Cruises to Alaska: A Shrinking Fleet

Alaska is one of cruising's showcase itineraries with its abundance of wildlife, spectacular scenery, and ubiquitous glaciers. Cruises to Alaska have historically commanded a premium that reflected their appeal. So, why is it that cruise lines will deploy fewer ships in the region in 2010 and even fewer in 2011? For the answer to that you have to think back nearly a decade to the way Americans changed their travel habits after Sept 11, 2001. Many shied away from flying, especially flying overseas. As a result, fewer ships were deployed to Europe and the year-round Caribbean cruise fleet burgeoned. Alaska also saw an increase in the number of ships sailing there in summer months.

With more ships in the region, the state of Alaska saw an opportunity to cash in on the increase in passengers by levying higher fees and taxes on the cruise lines. Environmental alarmists also pushed through legislation containing regulations that the cruise industry found difficult, or impossible, to comply with. Higher fees and taxes and increased expenses came at a time when cruise lines had more berths to fill and fares were dropping to all-time lows.

Cruise industry leaders concur that it's become difficult to get the yields they require to make a profit from ships in Alaska. As a result, it came as no surprise when Holland America and Princess Cruises announced last week that each line is withdrawing a ship in 2011. Bear in mind those reductions come on top of decreases already made for 2010. As cruise ships depart the state for other more profitable cruising regions, Alaskans can't say they weren't warned. In fact, the wake up call should have been sounded when the Alaska Cruise Association, representing Carnival Cruise Lines, Celebrity Cruises, Crystal Cruises, Holland America Line, Norwegian Cruise Line, Princess Cruises, Regent Seven Seas Cruises, Royal Caribbean Intl, and Silversea Cruises, filed a lawsuit to challenge the state's head tax on cruise ship tourists.

Other than Holland America and Princess, major cruise lines have not yet announced their itineraries for 2011, but we wouldn't be surprised at cut backs in capacity and corresponding fare increases. If an Alaska cruise is on your bucket list, you might want to look seriously at sailing in 2010.