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Alaska’s Tourism Industry
Background
Alaska is like no other place. It has more mountains, glaciers, and wildlife than just about anywhere else in the world. Alaska is a popular destination, and while the industry saw a decrease in visitors 2009-10, due to cruise ship redeployments, tourism business are hopeful new policy changes will continue to reverse the decline and bring more people than ever back to Alaska.
Approximately half of all visitors coming to Alaska arrive by cruise ship. The cruise industry, much like resource development industries, is a global market. Alaska accounts for only 4.8 percent of cruise itinerary destinations worldwide.
The tourism industry is made of several different components: cruise lines, air service, and highway/ferry traffic to Alaska. There are also thousands of businesses that depend on the passengers coming to Alaska to take their tours, dine in their restaurants, and stay in their guest rooms. Visitors benefit a multitude of Alaskans in different ways.
Facts & Economic Impact
- 2014 is expected to result in continued growth in tourism visitors, including nearly one million arriving by cruise ship.
- In 2013, 1.96 million people visited Alaska. The number of visitors is slowly increasing after seeing a decline from 2009 - 2010. A peak year in tourism was 2008, but years following were down, with the decline attributed mostly to a 2006 ballot initiative. The initiative posed excessive taxes and inequitable environmental laws on the cruise industry. As a result, cruise lines began deploying their ships elsewhere around the globe, causing a decline in the amount of cruise passengers coming to Alaska.
- Of the 1.96 million visitors in 2013: 51% (999,600) came by cruise, 45% (871,000) came by air, and 4% (86,300) came by highway or ferry.
- Direct visitor spending is more than $1.8 billion annually, excluding fares paid to travel (air, cruises, etc.). This spending figure increases to $2.42 billion when labor income from visitor industry jobs is factored in.
- Tourism is the second-largest private sector employer, and accounts for one in eight Alaskan jobs. The most recent available data indicates that the tourism industry generates over 39,000 direct and indirect jobs, 9% of Alaska employment, and $1.32 billion in combined labor income. The industry boasts a 78% resident hire rate.
- One in three Alaska visitors are repeat travelers to the state. Many of those who return are independent travelers who first came to Alaska on a cruise ship.
- Dozens of Alaska communities and boroughs collected $78 million in sales and bed taxes and docking fees in 2013. The State of Alaska collected $101 million in visitor related revenues.
- Alaska’s tourism industry invests heavily in the state, spending hundreds of millions of dollars on capital expenditures, construction, operating equipment, marketing, and contributions to non-profit organizations.
- Long before a 2006 ballot initiative, the cruise industry made great strides to develop responsible practices. Companies spent millions of dollars on ship upgrades to operate under standards more stringent than required by state and federal agencies. The systems on board these ships are highly technical and more effective than Alaska’s own land-based systems. The industry continues to research and develop innovations to minimize environmental impacts. These efforts include adopting practices pertaining to air, water, solid waste, and more. To the cruise industry in Alaska, the oceans are home and the livelihood of the companies. Ignoring impacts on the environment would result in those companies being unable to operate in Alaska.
- In 2007, as a result of the 2006 cruise ship ballot initiative, four new taxes were levied on cruise companies and their passengers: a $46 head tax, a $4 state ocean ranger tax, a 33% gambling proceeds tax, and a corporate profits tax. In 2010, the State of Alaska reduced the head tax and agreed to review other components of the ballot initiative, prompting some cruise lines to add ships to Alaska beginning in 2012. Often, cruise lines make their decisions a few years in advance, resulting in their 2010 decision to add ships to the 2012 market. Princess Cruises added a ship to result in 50,000 more passengers visiting the state, Disney returned with 38,000 passengers, and Holland America Line increased its capacity by 6%, resulting in 11,000 more passengers.
- 2010 brought a significant drop (14.5%) in cruise volume due to redeployed ships – about 140,000 less cruise passengers came to Alaska.
- In 2010 the Alaska legislature passed a bill on Cruise Ship Head Tax, reversing some of the negative effects of the 2006 ballot initiative. Since passage, the number of tourism visitors is slowly increasing to 2008 peak numbers.
- After an independent science panel concluded it would have no adverse impact on the environment, a 2013 bill improving the permitting process for the regulation of wastewater discharges was passed by the Alaska legislature, further making it feasible for cruise ships to return to Alaska.
Web Links
Sources
- Alaska Department of Commerce, Community and Economic Development
- Alaska Travel Industry Association
- Alaska Economic Performance Report
- North West & Canada Cruise Association
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