Royal Caribbean announced last month that it would pull one of three ships from Alaska in 2010, due in part, according to the Alaska Cruise Association, to the controversial $50 head tax implemented in 2006.
Now, it looks like other cruise lines will be following suit. During an earnings conference call today, Micky Arison, chairman of Carnival Corp. -- parent company of several lines, including Carnival Cruise Lines and major Alaska players Holland America Line and Princess Cruises -- stated that capacity reduction in the region is imminent.
"Recently, one of our competitors reduced capacity for 2010 and we intend to do the same," Arison said. "It should now be very evident to everyone that the initiative that passed a couple of years ago is having a significant impact on tourism to Alaska. Growth stopped immediately after the initiative passed. $50 is significant in this price sensitive consumer environment." Arison went on to say that further reductions will be made in 2011 if the landscape does not improve, and that Carnival Corp. has been "unable to find anybody that is willing to deal with the unintended consequences of this ill conceived initiative and its impact on the Alaskan economy."
Of course, the head tax may only be a piece of the puzzle. The economy is an inescapable factor, and Alaska cruise pricing in particular is especially weak, down 20 to 40 percent according to a recent report from Wachovia Capital Markets.
At this point, there's no word on what exactly would be cut -- and from which brands. Carnival Cruise Lines has already started making changes to its 2010 Alaska program. Carnival Spirit, which currently sails Alaska voyages from Vancouver and Whittier, will be relocated to Seattle where it will offer cruises to the Inside Passage. Seattle will offer a more convenient and more affordable drive-to option for many cruise travelers. Also, because the voyages depart on Tuesdays, ports should be less crowded.
We'll keep you posted.
--by Melissa Baldwin Paloti, Managing Editor
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Will More Cruise Ships Leave Alaska?
March 24, 2009