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Unique Cruise Solutions The news you need to know |
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Cruise News for the Corporate Travel Professional |
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Alaska governor strikes deal with cruise lines to bring back ships |
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The growing battle between Alaska and the cruise
industry over taxes and regulation reportedly took a major turn Friday as Alaska
Governor Sean Parnell announced he had struck a deal with big lines to bring
back ships. It would appear that in return for a 25% cut to the state's controversial $46-a-person tax on cruisers, cruise line executives have agreed to drop a federal lawsuit against the state to repeal the tax and to increase capacity in the state. The agreement was hammered out during a roundtable discussion between Parnell and cruise line executives Tuesday at Cruise Shipping Miami. It was noted that the reduction in the three-year-old head tax from $46 to $34.50 per cruiser must be approved by the Alaska legislature. It said the reduction would eliminate the 25% of the tax that had been designated for spending outside of Alaska port communities, a use of a cruiser tax that the industry argues is illegal under federal law. However, it is unclear whether the tax reduction would pass the state's legislature. Most major lines operating in Alaska including Princess, Royal Caribbean and Norwegian Cruise Line have reduced capacity in the state significantly for 2010, citing soaring taxes, fees and regulations that have made it a more difficult place to do business. More capacity cuts are in the works for 2011. "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," Carnival Corp. Chairman and CEO told Wall Street analysts in September during a conference call to discuss third quarter earnings. "You're talking the peak July and August period where we can make a lot of money on a lot of different itineraries, and (because of rising fees and taxes) we can't make a lot of money in Alaska." Carnival Corp. is the parent company of Princess and Holland America, the two biggest players in the Alaska cruise market. The meeting between Alaska's governor and cruise industry executives Tuesday came the same day Holland America CEO Stein Kruse delivered a stern warning to the state over its growing taxes and regulations on cruise lines in a speech to hundreds of executives from cruise companies, ports and vendors at the Cruise Shipping Miami conference. "We can and we will move ships," Kruse said, noting that cruise capacity in Alaska already is down 17% between 2009 and 2010. "It's a fabulous state, one of the great cruise destinations, (but) Alaska needs to realize that people and ships will not go to Alaska just to go to Alaska." |
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