Americans are taking shorter, less expensive vacations, and the Alaska tourism industry needs to cater to that market, Princess Cruise and Tours President Charlie Ball told an Alaska Business Roundtable luncheon audience Thursday.
"We need to make our products what travelers want," Ball said, "(and) figure out a way to provide less-expensive products."
Ball's presentation included an overview of Princess Tours' commitment to Alaska; the state of the cruise industry in general; the Carnival-Princess merger; the state of the Alaska travel industry and its outlook for the future.
Princess Tours has about $200 million invested in Alaska, Ball said. It has partnered with more than 1,100 Alaska businesses and has focused on marketing Alaska, not a cruise, as the product. The company also has worked with the state to be responsible corporate citizens.
"We've prioritized very highly our stewardship of the state," he said. "At the end of the day, we don't have anything to sell if we spoil it all."
The cruise industry in general, Princess Tours included, has had several hard years, Ball said. Most companies are "trying to digest" a building spree they began in the late 1990s to increase capacity for their growing customer base.
"We've had a number of difficult years in the industry in maintaining our profitability," he said. Though most of the boats that arrive in Alaska are filled to capacity, the cruise packages have been sold at significantly reduced prices, he said.
Part of the problem could be solved, he said, with better marketing.
"Like it or not, this capital is here, so we've got to get the word out about it," Ball said, echoing a familiar refrain in Alaska's tourism industry.
Outside destinations are "killing us" with marketing, he said.
The difficult economic state of the cruise industry is one of the reasons the Carnival-Princess merger makes sense, Ball said.
"In part, it's the realization that we need to be in a stronger economic position," he said.
While it is unclear how the merger will affect Alaska businesses who work with the Carnival group, which includes Holland America, it likely will not have a huge effect on the number of people employed by the group in Alaska, Ball said.
"It's going to be less change than everybody imagines," he said.
The consolidation will be most visible in the company's ground operations, such as motor coaches.
"You are still going to see two different corporate brands trying to offer two different products," he said. "... One priority is not to mess up two existing, successful companies."
Ball also issued a warning about the dangers of political debates about the cruise industry.
"The road to Southcentral Alaska goes through Juneau," he said. "... Juneau is the capital, and there's lots of discussions about our business here that get reported outside of the state."
Those discussions, no matter how they turn out, can negatively affect a potential visitor's decision to vacation in Alaska, Ball said.
Christine Schmid can be reached at firstname.lastname@example.org.
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