an upsurge in niche holidaying, which includes soft adventure travel. Seasoned travellers are looking for new holiday destinations such as South Africa, Kenya, New Zealand. Honeymooning abroad is getting popular Business travel has become an important contributor to outbound travel The trader class that primarily visited countries in South East Asia for business purposes previously dominated this segment. Professionals from the salaried sector have now supplemented it. The growing economy has resulted in the success of many Indian companies with international clientele resulting in expansion of their businesses overseas. This coupled with the presence of many multinational groups in India has resulted in the flourishing of international travel. Nowadays, it is very common to find professionals attend meetings and training seminars overseas. This is especially from the Silicon Triangle of Bangalore, Hyderabad and Chennai and other commercial hubs Mumbai and more recently, Delhi. Also, incentives in the form of overseas vacations to dealers as a
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 quasidomestic 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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 postgraduate 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
%
47 38 27 17
Singapore Europe Dubai Thailand
15
Malaysia
Top 5 Foreign Destinations for Foreign Tourists Survey results indicate that 100 % of the respondents had visited South Asia and Europe. In South Asia, Thailand emerged as the most popular. The other popular destinations were North America, South America, and China/Japan respectively as shown in the Exhibit below. Inclusion of some of the destinations in South Asia in the Indian Cruise Circuit would make the Indian cruise products more attractive reflecting a cruise potential for both the Indian tourists as well as foreigners visiting India.
Exhibit 32 : Top 5 Foreign Destinations for Foreign Tourists in India
100
100
28
21
South America
16
China/Japan
South Asia
Europe
North America
Attractiveness of Type of Holiday The survey revealed that travelling overseas followed by a beach holiday was the most sought after type of holiday for both domestic as well as foreign tourists. The Cruise Liner was the 3rd most preferred type of holiday as far as the domestic tourists go followed by a holiday on mountain and an adventure holiday. On the other hand for the foreign tourists a holiday on a mountain, adventure holiday were more preferred to the cruise holiday. The cruise market study shows that all the mentioned holiday types can form a part of the cruise vacation depending upon individual preferences. When the cruise ships call at a port, there are land excursions, arranged, so depending on the type of places around, the geography and connectivity a combination of the above can be offered as a package for e.g. a beach excursion, a mountain and adventure package, visiting foreign ports-all these would cater to each of the preferences below.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Foreign
Domestic
Cruising Trends : Actual Cruisers Survey results show that 22 % of the Indian respondents had been on a cruise while only 3 % of the foreign tourists in India had actually been on a cruise.
Exhibit 34 : Actual Cruisers among Domestic and Foreign Tourists
Intentions to go on a Cruise Holiday among domestic and foreign tourists The trend among domestic tourists showed that 81% of them would want to go on a cruise holiday while 3 % of them couldnt make their minds up and the remaining were sure they would never go.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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.
Exhibit 35 : Intention to go on a Cruise among Domestic and Foreign Tourists
Popular Cruise Destinations for Domestic Tourists The survey conducted on the most popular cruise destination for domestic tourists revealed that Hong Kong and Singapore were the most popular accounting for 35 % and 30 % respectively, reflecting once again their priority for visiting South Asia and the need to actively include these in the Indian Cruise Circuit itineraries.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
What attracts tourist while on a Cruise The survey revealed that the foreign and the domestic tourists shared the same preferences by giving priority to seeing many places followed by the pleasure of travelling through sea as the most attractive features of a cruise. This proves that offering many destinations through carefully chosen ports of call, and through attractive excursion packages would make the cruise a desirable vacation. The tourists preference also reveals that the Cruise Ship is not being accepted as a Destination in itself, but more so for its feature that offers visits to different places through the sea route. It is therefore necessary to consider the marketing and promotion aspect of Cruise Tourism wherein more emphasis should be laid on the cruise as a Floating Resort, with its entire gamut of activities and entertainment, which has been dealt in detail under the market features and trends. For foreign tourists, destination at the ports is more important to attractions on the cruise, revealing the importance the foreign tourists give to the ports of call. Thus if India wants to woo the foreigners who visit India to take a cruise, there should be a focus on the shore excursions and on the quality of destinations that can be effectively linked at each port. For domestic tourists the destination at ports seems to be of least importance, and attractions on the cruises seem to be more attractive, proving that Indians give more preference to the services offered on the ship rather than those at ports.
Exhibit 37 : What attracts tourists while on a Cruise
Foreign
Domestic
CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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.
Exhibit 38 : Relative importance of different aspects
Foreign
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
GOA
57
34
M UM BAI
30
40
23
C O C H IN
18
38
32
10
1 1
CHENN AI
13
27
38
17
M ANG ALO R E
12
34
37
9 1
T U T IC O R IN
3
E x c e lle n t
32
Good A v e ra g e
41
B e lo w A v e ra g e Poor
14
6 4
D o n 't K n o w / C a n 't S a y
Rating of Ports by Foreign Tourists Ratings given by the foreign tourists were found to be contradictory to the ones given by domestic tourists where Cochin was given the top priority with 36 of them rating it excellent and 50 rating it good. Goa followed Cochin closely with 30 giving it an excellent rating and 37 a good rating. The other ports rated in the order of priority were Mumbai, Chennai, Mangalore and Tuticorin. According to the foreign tourists ports services and infrastructure hold importance thus revealing that the Tuticorin and Mangalore ports are below average with regards to the same.
Exhibit 40 : Rating of Ports by Foreign Tourists
C O C H IN
36
50
12
1 1
GOA
30
37
17
1 1
14
M UM BAI
14
48
23
CHENN AI
12
29
11
42
M ANG ALO RE
13
78
T U T IC O R IN
21 4
5
Good A v e ra g e
88
B e lo w A v e r a g e Poor D o n 't K n o w / C a n 't S a y
E x c e lle n t
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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.
Exhibit 41 : Aspects considered important while disembarking from the Cruise
4.24
3.88
3.96
As indicated earlier it is found that the foreign tourists rate these conveniences while disembarking as an important determining factor. While disembarking it is revealed that fast immigration and transit through ports and positive attitude of personnel at ports hold top most priority for them. The other factors like interesting places to see at ports, shopping/entertainment facilities and conveniences at port terminal, fall second in place and are rated at an equal level. In respect of domestic tourists, 91 domestic tourists rate immigration and transit through ports as top priority, but unlike the foreigners, 86 of the domestic tourists rated good hospitality facilities at the terminal and 82 of rated interesting places to see at the ports as important determining factor. Good hospitality facilities are of least priority for Indians tourists. The above preference is a clear indication that the tourists, both domestic and foreign, feel that their immigration procedures and clearances should be smooth, hassle free and least time consuming. As studied in the procedures section, the Indian system at ports should aim at a speedy clearance of immigration and probably look at ways of clearing it before the cruise liner calls at its respective ports. The survey also reveals that hospitality management is necessary and that regular human resource development and training must be conducted for the personnel at the port terminals. Initiatives considered important to Position India as a Cruise Destination The survey questioned domestic and foreign tourists on the priority that they would place on various initiatives that must be taken to position India as a cruise destination. According to 75 foreign tourists and 37 domestic tourists building an international cruise terminal was most important, thus substantiating the recommendation that cruise terminals of an international standard must be set up at the identified ports in order to get the major cruise operators to our ports. 64 of the foreign respondents are of the view that India needs to be more tourists friendly. A step towards this could be training all the stakeholders, and those in the tourism sector, conducting
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
workshops for them in hospitality management etc, which has been dealt with in detail in the HR module. Cruise Industry is said to be a supply driven industry wherein if adequate facilities, services and infrastructure are provided, that will in turn attract more and more cruise operators to the Indian shores, so if initiatives are taken by the concerned authorities in all these respects, India as a cruise destinations stands a great potential owing to its continental spread and the culture/heritage offerings. Another initiative that was thought to be of importance by the foreign tourists and domestic tourists was creating good destinations at the ports of call.
Exhibit 42 : Initiatives rated important to develop Cruise Tourism in India
B u ild in te r n a tio n a l c r u is e te r m in a ls
75 37 64 14 52 44 38 23 37 37 27 16 26 35
M a k e In d ia m o r e to u r is t fr ie n d ly
C r e a te g o o d d e s tin a tio n s a t p o r t o f c a ll 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 & fo r e ig n to u r is ts 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 in te r n a l tr a ve l B r in g in in te r n a tio n a l c r u is e bra nds
H a ve s ta te -o f-th e -a r t c r u is e lin e r s
Foreign
Domestic
Rating Cruise Circuits by Domestic Tourists The following Exhibits capture the rating of cruise circuits by by both domestic and foreign tourists
Exhibit 43 : Rating Cruise Circuits in India
-100% -27 -80% -44 -60% -50 -52 -40% -36 -20% -18 -0% -1 -2 -22 -2 -30 -23 -3 -1 -23 -4 -1 -6 -1 -7 -3 -45 -41 -46 -31 -23 -17 -31 -10
-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
-Not Attractive At All -Quite Attractive -Not Very Attractive -Attractive
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
-15
-18
-80%
-61
-37
-38
-42
-11 -5
-8
-10 -7
-7
-8 -5
-7
-0%
The survey accordingly reveals that among domestic tourists the Cochin-Goa-Lakshadweep-Male circuit has been given the top rating with 27% and 52% giving it a rating of extremely attractive and quite attractive respectively. This is followed closely by Mumbai-Colombo-Singapore circuit. Among foreign tourists the Cochin-Kerala-Backwaters-Goa-Mangalore has been given the top rating. This is probably because of the strong marketing positioning of Kerala among foreign tourists. Rating the potential of River Cruises in India Both Indian and Foreign Tourist consider river cruises as offering high potential, as has been captured in the following Exhibit:
Exhibit 45 : Does India have good River Cruises to offer?
Domestic Tourists Foreign Tourists
No 39%
Yes 86%
No 9% DK/CS 5%
Yes 61%
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Rating Indian Coastal and River Cruises Both Indian and Foreign Tourist were asked to rate purely Indian cruises which were a combination of both sea and river cruises. The following exhibits capture the response:
Exhibit 46 : Rating Indian Cruises by Domestic Tourists
-100% -15 -24 -80% -52 -40 -60% -55 -40% -38 -20% -14 -10 -0%
-Goa Sea & -River Cruises
-12
-9
-12
-25 -31
-39
-41
-34
-29
-40
-5 -2
-Kerala -Backwater -Cruise
-10 -1 -2
-10 -2
-4
-15 -3
-3
-10 -4
-3
-Godavari -Cruise
-2 -3 -2 -1 -2
-3 -3
-2 -1 -3
-4 -9 -1 -1
-80% -42
-2 -2
-0%
-Goa Sea & -Ganges Cruise -Sundarbans -Gujarat Coastal -River Cruises -Cruise -Cruise
-Not Attractive At All -Quite Attractive
-Godavari -Cruise
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 Dont 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.
Source: www.indiastat.com & information received form Cochin Port ^ 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
The following conclusions can be drawn from the above table: During the period 1996 2001, there were 30 average calls made per year by the cruise liners. In advent of the terrorist attack on the World Trade Centre at New York on 11th September 2001-2002 experienced a steep decline with only 17 cruise vessels visiting the Indian Ports.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Committee constituted under Chairperson, MPT - to review rules and regulations applicable to cruise tourism and recommend suitable amendments to make them tourist friendly. Consequent to the deliberations of the National Committee, Ports have taken following actions: Each port has drawn up a status paper of existing infrastructure including facilities for tourist reception lounge, baggage handling, communication centre providing telephone, internet, fax, transport arrangements etc. In consultation with State Govt & tour operators, each port has prepared half day & full day excursion tours in and around the port cities which can be packaged as part of cruise for the tourists. Tourist attractions easily accessible at other places in the country have also been identified. Immigration facilities at ports have been discussed with immigration authorities & to some extent procedures streamlined for speedy clearance of passengers. Each port has appointed a nodal officer for coordination with all agencies involved & for prompt redressal of any difficulty to tourists/ cruise liners. Other Initiatives: The Mauritius Tourism Department and Blue Safari Submarine in its effort to strengthen relationships with India, plans to introduce its submarine cruises to India. Negotiations are in progress with the tourism department of Gujarat, through the patronage of the Gujarat Gas Company, the organisation instrumental in approaching the organisation in Mauritius. The National Committee on Cruise Shipping participated in the Annual Sea trade Cruise Conference in Miami, Florida held in March 2003. Promotional material like CDs, brochures to meet the requirements of international clientele was prepared and the potential of India as a cruise destination was showcased at the conference.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY 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.
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
CAGR %
The CAGR is considered only for the period 1996-97 to 2000-01, because this period reflects the actual growth trend at which the Indian cruise market was growing and was subsequently affected only due to a one-off incident (attack on World Trade Centre), which
40000 35000 30000 25000 20000 15000 10000 5000 0 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 India
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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)
2005-06 23,824
2010-11 45,510
2015-16 86,935
2020-21 166,068
2025-26 317,231
2030-31 605,990
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
Year
Cruise Tourists in N. America 3,290,000 4,000,000 4,480,000 4,400,000 5,050,000 5,890,000 6,880,000
1991
1993
1997
1999
2000
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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%.
Exhibit 56 : Table Number of Cruise Tourists in Europe
Year
2000000
1500000
1000000
500000
0 1989
1991
1993
1995 Europe
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 worlds 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:
Exhibit 57 : Forecast of Cruise Tourists in India (2003-2031)
Year
Number of Cruise Tourists
2000-01 49,160
2005-06 78,295
2010-11 124,697
2015-16 198,599
2020-21 316,299
2025-26 503,755
2030-31 802,308
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of 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.
Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
International Tourist arrivals in India (In million) 1.707 1.678 1.868 1.765 1.886 2.124 2.288 2.374 2.359 2.482 2.649 2.537
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
2002 2003
2.384 2.726
Source: Indian Tourism Statistics 2003: Report of Ministry of Tourism, Government of India & Times Research Group Report
At present Indias 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.
Exhibit 60 : WTO forecast for International arrivals
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.
Exhibit 61 : Forecast of International Tourist arrivals (2003-2031) In Millions
2010-11 2015-16 2020-21 2025-26 1010 4.61 1277 6.41 1614 8.91 2040 12.38
A WTO study indicates an average of 1.4% of all international arrivals across the world are cruise tourists. Considering, that once cruise facilities are developed in India the same % would be applicable, we have arrived at the potential market for cruise tourism.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Description International Tourist arrivals (in million) Potential market for Cruise Tourism (1.4%)
2020-21 8.91
2025-26 12.38
2030-31 17.20
38,164
46,491
64,599
89,759
124,720
173,298
240,796
Exhibit 63 : Projected potential Cruise market arising from International Tourist arrivals in India
300000 250000 200000 150000 100000 50000 0 2003 2006 2011 2016 India 2021 2026 2031
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.
2001 236.470
2002 269.598
2003 309.038
Source: Indian Tourism Statistics 2003, Report of Ministry of Tourism, Government of India
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 Indias 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 65 : Demographic Segmentation of Domestic Indian Tourists
Description
Basis used for estimation 2002-03 to 2010-11 2010-11 to 2020-21 2020-21 to 2030-31
A B C D
Total Indian Domestic Tourists Urban Tourists Higher Income Group Tourists Travel for Leisure & Holiday (L&H)
Growing with CAGR of 9.5% 27.0% of (A) 5.0% of (B) 30.0% of (A) 7.5% of (B) 8.7% of (C) above 33.0% of (A) 10.0% of (B)
This number of domestic tourists travelling for Leisure & Holiday (L&H) is extrapolated till the year 2030-31 using a CAGR of 9.5%.
Exhibit 66 : Table Projection of Cruise tourism market within Domestic Indian Travellers (2003-2031) (All numbers in million)
Description Total Domestic Tourists Urban Tourists Higher Income Tourists Leisure & Holiday Tourists
2002-03 2005-06 2010-11 2015-16 2020-21 2025-26 2030-31 309.0 83.4 4.2 0.36 405.7 109.6 5.5 0.48 638.7 191.6 14.4 1.25 1,005.5 301.7 22.6 1.97 1,582.9 522.4 52.2 4.54 2,491.9 822.3 82.2 7.15 3,922.9 1294.6 129.5 11.26
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.
Exhibit 67 : Number of Cruise Tourists within Domestic Indian Travellers (2003-2031)
2002-03 2005-06 2010-11 2015-16 2020-21 Leisure & Holiday 0.36 0.48 1.25 1.97 4.54
2025-26 7.15
2030-31 11.26
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Tourists (in million) Cruise Tourists million) (in 0.005 0.007 0.018 0.028 0.064 0.100 0.158
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.
Source: Indian Tourism Statistics 2003, Report of Ministry of Tourism, Government of India
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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-cumbusiness 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. 2. 3. 4.
Indian Outbound Tourists Leisure & Holiday Tourists (17%) Business (29.1%) Tourist
Considering only 50% of Business Tourist for analysis Outbound enjoying facilities (2+4) tourists leisure abroad
0.78
0.95
1.32
1.83
2.54
3.53
4.90
5.
1.69
2.06
2.85
3.96
5.51
7.64
10.62
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)
Description Outbound tourists enjoying leisure facilities abroad (in million) Potential market for Cruise Tourism (10%) Projected no. of outbound tourists opting for Indian cruises (1/5th)
2002-03 2005-06 2010-11 2015-16 2020-21 2025-26 2030-31 1.69 2.06 2.85 3.96 5.51 7.64 10.62
0.17
0.21
0.29
0.40
0.55
0.76
1.06
33,764
41,116
57,096
79,287
110,102
152,894 212,317
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of 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.
2010-11 64,599
Cruise Tourists Domestic Tourists Outbound Tourists Total Upside of the analysis
It may be noted that the above analysis represents the base minimum number of cruise tourists that would embark / disembark from Indian Ports. The actual movements may be higher depending on the infrastructure developed and the marketing efforts undertaken to promote cruise tourism in India.
The analysis has been undertaken as a standalone exercise without considering the effects of technological, social and economic developments on tourism globally. For example, falling prices of international air travel may completely change the way tourism and cruise tourism is undertaken. Incidents similar to terrorist attack on World Trade Centre can never be foreseen. Their positive / negative impact and the extent of the same too remains unknown and cannot form a part of the above forecasting exercise.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
As per the feedback received from JM Baxi & Co, who are their shipping agents in Mumbai, the response to Star Cruises has been very good. The cruise ship which is making 3 calls per week out of Mumbai is averaging around 800-900 passengers per sailing, which amounts to a capacity utilization of around 60% thus far. They also achieve 100% capacity on many occasions when the ship is chartered by a single party. It is understood that, during the holiday season of Diwali, the cruises were heavily overbooked. Considering the fact that they are the first players in India in this market, it is widely opined that the performance of Star Cruises is creditable and sets a healthy trend for Cruise tourism in this country. However, the operations are still at an early stage, with the company still consolidating its marketing efforts. It would be appropriate to wait for at least a year to be completed before any conclusions are arrived at. ^ 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.
WTO estimates
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Passenger Operations Transit Passengers Tours Shopping Meals Entertainment Entrance Fees 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 industrys 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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.
Report of the Committee constituted to Review Rules & Regulations applicable to Cruise Vessels & Cruise Tourists in India Report of the Committee constituted to Review Rules & Regulations applicable to Cruise Vessels & Cruise Tourists in India
10
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Mumbai
Mumbai
Popularly known as The city that never sleeps, Mumbai is a vibrant city with a long history and culture lasting several decades. Besides being, Indias financial and commercial capital, Mumbai is a leading transportation and manufacturing hub and one of the four metropolitan cities in the country. Mumbai Port is a Major Port with a natural harbour. It is a well-protected all-weather port, with facilities for handling containers, general cargo, liquid cargo & passengers. It lies at latitude 18o54N and longitude 72o49E. Beaches, monuments, museums, world heritage sites, renowned eateries, shopping & entertainment facilities; proximity of exotic tourist locales in the vicinity too enhances its attraction Mumbai has many gothic architecture heritage buildings, a reminder of the glorious past of the city in conjunction with tall skyscrapers indicating its importance in Indias commerce & trade. Excellent air connections to other cities makes it an ideal boarding / destination point for passengers doing the regional cruise circuit A variety of tourist options, moderate climate, and international standard hotels in a cosmopolitan & safe environment, make it among the most preferred tourist destinations in the country.
Berthing facilities for Mumbai Port handles Cruise vessels at the Ballard Pier Extension Berth. cruise liners The earmarked berth is capable of handling large cruise vessels of up to 70,000 GRT having length 800 feet and requiring a draft of 33 ft. Infrastructure & The dedicated cruise terminal building at the Ballard Pier Extension, has a support facilities for concourse hall and two upper floors spread over an area of 6000 sq. mts. cruise ships Two side halls of about 3000 sq. mts. are used for baggage handling.
Provision for gangways, forklift, mobile crane, tractor Baggage handling facilities, including battery operated trucks for movement of baggage trolleys as at airports Supply of provisions for ships consumption, disposal of garbage from ships
Facilities & The terminal for reception of passengers and completing Customs / amenities for cruise immigration formalities provides following facilities:
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 (Queens 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
Mormugao
Goa
Goa is located on the western coast of India in the coastal Konkan region. It is among the most favored destinations on the itinerary of international tourists visiting India, for its unique combination of beautiful beaches, great outdoors and tourism-friendly environment. Mormugoa Port is among the oldest Indian Ports on the West coast of India with a fine natural harbour. It is located at the mouth of River Zuari and is the premier iron ore exporting port of India. It lies at latitude 15o25N and longitude 73o47E. Sun, sand & beautiful beaches; Lush countryside, exotic locales, swaying palms, seafood & architectural splendors of its churches, convents and old houses
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Key offerings of serenity, relaxation & parties A meeting point of religions and cultures of East and West over the centuries, Goa has a multi-hued and distinctive lifestyle quite unique from the rest of India No dedicated passenger berth available. Priority handling of cruise vessels on general cargo berth. Berth is cleaned prior to arrival of passenger vessel. Smaller cruise vessels also handled at inner anchorage where passengers are transported to shore through ship tenders. Additional berths being constructed to enable cruise traffic to be handled at the existing berths in a pollution free environment There is no dedicated passenger terminal at present. The bare minimum amenities that can be made available are provided for the comfort of the tourists by making temporary arrangements in sheds. Facilities provided include toilets, shopping, medical aid, tour operators, traditional Indian Style welcome Arrangements for parking of coaches, taxis etc. with proper signage in the vicinity of the berth for convenience of cruise tourists are planned Facilities for immigration & custom clearance Security at the terminal A domestic airport at Dabholim services Goa. The airport also receives several international chartered flights. Goa is well connected through National Highways & Konkan rail connectivity to rest of the country Visits to the Beaches Anjuna, Baga, Benaulim, Calangute, Colva, Dona Paula; churches, temples, and historical places in & around Panaji, Vasco; Forts Aguada, chapora & Cabo de Rama, Rivers Mandovi & Zuari
Infrastructure & support facilities for cruise ships Facilities & amenities for cruise tourists
Cochin Port
Exhibit 78 : Analysis of Cochin Port
Cochin
Cochin (Kochi)
Kochi lies in the State of Kerala. Kerala has been named, as one of the 50 must see destinations of a lifetime by the National Geographic Traveller. A natural harbour and enchanting backwaters that encompass historical and traditional treasures, make Kochi among the most beautiful cities of India. Kochi has been the gateway to India, since the arrival of Vasco-De-Gama in 1498 and is known as the Queen of Arabian Sea. The cochin port is one among the 12 Major ports in India. The Cochin Port is situated on the south-west coast of India at latitude 9o58N and longitude
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
76 19E, about 900 kms south of Bombay. It is a natural harbour and has comparatively calm & sheltered waters. Major drivers for Cruise tourism, USP of the port
Ayurveda & Yoga, rejuvenation therapies, spices & seafood, lagoons & backwaters, hill stations Souvenirs & artifacts, traditional dance & art forms Beaches, Churches & Synagogues, monuments, local arts, Chinese Fishing nets & village, tea & coffee plantations, dense forests etc. There is no dedicated passenger berth or terminal. The cruise vessels are handled at a clean container / cargo berth. Requisite facilities are temporarily created at the berth during the cruise vessels stay.
Infrastructure & Cruise cell constituted to cater exclusively to cruise traffic. The officers support facilities for of cruise cell liaise with officials, crew and cruise tourists to provide cruise ships quality services and address specific requirements. Facilities & amenities for cruise tourists
Tourist information centres, curio stalls, emergency medical support, Pre-paid taxi services & Parking space are provided Traditional Indian style welcome Leading star hotels of international repute & city centre are within walking distance Single window clearance for customs and immigration Cruise Cell officers coordinate with officials of allied agencies such as Customs, Immigration, Port Health office etc. to ensure hassle free and speedy services / clearances. Port security is provided Kochi has a domestic airport and international airport offering easy connection to cities internationally & in India. Proximity to Railway station, National Highways & inland waterways offer a good option for transportation into the hinterland
Places of tourist Alleppey backwaters, Munnar, Periyar Wild Life Sanctuary, Jewish interest in vicinity Synagogue, beaches, temples & churches, specialized resorts for Ayurveda, shopping bazaars for spices etc. New Mangalore Port
Exhibit 79 : Analysis of New Mangalore Port
New Mangalore
Mangalore
The city is a major port town of Karnataka. It enjoys historical importance due to its trade connections with Arabian Gulf & European Countries. Mangalore is an ideal gateway to explore the rustic & traditional charm of Southern India. Serene hills, placid lifestyle and a cool, windy climate best
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
describe Mangalore. Brief details of Port Mangalore is the Gateway Port of Karnataka catering to the growing needs of its vast hinterland covering the whole of Karnataka and parts of Andhra Pradesh and Kerala. It handles a wide mix of cargo including containers. It lies at latitude 12o55N and longitude 74o48E. Proximity to historical heritage temples of Hampi Vibrant green forests, paddy fields, gigantic monolithic statues, sunbathed beaches, exquisite temples, mild sandalwood, traditional buffalo races & conventional red-tiled roof houses Lush hills surrounding Mangalore offer scenic views of the Arabian Sea The port does not have a dedicated berth for cruise liners. It uses a bulk cargo berth for berthing of cruise vessels. The port does not have a dedicated passenger terminal. A temporary passenger shed is erected for the convenience of passengers. Facilities provided include tourist information centre, toilets, shopping, medical aid, tour operator counters, traditional Indian style welcome The port does not have an Immigration Check-post. As a result, cruise tourists are permitted out only for local sight seeing and cannot embark/ disembark in another port of the west coast circuit, the cruise tourist cannot join back on the ship at this port. Mangalore has a domestic airport with connectivity to Mumbai & other regional cities Mangalore is connected with National Highways and Konkan Railway to the hinterland areas Surrounding hills & beaches Kudremukh, Madikeri, exquisite temples, Karakala Giant Monolithic statue, Kemmanagundi, Monuments of Hampi, Nandi Hills, Tea & coffee plantations, Nilgiri Hills, Banerghatta National Park, Hassan, Halebid, Bellur etc.
Berthing facilities for cruise liners Infrastructure & support facilities for cruise ships Facilities & amenities for cruise tourists Services for providing clearances / approvals Airport accessibility & Linkages
Tuticorin Port
Exhibit 80 : Analysis of Tuticorin Port
Tuticorin
Tuticorin
Tuticorin lies on the southern-most tip of India and is a major industrial and commercial centre. It is a gateway to the traditional charm of Tamil Nadu and a major Port city. It is well known as a pearl diving and fishing centre, and is popularly referred to as the Pearl city of India.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Tuticorin Port lies at latitude 8 45N and longitude 78o13E on the South Eastern coast of India, strategically close to the East-West International sea routes. It is located in the Gulf of Mannar & lies only 140 nautical miles North of Colombo, Sri Lanka. The 1000-year old temples at Thanjavur, a World heritage site, Kanniyakumari the southernmost tip of India symbolizing confluence East & West and Kancheepuram a temple town. Gateway position to Indias culture and heritage Proximity to International Sea routes A multi-purpose berth has been earmarked for handling Passenger Liners. A newly constructed berth with 370 mts quay length and 10.7 mts draft is made available for handling larger cruise liners. A new passenger terminal developed recently includes separate enclosures for embarking / disembarking passengers Five hectares of paved area available for reception of passengers, organizing cultural events & erecting temporary shopping arcade etc. Fuel Bunker facilities Seating arrangements for 300 passengers Drinking water, cafeteria, Duty Free Shopping, foreign currency exchange counters, Communication facilities, Banks, tour operators Parking for luxury coaches Customs Examination, Immigration Department & Health Officials desk within port State Police Department & CISF ensure terminal security
Berthing facilities for cruise liners Infrastructure & support facilities for cruise ships
Two X-ray machines for screening of baggages have been erected, one by the Port and another by Customs Department. Airport accessibility & Linkages Places of tourist interest in vicinity Nearest airport is at Madurai, about 135 kms away. Madurai is directly connected to Mumbai & Chennai Thanjavur, Kanniyakumari, Kancheepuram, historical temples, Churches and ancient structures around Tuticorin, Madurai, Ooty, Kodaikanal, Tanjore, Kovalam.
Chennai Port
Exhibit 81 : Analysis of Chennai Port
Chennai
Chennai
Chennai is located on the Eastern Coast of India in the State of Tamil Nadu. Chennai (Madras) is among Indias 4 metropolitan centres and has had a long tradition since the days of British as an important cultural, social
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
& historical centre of Southern India. Brief details of Port Chennai Port is among the 12 Major Ports in India and is located adjacent to the southern metropolitan city of Chennai. It lies at latitude 13 06 N and longitude 80 18 E. Rich heritage, vibrant social & cultural ethos, variety of cultural and art forms Bustling metropolis, ancient temples, clean sea front, international hotels Famous for silk shopping Chennai is connected by a passenger liner to Port Blair (Andaman Islands) A dedicated terminal has been developed with capacity to accommodate 500 people. Terminal to have duty-free shops, handicraft and handloom showrooms, Food courts etc. Tour operators will develop facilities for ticketing & sightseeing trips The port will provide facility for customs and immigration clearance by respective departments Chennai has domestic and international airports, providing excellent connectivity to Indian & International cities It is connected through National Highways, State Highways & Railways to the hinterland and other cities Taxi services and intra-city bus services are available for travel around the city Chennai city sight seeing, Chepauk Palace, Mahabalipuram, Pondicherry, Kancheepuram, Thanjavur, Madurai, Chidambaram and Tiruchy.
Berthing facilities for cruise liners Infrastructure & support facilities for cruise ships
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India Mumbai Mormugao New Mangalore Cochin Tuticorin 243 250 200 350 340 10 10 10.3 10.75 11.9 9.6 Km 5.0 Km 7.5 Km 10.5 Km 4.0 Km 8.5 13.7 15.40 13.20 12.80 350 250 245 200 183 500 480 570 500 488 4.4/2.28 2.3/1.1 1.50 1.00 2.58 5.94/4.8 3.25 1.00 3.35
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Berth Gangway Terminal Building Passenger Lounge Luggage Counter Tourist information centre Drinking water Toilets/Shower/ Lockers Money Exchange Counter / Bank ATM Internet Caf/ Communication Centre Cafeteria / Restaurant Duty free shop / Souvenir Excursion facility/Tour Operator Taxi service Coach transfers/shuttle bus Parking facility Domestic Airport International Airport Medical Clinic Custom clearance counter Immigration check counter Security check counter Port Health Officer Local police Wheel Chair Escalator / Elevator Terminal Map 101
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India 28 29 30 31 32 Harbour Cruise Facility Entertainment Centre, Movie Theatre Air Conditioned Post Office Aero-Bridge from Terminal-to-Ship
Passenger Lounge Public address system Foreign exchange counters Communication centre Taxi service Parking Space for vehicles
Luggage Counter Drinking water Bank service counters / ATM Cafeteria Excursion Operators facility /
Tourist Information centre Toilets / Showers / Lockers Wheel chairs for disabled, old Trolleys for baggage Tour Coach transfers / shuttle bus service
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
Escalators / Elevators
Crew lounge Gift / Souvenir / Artifact & Curio shop Internet caf Magazine / Book store Harbour Cruise Facility
Air-conditioning for terminal Duty free shopping building Restaurant Medical Clinic Florist Laundromat Postal service Ice cream Bar Yacht Parking Facility
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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.
Exhibit 87 : Facilities for Cruise Vessels
Facilities for cruise vessels Terminal Building Trucks for handling baggage Embarkation Balcony Fuel Bunkering Gangway Baggage Conveyor system Ship Chandelling Garbage disposal facility Aerobridge Agents Office Water Supply
Port & Port related infrastructural facilities 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.
Exhibit 88 : Port & Port related infrastructural facilities
Facilities for entry-exit checks / clearances Cruise tourists arriving into / departing from the port are subject to certain checks and clearance procedures by law. Officials from specific government departments are deputed to extend the clearances. Considering the short stay nature of cruise vessels at the port-of-call and sensitive nature of international cruise tourists, the clearance procedure should be quick and hassle-free. The port authorities should create adequate infrastructure to enhance the efficiency of the departments. The facilities to be provisioned by the port at the cruise terminal include:
Exhibit 89 : Facilities for Entry-Exit Checks/Clearances
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 caf 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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
Cruise Facilities & Services: The Department of Tourism and Commerce Marketing (DTCM) under took extensive research on the needs of the cruise lines to arrive at the following facilities and services provided on its Terminal
Exhibit 90 : Facilities & Services at the Port Rashid Cruise Terminal, Dubai Extensive docking facilities Spacious 3,300 sq.m. ultra-modern cruise terminal. 335m of Quay with a Quay apron of 35m. 11.m Draft for ships of all sizes. Entire site surrounded by a perimeter fencing with security system. Well-equipped in-terminal services Highly efficient reception check-in. Competent information center with concierge service. Luxurious VIP lounge Pleasant relaxation zone and a delightful cafe. Rest rooms with handicap access toilets. Special conveniences for the physically challenged (wheel chairs/electric carts/ramps). Big screen entertainment center. A world-class Duty Free and retail shops. Heritage and culture exhibits. A beautiful Arabian palm garden. Excellent communication and business assistance Authorised money exchange. Convenient computer terminals and an Internet center. Post office and other communication facilities. Conferences facilities and business center. Well-developed transportation network Personal & baggage security screening. Semi-Automated Baggage Handling System Covered baggage handling area. Ample parking for tour buses as well as a taxi stand. Efficient Support Facilities No passenger handling fees for maiden calls. Passenger clearance via manifest system with swift immigration procedures and no visa problems for visitors. Professional and certified tour guides. Capable shipping agent and ship handlers. Excellent ship repair facilities and marine supplies and services.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Home Port and Port of Call Dubai Terminal has made its mark both as a Port of Call and as a Home Port. 15 ships including MV Astoria, Seven Seas Voyager, Queen Elizabeth II, Hebridean Spirit, Silver Cloud, Seabourn Spirit, TS Albatross, Europa, Hanseatic, Silver Shadow, MV Deutschland, Nautica, MV Astoria, have called at the Port Rashid in 2005. Parallelly, Abou Merhi Cruises has made an investment of US $40 million investment to launch its Dubai-based Orient Queen cruise ship. Unlike most ships, which stop off in the Gulf on their way to and from other destinations, the Orient Queen cruises solely between regional ports. Through May 2006, the Orient Princess is slated to operate two round trip cruises a week, stopping off at Bahrain, Qatar and Oman. During the fall and winter season the Dubai Cruise Terminal will be the home port for the 6,916 tonne, 12 deck cruise ship, which has 336 staterooms, 56 suites, sports facilities and duty free shopping. During the spring and summer periods, Lebanon will be the homeport for the Orient Queen, which will cruise between Mediterranean destinations, including Cyprus, Greece, Istanbul and Port Saeed. 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 nonrenewable. 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Exhibit 91 : Services and facilities at the Singapore Cruise Centre SERVICES FOR INTERNATIONAL CRUISE SHIPS A. Terminal Services Airconditioned Arrival and Departure Halls Terminal-to-Ship Linkbridges Passenger Gangways Portable Baggage Conveyor Belt Forklifts Pipeline Freshwater Supply Shore-to-Ship Telephones Baggage Carousels Travolators Facilities for the Handicapped B. Passenger Services Limousine Taxis Free Baggage Trolleys Duty-Free Shopping Food and Beverage Outlets Moneychangers Banks Supermart Convenience Store Pharmacy Post Office Chinese Medical Hall Medical & Dental Clinics SERVICES FOR REGIONAL FERRIES A. Terminal Services Airconditioned Arrival and Departure Halls Overnight Mooring Freshwater Supply for Overnight Mooring Facilities for the Handicapped B. Passenger Services Limousine Taxis Free Baggage Trolleys Duty-Free Shopping Food and Beverage Outlets Moneychangers Banks Super-mart Convenience Store Pharmacy Post Office Chinese Medical Hall Medical & Dental Clinics Courier Service VIP Lounge (TMFT only) Conference Room (TMFT only) Smokers' Lounge (RFT only)
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
2.
3.
4.
5.
6.
7.
8.
9.
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. 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. 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. 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. 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. 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. 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. 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. 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 No. Description Dimension Rs. crores 40.00 8.00 7.05 13.50 6.00 14.70 2.37
1. 2. 3. 4. 5. 6. 7.
Development of Cruise Berth Renovation of existing berth Aero Bridge, telescopic Gangway, Baggage conveyor system, trucks & trolleys for baggage Terminal building construction Air-conditioning for Terminal Building Passenger Lounge, Crew Lounge, Embarkation Balcony Passenger amenities like Toilets, Water fountains, Showers, Lockers, Public address system, Escalators / Elevators, signboards, terminal map, wheel chairs, shuttle bus coaches, telephone & fax equipment Service counters for Bank services, foreign exchange services, communication areas, tourist information centre, luggage counter, postal services, Customs / Immigration / security check areas Shopping areas, restaurants, cafeteria, medical clinic, Internet caf, Laundromat, Entertainment centres, tour operators, Ship agents office Miscellaneous facilities including X-ray Machines, bunker storage facilities, garbage disposal facilities, water supply facilities, maintenance & repair facilities Levelled area for parking
300 mts. length with 10 m draft 300 mts. length with 10 m draft Facility area 15,000 sq. mts. Facility area 15,000 sq. mts. 7,500 sq. mts. -
8.
3.45
9.
2.63
10.
0.65
11.
0.25
Investment required for development of a cruise terminal Based on the above cost estimates, the following would be the investment required for development of a cruise terminal at any of the Indian Ports.
Exhibit 93 : Cost Estimates for each Cruise Terminal Cruise Terminal on new berth (Rs. Crores) Gross Investment required Contingency cost (5%) Total Investment required 90.60 4.53 95.12 Cruise Terminal on renovated berth (Rs. Crores) 58.60 2.93 61.52
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 onetime 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.
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. 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 per tourist per port US$ 89 90 109 95 77.7 Year Study Undertaken by
Miami Port (USA) Florida (USA) US Ports Ketchican Port (Alaska, USA) St John (Canada)
Business Research Economic Advisor (BREA) Florida-Caribbean Cruise Association (F-CCA) Cruise Lines International Association (CLIA) McDowell Group - Research Based Consultant Department of Economic Development, Tourism & Culture, City of St. Johns Queensland Tourism Authority PricewaterhouseCoopers Consulting (PWC)
2005 2000
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 200001 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Breakdown
USA (%)
26.0 14.3
29.5
-- Othe rs
As seen in the table above, the major spending at a base port is on accommodation, followed by food and shopping.
Exhibit 96 : Cruise Passenger Spending at Secondary Port
Breakdown
USA (%)
On the other hand, major spending at a secondary port is on sightseeing trips followed by shopping, other related activities and food. On-Land crew spending ( CREW) As per WTO estimates, about a third of the crew takes advantage of a port-call to disembark. This equates to roughly 15% of passengers, taking into account that the crew / cruise passenger ratio is between 2 and 2.5 to 1. The average crew spending at a port-of-call is nearly $ 30 per port-of-call. The key spending areas for crew are on-land restaurants, transportation, souvenir shopping etc.
S
An average spend by cruise tourist per port in India has been taken at $ 45 while that for the cruise crew member is taken at US $ 30.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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
Description
2010-2011
2030-2031
No. of Cruise tourists Spending per cruise tourist (US $) Annual spending at Indian ports by Cruise tourist (US $)
No. of Cruise crew members Spending per crew member (US $) Annual spending at Indian ports by Cruise crew members (US $) Total cruise tourist & crew spending (US $) Total cruise tourist & crew spending (Rs. million)*
* US $ 1 = Rs. 45/-
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, Indias 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 caf, 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) Financial parameters Renovated Berth 17.89% 18.24% 28 years 1.47 3.60 New Berth 14.32% 14.21% Beyond 30 years 0.96 2.34
PIRR (for 30 years) EIRR (for 30 years) Concession Period Min DSCR Avg DSCR
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 Capital Expenditure Sensitivity (renovated berth) 10% increase 20% increase Beyond 30 years 14.76% 2.50 30% increase Beyond 30 years 13.52% 2.14
Revenue Sensitivity (renovated berth) 10% decrease Concession Period (yrs) Beyond 30 years 20% decrease Beyond 30 years 30% decrease Beyond 30 years
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
17.06% 3.23
16.00% 2.87
14.83% 2.52
Subsidy requirement for concession period of 30 years for change in Capex (renovated berth)11 10% increase 20% increase 1,123.72 11.40% 18.06% 2.37 30% increase 1,821.67 15.70% 18.11% 1.98
Exhibit 101 : Sensitivity of a Cruise Terminal constructed on New Berth Capital Expenditure Sensitivity (new berth) 10% increase Concession Period (yrs) Equity IRR Average DSCR Beyond 30 years 12.65% 1.94 20% increase Beyond 30 years 11.43% 1.64 Revenue Sensitivity (new berth) 10% decrease Concession Period (yrs) Equity IRR Average DSCR Beyond 30 years 13.38% 2.11 20% decrease Beyond 30 years 12.48% 1.88 30% decrease Beyond 30 years 11.50% 1.65 30% increase Beyond 30 years 10.30% 1.40
Subsidy requirement for concession period of 30 years for change in Capex (new berth) 10% increase 20% increase 3,817.07 25.60% 19.67% 1.70 30% increase 4,551.75 26.00% 18.11% 1.44
Observations on Cruise Terminal Viability It can be clearly seen that cruise terminals have only a marginal viability and moreover this viability is extremely sensitive to critical aspects such as project cost and revenue accruals arising from tourist arrivals and tourist spend. A fluctuation in any of these factors would seriously impact on the project financial performance and viability. Projects may also see losses in the initial years. To protect the projects from such risks and also to attract the necessary private sector participation into the construction of cruise terminals, it may be necessary to extend a one time viability gap
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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Develop an approach/policy which is sensitive to the need to develop cruise terminals in environmentally sensitive areas Provide the approvals etc subject to meeting certain basic environmental standards & stipulations
Ministry of Tourism
Tourism related urban infrastructure Sector level marketing, positioning, publicity Viability gap funding for terminal development Coordination for any interstate circuit development
Department of Tourism
Hinterland/regional tourism development Human resource training capacity building Circuit development within the concerned state State level marketing efforts
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--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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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-leasetransfer (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 Arrangeme nt Build Own Operate (BOO) Description
In the BOO concession structure, privatisation is total with the onus for investment & operation along with asset rights being handed over to the private operator. Government 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). The BOOT structure varies from BOO only to the extent that the concession would be for a specified period at the end of which the land and the assets thereon would transferred back to the Government at the end of the concession period as per the terms of the concession contract. As such Governments interest in the land would be protected. The 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. In the BT structure the construction of the facility would be financed and carried out by 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. The BTO structure would differ from the BT structure in that the facility would be financed and constructed by the private sector and handed back to the Government after which the operational rights would be given either to the same private developer or to some other operator depending on the structure of the contract. This structure may be relevant in 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. The BOT is the typical and most widely used concession contract and offers the flexibility to be structured either on the basis of a lease or a license. The facility is financed, designed and built by the private operator in return for which he is given the concession to operate the project, either on the basis of a lease of land or a license to operate, for a specified 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. In the BLT structure the construction of the facility would be financed and carried out by the private sector after which the entire facility would be given on lease to the Government for the purpose of operations. This structure is used in sectors where the operations of a certain service have not been fully privatized, such as in the Railways. Hence only finance
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Contractual Arrangeme nt
Description
& 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. The BTL offers great flexibility in structuring a project such that the two phases construction and operations are bifurcated. In this structure the facility would be financed, constructed and pre-marketed by the private sector and handed back to the Government - the 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. In a JV structure, the project would be implemented by a Joint Venture Company, (JVC), in which both the private developer and the Government would have shareholding. The 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 subconcessions 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--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--vis Government objectives Elements of the PSP Structure Build / Finance Government Objectives
Operate/Manage Transfer
Overcome financial constraint on the State Government / Agency Exploit private sector design and technology capabilities Exploit private sector financing and risk taking ability Introduce efficient & high standard of operating procedures & practices Bring in private sector operational efficiencies Assets being of a strategic nature, to revert to government
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Joint Venture
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 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 developers 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 governments 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 authoritys objective of having created a bankable and viable PSP structure. Viability gap funding It is envisaged that traditional revenue sources may not support the entire project investment; hence it is pertinent that the project has to be appropriately phased and packaged to attract
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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. Contribution by project stakeholders To enhance viability of project and attract private entrepreneurs, the various beneficiaries from the development involved from the design stage could be attracted to contribute to the projects capital cost. Such participation would enable easy tie up of funds for the private partner making the project bankable and viable. Extension of the Concession / Lease period Generally port projects undertaken through private sector participation involve a 30-year concession period, during which the private operator is able to recover his investments, with adequate returns. Investments made in developing infrastructure for the cruise industry require a longer time period for adequate returns to be generated due to two key reasons, a) The off-season period for cruise movement during the monsoons and b) the small base of Indias cruise industry. Hence, the period of 30 years is expected to be short for generating requisite returns on the investment to be made by the operators. To make the project viable and feasible independently, the concession / lease period may be suitably increased.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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. Large entrepreneurs in Tourism/other businesses Large entrepreneurs also interested in the tourism business would also like to consider investment in a cruise terminal especially close to their tourism projects. For example, the Muthoot Group, which is today one of the largest business groups in South India with interests in varied sectors including hospitality with many fine resorts and hotels in Kerala, wold be keen to look at investment in a cruise terminal in any of the southern states, especially Kerala. Similarly Reliance Group, which is trying to diversify its businesses, may actively look at a cruise terminal in Mumbai or Gujarat. 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 Other private stakeholders Smaller stakeholders like tour operators, travels agents, shipping services agent etc would also be interested in participating in cruise terminal development, however, they may not have the finance to take it up independently. Accordingly, their participation must be explored in a consortium model where they tie up with the larger player in the investment while gaining special privileges in the development. Other funding sources In addition to private sector participation the following additional funding options may also be considered: Levy of Fee: The Government may consider the levy of special fee for Cruise Terminal Development or alternately set aside a portion of an identified fee collection for the purposes of cruise terminal development. This approach has been successfully followed in developing airports and may be considered. Institutional Funding: Indian Financial Institutions like HUDCO, IFC etc. extend structured financial assistance for infrastructure development especially in the areas of urban development, including the development of cruise terminals. The Cochin airport was funded by HUDCO against securitization of the assured revenue resources. Such structured funding options may also be explored.
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4.1.4 Need to position Indian Cruises for the youth and for families
World over, traditionally, cruises have been thought of as meant only for the newly weds or nearly dead with cruises being filled principally with retired or honeymooning travellers. This profile is fast changing and India would need to take advantage of this trend to position Indian cruises for the youth and for families both of which constitute an important component of Indian tourism
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4.2.1 Itineraries
Itineraries refer to the detailed programme of a cruise liner comprising of the various ports of call the cruise liner will be touching and the destinations that the cruise travellers would be able to access enroute. Within the overall region of operations, itineraries would largely be decided based on the nature of the particular cruise, its duration and pricing. A short duration cruise would plan its itinerary so as to link the closely located ports while the longer duration cruises would have greater flexibility in determining the ports of choice. World over, the demand for short duration cruises is on the rise. Studies indicate that the Indian market is likely to follow the same trend. Star Cruise, the leading cruise line in Asia-Pacific, has itineraries for one night to five nights, which are very popular. Taking this as a benchmark, the Indian cruise industry should work on short duration itineraries. In addition short duration cruises would be very important from the point of view of making the cruise available and affordable to a larger population. In fixing the itineraries, the cruise circuit could be an exclusively Indian circuit covering only the Indian ports or a combination of Indian and international ports. This would be largely dictated by the target segment.
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Exhibit 105 : Map showing Cruise Destinations in the South East Asia
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
A theme designed on wellness of mind and body with such centres as destinations is bound to attract a sizeable international audience as also the crme de la crme of the Indian society since spirituality and wellness has become the in thing these days.
Porbander Mumbai Goa Cochin Tuticorin Porbander D 315 502 853 1144 T 16 25 43 57 -
D-Distance in Nautical miles, T-Time in hours Goa Cochin Tuticorin D 223 376 642 502 T 11 19 32 25 D 580 376 236 853 T 29 19 12 43 D 816 642 236 1144 T 41 32 12 57
As an example, a six-day itinerary Mumbai-Goa-Cochin-Tuticorin based on the Discover India theme could thus be as follows:
Exhibit 109 : Discover India Circuit Itinerary
Day First First Second Third Fourth Fifth Sixth Goa Goa
Destination Mumbai -
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.
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 hunters 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 Ingos 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 handwoven 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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, Humayuns 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.
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.
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.
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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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Exhibit 113 : Heritage Cruise Day First Second Third Fourth Fifth Sixth Seventh Eighth Ninth Tenth Eleventh Twelfth Thirteenth Fourteenth Fifteenth Sixteenth Chennai Chennai Penang Penang Phuket Phuket Mumbai Destination Mumbai 1.00 a.m 6.00 a.m 10.00 a.m 10.00 a.m Arrival 11.00 a.m 10.00 p.m 10.00 p.m Departure 12.00 p.m
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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. The primary survey results indicate that 61% of the domestic tourists and 86% of the foreign tourist consider that river cruises offer high potential. 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 Indias 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 Indias 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 Indias 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
magazines and TV channels. Special brochures should be sent out to identified corporate organizations with discount offers for bulk bookings.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 countrys 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
Today there are around 315 vessels cruising around the world. Taking the routes into consideration, there are around 150 ships which can call at India ports, during the off-season in their typical routes. Examples of such cruises would be vessels plying from
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
o US West coast to Hong Kong o Singapore to SE Asia & Gulf/Mediterranean o South Africa to US East Coast Indias strategy would lie in pulling these cruise vessels to our shores by creating the necessary attractions, positioning, linkages and affiliations.
Similarly, India can also try to make the existing cruise operators position one or two of their cruise ships in India, using the Indian Ports as home ports. For example, Star Cruises starting operations in India with Mumbai Port as the Home Port is an example of the latter. Starting operations on the 25th of September 2005, Star Cruises redeployed Super Libra an 18 year old ship from Norwegian Cruise Lines having 1500 passenger capacity. Today the following three cruise itineraries are offered:
o Four night cruise covering Mumbai-Lakshadweep-Goa-Mumbai o Two night cruise covering Mumbai-Goa-Mumbai o Evening cruise covering Mumbai-nowhere (to the open sea) The example of Star Cruise proves that rather than bringing new cruise ships, the objective would be to attract existing cruise ships, cruise operators and cruise lines to adopt India either as a turnaround port or as a home port. Smaller Cruises linking domestic destinations may be considered While acquiring large cruise ships would be unviable, India could successfully consider a model of smaller but quality cruises catering to small and niche segments. These could ply along the Indian coast enabling international and domestic tourists to explore Indian destinations along the coast line. In a special way, states that do not fall in the main cruise route, such as Gujarat & Karnataka in the West Coast and Orissa, Vishakapatnam, West Bengal in the east coast would present ample opportunities to be connected through varied and viable cruises providing access to tourist via the sea route. Such small scale domestic cruises could link destinations not falling in the main cruise route and cover trips such as: o Calcutta and/or Vishakapatnam Andamans o Pondicherry Andamans o Goa Mangalore o Goa Lakshadeep o Mangalore Goa - Dwarka This is only indicative and many itineraries may be drawn up. The important fact is that this would throw up each of these states to a new set of opportunities in terms of access, linkage, destinations that may be showcased and circuits that may be created.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
effluents generated by the industry. The cruise industrys commitment to protecting the environment is demonstrated by the comprehensive spectrum of waste management technologies and procedures employed on its vessels.
Drawing up plans for development of cruise tourism, ecotourism, rural tourism in environmentally sensitive areas Drawing up guidelines for the reference of other agencies which could be used in the implementation of all projects related to cruise tourism Drawing up a system of quality certifications providing the minimum compliances for basic certification and right to operate and further higher levels of compliances to obtain quality certifications
Sector of Levy
State/ Centre
Issues
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Tax Particulars
Issues similar in nature Ranges from NIL in Orissa to 20% in Assam, Gujarat & Tamil Nadu12 Levied on published tariff in certain states. Starts at very low threshold limits in certain states. Incidence of double taxation since Expenditure tax is similar in nature Levied @ 10.2% Incidence of double taxation in cases wherein F&B related taxes are charged in conjunction with service tax Levied @ 10.2% Comprises of Road tax, Passenger tax and Permit Charges Very high taxes imposed by certain states Method of collection causes harassment to tourists Charges in UP, Rajasthan, Madhya Pradesh in North India and Kerala, Karnataka and Tamil Nadu in South India are high Different rates for different categories viz. Food, Soft drinks, Local liquor, Foreign Liquor, Carbonated Beverages etc Ranges from Nil in Arunachal Pradesh to 60% on Imported Liquor in Karnataka Incidence of Double taxation in many cases Same as above FTT constitutes upto 3% of the ticket price (international air travel) ATF constitutes 30% of an airlines operating cost Effective duty comes to around 39.2% which increases the cost of domestic air travel Very High
Luxury Tax
Hotels
Centre
Transport Transport
Centre Centre
State
Liquor Tax Foreign Travel Tax (FTT) Second Tier Taxes Levies on ATF
State Centre
Transport
Centre
Customs Duty on Imported Liquor Other Charges Passenger Service Fee (PSF)
Centre
Centre
Miscellaneo us
ASI
Miscellaneo us
State
PSF is levied at Rs. 200 in the nature of a fee from which Rs. 130 accrues to Bureau of Civil Aviation Security and Rs. 70 accrues to the airport operator(AAI) The dollar charges for certain monuments are very high Often a cause of concern to foreign tourists on account of discrimination Issues of dual pricing High charges in some instances
Source: FHRAI
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Tax Particulars Property Tax-Hotels Stamp Duties on land purchased for hotels Bar License Fee/Permit Fee paid by Hotels Corporate taxes paid by Hotels
Issues
A comparative statement of applicable tax rates in Indias competing destinations is presented in the Exhibits below and, as can be inferred, Indias 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 Head Accommodation Meals F&B Car Rentals
35% 30% 25% 20% 15% 10% 5% 0% Singapore Malaysia Thailand Hong Kong Meals India (High) F&B
Singapore 4% 4% 4% 3%
Malaysia 5% 5% 5% 5%
Thailand 7% 7% 7% 7%
Hong Kong 3% 0% 0% 0%
Car Rentals
Accom m odation
Corporate Taxation on Tourism The following exhibit highlights that in comparison to competing countries, the corporate tax level in India is considerably higher. A high corporate tax level, ceteris paribus, would dampen the interest of investors into the sector which may in the long run result in lower private investments coming into sector. Although the examination of corporate tax, which is applicable to all industries in India, is outside the scope of the study, recommendations on measures to reduce the effective corporate tax rates through recommendations on tax exemptions and other incentives has been attempted in the report.
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Hongkong
Philippines
Indonesia
Thailand
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 subproducts 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
2 0 .0 0 % 18 .0 0 % 16 .0 0 % 14 .0 0 % 12 .0 0 % 10 .0 0 % 8 .0 0 % 6 .0 0 % 4 .0 0 % 2 .0 0 % 0 .0 0 %
K u a la L u m p u r Bangk ok Ho n g K o n g S in g a p o re N e w De lh i
A irp o rt re la te d
A c c o m m o d a tio n re la te d
F ood & B e v e ra g e re la te d
C a r re n ta ls re la te d
T o ta l ta x e s
M um bai
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 Kuala Lumpur Bangkok Hong Kong Singapore New Delhi Airport related 1.70% 1.26% 0.72% 0.94% 0.94% Accommodation related 4.76% 6.54% 2.91% 3.85% 16.67% Food & Beverage related 4.76% 6.54% 0.00% 3.85% 6.54% Car rentals related 4.76% 6.54% 0.00% 4.38% 4.76% Total Taxes 6.46% 7.80% 2.18% 4.98% 13.18% Rank 7 8 2 3 19
13 14
Source: WTTC Tax Barometer All tax percentages are percentages of the total item cost.
Seychelles
Taiwan
Japan
India
Singapore
Myanmar
Malaysia
Vietnam
China
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Rank 21 1 52
15
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--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.
The sample contains 52 cities with 1 being most competitive and 52 being least competitive. Developed by the World Travel Tourism Tax Policy Centre
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 Organizations (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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Authority
Customs
Immigration
Provision of pilot for berthing / sailing off Provision of garbage disposal Clearance of ship for sailing Passenger manifest prior to berthing Clearance of passengers baggage Clearance of ships requirement namely provisions, fuels, water supply Collection of light house dues Clearance of ship for sailing Passenger manifest prior to berthing Checking & stamping of Passport & Visa Issue of short shore passes & longer transit passes Immigration clearance of embarking tourists Passenger manifest prior to berthing Collecting declaration of health with regards to contagious diseases, SARS & yellow fever Health clearance of tourists & crew. Exercise Port State Control over the ship Ensure compliance of Cabotage Law on Ships
Laws & Regulations governing the Cruise Industry Exhibit 120 details the important laws governing / regulating the industry with respect to the cruise industry:
Exhibit 120 : Laws & regulations governing the cruise industry Authority Important laws governing / regulating the Industry
Port authorities
Customs
Major Port Trusts Act, 1963 Indian Ports Act, 1908 Docks bye-laws Docks Scale of Rates Ports Scale of Rates Customs Act, 1962 Light House Act Foreign Exchange Management Act, 1999 Foreigners Act, 1946 & rules framed thereunder Passport (Entry into India) Rules, 1950 Indian Port Health Rules, 1955 under Indian Ports Act, 1908 Merchant Shipping Act, 1958
Flow Chart of Activities related to cruise shipping Exhibit 121 and Exhibit 122 show the general set of activities related to cruise industry undertaken at Indian Ports:
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Advance requisition for berthing at the port Submitted to port authorities by agent of cruise line. Provides details of Embarking & Disembarking tourists, transit tourists, day tourists & crew at port-of-call. Filed with Customs, Immigration & Port Health Officials by agent of cruise line. Payment of berth hire charges, port dues, Pilotage & lighthouse dues Agent makes the payment to Port authority & Customs
Declaration as per W HO norms is made with respect to cruise vessel coming from yellow fever zone etc. Agent or M aster submits declaration to Port Health Officials As cruise vessel enters the port area, the Pilot boards the vessel at channel entrance and ensures safe berthing with help of towing tugs Request for services of Pilot are made by agent to Port Authority Involves health clearance for tourists by checking their vaccination certificates for yellow fever, communicable diseases etc. Port Health Officer boards the ship at channel entrance to save on time
Health Clearance
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Checking of passport & visa documents of disembarking tourists Tourists have to complete the formalities personally with Immigration officials. Tourists disembarking for sight seeing / day trip at a port require Shore Passes Tourists disembarking for longer tours intending to rejoin at another Indian Port require Transit Passes Immigration Official issue passes to single tourists or as a group on fulfillment of conditions Baggage clearance of disembarking tourists & declaration of bond stores Customs formalities may be completed at port or enroute during ships voyage from previous port of call.
After tourists receive the Shore Pass / Transit Pass; the ships agents, tour operators, taxi & coach service providers act to transport the tourists for day trips / to airport / to hotel etc. The DG Shipping Office undertakes check on cruise vessels as with other vessels calling at the port to ensure that the vessel is not in contravention of any international law Ship chandlers & provision suppliers obtain clearance and meet requirements of vessel. Clearance is given by customs official for supply of provisions Cruise vessels may collect large amount of garbage during a trip. Ports may cater to the requirement of vessels as a value added service.
Disposal of garbage
Continued
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Continued
Cruise tourists embarking into the ship from the port are required to obtain Customs clearance for their baggage
Embarking cruise tourists present their passports for immigration clearance prior to departure from country
Cruise tourists, who have taken day trips at the port are required to obtain immigration clearance prior to boarding vessel
Cruise tourists are required to undergo security checks prior to boarding to ensure overall security of cruise passengers. Local Police / Security agency provides the clearance
After all cruise tourists & crew have boarded the vessel, clearance from customs and port authority is required before the ship can sail.
The Pilot finally boards the cruise vessel to escort it safely to deep waters at channel entrance
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Formats / Applications related to Cruise operations Exhibit 123 lists the formats and applications that are required in relation to cruise tourism industry.
Exhibit 123 : Applications related to Cruise Operations Authority Concerned Action By Formats / Applications
Port
Ship agent
Customs
Ship Agent
Immigration
Berthing application Application for payment of Port charges Application for Pilotage services Application for sailing Passenger manifest filing Application for payment of Light House charges Bond stores declaration Currency declaration form under FEMA, 1999 Passenger manifest filing Govt. of India Disembarkation card - Arrival Shore pass for passengers Temporary Landing Permit Government of India Embarkation Card - Departure Passenger manifest filing Maritime declaration of health Port call list Yellow fever Vaccination List
Measures to simplify procedures and taxes so as to reduce harassment & delays - Customs No changes are necessary in the existing acts, rules and regulations governing customs functions. However, some changes in procedures were considered as under: The clearance of tourist and baggage at ports needs to be further streamlined with a view to minimize delays. Adequate number of officers should be posted to enable speedy clearance of tourists embarking / disembarking X-ray machines should be provided to facilitate quicker clearance Necessary executive orders should be issued permitting in-transit bond for transfer of baggage of cruise tourists between airports and seaports Although, a common form exists for customs, immigration and other purposes, the same is not used frequently. The usage of the single form that covers both immigration and customs clearance details should be encouraged. 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. Disembarking tourists may be issued day shore passes which are unique from TLP 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. 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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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:
Exhibit 124 : Stakeholder Vs Training Required
TRAINING STAKEHOLDERS Awareness of the Cruise Industry Soft Skill Management Skills Public Relation Case Study Training F&B Training First Aid Training
Computer
Security
Hospitality
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 STAKEHOLDERS Awareness of the Cruise Industry Soft Skill Management Skills Public Relation Case Study Training F&B Training First Aid Training
Computer
Security
Hospitality
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 personnels. 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.
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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: Indias 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. Indias long coast line and strong port positioning imparts a natural advantage to the country to attract international cruise lines. Indias 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. Indias strong domestic tourism sector would enable the country to achieve a strong domestic cruise sector that could complement the growth and support viability. Indias 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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
i. Create dedicated cruise terminals at Chennai, Mangalore and Tuticorin ii. Explore potential of other ports like Porbandar & Kandla in the West Coast: and Vishakapatnam, Calcutta & Paradeep in the East Coast Along with developing the identified cruise ports, developing exotic destinations would greatly enhance the value of Indian Cruises and bring in the exotic element which would be imperative to position the Indian Cruise sector globally. Market interactions reveal that Cruise operators are keen on including these destinations as ports of call however in absence of basic infrastructure it is impossible to do so. Similarly, to realise the cruise potential that exists for India over the next 26 year period, it would be necessary to identify and develop the other Indian Ports having cruise tourism potential including the Porbandar & Kandla Port in Gujarat, the Vishakapatnam Port in Andhra Pradesh, the Calcutta Port, the Paradeep Port in Orissa. Each of these states has enormous tourism potential that can be effectively tapped for cruise tourism if accessibility and availability can be ensured through creation of necessary port based infrastructure.
Recommendations to reinforce port development The following would constitute the key recommendations towards developing ports infrastructure: o
Cruise Terminals should be an integral part of Port Master Plans The concerned Ports authorities should prepare detailed master plans for the development of these ports, which should include the strategy for development through private sector participation. In the development of the cruise terminals the Tourism department may support Port Authorities by making available the Central Financial Assistance for large revenue generating projects and other assistance available for Development of Tourism Circuits. To be globally competitive and have a sound positioning in the worldwide cruise tourism market, India should plan for dedicated cruise terminals and berths. This would represent a long term goal but would need to figure in the master plans of the individual ports. Dedicated terminals would need to address security concerns and facilitation Cruise Terminals located within Cargo Port area create security issues. In creating dedicated terminals, this aspect has to be addressed and resolved. Also hospitality related aspects to enable the necessary facilitation services to the cruise tourists would have to be built into the cruise terminal development plans. Terminal Plans would need to be developed in consultation with key players In finalizing the cruise terminal development plan, inputs from cruise lines, tour agents, developers would ensure that the concerns of the key stakeholders are adequately addressed. This would ensure the long term success of the terminal. Initiate Feasibility Studies Feasibility studies for individual cruise terminals would need to take into account the port specific developmental aspects duly incorporating capital cost towards dredging based on geographical features of the concerned port, land acquisition costs etc. Such feasibility studies would cover the technical and financial aspects of the terminal development and identify viability and sustainability aspects of the development. Structure bankable PPP Options Globally the development of cruise tourism has been achieved purely in the private sector with the Government playing a supportive and strategic role. It would be important for India to follow this precedent by creating the necessary enabling environment and giving the private sector the space it needs to grow.
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Government would need to clearly develop bankable project structures that achieves balance risk sharing and addresses the key concerns of the private developer and the investor along with the Government. Based on the viability study undertaken and where necessary, Government would need to explore support private investment into the project through financial incentives and viability gap funding schemes. All incentives available for infrastructure projects should be made available for cruise terminals.
Long term objectives o Make cruise terminals into destinations by themselves Cruise terminals represent the entry point of the cruise tourists into various tourism locations. Besides offering the facilities and amenities that would be essentially from the point of view of tourist facilitation, it would be an important strategy to make the cruise terminals themselves into mini tourism destinations much like a tourist village showcasing Indias 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, childrens play area etc. In addition to being an effective promotional medium of the countrys brand it would also increase the commercial and business potential of the terminal making it more amenable for private sector participation. Similarly, taking into account that the cruise season (in India) is from September to March each year, the Port authorities can use integrated cruise terminal facilities for other usage such as convention centers, symposiums, exhibitions etc o Focus on home porting in the long term Significant benefits can be derived from home porting. These benefits include pre-and post-cruise transport and accommodation, increased visitor expenditure, and stores for cruise ships. India should, as a long-term objective, emphasize in developing the Indian cruise ports as home ports rather than only ports of call. Government should continue to address the infrastructure requirement issues that would support home porting. 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
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
- 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- MumbaiPorbander o Shoppers 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
Recommendations to reinforce cruise design The following would constitute the key recommendations towards developing ports infrastructure: o
Select circuits related to port development should be responsibility of Ministry of Tourism The Ministry of Tourism, which best understands the tourism resources and the tourism development strategy, should be made the agency responsible for select tourism circuits which may be aligned to and developed concurrently with the cruise port development. For this purpose, the Ministry should earmark a dedicated fund towards o Hinterland tourism development o Tourism related Infrastructure and linkages o Viability gap funding This would ensure that the tourism resources are effectively developed, positioned and showcased as part of the cruise circuits. Quick connectivity to other destinations/ attractions/ tourism locations to increase choices An important strategy in cruise tourism development would lie in ensuring easy, timely and quick access to heritage locations, monuments, natural features, tourism destinations that lie in proximity to the cruise ports. This would ensure that tourists, especially international tourists, do not miss the opportunity to see the prominent locations that may lie. Enabling cruise tourists who arrive at the Mumbai port the necessary air connectivity to visit the Taj, enabling those arriving at the Mangalore/Cochin Port to see Hampi, and linking Goa port to Somnath/Dwarka are some ideas that could be explored. Create port wise & region wise destinations To ensure success the development of Cruise tourism would have to be achieved in close coordination with the development of the larger tourism sector itself. Needless to say these complement each other and the synergistic benefits have to be explored on a continuous basis. It would therefore be imperative to closely link state-wise tourism development master-plans with cruise development plans, marketing and promotion. It is well known that in Cruise Tourism it is the destinations rather than the ports, which attract tourists and liners. It would therefore be imperative to create attractive, varied and exotic destinations at every state that can be linked to the cruise ports and highlighted as cruise offerings. While this would be essential to position the ports as effective ports of call it would be equally important for creating a drive in market for the home ports where domestic and foreign tourists
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visiting the destinations would build the cruise into their itinerary and suitable packages may be offered.
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.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
Recommendations to reinforce positioning The following would constitute the key recommendations towards reinforcing the marketing and positioning strategy: o
Develop an effective media campaign The positioning and promotion efforts would have to be supported through a proactive media plan which would cover both domestic as well an international markets. The Media Plan will cover audio-visual presentations and films, out-door advertising, organizing events & exhibitions, preparing attractive brochures, leaflets, posters, hand-outs, TV inserts etc. The department of tourism would need to identify the media requirements and provide for a suitable yearly budget for this activity. While it would be desirable to adopt multi-pronged marketing strategies, it would be equally vital to draw up focused marketing strategies to address each of the segments targeted taking into account the unique characteristics of the segment targeted. It would also be useful to consider appointing a specialized marketing and brand promotion agency to draw up the marketing strategies, the media plan, the brand promotion approach etc. in a phased manner. This would be important because this involves extensive planning and careful strategizing and professional agencies would more effectively market the State in the long run. This agency would also take care of advertising and promotion, events and festivals, all audiovisual and publicity material, advising the state in participating in useful international festivals and forums etc. Participate and create visibility in International forums Effective promotion would demand representation in international forums including 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 would also be relevant. The objective would be to create visibility and reinforce the brand name overseas. Establish dialogue with all the four key players Government should immediately start a dialogue with the big four players - Carnival, Royal Caribbean, P&O Princess & Star Cruises Group - who control the cruise tourism market. Creating a brand with these operators would go a long way in achieving the marketing objectives. The inputs received from them in terms of terminal, product and circuit development would also be relevant to ensure that the development happens on the right lines. Explore synergies with Dubai Cruise Tourism Dubai is a relatively new entrant into the Cruise market, very close to the Indian Sub continent. The cruise ports identified for development in India in the first phase Mumbai, Cochin and Goa are all on the west coast of the country, close to Dubai. India should explore the synergies between the two countries wherein both countries can arrive at cooperative measures to jointly promote cruise tourism. The Dubai Department of Tourism and Commerce Marketing (DTCM) has offices in India. Both countries can mutually cooperate to explore & exploit its proximity so that all cruise ships that touch the west coast of India can visit Dubai and vice versa.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
To enhance the marketability of India, a sustained objective should be to create a larger IndoAsian 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 Asian ports and regions already form part of the South-East Asia and Asia Pacific itinerary. There is merit in exploring the possibility of co-branding these segments of the journey as an overall Asian experience, gaining promotion leverage from each port and developing a consistent quality of activities and services offered. The benefits of regional partnerships would include - 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. Such an experience will have considerable positive branding implications.
Simplify procedures to reduce harassment at Ports The port authorities should work towards simplifying the procedures covering immigrations, customs, procedures, travel, linkages so as to make the port visit a pleasurable experience remembering that swagat and suvidha form important policy aspects of tourism development in the country. The primary survey undertaken clearly indicates that fast immigration & transit through the port is the topmost priority for both foreign and domestic tourists The regular port procedures would need to be reviewed in the context of cruise tourist as these would be in the nature of harassment for a holidaying passenger. Some examples of such simplification would be: - 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 Similarly, effective bilateral relationship with other cruise destinations (especially in the region) would be important to make travel visa/clearances quick and efficient. For example, Singapore has understanding with Thailand whereby Thailand automatically endorses the Singapore visa when the vessel arrives. Such arrangements need to be actively considered and pursued. Develop a tourism approach (6S) at ports The Ministry of Tourism has highlighted the 6 critical aspects of tourism development as part of its national tourism policy. These dimensions - Swagat, Soochna, Suvidha, Suraksha, Sahyog,
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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.
Structure focused programmes aimed at awareness building and skill development The training programmes would have to be carefully structured and focused on all aspects such as: - Training for immigration and customs officials - Communication programmes for all - General awareness building and sensitization campaigns - Workshops to police, taxi drivers, security personnel Contact Foreign Universities conducting training for approach & structure Certain select foreign universities like Southern New Hampshire University and the Bremerhaven University, are conducting such training programmes. These may be approached for getting the necessary structure, approach and methodology. Consider accreditation as a tool to improve quality and surveillance
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Certifications to validate quality and service standards will be an effective tool to improve quality standards while increasing comfort levels with customers. Kerala has followed this strategy in certifying its ayurvedic resorts, house boats, restaurants and eating places etc. This strategy would importantly demonstrate the commitment of the government to quality as well as to the needs of the cruise passengers.
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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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 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
Short 1 - 5 years
Medium 6 - 10 years
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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ANNEXURE I: PORTS
Tourist Centre
Information :
Counter for imparting information or providing assistance to cruise tourists on their arrival to the port. The counter is generally manned by the State / Central tourism officials City sightseeing and excursion trips to tourist centres around ports form an integral part of the cruising experience. Provisioning of facility for organizing these day trips through authorized tour operators Coaches or buses dedicated to the cruise terminal. Used by cruise tourists for specific point transfers from port or for excursions Self service trolleys, similar to those available at airports, for carting heavy luggage from terminal building to taxi / shuttle buses A map giving the location details of different facilities within & outside the terminal building within the port area Resting & comfort area specifically dedicated for crew members of the cruise Shop selling antique and local art & handicraft items Parking for sail boats & small motor boats for leisure travel within the harbour area Self-service laundry facility Cruise tourists prefer to send letters, gifts and specifically picture postcards (depicting landmark sights of the port / city) to friends & family Area for leisure and fun activity provisioned for cruise tourists during their stay within the port
Stairway used between cruise ship and berth for embarkation & disembarkation
Excursion facility / : Tour operator Coach transfer Shuttle bus service Trolleys for baggage / : :
Terminal Map / Sign : Board Crew Lounge Artifact Shop & : Curio :
Bridge extending between the terminal building and the cruise ship to enable cruise tourists to embark & disembark conveniently Automatic conveyor belt within the terminal for luggage movement from clearance counter to collection by tourists after disembarkation, similar to airports. Public viewing gallery for seeing off embarking passenger or receiving disembarking passenger Activity of provisioning food, water & other supplies on commercial terms for a ship during its stay at a port
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: :
Activity of provisioning fuel & other related supplies on commercial terms for a ship during its stay at a port Pilots are generally called upon, to guide ships from their entry in a harbour to the berth. They also provide assistance to the ship when it is exiting the port. Activity of providing directional assistance to the ship through tug boats, when it is in the ports harbour area
Wire ropes or chains used to hold the ship in place besides the
: :
berth. Command Centre for coordinating with ship from their arrival to departure and stay within the harbour area at the port
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ANNEXURE II:
Details of Cruise Ship Costs presented below have been taken from Cruise2.com web site
Date Due 2002 3/2002 3/2002 4/2002 4/2002 4/2002 4/2002 6/2002 7/2002 7/2002 7/2002 10/2002 10/2002 11/2002 11/2002 12/2002 2002 2002 2002 2002 2002 2002 2002 Star Princess AidaVita European Stars Finnmaken Trollfjord
Ship
Cruise Line
"GRT"
Passengers
Cost
Princess Aida Cruises First European/Festival Norwegian Coastal Norwegian Coastal ResidenSea Celebrity RCI Carnival Canyon Ranch Carnival Princess RCI HAL NCL Royal Olympic American American West NCL Delta Queen Coastal First European/Festival Costa
109,000 42,000 58,600 15,000 15,000 43,000 91,000 90,090 86,000 25,000 110,000 88,000 142,000 85,000 91,000 25,000 1,200 N/A 91,000 1,580 58,600 53.873
2,600 1,300 1,566 643 674 176 1,950 2,100 2,124 320 2,974 1,950 3,114 1,848 2,300 836 49 224 2,300 224 1,500 1,494
425 Mil 350 Mil 278 Mil N/A N/A 266 Mil 350 Mil 400 Mil 375 Mil N/A 500 Mil 330 Mil 600 Mil 400 Mil 380 Mil 175 Mil N/A N/A 380 Mil 42 Mil 285 Mil N/A
World of ResidenSea Constellation Brilliance of the Seas Carnival Legend Quest 1 Carnival Conquest Coral Princess Navigator of the Seas Zuiderdam Norwegian Dawn Olympic Explorer American Glory Empress of the North Libra II Cape Cod Light Mistra 3 CostaEuropa (ex-Westerdam)
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2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2004 2004 N/A (option) NCL 75,000 2,000 300 Mil N/A (option) Queen of the Americas Island Princess Carnival Glory Silver Shadow na (option) Mariner of the Seas CostaMediterranea Serenade of the Seas 7 Seas Voyager Crystal Serenity AidaAura MSC Symphony Diamond Princess Mistral Class 4 Oosterdam Superstar Sagittarius II The World 2 Queen Mary 2 Empress of the North Quest 1 CostaFortuna Trollfjord N/A Carnival American Classic Princess Carnival Silversea NCL RCI Costa RCI Radisson Crystal Aida Mediterranean Shipping Princess First European/Festival HAL Star ResidenSea Cunard American West Canyon Ranch Costa Norwegian Coastal HAL 80,000 72,000 88,000 110,000 25,000 75,000 142,000 86,000 90,090 46,000 68,000 42,000 60,000 113,000 80,000 85,000 112,000 50,000 150,000 N/A 25,000 105,000 15,000 85,000 2,000 1,900 1,950 2,976 390 2,000 3,114 2,114 2,100 720 1,080 1,270 1,600 2,600 2,000 1,848 3,000 396 2,800 N/A 320 2,720 674 1,848 400 Mil 440 Mil 400 Mil 500 Mil 200 Mil 300 Mil 600 Mil 350 Mil 400 Mil 250 Mil 300 Mil 250 Mil 250 Mil 500 Mil 240 Mil 400 Mil 500 Mil 280 Mil 780 Mil N/A N/A 400 Mil 105 Mil 400 Mil
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2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2005 2005 2005 2005 2005 2005 2005 Vista Class 5 N/A Queen Victoria Carnival Liberty N/A Project America 2 HAL RCI Cunard Carnival First European United States Lines 85,000 88,000 84,000 110,000 80,000 72,000 1,848 2,000 1,968 2,976 2,000 1,900 400 Mil 400 Mil 400 Mil 450 Mil 350 Mil 459 Mil Westerdam N/A Carnival Valor Sapphire Princess Silver Whisper (Grand Class) Jewel of the Seas Crown Princess Caribbean Princess (Project America) Empress of the Pacific CostaMagica MSC Opera Carnival Miracle N/A Quest 2 Project America 1 Mistral Class 5 N/A Superstar Capricorn HAL SeaAmerica Carnival Princess Silversea P&O RCI Princess Princess American Classic American West Costa Mediterranean Shipping Carnival RCI Canyon Ranch U.S. Lines First European/Festival Norwegian Coastal Star 85,700 N/A 110,000 113,000 25,000 110,000 90,090 110,000 116,000 72,000 N/A 105,000 60,000 88,500 137,300 25,000 72,000 80,000 15,000 112,000 1,848 1,012 2,976 2,670 390 2,600 2,100 2,600 3,100 1,900 244 2,720 1,600 2,124 3,114 320 1,900 2,000 674 3,000 400 Mil 300 Mil 500 Mil 500 Mil 200 Mil 500 Mil 400 Mil 450 Mil 500 Mil 440 Mil N/A 400 Mil N/A 375 Mil 600 Mil 200 Mil 440 Mil 240 Mil 105 Mil 500 Mil
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2005 2005 2005 2005 2005 2005 2006 2006 2006 2006 2006 2006 2007 2007 2007 Option Option RCI Radisson 160,000 49,000 3,600 700 720 Mil 250 Mil Ultra Voyager 1 Noordam Carib Princess 2 N/A N/A RCI HAL Princess Costa NCL 160,000 84,000 116,000 112,000 93,000 3,600 1,800 3,100 3,000 2,400 720 Mil 400 Mil 500 Mil 540 Mil 395 Mil N/A N/A 2 N/A N/A Sagittarius II N/A Canyon Ranch Canyon Ranch Celebrity Norwegian Coastal Star NCL 25,000 25,000 85,000 N/A 112,000 93,000 320 320 1,950 N/A 3,000 2,400 200 Mil 200 Mil 350 Mil N/A 500 Mil 395 Mil
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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
ANNEXURE III:
Development of Inland Water Transport : Address by The Union Minister of Shipping 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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 upgrade 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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CRUISE TOURISM POTENTIAL & STRATEGY STUDY Ministry of Tourism, Government of India
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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