Thursday, March 26, 2009

The Alaskan Picture Becomes Clearer

Tuesday's announcement by Carnival Corp that they intend to decrease capacity in Alaska in 2010 wasn't specific about which brands and how many ships, but Carnival chairman Micky Arison said the impact would be felt in Alaska.

Holland America has confirmed to CND that they will move one of their ships out of Vancouver where has operated on 7-day one way trips between Vancouver and Alaska. Instead they will move it to Seattle where it will operate a new 14-day round trip program from there. While it will still be going to Alaska, it will essentially only carry half the number of people. That translates into about 11,000 fewer passengers over the course of the summer.

Princess had already confirmed to CND that they would remove one ship from the Gulf of Alaska route and deploy it elsewhere. That represents 29% of their capacity in the Gulf, or 16% of their overall Alaska capacity.

Arison indicated that their land operations (tours and hotels) would also be scaled back. Neither company could yet provide data to CND on how many fewer employees they would have in Alaska in 2010.

Last ppdated 530pm EDT March 27, 2009

Tuesday, March 24, 2009

Bombshell for Alaska

In today's conference call to discuss the last quarter's earnings, Carnival Corp chairman Micky Arison said the effects of Alaska's initiative, which imposed a $50 tax on passengers cruising to the state, are now becoming clear with bookings to Alaska down in the "double digit" percentages for the company. With pricing down, the $50 becomes even more significant.

He announced that Carnival intends to decrease capacity in Alaska in 2010, and specifics will be announced soon. Royal Caribbean International earlier announced reducing their presence in the market next year from three ships to two.

Arison went on to say that if the 2010 cuts don't help stabilize the market and improve yields, there will be additional cuts in 2011 capacity.

In response to one of the questions, Arison said the reduced capacity will also have an impact on their Princess Tours' and Holland America/Westours' land operations.

Proponents of the measure to increase the taxes in Alaska argued the public would not mind the additional taxes and cruise lines would not reduce capacity.

Further details will be in today's edition of CND.

Updated 11:05am EDT