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CRUISE LINER INDUSTRY

The Cruise Industry has become so diversified and complex, that finding a simplistic definition for it is

difficult. However studies and guides of the industry by the Cruise Lines International Association (1992,

2006), Hockmann (1993) and Ward (1996) define a cruise on sea as a trip on a ship which has been

purposefully styled as a floating leisure environment

The Cruise Tourism industry has become one of the most exciting facets of the global Tourism Sector with

total revenues of over $ 35 billion and accounting for about 20 million passengers in 2012. It is expected

to reach a figure of $ 60 billion by 2016, according to industry sources.

The Cruise industry combines the traditional offerings of travel and hospitality in one product by offering

luxury accommodation and entertainment as well as the opportunity to explore new destinations.

Cruise ships range is size from small, private yachts to 220,000 ton behemoths which are travelling resorts

capable of accommodating several thousand passengers at a time. The duration of cruises also range

from a minimum of typically two days to months.

INTRODUCTION

Cruising is a unique tourism product, a blend of the 5A’s: attractions, activities,

access, accommodation, amenities. The words "luxury" and "pampering" are found in all cruise

brochures, and every cruise line proudly highlights these five aspects to market its product.

Cruising is now well established as one of the most service-intensive sectors in the world, with

ever more incredible state-of-the-art vessels being built each year. ‘Pampered in luxury"

accurately describes the cruise experience.

Cruise ships operate mostly on routes that return passengers to their originating port. In

contrast, dedicated transport oriented ocean liners do "line voyages" and typically transport

passengers from one point to another, rather than on round trips. Some liners also engage in

longer trips which may not lead back to the same port for many months.

WHAT IS CRUISING ?

The cruise industry is primarily concentrated in and around North America with the Caribbean

being the most popular destination. Americans account for more than 70% of cruise travellers

worldwide. Other popular circuits include Alaska, North Europe, the Mediterranean and the Trans-

Atlantic routes. An increasing number of cruises are going round the world or on long cruises

spanning oceans. Cruise ports have sprung up all over the world.

Generally, these are major trade ports which happen to be located in tourist hot-spots. Miami has

become the defacto capital of world cruise tourism. Caribbean ports, San Diego, Stockholm,

Marseille, Barcelona, Venice, Canaveral, Los Angeles, Singapore and Hong Kong are among the

most popular cruiser ports worldwide. So far, cruise tourism has been confined mostly to affluent

markets of the developed nations. The more popular cruise ports have dedicated cruise terminals while others handle cruise ships at general berths with make-shift arrangements.

PRESENT MARKET PLAYERS

Miami has become the cruise capital of the world due to the proliferation of cruises in the Caribbean and through

continuous investment in infrastructure. It has positioned itself as the world's premier home-port.

Key learnings from Miami include:

a) Close integration of cruise tourism into overall tourism strategy.

b) Development of local attractions and itineraries.

c) The need for quality infrastructure.

d) Development of close relationships with cruise lines and shore agents.

Singapore has become the cruise capital of Asia. A long term policy of Public Private Partnership and

governmental policy support has been behind Singapore's rise. Singapore has successfully promised “Fly-Cruise”

tourism and regional cruises.

Key learning from Singapore include:

a) Need for strong governmental support

b) Development of world-class infrastructure in anticipation of demand

c) Integration of cruise tourism into overall cruise strategy

India was a late entrant to the cruise industry. Till a few years ago, a few Indian ports

mostly along the West Coast got random visits from cruise ships which were passing by.

Today, the ports of Mumbai, Cochin and Goa receive around a 800 visits each year from

cruise ships, some of which have made India a regular destination. Now, the Government

of India has drawn up plans to create cruise hubs in ports like Mumbai, Murmagoa, New

Mangalore, Cochin and Tuticorin.

SCENARIO IN INDIA

1) India has developed a vibrant inbound, domestic and outbound tourism sector. It has a market potential of over 550 million tourists

2) Cruise tourism is a miniscule part of the overall sector at present; this presents a massive opportunities but also hints at major challenges. Factors like economic growth, a young population, increased global awareness of India and the improvement of infrastructure point to a rapidly growing market

3) Surveys show that domestic tourists are already showing interest in the cruise market

4) Domestic tourists and foreign tourists have different priorities for the various components of a cruise, however all of them felt that the availability of infrastructure at and interesting destinations near the ports was important.

5) Both domestic and foreign tourists already rate Kerala as a top potential destination.

6) India received 65.8 lakh (Provisional) visitors during the period January-November, 2014 which is the highest ever number of visitors received till November in any year during the last decade. The Foreign Tourist Arrivals (FTAs) during this period showed a commendable increase of 7.1 percent over the same period during the previous year. The FTAs for the entire year 2013 were 69.7 lakhs showing a growth of 5.9% over the previous year. In comparison, the growth rate in International Tourist Arrivals for the World as a whole was only 5% in 2013.

7) Six existing ports have been identified as potential cruise hubs –Mumbai, Goa, Cochin, New Mangalore, Tuticorin and Chennai

8) Funds have been allocated for setting up cruise facilities at these ports, however only Cochin has made any progress in this regard so far.

Demand for Indian Cruise tourism would arise from 4 segments

1) 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.

2) 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.

3)Short 2 to 5 days cruise have growth 7.5 times in the period between 1980 and 2003, showing the highest growth trend internationally

4)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.

5) 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

6) It is a ‘supply driven’ market with capacity driving the market, because cruise liners are ever insearch of new markets, new itineraries and new destinations. If adequate facilities, services andinfrastructure are provided, that will in turn attract more and more cruise operators to the shores

POTENTIAL OF INDIA

8) 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.

9) 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.

10) 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

a market size of 1.2 million cruise tourists by the year 2030-31 . These are conservative estimates

and the actual potential may be much higher depending on the infrastructure developed and the

marketing efforts undertaken.

Taking a conservative estimate of each tourist spending US$ 45 per port (as against the international

average of 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 earnings from cruise tourists & crew during the period from 2005-06 to 2030-31 is

estimated at US$ 599 million (Rs. 26980 millions).Considering the tremendous boost that cruise

activity would provide to the domestic GDP through increased spending on various aspects, the

one-time investment on creation of cruise facility would be justifiable.

Income is perhaps the key determinant in identifying potential cruisers as the cruise industry remains

restricted to the upper income segment, wherein there are further sub-segments like contemporary

and luxury cruises which are again based on relative affluence.

1) Core Market ($40,000): As indicated below, the most likely scenario is that the majority of adults

from this target market will cruise within the next three years, based on stated intent to cruise. In

addition to population and cruising intent updates.

2) Affluent Market ($60,000+): This segment is likely to go for contemporary or luxury cruises.

3)Very Affluent Market ($80,000+): This more limited market is showing slow growth, but cruisers

from this segment will prefer the upper end of cruises.

4)Ultra Affluent Market ($150,000+): This very high-end group is showing surprisingly quick growth

and are likely to go on luxury, long duration cruise and niche cruises.

So our target audience are people of 10-50 years in affluent, very affluent and ultra affluent class, people of 50-70 years of all classes and foreign tourists.

MARKET SEGMENTATION BY INCOME

Consumer Interest in cruising continues to be strong, despite the economy and fuel costs: 77% of past cruisers and 55% of those who have yet to take a cruise expressed interest in doing so within the next three years.

1) 95% of cruisers rate their cruise experience as satisfying: 44% claim “extremely satisfying” making a cruise among the best in meeting and exceeding expectations.

2) Median age of cruisers is now 46, down from 49 in 2006; cruises continue to attract younger travelers

3) Cruisers agree (80%) that cruise vacations are a good way to sampledestinations they may wish to visit again, which further demonstrates that cruisers are the best prospect for travel.

4)Cruisers are the premier leisure traveler; they take 39% more vacations per year than non-cruisers and take more types of vacations with nearly one in four being a cruise. They also typically spend 50% more on their vacation than a non-cruiser.

5) Both past cruisers (69%) and cruise prospects (56%) recognize a cruise vacation as providing very high value. Those who’ve experienced the inclusive nature and service of a cruise, rank it as the best vacationvalue.

CRUISE TOURISM FINDINGS

Kerala is well endowed wit tourism resources which include:

- Tropical climate

- Beautiful ,lush and varied nature

- Wild-life areas

- Long palm fringed coastline

- Hill stations

- Well-educated hospitable people

- Rich cultural and historical people Among these, one of the most truly unique and peculiar features

of Kerala is undoubtedly the backwaters.

The approach needed is to introduce river/canal cruises along the canal system which runs from one

end of Kerala to the other. Till recently, most of these canals were diused and almost unpassable even for big boats due to siltation and encroachments. However, this is now quickly changing.

KERALA AS CRUISE DESTINATION OF INDIA

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Question 1

Kerala's 600 Kms of coastline and about 800 Kms of inland waterways give it high

potential to attract international and regional cruise tourists.

Strongly Agree

Agree

Disagree

StronglyDisagree

SURVEY

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Question 2The proximity to the main International East-West shipping lane makes Kerala an

attractive destination for cruise ships to make calls.

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

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Question 3The lack of dedicated infrastructure for cruise tourism has been a significant factor

in limiting the number of vessel arrivals in major and minor ports

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

0

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Question 4Regional cruises can be formulated with itineraries covering Kerala, Lakshadweep,

Sri Lanka etc

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

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Question 5Kerala can eventually emerge as the center of a cruise circuit covering the entire

Indian Ocean region due to its central location.

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

30

70

Question 6The proximity of the port to the city and a diverse set of tourist destinations has the

potential of making Trivandrum a very exciting destination for cruise tourists

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

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60

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Question 7The presence of multiple transport hubs like the International Airport and railway

terminal close to the Port creates the possibility of a multi-modal cruise terminal in Trivandrum.

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

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Question 8The provision for a full-scale cruise terminal can be made in the master plan of the

Vizhinjam port.

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

8.23.2

1.4

1.2

Question 9With a proper development strategy, Trivandrum can be developed into a global

cruise hub in the next five to eight years

Strongly Agree

Agree

Disagree

Strongly Disagree

No Answer

SWOT ANALYSIS OF TRIVANDRUM PORT

Trivandrum has a diverse set of attractions which can be show-cased to tourists, but care needs to be taken not to overwhelm them with the entire range at one time. The product design has to carefully seggregate between attractions based on parameters like the time taken to experience each one. For example, in the short and medium term, Trivandrum will mostly receive cruise tourists who may alight for day excursions. Hence, activities with relatively long durations like ayurvedic wellness treatments or visits to distant locations may not be ideal for the primary package.

For longer duration tourists, a secondary package can be drawn up. As time progresses, and activities like “fly-cruise” or home-porting develop, longer itineraries can be given increasing importance. In the initial phases, emphasis can be laid on the attractions within the city itself with a focus on the unique cultural elements and natural attractions. Cruise passengers typically like to sample various aspects of the destination, rather than engage in long stays at each attraction. So, natural attractions such as beaches and lakes, as well as cultural and historical attractions such as museums, temples, historic monuments and architectural highlights are best suited for inclusion into a day package. Short cultural performances can be included in some of the itineraries as the art-forms of Kerala are unique and world-famous.

STRATEGY TO DEVELOP TRIVANDRUM PORT

A sample 12-hour itinerary could be Disembarkation at Vizhinjam – Backwater trip to Veli Lake – Space Museum - Vettukad Church – Fort area – Shopping – Secretariat – Lunch – Museum Complex – Cultural performance – Kowdiar Palace – Tea – Kovalam Beach – Re-embark at Vizhinjam. Specific itineraries could be planned for satellite destinations like Ponmudi – Neyyar Wildlife Sanctuary (Ecotourism), Thenmala (Adventure Tourism), Varkala – Akathumuri (Backwater focus) or Kanyakumari – Suchindram –Padmanabhapuram. A specific itinerary could even focus on short rejuvenation treatments. As the destination evolves to receive longer duration visits, more exotic and intensive itineraries can be added.

Wellness and Rejuvenation programmes can be made a key attraction, since Kerala enjoys the top position in these, especially in the case of natural and Ayurvedic programmes. In fact, themed cruises which focus on healthy living could be attracted on this basis, as could luxury cruises which are predominantly patronised by senior citizens.

In short, the product to be offered would include, among others, the following key features:1) A wealth of natural attractions.

2) Rich culture and heritage; exotic architecture.

3) Range of activities from adventure sports to rejuvenation therapies

4) A modern urban ambience which ensures convenience and safety

5) World-class infrastructure

6) High-quality vendors Packaged effectively, this product could well be unbeatable – offering a combination of What is available at Singapore, Phuket and Bali, for comparison's sake.

1) India manufactures naval ships and submarines.

2) After the life times of these ships are completed they can be used to manufacture cruise ships.

3) India has a potential to manufacture cruise ships in near future.

4) Lot of emphasis given to make in India paves way for growth of this industry.

SCOPE OF MANUFACTURING CRUISE SHIPS INDIA

1) Lack of well developed ports.

2) Lack of technology and expertise

3) Lack of skilled labour

4) Lack good infrastructure.

WEAKNESS OF INDIAN CRUISE INDUSTRY

THANK YOU