ACA hosted a ship tour of Holland
America’s MS Amsterdam earlier this season in Homer. Alaska is expected to see
a 15 percent decline in passengers this
cruise season.

Despite recent news that a boost in independent-visitor traffic is helping offset the negative economic impact of fewer cruise ship passengers this year, the Alaska tourism industry is struggling.

Last year’s redeployment of three ships to other parts of the world greatly impacted the entire state. Alaska will have 140,000 fewer cruise visitors this year, which equates to a loss of $150 million in direct and indirect spending and 5,000 Alaska jobs. Based on industry announcements, it is estimated that Alaska will see 125,000 fewer passengers in 2011.

On June 14, Ron Peck with the Alaska Travel Industry Association said the number of independent travelers is up from 2009, but only slightly. Even with the increase, this year’s numbers are nowhere near where they were 2008.

Initial data from the Alaska Department of Revenue show roughly 20 percent fewer passengers visited Alaska in May of this year than in May 2009. The overall decline in passengers for the summer cruise season is expected to be 15 percent.

"There are days that you just drive through town and wonder where everybody is," Mary Richards, who runs the Bed and Breakfast Association of Alaska, told the Anchorage Daily News July 19. She is the proprietor of All Seasons Bed and Breakfast Inn in Fairbanks. "We know short of a miracle that we will have another down year this year," Richards added.

While not a port city, cruise lines purchase tens of millions of dollars of goods and services from businesses in Fairbanks and support jobs for thousands of employees. According to a July 17 Fairbanks-News Miner article, this year’s ships have 25 percent to 30 percent less passenger space. That translates to fewer bus tours through the Interior. The tours usually bring about half of all summer visitors to Fairbanks.

The Alaska Railroad Corp. reports passenger loads are down nearly 12 percent this year and the state-owned railroad is generating approximately 10 percent less revenue. Last year, passenger ridership was approximately 470,800.

Anchorage is forecasting hotel room tax revenue will drop nearly 8 percent in 2010, primarily due to the reduction in cruise-ship visitors.

The Alaska Legislature agreed this year to adjust the cruise passenger head tax to make Alaska more competitive globally and improve the state’s investment climate. Alaska’s tourism industry hopes the adjustment may tempt some cruise ship operators to increase vessel calls next year. Increased marketing dollars, from $11.7 million to $18.7 million, might also help bring more tourist dollars to the state.

Still, the future remains, at best, uncertain. John Binkley, president of the Alaska Cruise Association, told the Anchorage Daily News July 19, "We’re all holding our breath for 2012."

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