Carnival Corp. Vows To Keep Investing In Alaska

Open Jaw
by Bruce Parkinson

Celebrating the opening of Denali Square at McKinley Chalet Resort

Denali Square.

How important is Alaska to Carnival Corp.? Let’s look at some numbers.

Together, Carnival’s brands bring 1 million cruisers to the last frontier each year. That figure represents about 60% of the overall Alaska cruise market. Some 150,000 Holland America Line and Princess Cruises pax continue on to land journeys in the state as well as the Yukon.

Carnival owns much of that side of the operation as well. Its Alaska/Yukon portfolio includes 10 lodge and hotel properties, as well as some 300 motor coaches and 20 domed rail cars. “Ships, trains, buses, hotels – our Alaska operations are pretty considerable,” said Stein Kruse, Holland America Group CEO.

Nearly 1/2 of all Holland America and Princess ships spend the summer in Alaska. Carnival Legend is there this year as well, and next year Seabourn Sojourn will be sailing to the 49th state.

All told, Alaska represents about 10% of Carnival Corp.’s business – and Carnival’s USD15.7 billion in annual revenues would put it among the top 200 on the Fortune 500 list.

Carnival is important to Alaska too – it partners with 1,500 Alaska-based companies and employs 4,000 people in the state.

Open Jaw recently attended the inauguration ceremony for Denali Square, a new dining, retail and entertainment complex at Holland America’s McKinley Chalet Resort. The development is just the latest in a series of improvements at the 478 room property.

Execs are coy about the cost – all they’ll say is that over the past 15 years they have invested “3 or 4 tranches of tens of millions of dollars” in the property.

There are a number of strategic reasons for continuing to invest in the state; the destination attracts a significant new-to-cruise audience; the land experience needs to be on a quality level with the shipboard product and, as Charlie Ball, Executive V.P. Land Operations & Customer Service at Holland America Group puts it: “We operate essentially full for the entire season.”

Alaska’s wild nature is the big attraction, of course, and it rarely disappoints. “The experiences of a lifetime, in many cases the trip of a lifetime, happen right here,” Ball says. “Physical investments like this one are important because resorts like McKinley Chalet are very differentiating for our product. We want to grow both the sea and land sides of the business and we are trying to get the land ratings as high as those for cruise. We’re very close now on the overall experience rating.”

Holland America Line President Orlando Ashford says the cruise line has a tight focus on creating memorable, authentic experiences for its guests. Alaska, with its raw nature and the extraordinary independence of its populace, offers an ideal canvas on which to create such experiences.

“This is a very special place,” summed up Holland America Group’s Kruse. “We want to show it more people in the future.”

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