WHY ARE SHIPS PULLING OUT OF ALASKA?
The news came as a shock to many - in 2010 four cruise lines will either pullout or change their programs in Alaska.
According to the Alaska travel Industry Association, ships pulling out of Alaska next year include; Star Princess, Serenade of the Sea, Norwegian Sun, and the Spirit of Oceanus. Holland America is cutting the sailing of the Amsterdam by ten cruises. Cruise West will take three of its eights ships out of Alaska; the remaining five will operate only from Juneau south. Princess is also taking one of its ships off the Gulf of Alaska in favor of Seattle - Seattle run.
Rumors have been afloat that after announcing Seattle’s new Terminal 91 as its northern homeport, Carnival may also be reconsidering its commitment to Alaska.
These current estimated passenger loss for 2010 is 140,000 which reflect a 10% drop in total passenger arrivals to Southeast Alaska with as high as a 25% reductions for some small towns. The economic effects on Southeast Alaska will be devastating. In edition to the economic slump felt throughout the country, Southeast Alaska has been acutely suffering for decades. In the 1990’s communities watched as mills closed in light of increasing EPA restrictions; commercial fishing plummeted over claims of Canadian overfishing. No new jobs were created to replace the loss in fishing and timber. With most communities located on islands options for new industry are limited. Tourism via cruise ships became the much welcomed infusion of much needed cash, albeit seasonal.
As more and more ships started to call on Alaska, especially accelerated after 9/11, when cruising to Alaska was seem as a safe domestic destination; environmental abuses occurred. Stiff fines were levied on the guilty cruise lines. In response, the state legislated more restrictive environmental regulations and a per passenger head tax. In light of the recent economic downturn and the subsequent fall of cruise bookings, the added expense of doing business in Alaska is cause for some cruise lines to head south of the border where fewer restrictions exist.
Carnival Corporation Chairman Mickey Arison said to USA Today, “I would venture to guess that the economic losses, including job losses in Alaska, will be greater than the revenue generated from the taxes imposed. The saddest thing is we have been unable to find anyone willing to deal with the unintended consequences of this ill-conceived initiative and the impact on the Alaska economy.”
Hundreds of businesses and thousands of jobs in Southeast Alaska depend on summer cruise ship traffic. Companies, including Native corporations, have invested their family fortunes betting on handsome returns from tourism. According to Tim Bradner of the Alaska Journal of Commerce, cruise related job losses in 2010 could reach 1,800 statewide with 300 of the usual 3,000 jobs lost in Southeast Alaska alone.
It will be interesting to see what happens. Will there be a compromise? Personally, knowing that Alaskans are protectionists when it comes to their state - I don’t envision anyone backing down. As much as cruise ships bring in much needed revenue they are seen by many locals as a necessary evil during the summer months. On the bright side, one possible scenario might be that dwindling profits may force multi-national companies operating in Alaska as well as Mexico and the Caribbean to pull out or reduce their presence. This may allow local companies to re-establish new year round businesses creating more of a community friendly atmosphere and that keeping cash in town.