The process of Russia’s cruise fleet reduction is faster than its expansion with new units, despite the Government’s tourism development strategy adopted in 2022 with a purpose to double the cruise market by 2035. Dmitry Galkin, General Director of Gama LLC, said this at the 18th International Tourism Exhibition “Intourmarket in Moscow.
According to the head of the Nizhny Novgorod based cruise company, Russia’s cruise fleet is expected to shrink by 50% to about 50 ships by 2030. “Today, the country's cruise fleet numbers about 100 units with varying degrees of deterioration. With the annual decommissioning of 5-6 units, only 7 ships are being built in Russia today. To achieve the goal of doubling cruise tourism by 2035, it is necessary to build the same number of ships as are operated today, that is, taking into account the decommissioning, that is about 150 new ships. If nothing is undertaken, the cruise market will shrink by half in 7-8 years,” the expert said.
According to him, the problems of building a cruise fleet are connected primarily with the uncertain position of the state, starting from the planning and ending with support measures, which are not sufficient, he believes. “Every year, cruise companies submit applications to the Government for their fleet modernization based on actual requirements. However, the plan announced officially finally has nothing to do with cruise reality: “to build 140 units of sea/river fleet”. Why, for whom?” Dmitry Galkin asks.
He believes that with no systematic approach to the construction of ships, the competitiveness of the cruise segment is reduced drastically. “Today, we see no understanding of the priority of certain projects in civil shipbuilding from the state. We see no systematic approach, as it was in Soviet times with standard projects and international cooperation. Shipping companies should buy a finished product of mass series instead of creating lead ships from scratch each time,” he said.
State support measures, Dmitry Galkin says, do not meet the rate of price growth in shipbuilding. “Over the recent 2 years, the cost of building a ship has doubled. The state support that we receive in the form of a 25-pct grant for scrapping does not correspond to the increase of costs. In Norway, the recycling grant is 90% and we would like to get at least half of that. I believe, we have to develop either similar to the rest of the world, or not to develop at all,” said the head of the shipping company.
In his opinion, the optimal measure of state support for today is leasing. The company is building two ships under this scheme: “The first one is M/V Golden Ring of our own design, which is under construction at Astrakhan based shipyard Lotos since 2018. The construction is foreseen by an agreement signed with Mashpromleasing JSC for 15 years at 3%. The vessel is already 95% complete with finishing works and installation of furniture underway. All the materials and equipment are of domestic origin except for the bow thruster. So we see no problems with the servicing. The vessel will enter the navigation in May and will make round voyages between Nizhny Novgorod and Moscow. According to our calculations, the payback period for the vessel will be 13-14 years. The second ship is under construction at the same shipyard with the delivery scheduled for 2024,” said the head of the company which currently numbers 6 conventional cruise ships and 3 ships of wheel type.