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Sitka Cruise Ship Traffic Numbers To Move Up?

By Tom Hesse
Sentinel Staff Writer

Cruise ship traffic to Sitka rebounded last season from a low of 90,000 passengers in 2014, but where the market is headed next is anyone’s guess.

That was the message Fred Reeder, port manager for Cruise Line Agencies of Alaska, delivered to the Chamber of Commerce Wednesday.

Reeder said visitor traffic to Alaska has been creeping up after steep declines from 2008 to 2010. For Sitka, that meant growing from 90,182 in 2014 to nearly 115,000 last year – an increase of 27 percent.

Next season’s number is expected to be in line with this trend, Reeder said, while observing that it will still be far short of the 290,000 passengers who came to Sitka in 2008.

“The yields aren’t back to where they were in 2008. We’re still returning from that crash,” Reeder said.

In 2008 the housing market crashed, leading to a nationwide economic recession. Reeder said the culprit in the loss of cruise business, however, was the Alaska Legislature.

“We did have a dip and that was predominantly from taxes,” Reeder said. “The Alaska Legislature decided in 2008 to impose a head tax. So if you impose taxes on businesses they tend to move.”

Reeder said the tax was compounded by local head taxes in Juneau and Ketchikan, and that when the Legislature changed the rules to avoid taxing cruise ships twice, it helped bring back more travelers. Given the current budget crisis, legislators are considering additional taxes on all industries, including tourism, which Reeder said should be a concern for port towns.

“Now I see the governor wants to put $15 back in and not account for the payment that’s going to Ketchikan and Juneau,” Reeder said.

The addition of port calls to Hoonah also contributed to the decline in traffic to Sitka, Reeder said. Across the state there were just under a million passengers, a number which is expected to increase by around 400,000 passengers for 2016, Reeder said.

That’s a lot of people but a small share of the overall cruise industry, he said.

“You think a lot of people come to Alaska, but we only represent 4 percent of the market,” Reeder said, citing numbers from the Cruise Line International Association.

Trips to Caribbean ports account for one-third of the cruise business, the largest share of the market. Reeder said one of the biggest changes in the market recently has been the larger size of ships coming to town and the availability of the Old Sitka Dock to accommodate them.

“It’s not more ships in the market, the ships are getting bigger,” Reeder said, adding that some of these larger ships are able to stop only in towns with a dock.

“There’s over 10- or 12,000 passengers who are directly tied to the dock,” Reeder said.

And so far, busing tourists in and out of town hasn’t been a problem.

“We have yet, touch wood, to have left anyone behind,” Reeder said.

After the Centennial Hall remodel is complete, Crescent Harbor will be the primary lightering dock, Reeder said. In the past, passengers have been dropped off at either Crescent Harbor or on Harbor Drive below the O’Connell Bridge. Reeder said there are still concerns about making sure visitors see all of downtown, but he thinks traffic should still be sent to Crescent Harbor once the Centennial Hall remodel is complete.

“I recognize that, for whatever reason, people come to the church and they stop. We need to encourage them to keep going,” Reeder said.

By doing that, Reeder said the O’Connell Bridge dock could be transformed to cater to yachts.

Reeder took a handful of questions from the audience about what could be done to improve visitor traffic, including how Alaska’s legal marijuana might affect visitation.

Cruise lines don’t intend to allow marijuana on board, Reeder said. As for other attractions, Sitka’s resources will have to grow with increased traffic, he said.

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