State likely to lose more ships

January 1, 1970

The Interior Tourism Summit, sponsored by the Fairbanks Convention and Visitors Bureau, explored challenges facing Alaska visitor businesses, including the news that cruise companies would send fewer vessels to the state next summer. The summit follows a season in Fairbanks that saw fewer visitors, reflected in fewer airline passengers traveling in and out and a drop in visits to the University of Alaska Museum of the North.

Carnival Corp. Chairman and CEO Micky Arison told Wall Street analysts that the company is likely to pull more ships out of Alaska over the coming year due to the rising cost of doing business in the state.

The parent company of Carnival, Princess and Holland America already has announced plans to reduce capacity in Alaska significantly for 2010, as has Royal Caribbean and Norwegian Cruise Line, but Arison says further reductions to begin in 2011 now are under discussion.

"It is likely we are going to do more of (the capacity cutting) in '11," he said during a conference call to discuss third quarter earnings. "The amount of cost that they've put on to the industry during this short season is astronomical, and it will continue to negatively affect Alaska."

Arison and other Carnival executives said it was becoming increasingly difficult to make money in Alaska due to growing fees, taxes and regulations imposed on cruise companies by the state, and they said that other destinations such as Europe now hold more appeal for their ships.

"The brand will decide to put the ship where there is the best return and the most profitable returns," Arison told analysts. "They have to put it in the context that they already have seven ships in Europe or they already have two ships in Australia, but they will model it out, and if it pays to pull a ship from Alaska and put it in Europe or ... the Far East they will do that."

Source: Cruise Log