Cruise holiday tax cut in Alaska

Cruise holiday tax cut in Alaska

Alaskan governor Sean Parnell has signed legislation cutting the levy on visiting cruise passengers in a move designed to bolster the state’s flagging reputation.

Announced earlier this year, the decision will see the per person tax drop from $46 to $34.50, with deeper offsets for ships stopping in at least one of two popular ports, Juneau and Ketchikan.

However, the immediate impact of the decision was less clear.

Cruise operators have already outlined itineraries for the 2011 season, making any immediate upswing in demand unlikely.

Members of the Alaska Cruise Association (ACA) also questioned the impact of an $11.50 fall in the price of a $2,000 holiday.

The change does not come into effect into October, thus passengers travelling this year are also unlikely to benefit.

The American state has seen a sharp fall in demand in recent years.

A further three ships were repositioned away from the state ahead of the current season, with the loss of an anticipated 140,000 passengers.

Royal Caribbean, Princess and Holland America Line are among those who have acted to reduce capacity in the region.

Turning the Tide

In an attempt to mitigate the decline, the governor Parnell also outlined an 80 per cent boost for the state’s tourism marketing budget.

The move to reduce the passenger tax is also likely to end an ACA legal battle against the levy, with the cruise body branding it “unconstitutional”.

One of the key operators in the area responded positively to the developments.

The tax cut “signals the beginning of a better and more positive relationship between the cruise industry and Alaska’s leadership,” said Holland American Line president Stein Kruse.

“I know Holland America Line will be looking carefully at its 2012 and beyond itineraries in light of this news, and I feel certain the rest of industry will be doing so, too.”