Royal Caribbean International has decided to redeploy its Serenade of the Seas out of Alaska in 2010.
The move will cost Alaska about $55 million a year in lost revenues, cruise line purchases, passenger spending, jobs and payroll.
"These ships have a huge impact on our economy," said John Binkley, President, Alaska Cruise Association. "A ship this size supports 600 full-time equivalent jobs and an annual payroll of $23.4 million."
Royal Caribbean has not disclosed the future itinerary of the ship, which this season will make 20 trips between Vancouver, B.C. and Juneau, Icy Strait and Skagway.
"We also lose indirectly as the marketing dollars associated with the Serenade will not be spent on a competing destination," Binkley said.
In a statement, Royal Caribbean said: "Alaska has traditionally been and continues to be an important market for Royal Caribbean International. For many years we have deployed three ships to Alaska during summer. In 2010, we will deploy two. This is the result of our further expansion into global markets and the relatively high costs, to our company and our guests, associated with Alaska sailings."
"Like other cruise lines, we have a responsibility to maximize the return to our shareholders. While our continued global growth assists in that process, the costs associated with Alaska sailings do not. We hope steps will be taken to reduce those costs and make Alaska more competitive in the U.S. and global marketplace. In the mean time, we look forward to operating two ships in Alaska in summer 2010 and continuing to offer exceptional Alaska cruise tours through Royal Celebrity Tours."
Dave Kasser of the Anchorage Convention & Visitors Bureau said the decision could be a harbinger of decisions by other lines. He called cruises "the Alaska starter kit" because first-time visitors on ships often extend stays or return with family and friends in tow.
"This industry needs to be coveted and accorded like any new industry that we would be attracting to Alaska," Kasser said. The state should be trying to make Alaska as attractive a destination as possible, he said.
"It's anyone's guess at this point if we're going to see any fallout here as a result of (Royal Caribbean's) decision to take that ship off the Alaska itinerary," said Patty Mackey, Executive Director of the Ketchikan Visitors Bureau.
The potential for losing cruise business because of additional costs was a reason many people opposed the 2006 cruiseship ballot initiative, according to Mackey.
"The cruise lines were telling us at that time that they're going to take a look at the cost of doing business," Mackey said. "I wouldn't be a bit surprised if all of the major lines are sharpening their pencils right now, particularly after the 2008 season, when you had extremely high fuel costs coupled with the fees and taxes that they're required to pay."
The 90,090-ton Serenade carries 2,100 passengers and a crew of 870. It has spent summers in Alaska since its was commissioned in 2003.
What happens when a destination loses a cruise ship
Losing a ship like the Serenade of the Seas will:
- Cost Alaska about $55 million/year in lost revenues, cruise line purchases, passenger spending, jobs and payroll.
- Reduce the number of visitors by at least 42,000/year.
- Reduce crew visits by about 17,000/year.
- Eliminate about 600 full-time equivalent jobs in Alaska and an annual payroll of $23.4 million. Reduce cruise line spending with Alaska businesses by an average of $6 million/year.
- Shrink government revenues by an average of $3 million/year.