Ben Hohenstatt/Juneau Empire 
Howard Sherman, executive vice president, onboard revenue and destination development for Norwegian Cruise Lines, sat down with the Empire this week to conduct a wide-ranging interview. He said that Alaska remains an in-demand destination for cruise ship travelers but that he suspects the overall passenger load is close to the cap.

Ben Hohenstatt/Juneau Empire Howard Sherman, executive vice president, onboard revenue and destination development for Norwegian Cruise Lines, sat down with the Empire this week to conduct a wide-ranging interview. He said that Alaska remains an in-demand destination for cruise ship travelers but that he suspects the overall passenger load is close to the cap.

Covering the water: Execs talk restarting cruises, industry future and ballot initiatives

There’s a lot to talk about.

If the federal Centers for Disease Control and Prevention give the greenlight, Norwegian Cruise Line could resume voyages to Alaska as soon as August, said two NCL executives in a sitdown with the Juneau Empire this week.

During the wide-ranging interview in the Empire’s new conference room, the executives discussed the future of cruising in Southeast Alaska, the donation the company recently made to communities affected by the pandemic-induced pause on cruises, and the trio of ballot initiatives that could limit future cruise ship traffic to Juneau.

Howard Sherman, executive vice president onboard revenue and destination development, and Steve Moeller, senior vice president for commercial development, said this is their first business trip since the onset of pandemic-based travel restrictions.

Steve Moeller, senior vice president for commercial development for Norwegian Cruise Line, discusses NCL’s plans for Southeast Alaska during an interview with the Juneau Empire. (Ben Hohenstatt/Juneau Empire)

Steve Moeller, senior vice president for commercial development for Norwegian Cruise Line, discusses NCL’s plans for Southeast Alaska during an interview with the Juneau Empire. (Ben Hohenstatt/Juneau Empire)

“Personally, we are thrilled to be here. It’s our first business trip in 15 months,” Sherman said.

The pair were in town as part of a swing through Southeast Alaska to announce a $10 million donation to local communities hard hit by the pandemic-induced suspension on cruising.

Of the donation, the company offered $2 million to the City and Borough of Juneau. The City Assembly is considering whether to accept the money and, if so, how to spend it.

“When our cruise partners meet economic disaster, we feel an obligation to step in. Southeast Alaska is uniquely dependent on the cruise industry. We need to show partnership, so when we return our cruise ships, we find a vibrant community,” Sherman said.

Sherman said the donation had been in the works for several months and was similar to the types of donations the company has made to various Caribbean communities in the wake of hurricanes and other natural disasters.

Plans to sail

Sherman said that the company is eager to restart cruises to Southeast Alaska and could do so as soon as August if the CDC gives the go-ahead. He said that Gov. Mike Dunleavy and Alaska’s congressional delegation, all Republicans, have been instrumental in working with the federal government to break the logjam of CDC silence on guidelines to restart cruising.

“We are seeing demand. We have existing sailings on the books, and we want to proceed,” Sherman said.

He explained that the company’s vaccination policy requires that all crew and passengers verify that they are fully vaccinated. In addition, he said that rapid antigen testing would take place for passengers during embarkation.

He said the company is still waiting on guidance from the CDC concerning onboard masking requirements.

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Alaska is a top destination

Sherman said that Alaska is an attractive destination for travelers, but that he suspects passenger load is close to the cap.

“I don’t anticipate much incremental traffic growth. Mathematically we are near the peak based on the number of embarkation ports,” he said.

Sherman said that Alaska’s status as a top destination offers many advantages.

“We send our best ships to Alaska. People want to see whales, eagles, and bears and enjoy the cool air in the summer,” Sherman said.

He explained that Alaska’s status as a premier destination means that NCL sends the newest ships to the region. Those ships command premium pricing and attract more well-heeled travelers.

“When you get new ships, people pay more to sail aboard those ships, and those passengers are better able to purchase high-value packages when they arrive in town, like the whale watching tours and the helicopter rides to the ice fields,” he said.

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Ballot questions

Sherman and Moeller said that they had recently learned of the trio of potential ballot initiatives to reduce cruise traffic to Juneau during future seasons. He said the initiatives had created a “tremendous amount of concern” in the community and that they were “well-intentioned but misguided.”

“Juneau is a well-informed community. It’s creating lots of concern, but it is also a rallying cry for local businesses,” Sherman said.

He said that the local government in Juneau is very effective, and that the partnership among city officials, community members, and NCL has provided welcome input to the company.

“Juneau has the most vigorous public engagement of any place I’ve been in the world. For example, the Visitor Industry Taskforce received hundreds of comments and made fantastic recommendations. It’s the best I’ve seen anywhere,” Sherman said.

He said that organizers of the ballot initiatives created the questions without input from lawyers or economists.

He noted that similar bans in Key West, Florida, were recently declared unlawful. The South Florida Sun-Sentinel reports that in late April the Florida House passed a bill that prohibits local ballot initiatives from restricting maritime commerce. However, final action on the question is still pending.

“There’s lots of concern about this. Can citizens legislate what happens to private property or where people travel?” he asked.

Framing the question in personal terms, he said that if a citizen of Juneau flew to Hawaii and then learned at the airport that they could not get off the plane due to a cap on visitors, outrage would follow.

He said that Juneau is an “integral” destination in Alaska and has been for some time. Still, if restrictions made it too onerous to visit, Juneau would likely get bypassed in future itineraries.

“There is a one-to-one correlation of people who want to visit Alaska and who want to visit Juneau. But, it’s not a birthright,” he said.

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Hypothetical impacts

When asked to speculate about the effects of the ballot initiatives, Sherman said that each initiative creates different problems and unintended consequences.

Sherman said he understood the sentiment behind the initiative to restrict ships after 7 p.m. and before 7 a.m. But, that such a limit would disadvantage everyone, especially bars, restaurants and shops downtown, because passengers would need to return to the ships well before the sailing time.

He said that if ships over 100,000 gross tons are banned, cruise lines will send older ships to Juneau and that those ships are not as energy-efficient as the new ships.

He said that older ships carry a different type of passenger, who typically spend less money while in town. He added that older ships generally attract more budget-conscious travelers, more likely to “get off the boat and buy two beers and a T-shirt.”

Sherman called the idea that independent travelers could fill the gap left by cruise ship passengers “fantasyland.”

“Do you really want 10 new hotels? If you build the hotels, that money doesn’t go to local hotel guys. It goes to Hilton or Marriott. Where will the workers live? With that many people, you need a new water treatment plan,” he said.

Dock development

Sherman said that NCL continues to seek community input on its plans to build a new cruise ship dock on its waterfront property on Egan Drive.

Sherman said that community input so far had yielded new ideas, including steps down to the waterfront for launching canoes and kayaks.

“It’s a very modern need that intersects with the historical use of the property by the A’akw Kwáan people,” he said.

Other ideas have included housing and day care space at the site and street-level green space to cover an underground parking area.

Dock electrification, an idea with much public support, is considered a priority for the project, Sherman said. Though, NCL would be an interruptible customer if the community demanded more power while a ship was plugged into the grid. Currently, only one dock in Juneau is electrified.

Earlier this year, NCL announced that it had signed a memorandum of understanding with the Alaska Ocean Center to house the proposed center as part of the development.

Sherman acknowledged that the process has been moving forward slowly and said it will still be several years before the company can dock the first ship at the location.

“We got the dock in September of 2019, and then we sat back and let the Visitor Industry Task Force meet, and they were ready to make recommendations just as the pandemic hit,” he explained.

He said the company is ready to restart the process but understands that an additional public process is needed.

• Contact reporter Dana Zigmund at dana.zigmund@juneauempire.com or 907-308-4891.

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