Princess Cruises, Carnival, Royal Caribbean and Norwegian Cruise Line have all announced changes to their Alaska schedules for this summer and next, introducing new marketing initiatives and new products in a bid to cut costs and attract new business.

The bad news for Vancouver is that it is cheaper for vessels to operate out of Seattle, its U.S. rival for cruise vessel homeport status, 90 kilometers to the south. Cruise lines say additional new taxes levied by the State of Alaska are also to blame by driving up costs.

“We still expect ships to be full this summer, partly because Alaska remains a highly desirable destination and partly because of the redeployment efforts but, unfortunately, Vancouver is suffering the brunt of the economic downturn,” John Hansen, president of the North West CruiseShip Association, told Cruise North America magazine.

“There’s still a lot of ships left here, but Vancouver has taken a big hit. Passengers can fly to Seattle and join a ship there at a lower cost than if they fly to Vancouver. It’s really as simple as that.”

The industry anticipates a loss of up to 60 sailings this year for a total of 260,000 passengers, resulting in a $120-million hit to the local tourism economy and a projected reduction of 1.3 percent in overnight visitors to Vancouver.

“We are still working out what the net effect for Vancouver will be as a result of ship deployments and changes to the product mix, but it appears we will lose 20-25 percent of our business in 2010,” said Greg Wirtz, Port Metro Vancouver’s product trade development manager. “It’s a terrible situation. The community here has worked hard and is committed to serving the cruise industry and we are very disappointed for them.

“But our schedule will be three-quarters or more full in 2010 and we are committed to serving that business as effectively as possible while trying to rebuild beyond 2010.”

Tourism Vancouver, British Columbia’s biggest tourism agency, said in a release that it will continue to work with its industry partners to ensure that any drop in business is short term.

“We understand that this is a tactical move on behalf (of cruise lines) and not a reflection on Vancouver as a port,” said Stephen Pearce, Tourism Vancouver’s vice-president of leisure travel and digital marketing. “Tourism Vancouver expects this drop to be temporary and we’re working to continue to build interest in Vancouver cruise products among both established and new markets.”

The loss of cruise business through the port, which is facing strong competition from Seattle as the predominant homeport for the Alaska market, could not have come at a worse time.

Along with partners Port Metro Vancouver, the Vancouver International Airport Authority and Tourism British Columbia, Tourism Vancouver will host the Cruise Lines International Association’s Cruise3sixty event in 2010.

Tourism Vancouver is also working to increase demand for Vancouver-based Alaska cruises outside of the U.S. by exploring other opportunities in international markets such as Australia and the United Kingdom, which currently represent 12 percent of the overall cruise demographic in Vancouver.

This year there are 27 ships scheduled to sail to Alaska from Vancouver, Seattle and San Francisco, carrying close to 1.5 million passengers. Vancouver had 254 vessel calls last year, and its Washington State rival Seattle had 210.

But for the first time last year the Puget Sound port moved ahead of Vancouver in the total passenger count, recording 886,039, compared to 854,453 that boarded or disembarked in Vancouver. That gap is now certain to widen.

Mr. Hansen noted that despite the economic downturn, Alaska “retains its strong place in the market because it’s still a highly desirable cruise destination.” He cautioned, however, that the knock-on effect of increased taxes and higher costs remains a threat to its future prosperity.

“We need a turnaround in the economy to restore consumer confidence, and maybe if Alaska could change some of its tax requirements it would help,” he said. “We hope that the cruise business Vancouver has lost will come back, but in this industry there are no guarantees.”

Source: Cruise North America

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