Alaska in Trouble? Royal Caribbean, Cruise West Pull Ships

January 30, 2009

Is Alaska losing steam as a cruise region? According to the Associated Press, Royal Caribbean announced that it will be pulling Serenade of the Seas out of the region in 2010. The move will leave two Royal Caribbean ships, Radiance of the Seas and Rhapsody of the Seas, in service in Alaska next year; the Juneau Empire reports that the loss of Serenade could cost the state $37 million in passenger and cruise line revenue. Also, small-ship line Cruise West told the Juneau Empire that three of the line's eight ships -- which normally sail in Alaska -- will not return this summer. Jerrol Golden of Cruise West told Cruise Critic that the company modified deployment to meet current booking trends and demands, but that all of the line's Alaska itineraries are still being offered.

Is the economy to blame for the shrinking demand? Maybe. A recent Wachovia booking survey found that pricing on Carnival, Royal Caribbean and Celebrity cruises is weak, down between 20 and 30 percent.

But there are other issues troubling Alaska's cruise sector. Alaska Cruise Association President John Binkley told the Juneau Empire that the controversial head taxes implemented in 2006 also contributed to Royal Caribbean's withdrawal, because the $50 per-passenger fee could turn off cost-conscious consumers. New stringent discharge rules could also be a factor.

Royal Caribbean's Don Habeger, a regional vice president based in Juneau, told the A.P. that the line made the decision to redeploy Serenade of the Seas because "the economics for the vessel were better elsewhere." However, it has not yet been announced exactly where the vessel will be headed instead.

Royal Caribbean spokespersons were not immediately available for comment.

At this point, no other lines have announced plans to pull ships out of Alaska. Princess and Holland America, both major players in the region, have told us that decisions regarding 2010 schedules have not yet been made.

We'll be following the trends in Alaska closely this year and will keep you updated on any new developments. Stay tuned.

--by Kim Kazell, Assistant Editor

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