Tourism in Alaska has recently been described as “bruised,” “threatened,” and even “bleak.” Indeed, with far fewer visitors this summer arriving on flights and cruise ships, riding the Alaska Railroad, browsing shops on downtown streets and panning for gold, industry leaders statewide have begun to meet and discuss how to survive these tough times.
The Alaska Tourism Summit, which began as the Southeast Summit in Juneau on July 21 and continued with the Southcentral Summit in Anchorage on August 20, was organized by representatives from the travel industry to brainstorm solutions in reaction to a reduced number of visitors this summer and an expected harder hit next summer.
Already this year, an estimated 200,000 fewer visitors arrived in Alaska. With the reassignment of three cruise ships to other routes for the 2010 season, Alaska can expect to have at least 140,000 fewer visitors than this year. This will mean far less stays at hotels and bed and breakfasts. It means fewer car and RV rentals in the state, declined souvenir shop patronage, decreased charter and day cruise operations, and less restaurant occupancy. Such a significant drop in visitor numbers affects Alaskans in all walks of life, a somber fact that was recognized by the over 400 participants in the tourism summits.
A major topic of discussion at both summits was determining the cause of such a sharp decline in visitors. Many recognize the global recession as a major factor, causing people to curtail spending and stay closer to home. Alaska is typically seen as an “exotic” or “long haul” location, far from many of the potential visitors’ hometowns and requiring expensive and lengthy flights to reach. But another major factor identified was the passage of a ballot measure three years ago, placing taxes and unnecessary additional environmental restrictions on the cruise industry. An excessive head tax and unattainable wastewater discharge requirement written into the ballot measure has led to financial losses for the cruise industry, leading some companies to send fewer ships to Alaska in 2010.
Fewer ships arriving in Alaskan ports will have far-reaching effects. Whittier is poised to lose 40 percent of its visitors next year as a result of less cruise ships in the port, and visitors to Seward will drop 17 percent. Many cruise passengers travel inland to Anchorage and Fairbanks, and as a result airline flights will be reduced in and out of these cities. Of course, fewer cruise passengers will mean a huge financial hit for lodging, recreation, tour, and retail businesses. Thousands of tourism industry jobs will be lost as businesses struggle to cut expenses and bookings are much lower, requiring less staff at many businesses. Moreover, local government will see a large decrease in bed tax revenues as fewer tourists will need lodging.
What can be done to offset the tourism downturn in Alaska? Some say repealing or decreasing the tax on cruise passengers and increasing tourism marketing will go a long way in helping to draw visitors back to Alaska. Removal of the tax, $50 per cruise passenger, would allow the industry to fill its ships without having to heavily discount the selling price.
“The adverse consequences of the ballot measure have come back to haunt Alaska’s tourism industry, especially during a weak economy,” said RDC Executive Director Jason Brune. “Alaska is now much less competitive with other visitor destinations and this fact has become painfully obvious across our visitor industry with the cruise lines deploying ships and passengers to more fiscally-attractive locations. We will not reverse this trend until we reduce the cost of business in Alaska for the cruise lines.”
Additionally, the Alaska Travel Industry Association (ATIA) supports increasing tourism marketing dollars through HB 167 and SB 138 to lure visitors back to Alaska. Both bills, which have substantial bipartisan support in both houses, would give a corporate income tax credit to cruise lines that donate money to an ATIA marketing fund. ATIA supports increasing the marketing budget dramatically, from $12 million to $20 million, to help make Alaska competitive in the choice visitors make for vacation destinations.
An upcoming Interior Alaska Tourism Summit is set for October 5 in Fairbanks, coinciding with ATIA’s Annual Convention. The Railbelt and especially Interior Alaska is expected to be most affected by the tourism decline, a fact that will certainly be discussed at this summit. Additional discussion will identify the next steps to revive Alaska’s tourism industry statewide. RDC will remain engaged in this effort, as it believes a healthy tourism industry is good for all Alaskans.
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