Norwegian Cruise Line will send the Norwegian Sun to Europe next year, bringing to three the number of large ships leaving Alaska in 2010. The redeployment will cost Alaska $165 million and the loss of 142,000 passenger and crew visits.

Reaction was somber as Alaska Cruise Association (ACA) Associate Members received an update on the 2010 season and this year’s legislative session.

So far, three ships will leave the Alaska market in 2010, reducing capacity by 142,000 passengers. The direct hit to the state’s businesses and government is estimated at $165 million.

Norwegian Cruise Line followed statements by Royal Caribbean and Princess Cruises to announce the redeployment of the Norwegian Sun, a ship that carries 1,936 passengers and a crew of 946.

“After carefully weighing the rising costs of deploying three ships in Alaska and taking into account the recently enacted legislation, in particular the $50 head tax, we felt it was necessary to redeploy Norwegian Sun,” said Kevin Sheehan, Norwegian Cruise Line’s chief executive officer. “Alaska is an incredible destination, but we are clearly seeing the impact of these changes in 2009, emphasized even more by this challenging economic environment.”

The 14 percent reduction in vessels deployed to Alaska in 2010 will affect areas of the state differently, John Binkley, ACA President said.

Capacity to Alaska has been reduced by over 140,000 passengers thus far, with some decisions still pending. Changes to routes across the Gulf of Alaska and into Railbelt Alaska vary by cruise line. Carnival will no longer offer routes across the gulf in 2010, while NCL just redeployed the ship it planned to send across the gulf next year. Gulf-crossing routes can be expected to be down approximately 117,000 passengers overall in 2010. Other route changes include Holland America’s new round-trip route from Vancouver to Southcentral Alaska and back. This route will not allow time for land excursions beyond Southcentral and into the Interior.

Snapshot of passenger decrease
2004 – 880,000 passengers
2010 – 873,000 passengers
We will be below the 2004 passenger count.

2011 and beyond – opportunity to regain ground

Cruise lines will make 2011 deployment decisions the third and fourth quarters of 2009. Steve Hites, of the “North to Alaska” show in Skagway, stated that a concerted effort is needed ? from government, Alaska cruise industry and tourism partners alike ? to regain ships lost in the recent round of 2010 cuts. The loss of a ship results in a subsequent loss of all the ship’s support efforts to a competing location, and regaining those resources is difficult.

Overall, ACA members were concerned about the myriad of challenges ahead, yet determined to do whatever necessary to retain this important industry in Alaska?s economy.

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