Alaska tourism officials stumped by decline in cruise visitors

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Alaska tourism officials are peering around doorways, checking under seat covers and glancing over their shoulders, looking for 8,000 cruise passengers who didn’t show up for the 2011 high season.



Preliminary cruise arrival numbers show a nearly 1% decline from the 2010 season, although the major cruise lines’ deployments held steady.

In 2010, 878,000 cruise passengers sailed the Last Frontier, and this year the number dropped to 870,000.

“I don’t honestly know why,” said Ron Peck, president and COO of the Alaska Travel Industry Association. “Our air arrivals were up substantially, FIT arrivals from international markets were up and cruise was down.”

The association is trying to figure out “how each line determined their lead-in prices and specials” and how those strategies resulted in fewer passengers, he said.

“The question to me is, did the cruise lines overestimate what they could get in terms of price? Were berths left over?”

Peck said he wasn’t aware of discounting in the run-up to high season.

“But if Line A runs at 102% occupancy and Line B runs at 90%, that’s going to account for the difference,” said Peck, who noted that the state won’t release official arrivals numbers until early 2012.

SunPrincess-AlaskaSince the major, publicly owned lines don’t disclose revenue, pricing or occupancy numbers by brand, it’s difficult to pinpoint how or why the cruise arrivals dipped.

The Alaska Cruise Association, which represents the lines operating in the destination, also is mum about the mystery. Efforts to reach its president, John Binkley, were not acknowledged.

Micky Arison, CEO of Carnival Corp., said in September that his company’s brands “did really well” in Alaska.

“We don’t see any reason why it wouldn’t be as good in 2012,” Arison said during the company’s third-quarter conference call with analysts. “We are very happy with the way it turned out [this year].”

Across all destinations, he said of the quarter, “cruise ticket prices for our peak summer season remained strong close to sailing, driving a 2.6% yield improvement. Our North American brands performed well, achieving an almost 6% yield increase.”

According to Peck, Carnival Corp. brands represented more than 50% of capacity in Alaska this year. Holland America Line and Princess Cruises each had seven ships in the market, and Carnival Cruise Lines had one.

Royal Caribbean Cruises Ltd., in its Q3 conference call with analysts Oct. 27, said yields in Alaska reached “a historical high,” an increase in excess of 15%. Officials did not address occupancy levels, however. Royal Caribbean International had two ships in the destination, and Celebrity Cruises had three.

There is anecdotal evidence suggesting that demand might not have been up to par.

Lisa Small, owner of Cruise Holidays of Anchorage, said she doesn’t recall the lines offering big discounts last spring or summer to fill high-season sailings. But she said, “They were doing a lot of discounting early on, last January to March, during Wave season. Even back into October 2010 there was really good pricing.”

Small said she had searched in August for a balcony cabin for clients who wanted to sail that same month. “I couldn’t find them a balcony cabin, but I did find inside cabins that were still available,” she said.

Some ships, she suggested, “may not have been sailing full.”

“I remember I could get decent pricing for May cruises in April,” she said. “That was unusual.”

Last June, Ross Spalding, president of Princeton, N.J.-based Crown Cruise Vacations, said that pricing had bounced back, but he was still finding open inventory for the remainder of the high season, although balcony staterooms were harder to snag.

One ship, he said, still had every cabin category available for a late July cruise.

Peck, meanwhile, is hopeful for next year. In 2012, Princess is slated to add one ship, and Holland America Line will boost capacity by 6%, offering more departures out of Seattle and Vancouver than it did this year.

RON PECKDuring the 2010 season, Alaska welcomed 150,000 fewer cruise passengers than in 2009. Princess and Holland America had cut capacity after the state implemented a controversial $50 cruise passenger head tax. The levy was eventually trimmed by 25%, which prompted both Princess and HAL to reward the state with the promise of more capacity in 2012.

“We’re very excited to have [another] Princess ship back next year and to have Holland America Line adding capacity,” Peck said. “Also, the Disney Wonder is staying all season in 2012. We think cruise arrivals could reach 955,000.”

The economy continues to be of concern to the state’s tourism officials, Peck said.

“We can do additional marketing, but we can’t control what happens with 401(k)sand other retirement funds and jobs. Our market is a little bit older — 50 to 65 —married, well traveled, generally no kids at home, and folks are looking at where their savings are and what kind of trip they can take,” he said.

Peck added that interest in visiting Alaska and advance bookings for summer 2012 appear encouraging.

“It’s almost as though the new normal for us is to be flat with the previous year,” he said. “I hope that’s not the case.”
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