SKAGWAY NEWS INTERVIEW

Jack Williams, president of Royal Caribbean Cruise Lines


Royal Caribbean Lines president Jack Williams (JW), lobbyist John Fox (JF), and tour division president Craif Milan (CM) stopped in Skagway on the Summit June 14, and were interviewed in the News office by editor Jeff Brady (SN).

SN: Is this a record year for you in terms of the number of people coming into here?
JW - Sure. Yeah. It will be a record year for the company in terms of overall guests across the whole system. It should be to Alaska, I don’t see why it wouldn’t be. We haven’t added any new capacity this year but our load factors have been up for the first couple quarters, and we’re booked solid for the third.

SN - You can kind of sense it this year, that people have a little more pocket money, are you sensing that as well?
JW - Absolutely. It’s the economy, I think, you know, a lot of pent up demands the past couple years, as people put the brakes on, given all the world events, and the economy has clearly strengthened. All that’s playing into a better revenue picture for the company.

SN - You just made another $25,000 donation to the city of Skagway...
JF - We’ve made $100,000 of donations over the years. Basically we said ‘what does the town need?’ and this $25,000 was the final element that helped the recreation center. I’m sure you’ve been over there, if you haven’t, what we try to do is listen ... not just come in here and say this is what we want to do.

SN - Are you going to continue something like that in the future? Or move into a different area? I don’t know if you guys got hit up by the mayor this winter, but he’s trying to sell this seawalk down here. He’s trying to get some cruise ships to help fund so it’s not all tax dollars.
JW - We’ve always had a community outreach program to all the ports we service. It’s an important part of who we think we are and what we need to do to build the kind of reputation that the community welcomes to their city. We will always have a program, how big it is and all that is dependent upon a lot of factors, but I don’t see any reason why we would be shrinking on that at all.

SN - Your company was involved at some point in, I guess the best word is a bidding war, with Princess last year. How do you survive the aftermath of that. Are you strong? Is RCCL going to be its own entity forever?
JW - The Princess cruises opportunity was a well-established very strong company, and post- that opportunity we’re still a very strong and solid company and continue to grow. The Royal Caribbean branch is still growing quite a bit. This year we just took over the Jewel of the Seas, and have the Ultra Voyager under construction right now. The branch is doing very well, so we’re going to be a big, big part of this industry forever.

SN - I know you’ve gotten into the transportation biz up in the Interior. Any plans to do that here? Or even expanding into hotels in this part of Alaska?
CM - Our business model is not to get involved in the hotel business. We figure that’s left up to the experts, even though we run hotels – the ships could be called floating hotels. Land-based assets other than what we’ve currently got with the rail and the rolling stock and the motor coaches, which will continue to grow as our demand grows, to scale the business. It’s not in our model to get involved in the lodge business. There’s an issue out there with this containment of guests with some of our competitors. They keep them on their rail cars, in their motor coaches, and in their hotels, at their restaurants, in their lodges, and the people on those tours really don’t get out to see the true Alaska. I think we’re different in the fact that we, because we partner with people with Aleyska Resort, the Mariott in Anchorage, the Grand Denali up in Denali, we allow people to get out and actually experience Alaska, we’re not trying to contain them in our own assets.

SN - We had a norovirus outbreak here two weeks ago here on the Island Princess. The next day, I’ve been doing this for almost 30 years, we go down and we put the kids to work on the docks and we pass out our tourist paper, and I noticed these things. Can you explain what these are? Obviously it’s some sort of way to correct this.

Visitors from the RCCL/Celebrity ship Summit wash their hands with these devices containing and alcohol-based cleanser before boarding the ship in Skagway. JB

JW - The best way is to minimize the spread of the flu, that’s what the Norwalk virus is, is to frequently wash your hands and to use the cleansers. We try and make it convenient, at gathering points where people are, to make it easier for them to go ahead and sanitize their hands. They take advantage of that, and that helps, if there is any flu on board, to really minimize the spreading of the flu. We have what we call an OPP program, which is an Operating Prevention Program, for sanitizing ships, and it works very very well. In 2003 some eight percent of the U.S. population got the Norwalk virus, and less than one tenth of one percent of the cruise population got the Norwalk virus, so if you want to really avoid that virus, you ought to get on a cruise ship.

SN - Princess quarantined them. Last year we had an incident where Holland America put people off in the hotel here and quarantined them here in town for like three days. That concerned a lot of locals. Do you have handouts on board?
JW - If you had the flu you’d stay home too. You wouldn’t go out and spend time with crowds. If people have the flu you want them away from the crowds so they don’t have it. I’m sure people in Skagway get the flu.

SN - Is your policy the same as theirs too, if it does happen, just keep them in their rooms?
JW - Well it depends on what’s going on. In their cabins, oh sure, but they want to stay in, they’re sick. Most of them are throwing up and have diarrhea, I mean it’s ugly for 24 hours, it’s not a nice flu. They don’t feel like going out. We’ll ask them to stay in their cabins, absolutely, but that’s an easy decision.
JF - I think you’re also asking whether we have on board programs. In the bathrooms, for example, we have signs. They simply say the more you wash your hands the less likely you are, so we do that.

SN - Last winter Gershon Cohen, I’m sure you’ve heard that name before, Alaska Clean Water Alliance, tried to get a measure on the ballot. I know you guys have done a lot of pollution controls in the past five years, but he’s trying to get a monitor system where DEC would have somebody on board every ship. What is your response to that? I guess they didn’t quite have the wording right and didn’t get it on the ballot, but they’re going to try again.
JW - My response for many years has been anybody’s welcome to come on board and observe our procedures and our policies and technologies. It’s the leading-edge technology today. It’s all an issue of fact. We have the best environmental auditors in the world ... who do all of our ships every year. You can’t find a better auditing firm, although if somebody wants to suggest one I’d be more than willing to take a look at it. We pay hundreds and hundreds of thousands of dollars in oversight today. The Coast Guard comes on any time they want, and look at anything they want to look at, so on and so forth, so at some point, when you continue to layer on oversight it becomes so redundant and so duplicative that it becomes a waste. Whether it’s DEC or our own external auditors that we work with, or the Coast Guard, or whatever. Clearly I think oversight’s good, I think it’s very good, and I endorse it and I encourage it, but at some point you have to say “why?”.

SN - I think as a rider to that he was also trying to get something about on-board ship advertising. I had complaints this winter from people who are involved in the program complaining about other jewelry companies getting 70 percent of the airtime on the TV spots on the shopping channel. Have you guys taken a hard look at the fairness factor of this? If somebody’s paying 45K, just throwing out a figure, to have half of the airtime, while the others only pay 10 percent, is that fair? In terms of the passenger watching it, do they know that that person that paid the most is getting the exposure because of what they paid?
JW - Well I don’t think the customer really gives a hoot. The customer is just concerned with whether they’re getting a good product or a good service for the value when they make a purchase. Our customers are very discerning people. It’s their money and they know what they want to do with it. At some point when they’re about to make the act of purchase, they’re going to decide whether or not that gem, or whatever else they’re buying, in their own mind is a good competitive value, because as they walk up and down the streets, they’re free to go anywhere they want to go.

SN - But if somebody’s paying to be a best buy or a recommended shop, and they get more exposure because they paid more money for that, is that fair for the consumer?
JW - I don’t know, is it fair for somebody out here to have a bigger sign than the guy next door to him?

SN - Yeah but we have regulations on how big the signs can be, you can’t have a bigger sign.
JW - Well yeah, but clearly there are bigger signs out there, we can go out there and I’ll point to them, there are clearly bigger signs out there that some of the shops have, because some people choose to have a larger sign. I don’t know if that’s fair or not, I don’t know, there are all kinds of ways to try and attract purchase. We have a port lecture program that’s run by an independent company, to try and help the consumers, in areas where they’re not familiar with what might be going on, to guide them to what might be a better purchase option for them. Even on board, ourselves we guarantee the lowest price on merchandise and stuff like that because it’s a very competetive field. I can tell you, I read all the customer complaints, or most all of them, that come in every week, in terms of our surveys, to say this isn’t an issue with the customers. And I don’t know of any particular program, whether it’s jewelry or sportswear or whatever, where any one retailer has 75 percent of the airtime. I’m not that close to those kinds of details, but I just can’t see that that would probably happen.

SN - What have your discussions been with the legislature and the Murkowski administration regarding any more taxation on the cruise industry? What are your lobbying efforts right now?
JF - It’s clear that in every legislative session you’re going to have some wacky stuff going on ... The fact of the matter is that 52 percent of the people that come to the state come on cruise ships. They spend hundreds of millions of dollars here, several million every year on shore excursions. There’s no other state that charges just to cross its borders, there’s got to be some service relative to whatever they’re going to charge us.

SN - What’s your impression of Skagway been over the years? How the place is looking? There are some complaints that we’re overcrowded. You probably saw the Alaska Magazine article a couple months ago.
JW - Last year when I met with the mayor in Juneau we were talking about the saturation of the ports, and it’s always a good discussion, not only in Alaska. At what point does it become undesirable for the guest and their experience. We were just talking about it, just thinking about a new dock in Juneau and stuff like that. Juneau’s a very popular port and a very important port on the itinerary. So I did some research on ports. I brought it with me, and talked to the governor about it. I was really surprised at how well all the ports came out. Some people are really enjoying Alaska. Skagway did really high. It’s kind of like what you have in your mind about what Alaska would be like. It feels historical, it’s tucked away in these beautiful mountains, the people are great. So I was real pleased just relative to other destinations we serve around the world, just how well Ketchikan, Skagway and Juneau came out. Juneau was slightly above both Ketchikan and Skagway in terms of satisfaction.... I personally like Skagway a lot, I just really like this place. I like to run here, I ran this morning... It’s our second year where the first thing we do in the morning is go for a run. It’s quiet, nobody’s out yet, spectacular.
Whenever people talk to me about going to Alaska I always mention Skagway. I say make sure you stop in Skagway because it’s well worth your time. It’s a good place. People here have been real good to us, very supportive of the industry, the local merchants, the business people, the mayor here has been a terrific soldier for the industry. I think we built the gym here too.