The Anchorage Daily News reports in this piece that the cruise industry plans to remove two ships from Alaska routes in 2011, in addition to the cuts announced for 2010. This amounts to a total reduction of almost 160,000 passengers annually by 2011.

At issue is a head tax passed by Alaska voters in 2006. The $50 tax is intended to offset infrastructure costs associated with the landings of large cruise ships that would otherwise be borne by the very small communities in Southeast Alaska. The cruise lines argue that the tax is a significant disincentive for budget-conscious travelers to choose a cruise. However, a number of studies have shown that the additional cost makes little difference in a guest’s choice to take a cruise.

Supporters of the tax think that many of the cruise industry’s protests are disingenuous. The number of Alaska visitors in 2009 was down considerably, and many ascribe this decline to the state of the economy. In Ketchikan, a city that is heavily-dependent on the cruise industry, hotel stays were down about 20 percent from the previous year, while the overall cruise passenger numbers to Alaska decreased only .5 percent. In general, cruise passengers do not overnight in Ketchikan. One interpretation of these numbers is that the cruise industry fared comparatively well despite the head tax and despite the poor economy, while other segments of the Alaska visitor industry suffered.

Andrew Halcro thinks that the head tax is good for the Alaska visitor industry. At the time that the tax was being debated in Alaska, he argued that the cruise lines do not pay taxes at the same rate that other transportation providers (airlines, car rental companies, etc) pay.

For people planning a visit to Alaska, the picture is actually quite good. The reduction in the number of cruise ships in Alaska will tend to increase the cost of cruises and require that cruise guests book earlier, there is still ample capacity for independent travelers to visit Alaska. Also, since many smaller operators had difficult years in 2009, most are reluctant to raise prices in 2010, so the costs of an Alaska vacation will be very close to the prices that we have seen over the last two years.