Alaska to get record cruise visitors this year

As May marks the beginning of the lucrative cruise season in
Alaska, the 49th state can expect a record 1.3 million cruise visitors flocking
to see its glaciers, eagles and scenic vistas and experience its pioneer
heritage, according to projections by CLIA Alaska.

The increase this year comes mainly from more big ships,
including the largest ship deployed to date in Alaska, the 4,180-passenger
Ovation of the Seas.

The Ovation headlines a 25% increase in capacity in Alaska
this year for Royal Caribbean Cruises Ltd. But not all of its brands’ ships are
filling as well as the Ovation. Travel advisors report that Azamara Club
Cruises has cut prices twice so far this year to boost its 686-passenger
Azamara Quest, which is sailing 10-day cruises between Vancouver and Seward. 

In response, Azamara noted that Alaska is a “new region”
for the line, and that “there is still space available at a great value.”

The contrast shows that the tide of demand is still rising
in Alaska, but it is not necessarily lifting all boats. 

“Demand is reasonable. I would not call it phenomenal,”
said Rich Skinner, chairman of a Cruise Holidays outlet in Woodinville, Wash. “I’d
say we’re up slightly over last year — less than double digits, but we’re up
from last year.”

Alaska has benefitted in recent years from the perception
that it is a safe domestic destination as well as from something of a build-up
of cruise capacity on the West Coast resulting in part from the industry’s
cooling love affair with China.

The Ovation had been sailing from Tianjin, China, during the
summer. Now it will sail Alaska before heading through Honolulu to Sydney in
September.

In a recent conference call with investors, Royal Caribbean
International president Michael Bayley said that Alaska “is the
highest-yielding geographic market that we have.”

Long before Royal was going to Alaska, two cruise lines
based on the West Coast, Princess Cruises and Holland America Line, dominated
the market. Today, they still control a combined share of about 50% of Alaska
capacity. 

Since they pioneered the market, each has been acquired by
Carnival Corp., which this year will sail 17 ships in Alaska, amounting to an
8% capacity increase over last year. Pricing for Carnival in Alaska is lower
than last year, CFO David Bernstein said in a March investor call.

“But remember that 2018 was record pricing in Alaska,”
Bernstein said. “And so, overall, we feel very good about our pricing for
the various brands we have up there.” 

The biggest ship Carnival has ever stationed in Alaska, the
3,560-passenger Royal Princess, began its season on May 11 amid some
controversy about its maneuverability in the tight straits and passages of coastal
Alaska.

In an April 1 report on the ship, the Southeast Alaska
Pilots Association said the 141,000-gross-ton ship displayed “poor
steering response” compared with similar ships in Alaska in simulations of
wind and current conditions common to the area.

The report cited the ship’s conventional shaft-and-rudder
propulsion system, in contrast with the more flexible azipod propulsion of
other ships. It said the Royal Princess is the largest rudder-steered ship ever
to cruise in Alaska.

The report also made note of the ship’s 3.3-acre “sail
area,” the lateral surface exposed to the wind, which adds to the steering
challenge in high winds. In a statement, Princess said that while it
appreciates the associations’s efforts, the model used by the pilots group
needs refinement.

“There are three Royal-class ships operating safely
around the globe in many challenging navigational areas,” the statement
said.

Two other ships tested in wind simulations fared better: the
Norwegian Bliss and its sister-ship, the Norwegian Joy, which, like the Ovation
of the Seas, was moved this year from China to Alaska.

On an April preview cruise on the Joy, Norwegian Cruise Line
CEO Andy Stuart exhorted travel advisors to get behind the ship, which had a
short booking window after being pulled from China. 

“Your business is extremely important to us. Please
keep doing what you do,” he said. 

Several brands are new to the Alaska market this year,
including Cunard, which is sailing the Queen Elizabeth on 10-day cruises from
Vancouver, and Viking Cruises, which sails 11-day cruises on the Viking Spirit
between Vancouver and Seward.

New projects are in the works to ramp up infrastructure for
further Alaska cruise growth, including a groundbreaking this month for a
second pier at the Icy Strait Point port near Juneau.

Also this month, the Port of Seattle picked three teams to
compete to build a new cruise facility at Terminal 46, which the port is
planning to open in 2022.

The terminal would be closer to Seattle’s airport, which
drew applause from Adrienne Greben, a Cruise Planners franchisee in Concord,
Ohio. “The airport isn’t exactly convenient to the city center,”
Greben said.

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