Royal Caribbean Cruises Thursday announced strong results for the summer cruise season, including a new record for its Alaska operations.
The Miami-based company is the second largest cruise line operating in Alaska, and includes ships under its own name and as well as Celebrity Cruises.
It is the first company to report results for the entire summer cruise season, which ended in September. The news overall was good, but was stellar out of Alaska, the company said.
The number of trips the company’s ships make to Alaska is set two years in advance and the ships always travel full, but this year berths didn’t have to be discounted to fill the ships.
That meant Royal Caribbean’s net revenue yield, a measure of profitability per passenger after subtracting some associated costs, rose markedly.
Net yields are one of the key measures used in the cruise industry.
“Our yields in Alaska this year were the highest in our history,” said Brian Rice, Royal Caribbean’s chief financial officer, in a teleconference with industry analysts after the earnings were released Thursday.
The company doesn’t release Alaska-specific numbers, but it said overall its revenues rose to $2.3 billion for the quarter ended Sept. 30, compared to $2 billion for the same quarter the previous year.
Royal Caribbean’s profit rose to about $400 million for the quarter, up from $350 million in the same quarter in 2010.
While Alaska was among the places doing well, the company struggled in less stable areas.
“Itineraries in places like the Caribbean and Alaska performed better than expected and these improvements even offset areas that were hurt by the bad economy and other political turmoil,” said Richard Fain, Royal Caribbean’s Chairman and CEO.
The yields in Alaska and the Caribbean each increased by more than 15 percent, he said.
Various problems in the Mediterranean Sea countries where there has been revolt and financial instability resulted in reduced sailings and diminished profits, the company said.
Some of that European dislocation seems to have benefited Alaska, the company said.
In North America, Royal Caribbean also saw increased spending by passengers in its “onboard and other” category, things such as alcohol purchased on the ship and tours booked through the ship. The company said that while its North American guests were spending more, Europeans were spending less.
During the recently ended recession, that extra spending shrank considerably as people still traveled but closely watched their expenses.
“Onboard and other” is a key measure watched by some in Juneau, where much of the economy is based on passengers being willing to spend extra on local tours and attractions.
The company also said it expected this year’s strong results to continue next year in Alaska, with one executive saying he had a “good feeling” about 2012, but it was way too early in the booking season to know for sure.
“My sense is that we’ll have another good year in Alaska,” said Daniel Hanrahan, president and CEO of Celebrity Cruises, on the teleconference with the Royal Caribbean executives.
• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneuaempire.com.
Comments (19)
Add commentRaise the head tax!
Guess the Governor was wrong? Again.
It must be nice to be in the 1% leisure class when things like a recession don't impact your ability to spend.
Must also be nice to know that if you're so rich to afford a $7000 trinket, that you won't have to pay sales tax on it here in Juneau.
So why not share in the wealth of the cruise lines? Maybe Alaska needs something similar to ACES for the cruise industry meaning, if their profits go up, so does the head tax.
It's only fair.
Christmas Card
I hope they send Parnell one.
Of course they will, stuffed full of $100 bills.
Bend over
Bend over Juneau and Alaskans. There is a line forming in the rear. The first in line is Parnell, then the cruise ship companies then oil and gas industry etc etc.
Another Good Year For Cruise Lines in Alaska
Thanks again to the Empire and Mr. Forgey for reporting on cruise line activities and profits in Alaska. Since the lines cried that the 'sky was falling' in 2009, passenger ticket prices have risen 40%, and will rise another 20% in 2012.
This amazing transformation in cruise line profits, hundreds of millions of dollars, is due entirely to the US economy, not the $25 cut in the Alaska head tax.
Jo Mac, when did retailers
Jo Mac, when did retailers stop including sales tax on their items?
If you will note Jo first
If you will note Jo first spoke of $7000 trinkets, which are excempt from sales tax. I dont remember the exact number but sales of items over $x000.00 are excempt from sales tax in an obvious concession to the tourist jewelry shops.
They aren't exempt from
They aren't exempt from paying sales tax on items over $7,000. Sales tax is capped at $350. It's an obvious concession to locals buying cars.
and have you seen the cruise
and have you seen the cruise passengers here? they are hardly part of the 1% crowd you all seem to be so jealous of. The vast majority of these people have saved for a long time to be able to afford the trip.
They Are The 1%
Folks who can afford to fly to Seattle, then spend $5,000 per couple for a week to SE Alaska are certainly in the 1%. Many cruise passengers also use group incentives, hotel points and other 'discounts', but they still spend far more than 99% would for a week vacation in North America.
Cruise Lines International
Cruise Lines International Association did a study that showed the profile of the average cruise vacationer as being someone with an average household income of around USD90,000.
That's great news....I'm a 1%!!!
Chip, your hatred for the cruise industry and your desire to stick it to the people that have saved money to travel to southeast is just sad.
Sales Tax
The CBJ collects sales tax on transactions made in Juneau, although there are some exemptions or caps on the CBJ sales tax, e.g., a cap on amount collected above a certain price point for big ticket items, folks that have an exempt card, etc., etc.
The more interesting CBJ sales tax issue has to do with transactions that are made out of Juneau for delivery in Juneau. For example, excursions sold by a travel agent, cruise line or other entity via the Internet often do not include payment of the CBJ sales tax. This is believed to be a considerable number of transactions and results in a fair amount of sales tax leakage.
The point being that some folks in Juneau see all the excursion activity and just assume that the CBJ is raking in sales tax. Sure, the CBJ receives sales tax on a lot of candy and tee shirt sales, but not nearly as much from the more expensive excursions as is touted by boosters.
Decent story here that confirms a couple points made by many folks over the last 2 or 3 years: 1. Alaska is a very desirable destination, and; 2. The downturn in cruising to Alaska in 2010 had everything to do with the recession and little to do with the taxes paid by passengers to the State of Alaska and local ports to pay for infrastructure and other amenities necessary to host the passengers.
Alaska may well be back up to a million cruise passengers next cruise season or perhaps in a year or two, although it is possible the cruise lines might not increase capacity again for a while in an effort to keep the margins robust.
chip thinks anyone who works
chip thinks anyone who works for a living must be a 1%.
Absolutely the CBJ is
Absolutely the CBJ is collecting sales tax on shore excursions. It is the responsibility of the tour operators to collect and submit sales taxes just like all businesses in Juneau. do you think that tour companies are getting away without paying their taxes? Check your facts before you go throwing around these unfounded claims that you and Chip are so fond of.
CBJ jewelry tax exemption
It was my understanding that jewelry sold in Juneau that is over $7000 is exempt from CBJ sales tax. This is not fair.
I might be wrong, so if someone has insight to that, I'd appreciate it.
Otherwise, it's just another tax break for the rich. Few 99%'ers can afford $7000 chunks of jewelry. And those who can afford $7000 pretty rocks likely don't look at the pricetag, nor are they dissuaded by a measly 5% sales tax on their pretty rock.
Tax cap
Jo - The first $7500 of any goods or services in CBJ is subject to the 5% Sales Tax - up to $375 for any one item.
For reference the cap in Petersburg is $72.
Most Excursions Are Tax Exempt
Cruise shore excursions that are sold with the ticket purchase or onboard the ship are tax exempt; local, state and federal. This has been going on since cruise ships began coming to Alaska, because the ships are foreign entities whose transactions are tax exempt.
Consequently, most high-end and popular motorized excusions - by boat, bus, helicopter, plane or train - are exempt from CBJ taxes and every other US tax. The shore operators pay CBJ property and US payroll taxes for their employees, but the hundreds of millions of dollars worth of motorized excursions do not pay taxes, except for those few that are purchased on-site, same-day.
I object to entities that are virtually tax-exempt, that deny it, then gather shills and grifters around them to scream the denials at every opportunity. It reminds me of Soapy Smith...
Wrong again Chip. The cruise
Wrong again Chip. The cruise line do not collect the CBJ sales tax but the local operators absolutely do! This I know first hand and this I guarantee. For a self proclaimed expert you sure do get lots of information wrong.
Chip has never let the truth
Chip has never let the truth get in his way. He constantly barks about wanting to stick it to the cruise industry, when in actuality, things like the head tax are paid by the very 99%ers he tries to get people to believe he's standing up for.
cjnorth
You sound like someone who knows about this. Can you please provide more information to substantiate your claim besides your 'guarantee'?
I'm sincerely curious about this because I've heard the same claims that Chip is making but have never had anyone demonstrate that they're wrong.