Cruise along the Concept
RF Government has approved the Concept for Development of Cruise Tourism in Russia until 2024. However, its implementation is associated with some problems including the need for modernization and construction of ships as well as lifting of excessive requirements on infrastructure.
Taking into account the pandemic, development of cruise industry in Russia has been quite good over the recent years with modernization of ships, construction of new vessels and development of new routes.
As Andrey Mikhailovsky, General Director of Infoflot, a company offering and promoting cruises, told IAA PortNews, the recent two or three years have seen an upsurge of interest to cruises among Russian people.
“On the rise is the interest to all cruises including those within Russia, river and sea cruises although it is held back amid the pandemic. Of course, financing is needed to launch and promote routes, to develop infrastructure”, says Andrey Mikhailovsky. According to him, local authorities should also contribute their efforts to make their territories more attractive for tourists.
As for cruises to certain regions of the North and the Far East, or to expedition voyages, they have always been rising interest but there was no offer. It is appearing now and cruise companies are active in occupying this niche.
“There is a cruise ship working on the Yenisey river and the next year will see the launching of a cruise route on Ob and Irtysh ... On Baykal, there are tours for several days. There is cruise shipping on the Lena river. So, worthy offers are coming out. However, it should be understood that organization of such voyages is cost-intensive while the season is limited ... So far, (last year and this one already) this segment is buzzing”, said Andrey Mikhailovsky.
In general, the head of Infoflot is positive about the cruise segment development over the recent years: “What cruises used to lack is their popularization. In this respect the state succeeded. For example, a cashback terms for cruise tourists are more attractive as compared with that offered to tourists raveling by land. As cruises are getting more popular, they attract more people who return and call their friends thus increasing the occupancy rate. I suppose that cruise segment has reached the level when it gets fully competitive with other leisure activities. Mass inflow of new customers has been seen for over the recent couple of year. Both the demand and supply have increased”.
When speaking about cashback and the pandemic implications, we can give a simple example of cruise liner Knyaz Vladimir. Its voyages sold under the cashback programme of the Federal Tourism Agency were cancelled due to absence of a sanitary certificate. Meanwhile the route offered by the cruise was highly popular among the tourists. Hopefully, the liner will be able to work in the season of 2022.
Besides, the Concept suggests offering of new destinations for both sea and inland cruises. That, in its turn entails the need of proper ships meeting up-to-date standards of comfort.
As Konstantin Anisimov, Deputy Head of the Federal Marine and River Transport Agency (Rosmorrechflot) told IAA PortNews, the key challenge of the cruise segment today is construction and renovation of the fleet.
“The main thing is to upgrade our cruise ships, both river-going and sea-going ones (of that there's none, or little). In our opinion, utilization grant should be raised from 15% to 30% minimum to reduce the cost of such ships. Given the short season of navigation for river-going ships and high cost of newbuilds, their construction is too heavy a burden for the business”, commented Konstantin Anisimov adding that out of 100 cruise ships about 40 ones are older than 60 years while their service life can hardly be extended for over a decade.
“Those ships of Projects 588, 2637, 305... were built in the 50s of the previous century. They have already undergone several modernizations. Their hulls’ wear level is very high. Their main engines have reached the limit of service life. Certain ship owners will be able to maintain their state but it is getting less and less reasonable. They are both worn out and obsolete…”, explained Konstantin Anisimov.
About 50 ships were built in 70s-80s and they can operate for decades taking into account their modernization. However, those 40 ships mentioned earlier are used for shorter voyages and carry more passengers. Therefore, the problem of fleet modernization is acute.
In terms of infrastructure, Konstantin Anisimov said there are no critical problems with inland water ways to be debottlenecked by 2025 and berth infrastructure being actively developed.
In this context we would like to emphasize that the newly approved Concept is quite vague about state measures to support construction of new ships with nothing said about the increase of ship utilization grant. The document only declares the necessity to extend the programme of subsidized leasing for cruise ships and the ship utilization grant as it is.
We would also like to add that infrastructure of passenger terminals faces a problem of excessive requirements on equipment aimed at ensuring transport safety, hence higher cost of such terminals construction and maintenance while passenger turnover at them is not high and cannot compete with that of urban public transport. This problem is not clearly covered by the Concept. However, the document has a clause stating that “safety of tourists is the first priority of cruise segment development and it should comply with the requirements on national defence and state security”.
To summarize our opinion on the Concept, we would like to say that it sets forth ambitious tasks but lacks ways to address the related problems. Hopefully, suggestions of ad hoc authorities and businesses will be reflected in the roadmap on the Concept implementation.
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