Cruise industry asks businesses to fight against initiative

Posted: Friday, April 07, 2006

The cruise ship industry will rely on the business community to rally support opposing a ballot initiative set for August that would impose a head tax on passengers in Alaska, Charlie Ball, president of Princess Tours, said Thursday.

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Speaking to members of the Juneau Chamber of Commerce on Thursday, he relayed the message that the ballot initiative is "anti-development" and "anti-business."

"If we continue to get broad-base support across the state from local groups, then we'll rely mostly on them," Ball said.

The initiative includes several measures that would go into effect, including a $50 head tax on each passenger, taxes on gambling while in state waters, a requirement to disclose the cruise ship's commission on shore excursions, and a requirement to have ocean rangers on board.

Also on Thursday, the Juneau Chamber of Commerce board of directors elected to support the cruise ship industry's resolution of opposition to the initiative.

"We believe the initiative is not consistent with doing good business," said chamber executive director Cathie Roemmich.


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Gershon Cohen, a sponsor of the initiative who speaks for Responsible Cruising in Alaska, said everything in the proposal, including the head tax, is good for businesses.

Cohen said the initiative would require cruise ship companies to pay corporate and gambling taxes at the same rate as other businesses in the state and require cruise ships to meet the same water quality standards as other industries.

Another portion of the initiative would require cruise lines to disclose to their passengers the amount of commission the cruise line pockets from shore excursions advertised on board.

This form of on-ship promotion is unfair to local businesses that cannot afford to advertise with the cruise lines, Cohen said.

"We believe that if the passengers are aware of the commissions paid to the cruise line, that it is more likely that local businesses will have a fair chance to compete," he said.

Ball said passengers are not "crying" for this information and the disclosure may discourage them from taking the trips.

Tim McDonnell, a vice president at TEMSCO Helicopters, said that portion of the initiative picks on the tourism industry, because car dealerships, newspapers, doctors and other businesses are not required to disclose information on commissions.

The bottom line should be the value of the trip, not where the money goes, he said.

"How they split it up between the operator and the cruise line is, in my opinion, none of their business," McDonnell said.

The $50 head tax proposal has surfaced as the key issue in the initiative.

Ball said the tax would be passed on to the passenger and he maintains that customers look elsewhere when there is an increase in price.

"If you charge people more money without adding any more value, then you affect demand," he said.

Ball said a 7 percent decline in cruise ridership out of Vancouver, British Columbia, was partly due to passengers picking Washington as a favored port because the airfare to Seattle was $45 to $75 less than the flight to Vancouver.

"Charging the passengers a modest tax of $50 for the whole trip to Alaska, when weighed against the thousands of dollars they spent on the cruise, is not going to stop anyone from coming to Alaska," Cohen said.

Ball added that the cruise ship industry overall is doing well. Carnival reported profits of $2 billion last year.

Carnival announced Wednesday that it was considering adding "profitable" ports of call in Alaska to stave off weak business in the Caribbean, according to a Reuters report.

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