Saturday, May 16, 2009

Cruising Alaska (part 2) – Don’t Get Left Out in the Cold!

Last week’s blog explained that we will have a drastic reduction in cruise beds sailing in Alaska in 2010 which is mostly due to the excessive taxes and port-related fees that Alaska’s state and local governments charge on cruisers. At least five cruises lines have adjusted ships and itineraries which will bring down the number of passengers able to cruise in Alaska by at least 25%.

With such a large impact one of the cruise industry’s most popular destinations, wise consumers will need to know how this will affect you.

Cruise prices, like most prices, are based on the laws of supply and demand. Cruise lines want to earn as much money as they can on their cabins. When the demand is low and cabins are not selling, we see lower rates and promotions. When the cabins are filling, prices increase.

The lower “supply” in Alaska next year will cause a higher demand for those beds and, therefore, higher prices. My advice is to book early! As cabins fill and prices increase, your cruise rate will be protected from increase. In the less likely event that your ship doesn’t fill and the cruise line offers a promotion, there’s a good chance that you will qualify for a reduction. No guarantees, but the majority of cruise rate promotions are applicable to previously booked reservations.

The cruise lines’ reductions also means less choices of ships, itineraries, cabin location and cabin type so don’t risk waiting too long. If your heart is set on something specific, the key to getting what best fits your interests is to book early.

I’m estimating that the reduction in “beds” due to ship deployment and itinerary juggling is going to reduce the number of wheelchair accessible cabins by about 20%. That’s one fifth less accessible cabins in a market that offers the most accessible ports. My fear is that this change for next year is going to most affect the travelers who have disabilities requiring the necessity to have one of these coveted cabins. Booking early is particularly important for travelers needing accessible accommodations.

Most of the cruise lines already have their schedules set for their 2010 Alaska sailings. While the brochures won’t be out for a while, our travel consultants do have access to all of the information available. We’re ready to book you and your friends, your family or your group. We have the keys to making a great vacation and you now have the key to what it takes to get your cabin choice at the best rate.
Don't procrastinate. Book early!

Saturday, May 2, 2009

Cruising Alaska (part 1) - Are We Tourists or Cash Cows?

Many Alaskans understandably experience mixed emotions regarding cruise passengers which is understandable. The scales weigh between needing income from tourism versus not wanting tourism to destroy the environment.

But Alaska’s politicians use cruise passengers as a cash cow for the state. Taxes and port-related fees are tremendously higher in Alaska than in most other areas. For instance, I compared two ships, each sailing to four ports in mid-August. Each had minimum balcony rates with just about the same cruise base rate. The taxes and port related fees for Carnival Cruise Lines’ Carnival Spirit in Alaska came to $318.45 whereas the same line’s Carnival Valor in the Caribbean had fees and taxes of $228.87. I found that the added costs on the Alaska cruise represented about 25% of a traveler’s price while those added costs on the Caribbean cruise were 17% of the total price. Obviously on a lower priced cabin such as an inside, the percentages going toward taxes and port related costs would be much higher.

Included in these inflated costs of cruising in Alaska is a $50 “head tax” known as the “Cruise Ship Initiative” that was barely voted in during 2006 to start with the 2007 sailing season. Also included in this “initiative” is a requirement that cruise lines must pay one third of all onboard gambling proceeds to the state of Alaska. As alcohol and gambling represent the two largest shipboard incomes, this is a huge blow to the cruise lines’ pockets which either needs to be made up in revenue elsewhere or as lower earnings when sailing in Alaska.

In a bad economy, the law of supply and demand has translated into too many cabins still available in this year’s Alaska season for the cruise lines to be comfortable. Therefore promotions roll out that lower prices on whatever sailings aren’t filling adequately. The providers of the accommodations, food and entertainment--- the cruise lines--- bite the bullet and have to lower their prices although the state of Alaska still gets their same income per passenger.

A combination of the economy and the cost of doing business in Alaska were the biggest motivators in Royal Caribbean announcing that they are going to deploy one less ship in Alaska in 2010. Immediately following this announcement, ABC Alaska News reported, “Analysts predict $55 million in lost revenue, 42,000 less visitors to Alaska, and the loss of 600 full time jobs.”

Royal Caribbean’s statement was soon followed by similar announcements by Holland America, Princess Cruises, Carnival Cruise Lines and Norwegian Cruise Line.

The state of Alaska will experience drastically lower revenue from cruise passengers next year. But perhaps their environment will be better off.

Stay tuned for a future blog on how this affects everyone wanting to cruise to Alaska whether you are a travelers who has a disability or not.

By the way, I meant no disrespect to cows in the writing of this blog. I lived on a dairy farm as a young child. We had Holsteins. They’re cute in a big, dumb kinda way. They don’t understand taxes. But I’m not crazy about bulls. Maybe some day I’ll tell you about Big Jack.