Royal Caribbean shifts cruise ship out of Alaska waters

WARNING: Tax, rules were a determining factor, says company.

January 27, 2009 

Tourism officials warned Tuesday that the state must take steps to protect its share of the cruise-ship market after a major line announced it will move a ship out of Alaska waters next year.

John Binkley, president of the Alaska Cruise Association, said the state should modify the 2006 voter-approved law that created a $50 per passenger fee on cruise ships and wastewater dumping rules that industry officials say are too tough.

Royal Caribbean Cruises Ltd. confirmed it will redeploy the Serenade of the Seas to another market in 2010.

The ship is scheduled for 19 trips to Southeast Alaska ports this year. The ship sails a seven-day itinerary round-trip from Vancouver, British Columbia, typically stopping in Juneau, Skagway and Hoonah. Cruise industry officials said the ship would have carried about 42,000 visitors in 2010.

Don Habeger, a Royal Caribbean regional vice president in Juneau, said the company decided the economics for the vessel were better elsewhere. The company also wants to move into a global direction, he said, and not just a North American direction. "Certainly the 2006 ballot measure exacerbated this whole issue," Habeger said. "It was a determining factor in our decision to redeploy."

He declined to say where the ship will sail next year.

Gershon Cohen, a sponsor of the 2006 initiative, called the timing of the announcement "pure politics." Cruise lines usually announce changes in April and this one, Cohen said, is aimed at the Alaska Legislature.

"This is purely grandstanding to try to influence the actions of the Legislature," he said.

Cruise companies earn billions off charges unrelated to ticket prices, such as liquor, gambling and shopping, Cohen said. He called ticket prices "a loss leader to get those people on the boats," he said.

"When they cry that they can't make a living coming to Alaska because of this $50 head tax, it falls on deaf ears," he said.

Binkley gave a different reason for the timing of the announcement. Deployment decisions are made in the winter even if they aren't announced until April; the cruise line was being considerate by giving a heads-up to Alaska ports and tourism vendors, he said.

A redeployment is key information for decision-makers, he said, noting that Juneau residents have discussed building a new dock, he said.

Dave Kasser of the Anchorage Convention & Visitors Bureau said the decision could be a harbinger of decisions by other lines. He called cruises "the Alaska starter kit" because first-time visitors on ships often extend stays or return with family and friends in tow.

"This industry needs to be coveted and accorded like any new industry that we would be attracting to Alaska," Kasser said. The state should be trying to make Alaska as attractive a destination as possible, he said.

Cruise companies have expressed concern about stringent discharge standards required by the 2006 law, especially for metals such as copper. An analysis by state regulators found that 12 of the 20 cruise ships that discharged regularly last summer received citations.

"If you go to Juneau and you take water out of the tap from a Juneau business right downtown and pour it off the dock into the water in the bay, you would be breaking the law, essentially, according to those standards," Kasser said. "They have to be realistic."

The $50 passenger fee adds to the total cost of doing business in Alaska, he said, and could sway passengers looking for a bargain. The tax revenue must be used on services to visitors or ships, Binkley said, and the state is having trouble finding projects to spend the money on.

"It's reasonable to go back and look at that after two years and make some adjustments."

Cohen, the initiative sponsor, said the industry is merely paying costs for dockside improvements who otherwise would have to be borne by Alaska taxpayers.

Cohen said the cruise industry has poured money into changing environmental standards rather than taking action to meet them. A technology conference in Juneau next month will bring together scientists and vendors that could provide solutions to closing the final gap in discharge violations, he said.

"To change the law this session before we've even heard from these people is absolutely premature," he said.

Daily News reporter Elizabeth Bluemink contributed to this article. She can be reached at 257-4317 or ebluemink@adn.com

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