Kenya is losing its cruise ship business to South Africa due to increasing pirate attacks in the Indian Ocean off the Somali coast, industry players have said.

Despite the intense campaign by the Kenya Tourism Board (KTB) to market Kenya in Europe, the country's largest cruise tourism market, the cost of insurance by vessels plying the Somali waters has gone up due to the high risk caused by pirates.

This has made the voyage costly, with cruise tourism focus shifting to South Africa, said Abercrombie & Kent regional director for East Africa, Mr Auni Kanji, who has also been handling most of the vessels.

Kenya expects to receive only 10 cruise vessels this season, which began in November and is expected to last until April, this year.

This is a sharp drop compared to 15 vessels received last year that visited Zanzibar and Cape Town. The country received over 20 vessels between 2005 and 2007, Kanji said.

Although pirates have never been able to hijack cruise vessels due to what maritime experts attribute to their height and relatively high speed, last year's statistics show an increase inn the sea attacks.

The Kuala Lumpur-based International Maritime Bureau, says Somali pirates ventured further out to sea last year to capture vessels.

"Pirates are now more desperate to hijack ships. Recent attacks, at a distances of over 1,000 nautical miles from Mogadishu indicate the capability of the Somali pirates," the bureau said in its annual report.

In the Gulf of Aden alone, 116 actual and attempted attacks took place, compared with 92 in 2008 targeting bulk carriers. Ten crew members were injured. In all, Somali pirates were responsible for 217 acts of piracy in 2009.

The other problem keeping cruise tourist away from the Mombasa, according to Kanji is lack of sufficient infrastructural support at the Mombasa port.

"We at least need a berth for cruise vessels, with facilities to cater for that," Kanji said.

The cruise ships calling at Mombasa port use berth 1 and 2 which are also used to handle conventional cargo and vehicles.

In 2006, the Ministry of Transport shelved plans to construct a modern cruise terminal at Mombasa port after failing to find a strategic partner to invest in the facility.

The plan, contained in the port's 25-year master plan and its strategic plan of 2005 currently under review ,would have re-developed berth one and two into world class cruise ship facility at the cost of $3 million.

According to the draft of the revised master plan presented to the port's stakeholders mid last year, it was suggested that a long term solution for the cruise would be to build a cruise terminal in the western side of Port Reitz

"Timing is dependent on the construction of by pass to Ndongo Kundu and the development of the cruise market liner," said officials.

The East and South Africa Indian Ocean countries have formed the Cruise Indian Ocean Association (CIOA), which will host a forum in Durban in May, this year, to present cruise lines and operators with an overview of the varied facilities and attractions the South and East African Indian Ocean states offer.

The two- day conference will provide a meeting point for top cruise line executives, with delegates from tourism, hospitality and marine sectors in East and Southern Africa, according to the public relations manager at the Kenya Ports Authority, Mr Benard Osero

CIOA last year signed a Memorandum of Understanding with Sea trade Communication Ltd during the Seatrade Europe convention at Hamburg, Germany.

The peak season for cruise ship visits is between November and March, during the European winter season.

A Value Added Tax on all marine and port services introduced this year by the government at the port of Mombasa may have also contributed to the poor performance of the industry due to its effect on the cost. According to Kanji, the tax was not well thought out and it would be desirable to struck it out. In letters sent to the KPA, the shipping lines said their decision to give Mombasa a wider berth was due to the VAT which would increase the operational costs for vessels calling at the port.

"The new requirements will push the cost of calling at the port of Mombasa up by 16 per cent. For instance, pilotage fees, which per operation are subjected to a minimum charge of $150, would rise to $174. Pilotage is but one of the services offered by KPA," a letter from Mediterranean Shipping Company dated September 17 this year read, adding that it was the first time the line was dealing with such a charge.

The marine services expected to be subjected to the punitive VAT provisions include pilotage fees, tug services, mooring services, port and harbour dues, supply of fresh water, dock, buoyage and anchorage, among a long list.

In response to the threats, Kenya Ports Authority chief operations manager Joseph Atonga said they had taken up the matter with relevant authorities and he expected a solution soon.