May 27, 2020
(Updated 1:20 p.m. EDT) -- From Alaska to Washington State and British Columbia in Canada, ports in the Pacific Northwest are facing significant financial challenges as the already-short Alaska cruise season confronts delays and cancellations from the COVID-19 coronavirus pandemic.
Coupled with restrictions on cruising brought on by the U.S. Centers for Disease Control and Prevention (CDC), and the temporary suspension of cruises from Canadian ports of call until July 1, Alaska stands to lose two decades' worth of passenger growth overnight.
The downturn will not only affect the ports; due to the high number of overland cruise tours that operate throughout mainland Alaska -- including Anchorage, Denali National Park, Fairbanks, and land tours to Canada's Yukon Territory -- Alaska will feel the effects statewide. Westmark Hotels, which operates properties throughout Alaska and the Yukon and caters largely to cruise tour passengers, announced on April 15 that it was shuttering its hotels "until further notice."
Ninety percent of all visitors to Southeast Alaska arrive by cruise ship, according to a 2020 report prepared last year by Rain Coast Data for Juneau's Southeast Conference Visitor Industry Committee. Southeast Alaska is home to the marquee ports of Juneau, Ketchikan and Skagway, plus smaller locales such as Sitka, Wrangell, Petersburg, Haines, and Icy Strait Point, operated by the nearby Tlingit village of Hoonah.
The Alaska cruise season is relatively short (five months), typically running between May and September. The Anchorage Daily News noted in a recent article that this short season has to sustain many operators and businesses through the lean winter months.
Approximately 1.44 million cruise passengers were expected to arrive in Alaska this year, bringing nearly $800 million in local spending with them, aboard a total of 43 different vessels making over 600 sailings.
According to the Alaska Department of Commerce, Community, and Economic Development, tourism as a whole in Alaska supports more than 52,000 jobs across the state and results in approximately $4.5 billion in economic activity.
Alaska Cruise Giants Pull Out
On April 14, Holland America Line and Princess Cruises both confirmed they were withdrawing their popular Land and Sea overland journeys, often referred to as cruise tours, to Denali and Canada's Yukon Territory for the entire 2020 season. Both Princess and Holland America will be shuttering their wilderness lodges in Denali and parking their fleets of motorcoaches and rail cars operated under their respective banners.
Princess canceled its popular "Alaska Gulf" voyages that sail between Vancouver and Whittier, along with all voyages out of San Francisco, Los Angeles and Seattle.
On May 6, Holland America Line and Princess canceled the remainder of their 2020 Alaska seasons, along with a host of other voyages.
"We deeply regret that we will not be able to employ the approximately 3,500 teammates who help show our guests the Great Land each summer," said Princess Cruises president Jan Swartz in a video posted to YouTube on April 14. "Our thoughts are also with all of our small business partners throughout Alaska who we have supported every summer for decades. We know these decisions will have a large adverse economic impact on the state of Alaska, which relies on tourism."
Holland America initially cut its own fleet down to just two vessels in Alaska before further canceling the season on May 6. It has now canceled all 2020 Alaska voyages.
Holland America has operated in Alaska since 1947, marking its 70th year of tours to the state in 2017. This is the first year the company has had to halt its Alaska deployment.
On April 23, Cunard announced that the return of Queen Elizabeth to Alaska would not go ahead this year. The line released the following statement: "For Queen Elizabeth, maintaining a shorter summer season in Alaska would not make these voyages viable, so the cruise line has taken the practical decision to cancel the entire Alaska season and all departures up to and including September 8, 2020."
Earlier in April, Carnival Cruise Line also canceled voyages to Alaska aboard Carnival Miracle. And on May 4, Carnival confirmed that all sailings would be canceled on sister ship Carnival Spirit, meaning Carnival has canceled its entire 2020 Alaska season.
Seabourn announced it was canceling its entire Alaska and British Columbia cruise season aboard Seabourn Sojourn on May 6.
Hurtigruten has also canceled all of its expedition cruises to Alaska for the 2020 season that were scheduled to operate aboard the hybrid-powered Roald Amundsen.
Reduction in Cruise Ships Has Significant Economic Implications
Meilani Schijvens, data director for Rain Coast Data and member of the Southeast Conference Visitor Industry Committee, told Cruise Critic she was initially projecting that 2020 would be the year that tourism overtook the State of Alaska as the largest provider of income in Southeast Alaska.
A survey conducted by the Southeast Conference in late March revealed many local businesses had already laid off 43 percent of their workforce, due to COVID-19.
In recent weeks, Alaska and the Port of Seattle have also lost calls from Norwegian Sun, while Windstar Cruises' Star Breeze (its refit delayed due to coronavirus restrictions on shipyard work) will not sail to Alaska from Vancouver as originally planned.
The reductions now suggest that 695,000 passengers have been lost from the estimated 1.44 million cruise visitors to Alaska this year, according to schedules put out by CLIA Alaska. The reduction in passengers and cruise traffic will directly affect employment in the state.
Turnaround Ports Also Affected
Ports of embarkation and disembarkation -- known as "turnaround ports" -- typically see greater economic impact. Turnaround ports are where passengers traveling to and from ships utilize airports and hotels along with shops and restaurants; it's also where most vessels are provisioned, bunkered with fuel, and made ready for the voyage ahead. A port call might generate revenues in the thousands or hundreds of thousands of dollars; a turnaround port call often runs into the millions.
The Port of Vancouver, which operates the Canada Place cruise terminal in the heart of downtown Vancouver, British Columbia, notes that each ship that turns around provides $3 million (Canadian) to the local economy. Last year, approximately one million passengers sailed through Canada Place on 288 individual ship calls -- a 20 percent increase over 2018, according to the Port of Vancouver.
Previously, the port's worst year was 2010, when the wake of the Great Recession reduced total passengers to just 578,986 from a high of nearly 900,000 the year before. It took almost a decade to recover those passengers; 2019 was the first season that the Port of Vancouver exceeded the passenger count from 2009.
The Port of Seattle estimates it receives $4.2 million in economic benefits from each vessel turning around at its Smith Cove and Bell Street cruise terminals.
While not a common turnaround port, the Greater Victoria Harbour Authority (GVHA), which operates the Ogden Point Cruise Terminal just west of downtown Victoria, expected to see nearly 300 individual ship calls this year. That number has been slashed in half due to the restrictions on cruising put in place by Transport Canada, the CDC and the multitude of cruise line cancellations.
"The significance [of these cancellations] is strong," Ian Robertson, CEO of the Greater Victoria Harbour Authority, told Cruise Critic. "We're set up as a not-for-profit, unlike Vancouver and Prince Rupert that have a significant amount of cargo and container traffic. For us, cruise is huge -- it represents almost 70 percent of our annual revenues."
Robertson noted that funds generated by the GVHA go to the maintenance and upkeep of a handful of major attractions in the city that are also enjoyed year-round by local residents.
"We are set up as a steward for some of Victoria's favorite places like the breakwater and the causeway in front of the legislature and the [Fairmont] Empress hotel," said Robertson. "We've been fortunate to have had a very robust cruise season and are now facing the reality that a significant portion of that revenue is lost."
"I also think about the impact on the local economy," he concluded. "We have a number of operators and businesses that rely significantly on cruise. I think about them and the impact on their business and not being sure of whether they can survive a year without cruise."
"The other piece that I think gets lost -- and it's not just a Victoria situation -- if you were to take away tourism, a number of businesses that locals enjoy would not be here… and [that] speaks to the broader importance of tourism."
Many individuals that Cruise Critic spoke with were optimistic about the post-COVID-19 future in Alaska and on the West Coast, while noting that the availability of coronavirus testing and public perception will continue to affect the industry for some time.
"The economic hangover from this has a backside to it," said UnCruise CEO Dan Blanchard. "To get things going, we have to have testing. We need test kits. We need them at airports, in every hotel, every overnight accommodation -- not just ships. Without test kits, this just gets to be a recurring sort of situation."
While not affected by the CDC ruling, even small-ship lines like UnCruise might find operations hampered by a lack of air service, hotel closures, and other restrictions beyond their control. UnCruise has formed a coalition of small-ship, U.S.-flagged operators, and the Alaska Municipal League will be voting on June 4 on whether to allow small-ship cruises to dock in Alaskan ports of call.
Blanchard's sentiment is echoed by Robertson, who sees reason to be optimistic in the long-term, noting that domestic travel within both Canada and the United States is likely to be the first to return following the pandemic.
"Talking to the cruise lines, the Alaska itinerary is seen as being very safe and secure," Robertson told Cruise Critic. "I think there is some optimism that if there is an itinerary that is going to recover, it will be Alaska."