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Alaska passengers may increase, profit may not

Posted: Thursday, March 25, 2004

ANCHORAGE (AP) Alaska can expect more cruise ship passengers this year but that may not mean bigger profits for the industry, said a Holland America executive.

Holland America Vice President of Government and Community Relations John Shively told the Anchorage Chamber of Commerce earlier this month that 807,040 tourists, or over 31,000 more people compared to last year, are expected to visit the state on a cruise ship this season. That projection is up by over 51,000 visitors from 2002 figures.

''Our revenue doesn't necessarily follow that trend,'' Shively said.

That discrepancy can be attributed to a steady increase in the size and number of ships offering trips to Alaska, which has resulted in highly competitive pricing between cruise ship companies, Shively said.

''The industry as a whole has increased capacity in double digits for the last few years,'' he said. ''Some of that capacity is coming up here.''

Holland America is bringing one new ship to Alaska this year, the MS Oosterdam, which will be joined by six other Holland America ships scheduled to complete 139 cruises, according to the Alaska Journal of Commerce.

Princess Cruises also has two new ships destined for the state, while Royal Caribbean International, Norwegian Cruise Lines and Silver Seas will all either add a new ship or replace older vessels for this season.

The cruise ship industry accounts for more than 52 percent of all visitors to Alaska, according to the North West Cruiseship Association.

Along with the additional cruise ship capacity being introduced to Alaska, Shively said expanded opportunities to cruise in other places, such as the Caribbean, are intensifying the competition for cruise ship passengers.

Even with the competition's downward effect on prices, Shively looks at the forecast for 2004 with an optimistic regard.

''I think we're positive about this coming year,'' he said.

The industry is keeping an eye on a ballot initiative that failed to garner enough signatures for this year's general election, but may gain enough support to be submitted to voters in 2006.

The initiative proposes a combination of taxes that would result in a $50 per passenger assessment. Additionally, a 33-percent tax would be levied on gambling income from onboard the ships.



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