August 23, 2006

Majority of Alaskans voting for tax on cruises

NEW YORK (Reuters) - Alaskans are likely to approve a
measure that would impose taxes on the cruise ship industry,
potentially hitting companies already struggling with record
fuel prices.

In state elections held on Tuesday, Alaskans had voted 52.4
percent in favor of the measure that would impose a tax of
about $50 per head on cruise passengers and a 33 percent tax on
casinos on ships sailing in the state's waters, according to
unofficial results posted on the state government's Web site.

By Wednesday morning 382, or 87 percent of the state's 439
precincts, had their votes tallied in the state elections. Full
results should be available later in the week.

Cruise companies, such as Carnival Corp. and Royal
Caribbean Cruises Ltd., which offer Alaskan cruise vacations,
are already facing a slowdown in business in the Caribbean as
well as high fuel costs. They have said that business in Alaska
has been doing well.

Additional taxes could hurt the industry further, but the
impact is likely to be minimal as Alaskan cruises tend to be
more expensive than those in the Caribbean, an analyst said.

"Adding $50 to a multi-thousand-dollar cruise is probably
not a deal killer for most people," Susquehanna Financial Group
analyst Robert LaFleur said.

Carnival's shares were off 43 cents, or 1 percent, at
$39.05, while Royal Caribbean shares were down 23 cents, or 0.7
percent, at $33.64 during morning trading on the New York Stock