Growth in cruise industry continues, but more slowly

Posted: Wednesday, September 07, 2005

The International Council of Cruise Lines has issued a study showing that Alaska continues to be the "busiest cruise destination market" in the United States.

But due to emerging competition from "drive-to" ports such as New York City and European cities, the North West Cruiseship Association is keeping an eye on Alaska's overall share in the $30 billion industry.

The rate of growth and overall share of cruise industry spending in Alaska has tapered off a bit, according to a comparison of the new study and findings from previous studies by the International Council of Cruise Lines.

"For there to be any substantial expansion (in Alaska), we'd need a few more ports that have infrastructure to deal with large cruise ships," said Michael Crye, president of the international council, on Tuesday.

Crye said adding infrastructure in other Southeast Alaska communities could alleviate the heavy crunch of passengers in ports such as Juneau, Ketchikan and Skagway.

"It's a relationship issue with the community," Crye said.

Though conditions are crowded in Ketchikan, its voters recently rejected a city proposition that would have allowed the city to issue up to $70 million in revenue bonds to expand cruise ship docks.

The cruise ship industry is now working with the city on the possible funding of the expansion through private investment, said John Hansen, president of the North West Cruiseship Association.

Some are saying that the rate of expansion in the region is finite, anyway.

"No one thought that there was an infinite number of people who would come in ever greater numbers to Alaska," said Joe Geldhof, a Juneau attorney involved in an attempt to assess a $46-per-passenger tax on the industry.

He said the industry should consider sending more boats to communities such as Wrangell or Haines if they are serious about spreading out cruise ship traffic in Southeast Alaska.

Alaska has retained its ranking of fourth in the United States, after Florida, California and New York, in direct spending by the cruise ship industry, according to the study. In 2004, the industry spent about $762 million.

"We're still seeing growth in the Alaska market," said John Hansen, president of the regional cruise ship association, on Tuesday. The number of passengers visiting the Southeast Alaska and their spending both increased about nine percent from 2003 to 2004, he said.

In the 1990s, the industry's rapid growth hit 12 percent to 14 percent and was at times hard for communities to absorb, Hansen said.

Alaska's piece of the cruise ship industry's overall spending in North America declined slightly from 5.4 percent in 2003 to 5.2 percent in 2004.

In addition, Alaska's overall share in cruise ship passenger visits declined from about 8.5 percent to 7 percent in recent years, Hansen said.

There is no reason for the region to worry about the slower rate of growth for Alaska, compared to other destinations, Hansen said, "unless we started to lose traffic."

In other findings, the study showed that the average wage generated by cruise ship operations in Alaska was $33,400 in 2004, including 1,500 full-time and part-time employees.

• Elizabeth Bluemink can be reached at elizabeth.bluemink@juneauempire.com.



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