By Jessica Edwards
Operators of a shuttle ferry between Haines and Skagway say they need
four large cruise ships in Haines weekly to keep the business afloat, and last week
suggested the Haines Borough drop its docking fees to attract them.
Besides dropping dock fees as an incentive, the borough should consider
purchasing the Chilkat Cruises dock and terminal from Klukwan, Inc., and then lease the
dock to the ferry company for a minimal fee, shuttle partner Duck Hess told the borough
assembly.
"If we don’t get four ships a week in Haines in the next few
years, I think we are going to be in dire straits," said partner and Chilkat Guides
president Bart Henderson.
Because it must often run empty from Haines, the ferry may lose money
this year, hobbled by ever-increasing fuel costs and the cost of leasing boats and the
Chilkat Cruises dock. More ships docking in Haines would mean more ferry customers bound
for Skagway, operators said.
Former ferry operator Chilkat Cruises and Tours, a Klukwan Inc.
subsidiary, went out of business shortly before this year’s tour season, leaving the
more than 10 Haines tour operators scrambling for an alternative. About 50,000 tour
customers come from Skagway each year.
River Adventures and Chilkat Guides, Haines’ largest tour
operators, partnered to run the fast ferry service in partnership with ferryboat owner
Four Seasons Marine, but said they quickly discovered they would take a financial hit
without raising rates.
The two large operators say they could run smaller boats for their own
customers on their own schedules more cheaply, but said they took over the fast ferry
service because losing it could be devastating to the local economy.
Henderson characterized the private ferry as a linchpin in a complex
equation that brings large ships to the Port Chilkoot Dock.
For Haines to attract large ships, operators have to offer a certain
volume of tours for sale on board, he said. If fast ferry service stopped bringing
passengers from Skagway, the operators surviving the hit would need to shrink their
businesses, Henderson said, reducing options for visitors docked in Haines. "The net
effect is we probably lose the ships we have."
Tourism director Lori Stepansky said having fast ferry service to
Skagway increased Haines’ desirability as a port, providing access to the
region’s biggest attraction, the White Pass and Yukon Route Railroad. "It’s
the reason (ships) come to northern Southeast."
"(Fast ferry service) definitely is the biggest ace Haines has to
attract ships to the PC Dock," said former Chilkat Cruises president Bill Fletcher,
who ran the ferry business from 1999 to 2003. "In that respect, I can totally see the
rationale for approaching the assembly."
Fletcher said diesel costs during his tenure ranged between $1.20 and
$2.00 a gallon, but said the potential profitability of the ferry service had always
relied on "balancing out the lows in the Haines-Skagway equation," or taking
more passengers from Haines to Skagway.
"It was always a struggle to be profitable," he said, and the
equation was even tighter with higher fuel costs.
Skyrocketing diesel prices are a huge factor in the fledgling
company’s struggles, Henderson said, citing prices that had increased nearly 75 cents
a gallon since the start of the season in May, and currently hovered at $4.65 per gallon.
River Adventures owner and ferry partner Karen Hess said fuel costs and
lease fees caused the new shuttle company to increase its price to customers, most of whom
are coming from Skagway for a tour with Haines operators.
Haines operators using the ferry service to bring customers from
Skagway include Alaska Mountain Guides, Rainbow Glacier Adventures, Chilkat Guides, River
Adventures, Alaska Nature Tours, Chilkoot Lake Tours, Takshanuk Mountain Trail, Glacier
Valley Tours, and Northland Excursions.
Hess said continuing to raise prices to cover cost increases
wasn’t a long-term solution because operators in Haines would quickly price
themselves out of business, beat out by cheaper competition in Skagway. "If the price
is over $200 on board (the ship), you’ll see a significant drop in ridership,"
she said.
Duck Hess told the borough assembly last week waiving docking fees
would act as an incentive to ships to dock in Haines, and cruise ship initiative tax money
could be used to offset lost revenues to the borough. "We need a carrot, so to speak,
and I believe this incentive plan is the carrot."
How big a carrot isn’t clear. Since 2006, ships larger than 700
feet pay $2.40 per foot in docking fees plus an additional surcharge of 60 cents per foot
and a water service charge.
Docking fees for the 720-foot Holland America Lines vessel Statendam
ran about $2,160 each time it docked last year. Chief fiscal officer Jila Stewart said
docking fees and surcharges this year will generate about $79,000 for the borough.
Former borough manager Robert Venables said forgiving docking fees,
which were already among the lowest in Southeast, wouldn’t entice ships to Haines,
but offering more shore excursions would.
The borough offered half-price docking fees to large ships beginning in
2000 and ending in the fall of 2005. Assembly member Norm Smith said the half price
docking fees hadn’t encouraged dockings. "As I recall, it didn’t make a bit
of difference."
But Karen Hess said cutting dock fees had resulted in a large day ship.
"We immediately got a ship in here when we did that."
Interim borough manager Bob Ward said free docking could be an
incentive to ships, but not one that would result in ships choosing Haines over Skagway.
As major ports became saturated, the cruise lines were looking at sleepier ports like
Haines and Point Sophia.
Alaska Cruise Line Association president John Binkley said he awaited
official reactions from the cruise lines about the possibility docking fees would be
waived. "The initial reaction was extremely positive," he said. "It’s
a gesture of good will, a sign the community is encouraging cruise ships to come. That
goes a long ways."
