Tuesday, April 28, 2009
Despite Passage Of HB134, Norwegian Sun Cruise Ship Redeployed From Alaska To Europe Thanks To The Infamous 2006 Cruise Ship Initiative
In 2006, I warned that the ill-advised Cruise Ship Initiative, which gullible voters unfortunately approved, would gouge the cruise industry in Alaska.
O.K., maybe that was a bit hyperbolic, but the industry has struck back again. Despite the passage of legislation designed to introduce more flexibility into cruise ship wastewater discharge standards during the 2009 session, Miami-based Norwegian Cruise Line announced on Monday April 27th, 2009 that its Norwegian Sun cruise ship will redeploy from Alaskan waters to more profitable European waters during the summer of 2010. This decision will cost us as many as 2,000 tourists who would have spent money in the state. Company officials blamed Alaska's $50 passenger fee for the decision.
"After carefully weighing the rising costs of deploying three ships in Alaska and taking into account the recently enacted legislation, in particular the $50 head tax, we felt it was necessary to redeploy Norwegian Sun," said Kevin Sheehan, Norwegian Cruise Line's chief executive officer, in a statement. "Alaska is an incredible destination, but we are clearly seeing the impact of these changes in 2009, emphasized even more by this challenging economic environment."
Norwegian Cruise Line joins Royal Caribbean Cruises Ltd. in shifting a ship from Alaska waters for summer 2010. In January 2009, Royal Caribbean officials said they would move the Serenade of the Seas to another market. Regional Vice President Don Habeger of Juneau also said the 2006 ballot measure exacerbated the issue.
And more threats loom. Carnival Corp., which owns Holland America Line and Princess Cruises, has also threatened to "pull capacity" out of Alaska. And these cannot be considered mere "territorial-marking" or political threats any longer.
Naturally, one of the sponsors of the 2006 initiative, Gershon Cohen of Haines, is trying to spin it. He claims the ship shift is more likely about profits than the head tax. "They're redeploying ships in Europe because the American economy is falling apart and the middle class in America are not buying as many cruises and not spending as much money on board the ship as they have in the past," Cohen said. "It has nothing to do with the $50 head tax".
What a crock! It isn't just the economic downturn - the operators are clearly telling us that the head tax and other restrictions are also an issue. Amazing how all these "activists" somehow know more about a given industry than the operators themselves.
In The Alaska Standard, Dan Fagan also takes issue with this development, stating that the "pro-development, open-for-business mentality that used to dominate our state has clearly been replaced by an 'us against them' mindset when it comes to dealing with the our state’s largest job creators." Unfortunately, he also uses it as an opportunity to take a shot at Sarah Palin for not exercising more leadership, when the state legislature itself took steps to mitigate the ill effects of the 2006 cruise legislation by passing HB134, which allows for more flexible enforcement. Governor Palin is expected to sign the bill.
I have no qualms about criticizing Governor Palin myself when she does something which I believe adversely affects the public interest, and I'll even try to explain why it is a problem and propose a solution, but we've got to get out of this "Blame Sarah First" mode. When we put our elected officials through an endless gauntlet, reputable citizens will be reluctant to seek elective office - and all we'll be left with are scoundrels.
But Dan Fagan is right about one thing - if we want to attract and keep business in Alaska, we must open Alaska for business, with laws that actually encourage business in Alaska and a tax structure that doesn't penalize them for success.