Seattle cruise industry slows in recession's wake

The opulent floating city that is the Celebrity Infinity cruise liner dominates the downtown waterfront on Friday mornings.

It's one of 12 lavishly decorated ships that will make 223 calls — a record for Seattle's cruise industry — at Pier 66 and Terminal 91 during this cruise season, which stretches from April to September.

The cruise industry should generate $18.9 million in state and local taxes this year, according to estimates from the Port of Seattle.

"Cruising Alaska is big business," said Peter McGraw, spokesman for the Port.

But for all the ostentatious displays, from multimillion-dollar art collections to marble staircases and Food Channel-inspired kitchen theater, Seattle's cruise industry has been affected by the recession like everyone else.

People typically book cruises a year in advance, said local travel- industry analyst Steve Danishek, president of TMA. Because of this, the recession's effect on Seattle's cruise industry lags behind the national economy, which is slowly recovering.

As most of the country felt the full brunt of the economic slowdown in 2008, the city's cruise industry had a record passenger volume of 443,000 for Alaska cruises.

But cruise lines saw passenger volumes tail off to 437,000 in 2009. An anticipated 429,000 will set sail this year.

Holland America, the only cruise line based in Seattle, responded to the drop in passengers by cutting its total number of berths in Seattle from 5,200 in 2008 to 4,728 last year and about the same this year. The fleet of cruise liners calling Seattle home port has reduced the total number of berths by over 3,000 since the 2008 peak.

A typical Alaskan cruise — like those on the Celebrity Infinity — lasts seven days.

But last year Holland America, in a scheduling twist designed to reinvigorate sales, committed the Amsterdam, its smallest ship, to running 14-day cruises for the first time.

Rick Meadows, a Holland America executive, said it decided to expand the available itineraries to draw back previous customers, who make up a lot of its business.

Diversifying its offerings has helped the company fend off further price declines after a rough 2009. The new fortnight excursion is the cruise company's most popular trip, said Linda Lane, a travel agent with Seattle-based Cruise World.

"It's completely sold out," Lane said. "We haven't had any availability at all."

Room rates are up for the ships, too, Lane noted. Balcony rooms, the most expensive, are up about $200, outside rooms are up about $100 and inside rooms are up about $50.

Rates for downtown hotels haven't rebounded this year, however, dropping around 7 to 8 percent from 2009, said Tom Nowalk, president and CEO of Seattle's convention and visitors bureau. Occupancies are up about 7 percent from last year, though.

The Edgewater Hotel, a luxury hotel next to Pier 66, gets about 10 percent of its business from cruise passengers booking nights before and after their trips. Rates are flat at best, said Sarah Kiepe, director of sales and marketing at the hotel.

"It's not rebounding as fast as we would've hoped," Kiepe said.

But a few blocks up from the waterfront at Fifth and Blanchard, the Ramada Inn gets a lot of business from cruise passengers, said Barbara Brunetti, general manager. So far this year, occupancy is up significantly from 2009 and rates have jumped 20 percent for the comparatively lower-rate hotel.

Holland America plans to tweak its offerings further, switching its seven-day trips from three midsize ships to two big ships, while the Amsterdam continues its 14-day trips, Lane said. Bigger ships have more of the popular balcony rooms, at cheaper rates.

And so far, she's been impressed with the bookings.

"I think next year will be big," Lane said.

Jason Bacaj: 206-464-3320 or jbacaj@seattletimes.com