Princess Cruises to add Juneau ship

Posted: Friday, October 15, 2010

Princess Cruises will be returning one of the ships to Alaska that it pulled after the state's voters in 2006 adopted a passenger head tax and other cruise industry regulations.

Princess, a subsidiary of Carnival Corp. announced Thursday it would be adding a seventh ship to Alaska in 2012.

"I'm so over the moon," said a thrilled Tanja Cadigan. She's owner of Caribou Crossings in downtown Juneau, and had urged the Alaska Legislature to reduce the head tax.

Earlier this year Gov. Sean Parnell began advocating for a reduction in the head tax, and last spring the Legislature agreed.

"With Princess making the first move, lets hope this encourages the other brands to make moves as well," Cadigan said.

The as-yet-unidentified ship will be the fourth Princess ship sailing the "Voyages of the Glacier," run from Vancouver to Whittier. That seven-day route is a particularly valuable one for Alaska, because many of those passengers also visit other parts of Alaska, including attractions such as Denali National Park.

"Because many passengers on this one-way route usually spend extra time in Alaska's interior utilizing Princess' lodges, rail and motorcoaches, this itinerary provides significant tourism benefits to the state," a statement from Princess said.

Carnival Corp. owns both Princess Cruises and Holland America Line. Those two companies have huge on-shore operations in Alaska, including operation of Juneau's Baranof Hotel.

The company has a total of 15 hotels and lodges in Alaska, with 3,400 guest rooms, as well as hundreds motor coaches. Those land operations saw their revenues plunge and profits disappear after they reduced ships to Alaska.

In 2009, Carnival lost $16 million on revenue of $427 million, after revenues fell by $134 million from 2008. Bringing a fourth ship back to the Whittier run will enable those revenues to rebound.

Responsible Cruising for Alaska President Chip Thoma called the announcement "very encouraging," but disputed Princess and Cadigan's contention that the head tax was why the cruise industry moved ships in the first place.

"I think we all know it was more the recession than the head tax," he said.

Responsible Cruising for Alaska sponsored the initiative adopted by the voters, but since then the Legislature has rolled back many parts of it, including the head tax.

The industry disputes that the recession was the cause of declining profits in Alaska.

"There is no question that excessive taxes and government regulatory hurt our business climate," said Bob Berto, President of the Alaska Alliance for Cruise Travel.

Alaska ACT issued a statement Thursday praising Parnell and the Legislature for reducing the head tax and attributing that to the new ship's arrival.

"While more work needs to be done, today's announcement is proof positive that improving our business climate can lead to a stronger economy," Berto said.

Parnell, too, welcomed the new ship, which he said would bring 45,000 new visitors and $40 million in direct and indirect spending to Alaska.

"I am extremely pleased that Princess has demonstrated confidence in Alaska's business climate by adding another ship in 2012," Parnell said. "It is particularly exciting that the ship will sail into Southcentral Alaska, allowing visitors to spend additional time in our state."

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