Saturday, April 17, 2010

Cruise Lines Score Win in Alaska

Looks like the tax the the government approved the tax to be lowered. And at the bottom of the article, it's rumored that Royal Caribbean is leaving the Port of Miami.

Cruise Lines Score Win in Alaska

Alaska's Senate has agreed to roll back a tax on cruise ship passengers that has angered the industry and led some lines to cut back on ships visiting the state.

The tax would be lowered o $34.50 from, according to news reports. The bill still must be approved by the Alaskan House.

The cruise industry has challenged the tax in federal court as an illegal entry tax and the Senate bill would reportedly settle the issue if enacted.

The Alaska Cruise Association said the state will see a 14.2 percent drop in cruise capacity this year, which is 140,000 passengers.

Association officials could not be reached immediately for comment, but the group's Web site noted: Miami-based Carnival Corp. & PLC (NYSE: CCL; NYSE: CUK) previously stated that the move of Holland America's 1,270-passenger Ryndam to Europe in 2011 and Princess Cruises' 710-passenger Royal Princess to P&O Cruises were in line with the continued drop in Alaskan deployments.

Carnival Corp. and Royal Caribbean Cruises Ltd. (NYSE: RCL) spokespersons did not have immediate comment on the bill's passage.

Richard Sasso, who leads the marketing committee for the Cruise Lines International Association in Fort Lauderdale, said: "We need to be careful that destinations don't underestimate the value of cruise ships going to destinations and the economic contribution that makes."

Overly aggressive taxation can put a burden on guests, adding to the cost of a cruise and generate concern among cruise operators that the taxes aren't justified, especially if the proceeds aren't being used to enhance infrastructure related to cruise ships, he said. "What happened in Alaska over the years is they escalated the tax to a point where it seemed to be not only unconstitutional but also not a favorable cost structure for cruise lines to wanting to operate there."

Maritime lawyer Jim Walker of Miami, who is critical of pollution caused by cruise ships in Alaska, wrote on his blog that the vote is a big win for Carnival and its subsidiaries.

In other news

USA Today's Gene Sloan has written an article about what he describes as "Royal Caribbean's slow-motion pullout" from its longtime hub at the Port of Miami.

His posting followed Royal Caribbean's announcement that the 3,634-passenger Liberty of the Seas will move to Port Everglades in November 2011.

Royal Caribbean's Oasis of the Seas, which is the world's largest cruise ship, is already based at Port Everglades and the sister ship, Allure of the Seas, will be based there later this year.

The tent-like roof of Royal Caribbean's terminal is a landmark at the Port of Miami, but Sloan noted the company will have only one ship left in Miami in the winter of 2011-2012.

Royal Caribbean can utilize the state-of-the art Terminal 18 at Port Everglades, which is the world's largest cruise terminal. Port Everglades officials have touted the port's next-door proximity to Fort Lauderdale-Hollywood International Airport as a key marketing advantage because it's the discount airline hub for South Florida.

Royal Caribbean's move may put pressure on the Port of Miami, which is contemplating building a new cruise terminal, as previously reported on Cruise Industry report.

The move could also enhance Port Everglades' efforts to challenge the Port of Miami as the world's busiest cruise port in upcoming years.

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