Head tax could make bad tourism year worse, cruise official says

PHOTO/Lisa Seifert/For the Journal
With Alaska tourism facing a possible decline in summer 2002 visitors, a $50 per person head tax proposed by some lawmakers is ill timed, said one cruise line representative.

John Fox, a senior vice president with Royal Caribbean Cruises Ltd., spoke Nov. 30 at Sheraton Alaska Hotel during the Resource Development Council for Alaska Inc. annual conference.

He presented his views as a member of the Vancouver, British Columbia-based North West CruiseShip Association.

"In these grim days Alaska should send a message that it welcomes visitors," he said.

For 2002, cruise lines plan to deploy four additional ships to Alaska, a result of repositioning ships away from less attractive Middle East and Mediterranean routes, he said.

The cruise industry made the changes so more Americans could be within reasonable driving distance of a cruise port.

This summer 25 large cruise vessels will serve the state: 21 based in Vancouver, British Columbia, and two each based in Seattle and San Francisco, he said.

The move represents a 10 percent increase in capacity, Fox said. Typically, cruise ships in Alaska run at 90 percent occupancy, he noted.

Fox cited reports in late November from the Alaska Travel Industry Association that advance bookings for tours and shore excursions were down 40 percent compared with the same period last year.

One major factor affecting the travel industry is Americans’ reluctance to fly following this fall’s terrorist attacks on the East Coast, he said.

Whatever faith had been restored in air travel was stalled after the November airliner crash in New York, he said.

Alaska could post a good tourism season if people return to commercial flying, he said.

"We do know Americans are postponing their vacation decisions so we literally won’t know until the season arrives," Fox said.

Tourism around the country has been affected by the September attacks, he said.

"The fallout from Sept. 11 has been particularly devastating to the travel industry," he added.

Communities around the state were affected, including Anchorage losing revenue from convention cancellations and Juneau’s loss of $2.5 million in sales tax revenue, he cited.

The cruise industry has been hit hard by the slowing travel trend. Two cruise lines have filed for bankruptcy and others have laid off workers or delayed market entry of new ships, he said.

Fox believes a proposed $50 per person tax is unnecessary because the cruise industry already pays fees totaling $60 million annually to support Alaska infrastructure. The industry in the state supports 15,000 jobs, he said. Cruise companies spend $70 million on their own to market travel to Alaska, while the industry also financially supports ATIA’s marketing budget, he said.

A study by the state trade organization, conducted before Sept. 11, showed that 58 percent of those people surveyed said an additional $50 charge could cause them to decrease spending for onshore activities, Fox noted.

12/09/2001 - 8:00pm