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Alaska cruise leaders hail tax cut, marketing hike

Key industry figures hailed the 25 percent head tax cut and a nearly 80 percent boost for the state’s tourism marketing budget as significant steps in getting Alaska’s cruise business back into growth mode.

One of the most important cruise operators, Holland America Line, has already indicated the actions put future deployment considerations in a more positive light.

The tax cut “signals the beginning of a better and more positive relationship between the cruise industry and Alaska’s leadership,” said HAL president and CEO Stein Kruse.

“I know Holland America Line will be looking carefully at its 2012 and beyond itineraries in light of this news, and I feel certain the rest of industry will be doing so, too,” he told Seatrade Insider.

The Legislature’s approval of a bill to reduce the head tax from $46 to $34.50 effective with the coming season settles the industry’s legal action against the state, confirmed John Binkley, president of the Alaska Cruise Association.

He further noted the passage of an important measure that boosts the state’s annual tourism marketing budget from $9 million to $16 million.

“We are hopeful the demand will increase and the costs will be reduced. If this leads to better margins for the ships, I believe it will lead to getting capacity back to Alaska,” Binkley said.

Kruse, whose company is one of the top generators of tourism for the state, today was generous in praising lawmakers and Gov. Sean Parnell.

“The state of Alaska, through Gov. Parnell’s leadership and the passage of this legislation by the legislature, has taken a significant step toward making Alaska competitive again in the tourism market. We congratulate them,” he said.

Last month at Cruise Shipping Miami with Parnell in attendance, the Holland America chief pointed out there’s one place where cruising is on the decline: Alaska, where capacity is down 17 percent this year. Kruse pinned that on a tangle of taxes and on environmental regulations that he called “more burdensome and costly than anywhere else in the world.”

Parnell took the message home, introducing a proposal to lower the head tax and promoting, with renewed vigor, an earlier separate bill that provides tax credits to companies that support tourism marketing.

Lawmakers approved both measures in a down-to-the-wire session ending at midnight Sunday.

“Reduction of the head tax addresses one of the central concerns we have raised about Alaska,” Kruse said. “We look forward to working with them to also address the separate but related issues we have raised, such as excessive regulations that hold the cruise industry to environmental standards higher than those of any land-based facility.”

– Seatrade Insider

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