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Analysis finds loss of tourism jobs even worse than expected

By AlaskaACT

New figures released this month show the 2010 visitor season was not good news for Alaska’s economy. The Alaska Alliance for Cruise Travel (AlaskaACT) released preliminary findings from an analysis prepared by the McDowell Group, a Juneau-based research firm.

“Earlier this year, we conducted an economic impact analysis that predicted Alaska would lose 5,000 jobs as a result of the economy and the loss of cruise ships from the Alaska market. Not only was the prediction validated, new data shows that things were worse than expected,” said Susan Bell, commissioner of Commerce, Community and Economic Development.

Employment data for 2010 shows Alaska lost 1,850 visitor industry jobs this year. Added to the loss of jobs last year, the total job loss from the industry’s 2008 peak is 5,400. Approximately 1,950 were located in Anchorage, 1,450 in Interior Alaska and 2,000 in Southeast Alaska.

“Alaska businesses and our economy have been hit hard,” AlaskaACT Board member Bob Dindinger said. “Since cruise ship deployments are made well in advance, many businesses were able to weather this storm by reducing employees and other expenses. However, a continued loss to our businesses and economy is just not sustainable.”

Visitor volume data shows that domestic air passengers were up 2 percent this year but international air passengers were down 8 percent. Over the two-year period, domestic air passengers are down 10 percent and international air passengers are down 13 percent. Out-of-state ferry traffic is up this year but still remains down 8 percent from the industry’s peak in 2008. Cruise volume was down 15 percent this year with the deployment of three ships from the Alaska market.

“While there are some increases in independent travel, those do not come close to making up for the loss of 142,000 fewer cruise passengers. If you want to know how the industry is doing in Alaska, you really need to look at the impact the last two years. The bottom line is that we have seen a significant loss in gross sales and a huge loss of jobs. No matter how you look at it, this is not good news,” Dindinger said.

AlaskaACT was one of many organizations that approached the governor and the Legislature for help. AlaskaACT members advocated for a reduced cruise ship tax in order to make Alaska more competitive in the global market.

“There is no question the cruise industry is doing very well outside Alaska. It is important to remember Alaska ships were deployed to more profitable destinations. Through tax reform and increased marketing, we hope to build an environment where we can have increased capacity and profit in Alaska. That is the only way to turn around our decline. Thankfully, the governor and the Legislature have set us on that course,” Dindinger said.

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