Economic Impact by region

Numbers Are In. Visitor Industry Drives SE’s Economy.

While state government, fishing and timber remain in the doldrums, the visitor industry grows ever more important to the economy of Southeast Alaska, a consultant told the Southeast Conference’s annual meeting in Sitka. “The visitor industry has provided a critical counter-balance to a capricious economy,” notes “Southeast by the Numbers 2019,” an economic survey of the region prepared by Rain Coast Data for the Southeast Conference. “In just seven years, the tourism sector added more than 2,000 annualized jobs to Southeast communities, increasing wages by $85 million. During the summer of 2020, 1.44 million visitors are projected to spend nearly $800 million during their Southeast Alaska holidays.” Rain Coast Data Director Meilani Schijvens presented the survey findings during the opening day of the annual conference. The visitor industry, driven by the cruise sector, may become the region’s largest economic sector by next year, she said. Tourism is already the region’s largest private employer, accounting for one out of five jobs, and Schijvens predicts it will become the largest wage generator by 2020. The biggest growth in cruise visitation is expected at Icy Strait Point near Hoonah, which anticipates a 114% rise from 2018 to 2020, for a total of 404,033 visitors in 2020, driven by the addition of a second cruise dock. Norwegian Cruise Line is partnering with a subsidiary of Huna Totem Corporation to build the new 500-foot floating dock about one-half mile north of the existing Icy Strait Point dock. Statewide, the number of cruise visitors is expected to grow 23% since 2018, she said. “In 2019, 40 cruise ships are scheduled to visit the region, carrying 1.36 million passengers on 577 voyages. In 2020, ten new ships and 29 additional port calls are expected to be added, while seven ships will be phased out of the region. Lines with new ships will include Carnival, Princess, Royal Caribbean, Norwegian and Oceania. Lines that plan to reduce their Alaska fleet include Holland America, Crystal and Azamara, which has no ships scheduled to visit Alaska in 2020,” the study said. “The visitor industry has the strongest outlook of all Southeast Alaska industries,” the study said. “Alaska’s popularity as a visitor destination has continued to grow. … More Americans are traveling due to a strong national economy, and international travel destinations are increasingly perceived to have security risks. Cruise passengers are expected to continue to rise as larger, higher-capacity vessels hit the region.” One-third of all visitor spending in Alaska occurs in Southeast, she said. A copy of the report can be downloaded here.

Alaska’s tourism economy accounted for one in 10 jobs in the state and more than $4 billion in total spending in 2017. 2018 was also a record year for Alaska tourism, bringing in more than 2 million visitors to our state. 2020 should be even brighter as the state greets even larger ships and cruise liners provide an increased number of itineraries. Projections for 2020 include 43 CLIA Alaska ships, 606 voyages and 1.4 million passengers.

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Visitor spending by region, 2017

Direct visitor industry spending, 2017

Total Direct Spending: $2.8 billion

Regional employment impacts, 2017

Sources: McDowell Group: The Role of Visitors in Alaska’s Economy

Southeast Alaska

Almost all Alaska itineraries include visits to Southeast Alaska, which has three major ports of call: Juneau, Ketchikan and Skagway. Ships also make port calls in Sitka, Icy Strait Point and Haines. As the region’s hub, 99% of the ships stop in Juneau and 90% call on Ketchikan. Visitor industry-related employment plays the greatest role in Southeast, accounting for 11,950 jobs. To better handle the larger ships that are now calling on Alaska, Juneau built two Panamax docks that enable the city to handle two, 1,000-foot vessels at a time. Icy Strait Point added a second floating dock. Port expansion projects are underway or under study in Sitka, where a private company is building a dock that can handle two large ships at a time, and Skagway.

Southcentral Alaska

For many years, cruise ship-related traffic through Anchorage came at the beginning or end of one-way itineraries, with passengers primarily entering and exiting through the ports of Whittier and Seward. This year, ships will call 15 times in Anchorage and 97 times in Seward. Whittier will be called on 35 times. Cruise lines do business with 1,100 Southcentral businesses and support 20,700 jobs in the region. Both Anchorage and Seward have major port renovation projects under way or under study.

Interior

Despite being hundreds of miles from the ocean, Interior Alaska enjoys the economic benefits of the cruise industry each summer, as about 22% of all cross-gulf passengers extend their visits to include excursions into the Interior. Some 58% (188,500) of summer visitors to Fairbanks are on a cruise land tour. Tourism drives the Denali Borough’s economy. The visitor industry creates some 8,500 jobs to service more than half a million visitors to Denali National Park and Preserve. The visitor industry accounts for 10% of employment and 6% of labor income in the Interior.