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Alaska editorial: A comeback for the cruise industry

Posted: March 11, 2012 - 12:04am

This editorial first appeared in the Ketchikan Daily News:

The Alaska cruise ship industry is coming back in the wake of tax relief, with the passenger count expected to increase 50,000 this season.

More than 842,000 cruise-ship passengers are expected in 2012, according to the Ketchikan Visitors Bureau. Ketchikan anticipates 36 ships calling at its port and a total of 471 calls.

The Star Princess, a Princess Cruises ship, is returning to the line-up of ships calling here. With the capacity for 2,600 passengers, it will make 19 calls with possibly an estimated 49,400 passengers for the season.

When it comes to the big ships, Holland America Line also is upping the numbers with increased sailings into Alaska in 2012.

Norwegian Cruise Lines is scheduled to add the Norwegian Jewel to its Alaska fleet. The ship carries 2,466 passengers. With 18 calls on the calendar, the ship has the potential of offloading 44,388 passengers here.

The Jewel is replacing the Norwegian Star, a lesser-capacity ship.

The Alaskan Dream, owned by Alaskan Dream Cruises (Allen Marine Lines), also is scheduled to make appearances in Ketchikan. The 104-foot ship has can accommodate 42 passengers.

An Innerseas Discoveries ship, formerly a Cruise West operation, will be sailing one of its ships into Ketchikan weekly. Innerseas operates three 110- to 186-foot ships, including the 60-passenger Wilderness Adventurer, the 66-passenger Wilderness Discoverer and the 66-passenger Wilderness Explorer.

The number of cruise-ship passengers expected at the beginning of the season likely will be higher at the end. For example, in 2011 Ketchikan anticipated 787,990 passengers, according to KVB. By the end of the season, 844,400 passengers had been to the First City. That is about a 7-percent increase.

When looking at the 842,038 passengers expected at the start of this season, it is possible Ketchikan might entertain close to 904,000 before the season closes, based on the 2011 experience.

The increased number of passengers is directly related to the Legislature reducing taxes on the cruise industry in 2010.

This followed a 2006 ballot initiative that had imposed four new taxes on the industry. The initiative changed environmental standards and compliance methods, some of which was impossible for the industry to meet even with the best technology available. It also required private businesses to disclose confidential business information, a law since reversed by the Legislature.

As a result of the initiative, the cruise lines sent ships elsewhere and Alaska’s tourism industry lost about 150,000 passengers in the 2010 cruise season.

The cruise lines simply began moving to a more business-friendly environment, and the mostly small Alaska businesses that depend on the summer activity generated by the passengers suffered. It affected hotels, restaurants, tours and merchants.

Gov. Sean Parnell addressed the cruise industry decline almost immediately upon entering office, along with an organization called AlaskaACT, which included businesses and individuals supportive of the cruise industry. Ketchikan had representation in the group. As a result, Parnell and the Legislature reduced the taxes imposed on the cruise lines.

Cruise lines schedule ships seasons ahead. It will take a few seasons to regain what Alaska lost in terms of passenger capacity and begin to grow beyond previous records. But a 50,000 increase in passengers is a good beginning, and that number might reach close to 60,000 by the end of the season.

Alaska Economic Trends, produced by state economists, predicts the increased cruise traffic will generate about 50 new jobs in Southeast. It also should bring relief to some of the smallest Alaska businesses dependent directly on the cruise industry and improve business activity as well for those indirectly affected by the number of ships and passengers who visit here.

Alaska’s experience in recent years with the cruise industry show that it is imperative that Alaskans be well aware of the effect initiatives will have before they are approved by voters and become law, whether the initiative pertains to the cruise industry or not. It also demonstrates that, while business and industry will pay their taxes, they will respond to what they perceive as excessive taxation. They also will respond to tax relief, just like individuals — investing where they expect to receive the best return.

Alaska has what is now a growing cruise industry again. As a result, Ketchikan can look forward to a better season in 2012.

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