Cruise lines on Canada ban: We're not giving up on Alaska yet

|
The Norwegian Joy in Vancouver, British Columbia, in 2019. Canada's extension of the cruise ban complicates the Alaska season for cruise lines, because ships on U.S. itineraries are required to stop in a foreign port as part of their itinerary.
The Norwegian Joy in Vancouver, British Columbia, in 2019. Canada's extension of the cruise ban complicates the Alaska season for cruise lines, because ships on U.S. itineraries are required to stop in a foreign port as part of their itinerary. Photo Credit: Tom Stieghorst

Cruise lines have not canceled their upcoming Alaska cruises, expressing hope that there will be a way to save the season despite Canada's extension of its cruise ban into 2022

The government of Canada on Thursday announced an extension of its cruise ship ban for one year, until next February. And unless the U.S. gives cruise ships relief from the Passenger Vessel Services Act (PVSA), which mandates that foreign-flagged ships call on at least one foreign port on any U.S. itinerary, the ruling would effectively ends any hopes for large-ship cruising in Alaska this summer

Uncruise Adventures, American Cruise Lines and Lindblad Expeditions reminded cruisers that they are not impacted by Canada's cruise ban extension.

Continue Reading

In order to satisfy the PVSA, itineraries to Alaska generally start, end or call in Vancouver or Victoria, British Columbia. 

CLIA told Travel Weekly earlier this month that if Canada's restrictions were likely to remain in effect "for an indeterminate period, the cruise industry may consider asking for temporary relief from the PVSA." So far, the association says it hopes to "operationalize a path forward" with the Canadian government.

Travel advisors around the country said they would stand behind any push for PVSA relief.

"The industry needs to back CLIA as they push for PSVA relief to help get the attention this needs," said Vicky Garcia COO of Cruise Planners. "This has tremendous economic impact on so many, not just cruise lines, but so many small businesses, including the ports and those local vendors, and of course, travel advisors. It would've been understandable for Canada to delay until June or July to ensure safety; however, a year is absurd and very damaging to not only our industry but the economy."

Norwegian Cruise Line Holdings said that it has not canceled its cruises that visit Canadian ports while it reviews the order and works through "all available options."

"We are currently exploring several initiatives that may allow such cruises to continue, especially for the important Alaska season," a company spokesperson said. "Given the fluidity of the current environment, we will also continue to work with the Canadian government to amend their current suspension. We are working through all available options as quickly as possible and as a result we have not canceled our 2021 cruises that visit Canadian ports. We will continue to keep all travel partners and guests updated as the situation progresses."

Holland America Line and Princess Cruises, which have extensive land operations in Alaska that complement their cruise operations, both said that while they are "disappointed" in Canada's decision, if they cannot launch cruises in Alaska this summer, they are still committed to operating at least one of their two Denali lodges, the Westmark Fairbanks Hotel and Kenai Princess Wilderness Lodge, respectively.

"We will continue to maintain a focus on what we can do to support our fellow Alaska businesses, the thousands of people who rely on the tourism industry, and the regions in which we operate," both lines said in statements.

The Kenai Princess Wilderness Lodge, an Alaska lodge operated by Princess Cruises. The line said that it planned to operate the lodge for part of the summer even if cruises couldn't operate.
The Kenai Princess Wilderness Lodge, an Alaska lodge operated by Princess Cruises. The line said that it planned to operate the lodge for part of the summer even if cruises couldn't operate.

"Given the unexpected length of the order, it will take us some time to assess whether there are any options to preserve a portion of the 2021 Alaska season," according to the statement, which was also provided by parent company Carnival Corp. "We will be consulting authorities in both the U.S. and Canada before we take any additional action."

The statement added: "The cruise industry has demonstrated its commitment to health and safety through the development of extensive protocols in consultation with a panel of world-class medical experts, which will be implemented when we resume service. In addition, we recognize our importance to the economic health of many Alaskan communities and will continue to pursue any option which might permit safe operation of any portion of the season."  

Alaska's impact on cruise revenue

According to Patrick Scholes of Truist Securities, having to forgo an Alaska season is "not good for any company, but [is] most impactful" for Norwegian Cruise Line Holdings.

For Norwegian, he said, Alaska represents 9% of its annual deployment, while for Carnival Corp. it's 6% and 5% for Royal Caribbean Group. In the third quarter, those percentages jump to 22%, 15% and 11%, respectively.

In a note to investors, Scholes said Alaska cruises' impact on revenue is greater than those percentages, because Alaskan cruises are priced at a premium.

"There is widely-held belief that there will be a strong ramp-up in sailings in 3Q," Scholes wrote. "While there may be ramp-up in other markets, taking roughly 15% to 30% of expected revenues out of the 3Q equation from the loss of Alaska/Canada will likely put pressure on consensus estimates."

Comments

From Our Partners


From Our Partners

2021 WOL Webinar
The World of Luxury for 2022
Register Now
2021 Silversea Webinar
The Silversea Way - Two New Fares, One Incredible Experience Aboard Our Ultra-Luxury Ships
Register Now
Grand Palladium Lady Hamilton Resort & Spa and Grand Palladium Jamaica Resort & Spa
Grand Palladium Lady Hamilton Resort & Spa and Grand Palladium Jamaica Resort & Spa
Read More

JDS Travel News JDS Viewpoints JDS Africa/MI