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Cruise lines look to Asia

Daily News Staff Writer

The number of cruise passengers coming to Alaska is projected to continue to hold strong in upcoming years, even as cruise traffic to the state is outpaced by traffic to other parts of the world.

Alaska’s cruise industry is bouncing back after a decline that started in 2008 and became a crash in 2010, when the visitor count dropped almost 200,000 passengers from one year to the next.

The count was only 400 visitors shy of hitting 1 million in 2013, according to Cruise Lines International Association President John Binkley.

Ketchikan’s cruise visitor count is projected to fall from 2013, especially after the Carnival Cruise line announced last week that it canceled 15 of its 20 scheduled stops in the First City.

Statewide projections show 972,000 passengers bound for Alaska in 2014. Alaska is going to see two of the largest ships ever in the state in 2014 and 2015 — the 952-foot-long Crown Princess arrives in Ketchikan on May 12 and carries 3,082 passengers and approximately 1,200 crew, making it the most populous vessel to dock in the First City.

The Ruby Princess comes to Alaska and carries approximately the same number of people as the Crown Princess.

Port calls in Ketchikan and the rest of Alaska are expected to become a smaller share of the association’s cruise lines worldwide business, Binkley said on Friday in his presentation to the Ketchikan Visitors Bureau.

Growth in Alaska cruises has been outmatched — and the margin is widening — by growth in other markets beginning in 2005, according to Binkley, when Alaska accounted for 8.6 percent of worldwide business of the association’s member lines.

The association’s members include Carnival, Celebrity Cruises, Crystal Cruises, Disney Cruise Line, Holland America Line, Norwegian Cruise Line, Oceania Cruises, Princess Cruises, Regent Cruises, Royal Caribbean and Silversea.

Last year, Alaska sat at 4.8 percent of the global market — a 0.3 percent increase from the 2011 nadir — but is projected to fall back to 4.5 percent in 2014.

It’s not that cruise lines are steaming out of Alaska as they did in 2008 — which Binkley attributed to an unfriendly tax environment created by the 2006 voter initiative that levied five new taxes on the industry — but that they’re building more ships bound for Asia, the new and promising market for cruise lines, and other parts of the world.

The association’s members will deploy 410 ships globally in 2014, Binkley said, carrying 21.7 million passengers.

Deployments are rising in Asia (32 percent), Australia and Southeast Asia (22 percent), the Caribbean (12 percent), and northern Europe (5 percent).

Even with the jump in traffic to Asia, the continent will account for only 4.4 percent (less than Alaska) of the global traffic in 2014, but Binkley said that share is expected to shoot up in the coming years.

“The industry is really starting to put a lot of attention into Asia,” Binkley said, as cruise lines are looking to capitalize on China’s dense population.

Royal Caribbean is rolling out a new ship in the Asian market — an unexpected move for large lines.

“That’s very unusual,” Binkley said. “Usually, new ships they roll out in the Caribbean or in the Mediterranean, where some of their most popular cruising is.”

Asian populations aren’t natural cruisers though, he said, and lines are customizing their cruises to bring people around to the idea, rather than satisfy existing demand.

Binkley said the push in Asia isn’t a pilot program, but an open-ended push into the market — the results of which could mean gains for Alaska.

A cruise line survey showed that more Chinese are becoming wealthy enough to afford a cruise, and that Alaska “was one of those top destinations” for them, Binkley said.

“Even though they’re competition right now … in the future that could be very bright,” he said.

Binkley touched on the outlook at home as well as abroad.

There are a few facts that make Alaska an expensive destination for cruise lines and passengers alike, Binkley said, with geography being the most obvious.

Fuel is an issue for the state, and regulations from the Environmental Protection Agency and the state make paying for it more difficult.

Ships were required by the EPA to burn ultra-low-sulfur fuel, which was more expensive than regular diesel, until lawmakers convinced the agency to relax its standards, Binkley said.

He cautioned Alaskans against relying too heavily on the industry for tax dollars, given the competition from other parts of the world.

After his presentation, Binkley touched on the head tax spending in Southeast — singling out Juneau for handling its tax revenue poorly.

“I think we’re seeing some excesses in some communities, for example, Juneau,” he said. “They’re collecting so much — $13 million per year in head taxes.”

The association also objects to the City and Borough of Juneau’s practice of dedicating some head tax revenue to its general fund.

“We disagree with that,” he said, adding that the association believed it as “outside of what the law allows.”

Binkley also criticized Juneau’s $54 million cruise ship dock expansion, saying that it adds only 300 feet of dock space and calling it a “poor investment” of tax money.


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