Why India is setting its sights on cruise tourism

Country aspires to be a global hub for cruise tourism, a previously untapped sector with huge investment potential

The Indian government projects that the number of cruise ships operating in the country will increase from 208 in 2023 to 500 in 2030 and further to 1,100 by 2047. Bloomberg

Last Monday, India's first international cruise vessel, MV Empress, set sail from the southern city of Chennai on the Bay of Bengal to the island nation of Sri Lanka.

As the voyage began, Indian authorities took the opportunity to inaugurate a $2 million modern cruise terminal at Chennai Port, spread over an area of 2,880 square metres and able to host 3,000 passengers at a time.

All this is part of a much broader government strategy to grow cruise tourism in India with the aim of generating revenue and jobs – and cruise operators are keen to tap into the opportunity.

“India's cruise industry holds immense promise, and the government is actively committed to its advancement,” says Nishant Pitti, chief executive and co-founder of EaseMyTrip, an online travel company in India.

“Cruise tourism has been a relatively small but specialised sector in India for several years. However, following the resurgence of the tourism industry after the pandemic, cruise operators have been actively seeking opportunities in India.”

Major operators including Royal Caribbean and Costa Cruises are among those that have cruises stopping in India. The sector was battered by the Covid-19 pandemic, but has been rebounding strongly since travel restrictions eased globally.

India's foreign tourism arrivals have yet to return to pre-pandemic levels. Official data shows that India attracted 6.19 million foreign tourists last year. That was up from 1.52 million the previous year, when the country's tourism industry was hit by the impact of Covid-19.

But in 2019, before the pandemic, India received 10.93 million foreign tourists.

Authorities are hopeful that cruise tourism can bring in more international travellers. It is also something that could appeal to Indians with rising disposable incomes and a growing appetite for travel.

The Indian government projects that the number of cruise ships operating in India will increase from 208 in 2023 to 500 in 2030 and further to 1,100 by 2047. At the same time, the number of passengers using these cruise services is expected to grow from 950,000 in 2030 to 4.5 million in 2047.

Three new international cruise terminals are due to be operational by 2024. The government has highlighted that India's 7,500 kilometres of coastline and extensive river networks put the country in a strong position to become a global cruise hub.

“As more and more people are likely to experience cruise tourism in the near future, the government remains deeply committed to develop world class infrastructure to support and enable growth of cruise tourism,” said Sarbananda Sonowal, Minister of Ports, Shipping and Waterways, as he flagged off MV Empress on its trip from Chennai last Monday.

MV Empress is operated by Mumbai-based Cordelia Cruises, which is part of Waterways Leisure Tourism. Cordelia Cruises was launched in September 2021, and has been offering cruises within India, between Mumbai and Goa, and Chennai and Vishakhapatnam.

But launching its first international cruise this month is a big step forward for the company.

“We hope to host over 50,000 passengers for the Sri Lanka sailings alone between June 2023 to September 2023,” says Jurgen Bailom, president and chief executive of Waterways Leisure at Cordelia Cruises.

“The Indian cruise tourism industry has a strong potential, and it has been an untapped market for a long time. With a coastline so wide, it was about time to explore and dive deep into the cruising world.”

The company has plans to sail to Dubai and the Middle East next year, and also intends to add more ships, says Mr Bailom.

But he adds that the journey has not been smooth sailing, as many people in the country do not have experience in cruises.

“The primary challenges that we faced was educating the customers about the cruising experience and to educate the travel agents to reach the right audience with the right conversations,” says Mr Bailom.

There are also logistical issues and much more infrastructure development is still needed.

“Some other challenges we feel are development and upgradation of ports to accommodate cruise ships,” says Mr Bailom.

Destinations are working to improve their infrastructure as they recognise the benefits cruise tourism can bring.

The coastal state of Kerala in southern India has identified cruise tourism as a key part of its strategy to attract more international travellers. It has already begun receiving international cruise ships, but it wants to expand the sector much further.

“The state will streamline the entire procedure, ensuring ease of doing business with the state for all the private players interested in operating cruise tourism,” says PB Nooh, director of Kerala Tourism. “Second will be establishing cruise terminals and related infrastructure.”

He says that he expects cruise tourism to give a significant boost to the overall sector, as it brings in visitors who are willing to spend.

“I'm sure with cruise tourism, I'll be able to cater to a different category of people who are high net worth individuals, are interested to travel across the globe, and are looking for unique cultural experiences from different parts of the world.”

Experts say that it is a sector well worth investing in, with some of the larger cruise ships carrying more than 2,000 passengers.

“The potential is huge,” says Anant Singhania, president of the IMC Chamber of Commerce and Industry, based in Mumbai.

Cruises can have a massive impact across sectors beyond tourism, he explains.

“Ships normally sail with 100 per cent occupancy which gives huge boost to direct and indirect industries like hospitality, tourism, supply chain, fuel, ports,” says Mr Singhania.

“Ships are massive consumers of goods and services and thus can add a lot of economic growth.”

But he says that India needs to ensure that it puts high quality terminals in place, so that travellers have a smooth experience at the destinations.

“New ports that can be made ready to welcome both domestic and international cruise ships should be of international standards with excellent connectivity to mainland.”

He adds that “a revision of the taxes and ports charges for passenger ships can be considered”, with some of these charges being too steep.

The Indian government has said that it has taken a series of steps to “to boost cruise tourism industry … including infrastructure upgradation, rationalisation of port fees, removing ousting charges, granting priority berthing to cruise ships, providing e-visa facilities”.

Mr Pitti agrees that India still has a lot to do to achieve its cruise tourism ambitions, however.

“India is currently in the process of establishing a comprehensive infrastructure to facilitate efficient cruise tourism, encompassing everything from ships to ports,” he says. “This endeavour represents the most significant challenge facing the industry.”

But he believes that the country is on the right course, and that cruise tourism will bring a host of benefits to the wider travel sector.

“We eagerly anticipate the positive impact this will have on the industry.”