Politicians Want Permanent PVSA Exemption for Alaska

Efforts are afoot in Congress to make permanent changes to the U.S. law known as the Passenger Vessel Services Act (PVSA), which requires foreign-flag ships carrying passengers between U.S. ports to call at a foreign port at some point during their cruise.

This requirement was temporarily suspended this past May, allowing for an Alaska cruise season in 2021.

Now, Alaska’s senior U.S. Senator Lisa Murkowski and Representative Don Young want to make this exemption permanent.

“I’m proud to introduce new legislation to provide a permanent exemption for cruises between any U.S. port and Alaska from the PVSA,” Murkowski said recently in a statement announcing her Cruising for Alaska’s Workforce Act. “My new bill guarantees the PVSA will not intrude on Alaska’s tourism economy, while also ensuring foreign-built ships do not compete with U.S.-built ships. This legislation is good news for every Alaskan whose livelihood relies on tourism.”

Young’s bill, known as the Tribal Tourism Sovereignty Act, would allow a stop at ports or land owned by Native tribes or corporations to satisfy the PVSA requirement, providing a more limited exemption. This would apply to Icy Strait Point, for example, the popular Inside Passage cruise destination owned and operated by the Huna Totem Corporation.

As it currently stands, foreign-flag cruise ships sailing roundtrip from a U.S. port may stop at a “nearby” foreign port, which is defined as any foreign port in North or Central America, Bermuda, and the West Indies (including the Bahamas but not the ABC islands).

The same ships sailing one-way between U.S. ports must stop at a “distant” foreign port. So, for example, a ship sailing to Alaska roundtrip from Seattle usually stops at Victoria, British Columbia, while a ship sailing a Panama Canal transit from Los Angeles to Miami might stop at Cartagena, Colombia.

Altering the requirements of the PVSA could open up possible new cruise itineraries. Chief among these would be additional turnaround points for one-way Gulf of Alaska cruises, which are currently only available between Alaska and Vancouver. Gulf of Alaska cruises allow passengers to explore farther inland than does a typical roundtrip Inside Passage cruise. Such itineraries usually begin or end with the Railbelt that stretches from Seward to Fairbanks, and may extend as far north as Alaska’s Arctic communities or the gold-rush territory of the Canadian Yukon.

According to CLIA Alaska, which is remaining neutral on efforts to change the PVSA, some 22% of Gulf passengers participate in an extended land tour. Fares for these cruise-tour combinations can be double the fare on a per diem basis of a simple Inside Passage loop. Princess Cruises and Holland America Line have historically dominated this lucrative segment of the Alaska market, but in recent years both Royal Caribbean Group and Norwegian Cruise Line have entered the fray.

Seattle, meanwhile, has emerged as the preferred jumping off point for Alaska-bound cruisers since it opened its first cruise terminal in 1996. Revenue passengers have grown at a rate of 13% a year over the past two decades, according to the port, peaking at 1.2 million in 2019—the last year before the pandemic-caused suspension of cruising. A second cruise terminal was added in 2009, and the port was planning to construct a third terminal before the Covid-19 pandemic hit. These plans have now been shelved, at least temporarily.

Canada has since reopened its ports to cruise ships that meet public health requirements as of November 1, after the current Alaska season had already ended. A normal cruise season is expected in 2022, but a permanent change to the PVSA would shield Alaska’s cruise industry—which brings more than half the state’s annual visitors—from being shut down again should Canada re-impose restrictions.

“I think she [Murkowski] has the right intention to make sure the economy is not jeopardized by the actions of a foreign country and their decisions,” said Patti Mackey, President and CEO of the Ketchikan Visitors Association, “but I don’t know how much support that bill is going to get. I was curious to see if we were going to see any local government support or resolutions of support, and from what I understand no one has taken any action,” she added.

The exemption from the PVSA for foreign-flag ships under Murkowski’s bill would end once there is a U.S.-built ship that carries more than 1,000 passengers. The only large U.S.-flagged cruise ship currently in existence is the 2,186-passenger Pride of America, which was begun in a Mississippi shipyard and completed in Germany by Norwegian Cruise Line in 2005 for cruises of the Hawaiian Islands. The Pride of America is scheduled to return to service in January of 2022.

Murkowski’s bill (S.2818) has been referred to the Senate Committee on Science, Commerce, and Transportation, where it awaits further action. Young’s bill (H.R.4733) has been referred to the House Subcommittee on Coast Guard and Marine Transportation. You can follow the progress of both bills online at congress.gov.