LUCRATIVE ALASKAN CRUISE BUSINESS PROMPTS PUGET SOUND CAMPAIGN

LUCRATIVE ALASKAN CRUISE BUSINESS PROMPTS PUGET SOUND CAMPAIGN

Some of the Puget Sound region's most powerful corporations say they aren't going to sit back idly and watch $1 billion in spending by the Alaskan cruise industry slip away.

The powers that be in Seattle are squarely taking on a portion of the Passenger Service Act, a law intended to prohibit foreign ships from picking up cruise ship passengers at one U.S. port - such as Seattle - and dropping them off in another U.S. port - such as Anchorage, Alaska. This law has essentially allowed the Canadian Port of Vancouver, British Columbia, to hold captive the growing Alaskan cruise market.The Puget Sound Cruiseship Alliance - which includes the Boeing Co., Weyerhaeuser Corp., Holland America Lines, First Interstate Bank, the city of Seattle and the Seattle Chamber of Commerce - has launched a campaign costing up to $1 million to win congressional exemption from the law that discourages cruise lines from operating from Seattle.

Bill Oliver, a Weyerhaeuser executive who chairs the alliance, told reporters that a $25,000 study by consultants from Arthur Young of Seattle demonstrates the need for an Alaskan exemption to the 1886 Passenger Act.

We found out that what we thought was a half-mile race turns out to be a three- or four-mile race, he said, referring to obstacles listed in the study, but the results were sufficiently encouraging that we intend to press ahead.

Nearly all of the two dozen ships with summer cruises to Alaska operate

from Vancouver, British Columbia. From a foreign homeport, they can move passengers one way to a U.S. port and permit those passengers to board direct flights home under popular cruise-fly packages.

Mr. Oliver said the alliance intends to take its case for the exemption to the state's congressional delegation, and to press for a multimillion-dollar tourist promotion program to make Seattle more attractive to cruise lines.

Because such an exemption could take years to win congressional approval, however, others in the alliance also intend to explore the possibility of using an interpretation of the existing law to allow more cruises from Puget Sound.

For example, some lawyers believe that the most serious problems in the federal law might be solved with a technical port call in Canada, or a finding that air transportation could be included in the round-trip cruises allowed under current interpretation, or by creating specialized port zones in Alaska.

Gary Severson, executive vice president of First Interstate Bank, said the study calculated the direct economic impact of the Alaska cruise market at $43 million to $52 million, with $31 million to $37 million going to Vancouver and $12 million to $15 million going to Puget Sound.

With 6 percent annual growth, direct spending could approach $1 billion over the next 12 years. Using a multiplier factor of 1.8 to produce a figure for indirect spending, the figure would be $1.5 billion or more, Mr. Oliver said.

Consultants found that Canadian estimates of the economic impact of the Alaskan cruise industry at US$216 million a year could not be substantiated.

Mr. Severson said the study also concluded that Puget Sound interests need to change the Passenger Act, do a better job in promoting Seattle to cruise passengers, take advantage of limited cruise ship dock space in Vancouver and take steps to win over cruise lines that stay in Vancouver because of inertia.

Joel Pritchard, government relations director for Bogle & Gates and national adviser to the alliance, explained that U.S. maritime labor, U.S. shipyards and U.S.-flag Jones Act carriers strongly oppose changes in the Passenger Act.

He said he could not predict whether the alliance would be able to win a Passenger Act exemption within three years. That's how long it took Puerto

Rican interests to win a similar exemption for cruise ships calling in San Juan.

Other corporations in the alliance include Society Expeditions, Alaska Airlines, Continental Airlines, Westin Hotels, Stouffer Madison Hotel, Four Seasons Olympic Hotel, Holiday Crowne Plaza Hotel, the Space Needle Corp., Darigold, ALPAC Corp., Exports Inc., Washington Natural Gas, Unico Properties, Bogle & Gates, Pacific Northwest Bell and the Seattle Post-Intelligencer.