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25 Percent Reduction

Cruise lines to cut Alaska passenger lists by 100,000  Mar 27, 2009

Several cruise lines plan to slash their Alaska itineraries in 2010 with the net result that communities from Anchorage to Fairbanks could see a 25 percent reduction in cruise ship visitors.

Due to the combined cuts, roughly 100,000 fewer cruise passengers will spend time in Southcentral Alaska, out of the 400,000 passengers who typically visit Railbelt communities each summer, said Ralph Samuels of Holland America Line.
Railbelt communities should brace themselves for a serious financial pinch on airlines, restaurants, hotels, car rental companies, RV rental companies, and tour operators, said Ron Peck, president of the Alaska Travel Industry Association.

It's time for the state to be more supportive of the cruise industry, Peck said, echoing similar comments from the head of Miami-based Carnival Corp. who announced his company's plans to reduce Alaska sailings in 2010 during an investor teleconference on Tuesday.

The slashed cruise trips result from "a perfect storm" caused by the economic recession, new cruise taxation, and stricter regulations enacted on the Alaska cruise lines several years ago. In recent months, cruise lines have slashed fares 30 to 40 percent to get people to book tickets on Alaska cruises this summer, Samuels said.

"It costs you more, and your yields drop," he said.

During the Carnival investor meeting, the company's chief executive, Micky Arison, railed against the cruise ship law that Alaska voters approved in 2006, which contained new taxes and environmental rules.

Arison blamed the initiative for flat growth in Alaska's cruise industry over the past two years and for scaring off budget-conscious travelers this year.
"If we don't in the end find a political solution, I assume we will go ahead and litigate the issue, which is a last resort, but that is what we will do. Other than that, we will have to continue to reduce capacity until we find an equilibrium," Arison told the investors.

Carnival owns Holland America and Princess Cruises, the two giants of Alaska's tourism industry. Another ship cruises Alaska each summer under the company's Carnival brand.

Here are the cuts that Carnival plans in 2010:

• Princess is canceling one of its four Gulf of Alaska cruise itineraries, a ship called the Star Princess that carries a maximum of 48,000 passengers to Southcentral per season.

• Holland America plans to turn its seven-day cruise to Seward into a 14-day round trip that will not allow time in port for passengers to take an extended land tour. That equates to a loss of 15,000 visitors to Southcentral.

• Carnival is turning its Gulf of Alaska cruise into a southeast Alaska cruise, for a loss of about 40,000 passengers to Southcentral.

Royal Caribbean, a competitor, announced this year that it would shift one cruise ship out of Alaska waters next year, for a loss of about 42,000 visitors to Southeast Alaska.

Cruise lines to cut Alaska passenger lists by 100,000
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