If you intend to catch a cab in downtown Vancouver today, you may want to have a backup plan. Cruise season is in full swing, and about 12,000 people are expected to move through Canada Place on Saturday to board three ships in port.
Today is one of the busiest days of the Alaska cruise ship season, but the large crowds downtown mask what is forecast to be a bleak season for Vancouver. The number of cruise ship passengers through the city this year is expected to plummet by 30 per cent, from 900,000 passengers last year to about 600,000 in 2010. Ship calls will decline to 179 from 256, representing - at a reported $2-million a ship in benefits to the local economy - a $150-million hit.
Ports vying for Alaskan traffic
Competition from Seattle, a head tax on cruise ship passengers in Alaska, recessionary pressures and the lengthy time frame required by cruise companies to plan their routes all played a role in what is forecast to be a rough season, said Greg Wirtz, trade development manager for Port Metro Vancouver.
"The regulatory environment in Alaska chased quite a bit of business away - unfortunately it chased it all out of Vancouver this year," Mr. Wirtz said this week. "Next year, some gets chased out of Seattle.
"But you had cruise lines pulling capacity out of this market and putting it into other, more profitable markets. And this time last year, when the cruise lines were making their final commitments to the 2010 season, they were looking at the recession ... and taking somewhat drastic measures to address what they thought they were going to be facing."
The B.C. cruise sector hopes the downturn will be short. Alaska officials last month voted to reduce the head tax, a $50 levy that had been introduced in 2006, by about $12 to placate cruise lines and Alaskan businesses that said they were losing millions as a result of the fee, which is paid by the cruise companies.
But that doesn't mean B.C. can count on clear sailing. Of the three vessels docking this weekend in Vancouver, only one - Holland America's Zuiderman - will make Vancouver its home port for the entire summer, when it will offer a seven-day Alaska Inside Passage cruise. The other Holland America vessel, the Oosterdam, will make a one-day jaunt down to Seattle and then start its summer schedule of seven-day Alaskan Explorer cruises that begin, and end, in Seattle. The third vessel, Norwegian Cruise Line's Norwegian Star, is taking a mixed approach, offering sailings to Alaska from both Seattle and Vancouver.
From a standing start a decade ago, Seattle has become a serious contender, wooing cruise lines with new facilities and tapping American consumers' demand for convenience and accessibility. Depending on what measurements are used - head counts, ships or sailings - Seattle has grabbed an estimated 50 to 60 per cent of annual Alaskan cruise volume, with its gains coming at Vancouver's expense.
As Seattle has sailed on to the scene, other B.C. ports are vying for cruise ship passengers and dollars. Under maritime law called the Jones Act, foreign-flagged vessels cannot travel between two American ports, such as Seattle and Juneau, without stopping at a foreign port at some point on the journey.
That requirement gave Vancouver its foothold in the Alaskan cruise market, which caters almost exclusively to U.S. customers. Seattle got its foot in the door almost by chance, when Vancouver wasn't able to provide weekend docking space to a cruise line operator that decided to sail out of Seattle instead.
Over the past decade, that one-off experiment has grown. Seattle expects a record 223 ships at a new, $72-million terminal this year.
The Seattle-Alaska trade has benefited Victoria and Prince Rupert, where ships stop to fulfill their foreign-port obligations. Prince Rupert opened a cruise ship terminal in 2004 and is trying to capitalize on its wilderness appeal and local attractions, including aboriginal tourism. This year, for example, cruise ship passengers will be able to paddle a 65-foot war canoe, a venture of aboriginal-owned Metlakatla Seashore Charters.
Victoria, typically the last stop as cruise ships head back to their Seattle starting point, is welcoming thousands of passengers that once might have begun and ended their voyages in Vancouver.
And there are newcomers on the scene. Owned by the Campbell River Indian band, the Wei Wai Kum terminal in Campbell River opened in 2007. The $24.5-million terminal, built with nearly $10-million in federal funding, was supposed to generate average annual economic spinoffs of $11.4-million. The terminal welcomed four ships in its first season, one last year and has no scheduled stops this year.
The terminal is now trying to woo cruise lines for the spring and fall seasons as well as smaller, "pocket" cruises that might be run from starting points in B.C. or elsewhere, said Darryl Anderson, business development manager for the terminal.
Nanaimo, meanwhile, plans to build a $22-million cruise terminal, betting it can expand on the cruise business it already attracts. Port Alberni has also been a cruise ship stop.
"All the B.C. ports compete with ports around the world to get the ships into a theatre," Mr. Anderson said. "So you need a number of places to create an itinerary. The business can't grow unless you have new product and new offerings."
B.C. ports have banded together under the Cruise B.C. umbrella to promote the region, hoping to capitalize on the afterglow and worldwide media exposure of the 2010 Olympics.
But some cruise lines, most of which are headquartered in Miami, have invested heavily in Alaska infrastructure, including rail lines and hotels, creating a built-in incentive to steer traffic to Alaskan ports and minimize time at B.C. stops.
Growth at one B.C. port is likely to come at the expense of another, said Ross Klein, a professor at Memorial University in Newfoundland who has written extensively on the cruise industry.
"The number of cruise ships is not increasing (in fact it is contracting) and Nanaimo is competing with other B.C. ports for the same finite business," Prof. Klein wrote in an e-mail. "While the ports compete with one another for business, the cruise lines extract greater and greater concessions from ports in return for stopping there."
Cruise lines are building bigger ships and shaking up their marketing, slashing fares and targeting families and retirees with package deals. Those marketing changes have brought in more passengers but reduced margins, resulting in even tougher negotiations between ports and cruise lines.
For Vancouver, cruise consolation might come courtesy of Mickey Mouse. After several years of negotiations, the Disney Cruise Line announced last year that they would make Vancouver the home port for the Disney Wonder in 2011, delivering 100,000 passengers back to the Vancouver-Alaska market.
The commitment, at this point, is for one season. It's hoped the family-oriented ship could help Vancouver get back on course and steer the profile of cruise vacations from retirees in flowered shirts to a more multi-generational mix.
"They will grow the market in a way that no one else has," Mr. Wirtz said. "Families have never been a target demographic for Alaska cruising. And all of a sudden, it's on the map."
Wendy Stueck