There's good news on the horizon for Vancouver's cruise-ship business
VANCOUVER SUN JUNE 26, 2010
During the Alaska cruise season from May through September, cruise ships pull up alongside Canada Place and at Ballantyne Pier to disgorge passengers returning from their scenic voyage and welcome new guests about to embark on their own. Crews are refreshed, the galleys restocked and the vessel refuelled.
The cruise-ship industry is important to Metro Vancouver, with every sailing contributing about $2 million in benefits to the region. In good years, the business is worth an estimated $1.4 billion to B.C., with 90 per cent of that revenue flowing to Metro Vancouver, and supports more than 7,500 jobs. This, unfortunately, has not been one of the good years.
Cruise traffic through Vancouver is down by 30 per cent from 2009, when 37 cruise ships carrying 898,473 revenue-passengers made 257 calls, an increase of five per cent over 2008 volumes. The decline led commentators to question Vancouver's competitiveness, especially in light of Seattle's new $72-million US cruise-ship terminal, and they cited weaknesses in marketing and infrastructure, as well as high costs and an ineffective public policy response.
But the slump in cruise traffic has little to do with Vancouver and much to do with Alaska. An ill-conceived ballot initiative in 2006 introduced a $50 head tax on every cruise passenger entering Alaskan waters. Cruiseship companies reacted by cutting capacity on their Alaska routes and redeploying their ships to more welcoming destinations. Because schedules are planned a couple of years in advance, the impact is becoming apparent only now.
Alaska has seen a drop in cruise traffic of about 17 per cent, but Vancouver has borne more than its fair share of the loss, partly because it is the only port for the more expensive cruise-and-fly packages, which give travellers more time in Alaska than the typical seven-day round-trip cruise does. Cabotage laws (the Jones Act) bar foreign-registered cruise ships operating out of Seattle from offering the same product. Vacationers booking travel during the recession tended to choose the cheaper round trips originating in Seattle. It goes without saying that it costs far less for Americans to fly from Chicago to Seattle than to Vancouver.
To his credit, Alaska Gov. Sean Parnell recognized the damage the tax had caused in lost revenue and jobs and decided to do something about it. He met with the cruise lines in March in Miami and they were able to make a deal that effectively cut the tax in half. The change passed the Alaska legislature in October -- too late to affect operations this year, but likely to spur growth in 2011 and beyond, assuming, of course, that the U.S. emerges from recession.
With the tax situation settled, Vancouver can highlight its advantages: it is one of the greenest ports on the West Coast, being the third, after Juneau and Seattle, to enable cruise ships to plug into the electrical grid in port rather than running their engines to maintain power.
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