Alaska

Is the Alaska cruise season not totally dead for 2021?

During Royal Caribbean Group's first quarter earnings call on Thursday, Royal Caribbean Group Chairman and CEO Richard Fain was asked about the prospect of return to Alaska for this year, and while "slightly complex", he did not rule it out.

The Alaska cruise season faces two hurdles: the U.S. Centers for Disease Control and Prevention (CDC) ban on cruise ships, as well as Canada's own ban on cruise ships from its waters.

Mr. Fain said even if the CDC relents on its ban, they would need would need a waiver from the Passenger Vessel Services Act (PVSA), or Canada would have to allow at least technical stops.

The Passenger Vessel Service Act (PVSA) of 1886 requires foreign flagged cruise ships to call on a foreign port if sailing a closed-loop cruise form the United States.

This means, cruise ships cannot sail from Seattle and only visit Alaska ports.  It must make a stop outside the country, and Canada is the only place between Seattle and Alaska for that.

The justification for both the PVSA is to protect the U.S. Merchant Marine (the licensed (officers) and documented (trades) personnel on the ships) and to protect U.S. shipyards that both build and repair the ships.

Mr. Fain said during the earnings call that Royal Caribbean and "others" are working on resolving the issue with the CDC and Canada, "we're working on both and others are working on both, but we can't be certain where that will end up."

"I think given the momentum, there's reason for some hope, but that's a sufficiently complex and confusing situation that I don't think we're going to put odds on it one way or the other."

"But as to Alaska specifically, while we're optimistic and we're working to make that happen, there are these other factors."

"We do think that will be in time for the Alaskan season. And we're obviously hopeful that we'll be able to solve the issue with Canada in either one of these two ways."

U.S. Senators Lisa Murkowski and Dan Sullivan, both R-Alaska, introduced a bill in late February 2021 that proposes alleviate the Passenger Vessel Services Act (PVSA) restrictions for cruise ships transporting passengers between the State of Washington and the State of Alaska.

The Alaska Tourism Recovery Act (H.R.1318) was introduced in the House on February 24, 2021 and was referred to the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation the next day.

When the bill was introduced, Royal Caribbean International President and CEO Michael Bayley posted on social media in support of the bill, "If passed, this would represent a step in the right direction for the Alaskan communities that depend on the tourism industry."

"If you support the bill, please reach out to your representatives to make your voice heard!"

So far, that bill has not moved past that point.

Besides Royal Caribbean's lost cruise revenue, the state of Alaska is facing dire consequences for a second cancelled cruise season in a row.

Alaska Governor Mike Dunleavy (R-AK) said over the course of the lost 2020 and 2021 cruise seasons, Alaska will have a $3.3 billion loss in Alaska, "that's in a state with about a fifty six billion dollar GDP, so it's going to be significant."

"We're going to lose millions of dollars in local revenue for our communities, especially along the coast. Unemployment rates will remain stubbornly high when we can actually lower them through this process."

Meanwhile, Royal Caribbean's Alaska cruises are not cancelled yet.

Royal Caribbean did remove bookable Canada-related cruises from its website, but existing bookings are still on hold.

Facing another year without cruise ships, Alaska's small businesses are in grave danger, and Royal Caribbean is doing its part to help them out.

Royal Caribbean Group announced it will support the Shop Local Alaska Program, which generates revenue for port town businesses. Royal Caribbean Group is the first major travel supplier to hop on board with the Shop Local Alaska program in support of keeping Alaska’s small businesses open for when cruise visitors return to Alaska.

This is an initiative by the BuyAlaska Program and Voyij.com, an online marketplace exclusively for Alaska businesses. It was created due to the uncertainty of the 2021 cruise season in an effort to allow local businesses to survive another year without cruises.

You can visit the Shop Local Alaska website at https://shoplocal.voyij.com.

Without cruise ships, Alaska will lose out on 1.3 million tourists who might have spent money in these small towns.

Royal Caribbean Group has agreed to raise awareness of Alaskan-owned businesses in port towns that are struggling to survive. 

The Shop Local Alaska Program will be marketed to guests of the company’s cruise lines — Royal Caribbean International and Celebrity Cruises — around the globe.

They will be able to browse virtual Alaskan stores and buy with confidence on  Voyij.com during this period when ships are not able to take them there. The site offers a wide variety of Alaskan products; from locally caught fish to beautiful Alaskan jewelry to Native Art to clothing of the North. Any Alaskan-owned business can list their products on the Voyij  Marketplace.

"Alaska is the premier destination place in the world,” said Governor Mike Dunleavy.

"I am committed to deploying all resources that result in increased partnerships like the “Shop Local Alaska” initiative that spurs Alaska’s economy and directly benefits small businesses across our state."

Why can't cruise ships sail to Alaska?

A combination of the ban on cruise ships from American and Canadian waters is what is putting the 2021 cruise season in jeopardy.

Both countries have policies in place at the moment that prohibit nearly all cruise ships from sailing to Alaska.

In the case of the United States, the Conditional Sail Order (CSO) does not allow cruise ships to sail from U.S. waters due to the global health crisis.

Even if the United States lifted that ban, ships would not be able to visit Alaska ports until Canada lifts its ban.

Canada's ban will prevent Alaska sailings out of Seattle via Canada because of maritime law.

The Passenger Vessel Service Act (PVSA) of 1886 requires foreign flagged cruise ships to call on a foreign port if sailing a closed-loop cruise form the United States.

This means, cruise ships cannot sail from Seattle and only visit Alaska ports.  Cruise ships must make a stop outside the country, and Canada is the only place between Seattle and Alaska.

Another state is joining Florida in suing the CDC so that cruise ships can begin cruising again.

Alaska Governor Mike Dunleavy (R-AK) announced his state has joined in a lawsuit against the U.S. Centers for Disease Control (CDC) over its shutdown of the cruise industry for well over a year.

The decision to sue the CDC is about protecting Alaska's businesses, according to the Governor.

"Alaska's cruise ship tourism season is facing a second canceled season due to the federal government actions, which is why I'm fighting to ensure our tourism business and communities have a chance."

"Alaska is joining Florida's lawsuit against the CDC and urging them to revoke the conditional No Sail Order so we can get Alaskans, families and small businesses back up and running, which is why I'm fighting to ensure our businesses and communities have a fighting chance."

Governor Dunleavy is following up on his threat from a couple weeks ago that he would sue the CDC if things did not progress between the federal government and the cruise lines.

Both states want the CDC to drop the Framework for Conditional Sail Order (CSO), which is not allowing cruise ships to sail in U.S. waters.

Florida Governor Ron Desantis (R-FL) announced last week his state has filed a lawsuit against the United States Department of Health and Human Services (HHS) and CDC, demanding cruise ships be reopened immediately.

The impact of no cruise ships in 2020 and 2021 to Alaska has cost the state a lot of tourist dollars. Gov. Dunleavy says over the course of the two lost cruise seasons, Alaska will have a $3.3 billion loss in Alaska, "that's in a state with about a fifty six billion dollar GDP, so it's going to be significant."

In addition to the CSO, Alaska has an additional hurdle to jump over for cruise ships to return to the state. 

Canada announced it banned cruise ships for a year, which makes operating cruises from the United States to New England or Alaska nearly impossible.

Due to U.S. laws, cruise ships that are foreign flagged (which is pretty much every cruise ship on major cruise lines) must stop in a foreign port if they sail from the United States. By Canada denying entry into their waters, that leaves no foreign ports for cruise ships to sail to within the vicinity of Alaska or New England.

A Congressional delegation from Alaska has once again sent a letter on behalf of the cruise industry in order to get cruise ships sailing again.

U.S. Senators Lisa Murkowski and Dan Sullivan, and Congressman Don Young, all R-Alaska, sent a letter with colleagues to the White House COVID Response Coordinator, urging the Biden administration to be more transparent and timely in their efforts to develop guidance for the resumption of operations for the cruise ship industry.

In the letter, the Senators and Representative also pressed the White House for answers to a number of clarifying questions on current U.S. Centers for Disease Control and Prevention (CDC) guidelines.

In the letter, the CDC's inaction is squarely at the heart of the concern.

• When will the CDC provide more details related to the phases of its Framework for Conditional Sailing?
• What criteria does the CDC use to determine the next phase of reopening? What is the timeline?
• What more does the cruise industry need to do to assure the CDC it is ready for the safe resumption of operations?
• Does the CDC understand the economic impact its lack of communication and transparency has on the cruise industry and associated businesses and local communities? What is the Administration’s plan to create more open lines of communication between government and the private sector?
• Who is the official that has responsibility for the decisions about when and how the cruise industry can restart under the restrictions put in place by the CDC?
• What is the process, either within the CDC, or within the Administration to make and implement these decisions, and what other agencies are involved in the decision
  making process?
• When the Conditional Sailing Order was issued last October, there were no vaccines and the disease was on an upward trajectory. Today, we are in completely different
  public health environment. What is the CDC planning to do to address this very different set of circumstances?

The Alaska delegation has been vocal in recent weeks trying to get cruise ships sailing again, so that the 2021 Alaska cruise season can be salvaged.

The letter urged swift action, "The cruise industry has faced unique challenges amid this pandemic, and is one of the only industries that is completely precluded from resuming normal operations. This has created a dramatic negative ripple effect on the Florida and Alaskan families, businesses, ports and communities that rely on the cruise industry"

"If the CDC does not quickly commit to start communicating timely and effective guidance, as well as hold frequent and productive meetings with cruise industry stakeholders, it will have harmful impacts on another peak season for the cruise industry."

Alaska is especially vulnerable to another season of no cruise ships because of how much their economy relies on ships.

The entire cruise season was abandoned last year, and this year looks to be equally dire.

"The future of the cruise industry and thousands of good paying jobs at our states’ ports and supporting businesses are now at stake," they wrote in the letter.

Alaska's representatives to Congress have done the most to get cruises started again.

In February, they asked Canada to re-evaluate their ban on cruise ships. Then in March, they introduced a new bill to allow cruise ships to sail without having to stop in Canada.

Senator Murkowski grilled CDC Director Rochelle Walensky last week after the Director failed to provide any kind of timeline for cruises to restart and was unsure how that would even proceed.

Senator Murkowski says Alaska is one of the most vaccinated states in the country, with 18.9% of its population full vaccinated, and  28% having at least their first shot.

Will that Royal Caribbean cruise to Europe or Alaska actually sail this year?

That question is among one of the most asked concerns out there, and Royal Caribbean Group Chairman and CEO Richard provided his outlook for these regions.

So far, Royal Caribbean has cancelled May cruises in Europe and Alaska, but the rest of the cruise season remains intact.

During a webinar with travel agents, Mr. Fain said there is still going to be a Europe season, but it won't be the same.

"A lot depends on some of the regulatory hurdles that we're dealing with today, " Fain explained. "there'll be a European season, I believe. I certainly hope that it will be a large one. And I hope that this momentum carries us forward and allows us to make the kinds of decisions that we need to make now."

"It takes months to activate a ship. We not only need permission to be doing things, we need their permission sufficiently in advance to enable us to prepare for it. So late permission is equivalent to a denial."

"I do think you're going to see a good European season this summer."

What about Alaska? Mr. Fain's proverbial crystal ball was less clear.

Canada banned cruise ships for an entire year, and the U.S. Centers for Disease Control (CDC) still has a ban of cruise ships in the United States.

Meanwhile, Royal Caribbean's Alaska cruises are not cancelled yet.

"We've been very pleased and appreciative of the support we've gotten from members of Congress, from others who have spoken on not on our behalf, but on behalf of the small businesses in Alaska that depend on tourism for their livelihood."

"I can tell you that we and others are working on it. I don't think I feel confident enough to make a prediction as to whether we and they will be successful."

Latest on working with the CDC

Alaska, and to a lesser degree Europe, are tied very much to what happens with the CDC and their Conditional Sail Order.

Echoing CLIA's statement earlier today, Mr. Fain took a different tone in discussing what is or is not happening with the CDC.

In reference to the Conditional Sail Order, he said, "it calls for four-phases, but four-and-a-half months into that, we are still in phase one and we still don’t know what will be required for phase two."

"That is pretty unworkable, for us and the CDC."

"We think that that the science has moved ahead of the Conditional Sail Order. It was a very good process way back when. Back in October of last year we thought it was a positive, and it's now out of date."

Wondering what is the latest on where things stand with test cruises, June sailings, or Alaska cruises this year?

Many travel agents wanted to get the latest on these topics as well, and these questions were brought up during a webinar with Royal Caribbean on Wednesday.

Royal Caribbean's senior vice president of sales and trade support & service, Vicki Freed (and her team), provided the latest updates on where things stand.

Test cruises

First, the question was asked if the U.S. Center for Disease Control had provided technical guidance to the cruise lines for test cruises to start.

"Conversations are happening every week, multiple times during the week," Ms. Freed said in response to the question.

"We don't have the actual dates yet for the sample cruises... but we're getting closer."

Read more: Everything you need to know about Royal Caribbean test cruises

The question comes almost a month after Royal Caribbean International President and CEO Michael Bayley told investors that he was expecting to get technical instructions on what each ship needs to do in order to prepare itself for test cruises.

"We're literally expecting the technical specifications any day soon," Mr. Bayley told investors.

Will Royal Caribbean cancel June cruises?

Norwegian Cruise Line cancelled its June 2021 cruises this week, and that has prompted many to speculate if Royal Caribbean will follow suit.

Royal Caribbean Director of Revenue Strategy, Brittany Briggs, indicated nothing has changed yet, "It's a question that we get often when other cruise lines do make announcements and the best we can say is that, trust us, that we're continually evaluating the current environment.

"We're trying to do all that we can as well from our side. But currently we're only canceled through May of this year, which we've gone out with an announcement on."

Any update on Alaska cruises?

Another hot topic surrounds the fate of Alaska cruises for this year, which Royal Caribbean has placed on hold until further notice.

The entire Alaska cruise season this year is in jeopardy due to Canada's one-year ban of ships (along with the CDC's general ban of ships around the United States).

Ms. Briggs also answered this question, and told travel agents there is no change in the Alaska cruises yet.

"Currently that environment hasn't changed, we're continuously having those conversations and we are hopeful."

Earlier this month, a new bill was introduced to to alleviate the Passenger Vessel Services Act (PVSA) restrictions for cruise ships transporting passengers between the State of Washington and the State of Alaska.

Could the 2021 Alaska cruise season be salvaged after all?

Two U.S. Senators, Lisa Murkowski (R-Alaska) and Dan Sullivan (R-Alaska) introduced a bill to Congress to allow foreign flagged cruise ships to sail to Alaska without having to stop in Canada.

The Alaska Tourism Recovery Act is meant to alleviate the Passenger Vessel Services Act (PVSA) restrictions for cruise ships transporting passengers between the State of Washington and the State of Alaska.

Canada has banned cruise ships for at least a year, which means when cruise ships can restart sailings, they would be unable to legally offer cruises to Alaska due to U.S. laws.

Canada’s ban prohibits cruise ships from navigating, mooring, anchoring or berthing in Canadian waters until February 28, 2022 or until the Canadian Government lifts the prohibition. 

Royal Caribbean International President and CEO Michael Bayley took to social media to voice his support of the bill, "If passed, this would represent a step in the right direction for the Alaskan communities that depend on the tourism industry."

"If you support the bill, please reach out to your representatives to make your voice heard!"

Congress has been busy working to find a way for cruise ships to sail to Alaska in 2021 ever since Canada's cruise ship ban was announced.

The entire congressional delegation from Alaska sent a joint statement in February criticizing the decision to ban ships.

A few weeks later, members of the House Transportation and Infrastructure Committee sent a bipartisan letter to the Canadian Ambassador to the United States that sought to find a solution to the problem.

Senator Murkowski sees a need to allow cruise ships to visit Alaska in 2021 in order to provide much needed relief to Alaska's local economy.

"We have seen double-digit employment declines in Southeast and a more than 30 percent drop in revenue statewide. Missing another cruise season would only compound the economic fallout that has been devastating for so many families,"  Senator Murkowski said in a statement.

"By providing this technical fix to the PVSA for Alaska-bound cruise ships from the State of Washington, we are taking significant steps towards safely resuming cruise ship activity and economic certainty at a time when Alaskans need it most."

The problem with not being able to visit Canada

Foreign flagged cruise ships (which are all of Royal Caribbean's ships) are required to make a stop in a foreign port when sailing roundtrip from the United States.

The law is part of the Passenger Vessel Service Act (PVSA) of 1886, and if left in place, cruises to Alaska from Seattle, Washington would not be able to legally sail.

The justification for both the PVSA is to protect the U.S. Merchant Marine (the licensed (officers) and documented (trades) personnel on the ships) and to protect U.S. shipyards that both build and repair the ships.

By Canada denying entry into their waters, that leaves no foreign ports for cruise ships to sail to within the vicinity of Alaska or New England.

Thus far, Royal Caribbean has not canceled its 2021 Alaska or New England cruises (except for Quantum of the Seas, which is staying in Singapore).

Instead, the cruise line is placing these sailings on hold while it hopes legal action, such as this bill, will provide a means for ships to sail this year.

In the meantime, guests booked on 2021 Alaska cruises have the option to leave their bookings as-is, or cancel them.

While Royal Caribbean tries to salvage the 2021 Alaska and New England cruise season, guests will have more time to make final payment.

In an effort to keep guests from canceling their cruise to Alaska or New England due to Canada's ban on cruise ships, the cruise line announced on Wednesday the final payment date will be reduced from 90 to 45 days.

Royal Caribbean's Senior Vice President, Sales, Trade Support and Service, Vicki Freed, told travel agents that the cruise line is working to figure out a way to legally sail cruises while skipping Canada, but in the meantime the final payment date will be reduced for these cruises.

"I know this was not news any of us wanted to hear, and we truly hope that your clients will stick with us as we work through this evolving situation."

"Therefore, we've made the decision to push the final payment due date for Alaska sailings and Canada sailings to forty five days before sailing so that we have more time to hopefully work through all of the challenges of getting back into service."

Specifically, the 45 day final payment date applies only for those sail dates that approach and reach the final payment date that will get it pushed to forty five days for final payment.

In addition to pushing back the final payment date, Royal Caribbean has offered guests options for changing their sailing or getting a refund:

• Leave their bookings as they are, and wait to see what happens. All final payment dates have been extended to just 45 days prior to embarkation day.
• Request a 100% refund of the amount they've paid, to the original form of payment, to be processed by June 30, 2021.
• Choose a 125% future cruise credit (for sailings booked by April 30, 2022, and departing through September 30, 2022). Credits will be issued by April 16, 2021.
• Select a modified Lift & Shift, allowing the reservation to be moved to the same date next year (plus or minus one week) on the same ship with the same itinerary.

Canada recently announced a year-long ban on cruise ships from its waters and ports until February 2022, which means Royal Caribbean cruise ships sailing from the United States are unable to offer cruises to Alaska or New England due to American cabotage laws.

Without access to Canadian ports, Royal Caribbean and other major cruise lines cannot sail without violating U.S. maritime law.

Last week, Royal Caribbean said it was still working through some ways it can still offer these cruises and has not cancelled any sailings.

Read more: Why hasn't Royal Caribbean cancelled Alaska 2021 cruises yet?

"At this time, we have decided not to cancel any sailings scheduled to visit Canada," the line said in a letter sent to travel advisors on Friday.

"It's our hope that your clients will maintain their existing reservations with us as we work with the government and CLIA on potential alternatives."

Royal Caribbean has not specifically said what those alternatives are, but there are a few different options they are exploring.

Read more: Congress members call Canada's ban of cruise ships "unacceptable"

Reducing the final payment date to 45 days is an option the cruise line has not exercised at all during the cruise shutdown. Instead, they have relied on the flexible cancellation terms under the Cruise with Confidence program to allow guests the choice of canceling after final payment for a future cruise credit.

With the 2021 sailings to Alaska and New England, many guests are leery of making a final payment for a cruise that seems very unlikely to occur.

Although it removed bookable Canada-related cruises from its website following news of the country's one-year cruise ban extension earlier this month, Royal Caribbean International says it will not cancel its Alaska or Canada and New England sailings just yet.

"At this time, we have decided not to cancel any sailings scheduled to visit Canada," the line said in a letter sent to travel advisors on Friday.

"This includes cruises embarking/debarking from Canada ports, as well as those itineraries touching on Canadian ports of call. It's our hope that your clients will maintain their existing reservations with us as we work with the government and CLIA on potential alternatives."

Royal Caribbean has not specifically said what those alternatives are, but they could include calling on Canada for technical stops only, where no passengers actually go ashore, or asking the U.S. Government to waive archaic foreign-port requirements under the Passenger Vessel Services Act, at least temporarily.

Passengers currently booked on Alaska sailings have several options:

• Leave their bookings as they are, and wait to see what happens. All final payment dates have been extended to just 45 days prior to embarkation day.
• Request a 100% refund of the amount they've paid, to the original form of payment, to be processed by June 30, 2021.
• Choose a 125% future cruise credit (for sailings booked by April 30, 2022, and departing through September 30, 2022). Credits will be issued by April 16, 2021.
• Select a modified Lift & Shift, allowing the reservation to be moved to the same date next year (plus or minus one week) on the same ship with the same itinerary.

As another part of its ongoing efforts to help travel agents, the line has vowed to protect travel advisor commissions on all of the above options for fares that were paid in full, with the exception of the modified Lift & Shift. For that selection, commissions will be based on the final price paid for each shifted booking.

What happened with Canada?

Canada announced it banned cruise ships for a year, which makes operating cruises from the United States to New England or Alaska nearly impossible.

Due to U.S. laws, cruise ships that are foreign flagged (which is pretty much every cruise ship on major cruise lines) must stop in a foreign port if they sail from the United States. By Canada denying entry into their waters, that leaves no foreign ports for cruise ships to sail to within the vicinity of Alaska or New England.

Is there any hope for these cruises to happen?

There are a few  "Hail Mary" options for cruise lines to sort through, and evidently there is enough chance that Royal Caribbean has not thrown in the towel yet.

First, Canada can rescind the ban at any time if the global health situation improves. Certainly a lot can change by late summer.

Second, cruise lines could see if U.S. law makers would be willing to give cruise ships a temporary waiver to allow the cruises to legally occur without a stop in Canada.

So far, a delegation from Alaska has proposed such a waiver.

Do any of these have a chance? No one knows, but the odds are not good.

It has been almost a week since Canada banned cruise ships for one year, so why hasn't Royal Caribbean cancelled those sailings yet?

Many cruise fans have been asking this question, and the answer appears cruise lines are still exploring alternative options to allow these cruises to go.

Royal Caribbean's Senior Vice President, Sales, Trade Support and Service, Vicki Freed, addressed this concern with travel agents during an online webinar.

She said she had a conversation with Royal Caribbean International President and CEO Michael Bayley about the topic, and he indicated they are looking for other ways to get around the ban.

"We don't have information and we don't have answers yet. But we're looking at maybe there's an opportunity for an exemption, maybe there's not."

"We are committed to sharing our plan with you once we've evaluated all options for the impacted itineraries to Alaska and also those departing from the northeast. So more details to come."

The exemption that Ms. Freed referred to is the idea that the Passenger Vessel Service Act (PVSA) of 1886 could be temporarily waived for cruise ships in 2021.

Sometimes erroneously called the Jones Act, the PVSA requires foreign flagged cruise ships to make a stop in a foreign country when operating closed-loop cruises from the United States.

In addition to cruise line's efforts to get a waiver, two U.S. Senators and one Congressman announced they are "exploring all potential avenues, including changing existing laws."

Moreover, Canada did leave open the possibility of rescinding the ban if the global health crisis improves before the ban is set to expire.

Royal Caribbean could be holding off canceling Alaska cruises because of optimism related to the distribution of vaccines in the United States and Canada. By summer, the situation could be vastly different than today, which could open the door for a limited cruise season.

In the meantime, Royal Caribbean has already pulled down the 2021 Alaska and New England sailings from their website.

While the 2021 cruises are not yet cancelled, you can no longer book the sailings either via the cruise line website.

There are still a few months before Royal Caribbean's cruise season in Alaska would begin, and the fallout of Canada's ban is starting to get attention.  So there is still a lot of runway left for cruise lines to determine if there are any options left for them to salvage the Alaska cruise season in 2021.

What should you do if you have a 2021 cruise booked?

At this point, if you have a 2021 cruise to Alaska or New England booked, my advice is to hold onto it.

It is far more lucrative to have Royal Caribbean cancel the cruise than for you to cancel it on your own. By waiting for Royal Caribbean to cancel, you will get the option for a full cash refund, 125% onboard credit, or even Lift and Shift.

If you cancel on your own, you are subject to the standard refund policies.  For those with non-refundable cruise deposits, this means a penalty for canceling the cruise.