By Libby Sterling
The numbers aren’t good. Alaska, once a confident giant in the cruise industry, is now a market facing crippling challenges. Several ships have already been pulled from Alaskan waters for the 2010 season, an action that will result in a reduction in port calls from 2009. 130 fewer port calls will be made in Juneau, 118 in Sitka, 85 in Skagway and 71 in Ketchikan. According to Bob Berto, president of Cruise Line Agencies of Alaska, that translates to $98 million in projected losses throughout the Southeast region from 2009 to 2010.
Business owners, tour operators, government officials and concerned citizens gathered July 24th at an economic summit at the Juneau Arts and Culture Center. The event was organized by First Things First Alaska Foundation, a 501(c)(3) nonprofit dedicated to promoting sustainable and responsible economic development and resource management while preserving Alaska’s economic viability through public education. The summit was aimed at addressing the issues and trials facing Alaska’s visitor industry in the coming years.
A panel of eight presenters representing various facets of the visitor industry spoke on a variety of topics and answered questions from the audience. The forum served as a collective effort to brainstorm solutions to the unavoidable issues that are beginning to have a taxing effect on Alaska’s government, businesses and families.
“It may seem gloomy, but there’s hope by getting a group like this together,” Berto said.
In this situation, taxing is more than just a description of Alaska’s challenges, for it is a tax itself that many believe to be the biggest blow to the industry, even bigger than the general decline of the country’s economy. The “head tax” on cruise ship passengers, implemented thanks to a ballot measure that passed in 2006, was undoubtedly the hottest topic on the table at the summit and was opposed by nearly everyone in the room.
According to Ron Peck, president of the Alaska Travel Industry Association, the ballot measure was sold to voters without their complete understanding of it. Now that the tax has been in place for a few years, many in the industry are blaming lost revenue on the tax, which was implemented with the goal of doing the opposite.
Panel member Patti Mackey, executive director of Ketchikan Visitors Bureau, gave a breakdown of her town’s losses. This year, in addition to a decline in cruise visitors from 2008, the town’s hotels, bed and breakfasts and sport fishing resorts have been reporting a decline in revenue. Business is so slow in some cases that many lodging facilities have chosen to shorten their season, opening late and closing up early for the winter.
According to Mackey, in 2010 Ketchikan can expect a projected $17.7 million loss in cruise passenger revenue as 7.5 ships will be pulled from the town’s market.
Mackey described Ketchikan as “a town ready to do business, struggling in many cases by no fault of our own.”
Other panelists presented similar data from other communities, which verified that the entire state faces a downward trend in a once steadily growing industry.
Many audience members shook their heads in awe at the negative data presented. Others dropped their heads into their hands in frustration. But the mood lightened as fresh ideas began to be presented by panelists and the many members of the audience who chose to vocalize.
Many expressed cautious hope in Alaska’s new governor to cooperate with the visitor industry and take the steps believed necessary to avert its downfall. Some asserted that the decline in large cruise ship traffic has not had a negative effect on some businesses and that more priority should be given in marketing to independent travelers and passengers on small cruise ships.
During closing statements by the summit’s panelists, there was a general consensus that progress had been made, new ideas had been voiced and that the event was a success. However, panelists and audience members agreed that it was simply the first step in a “grassroots” operation that will require hard work and dedication from everyone involved in Alaska’s tourism industry.
Source: Capital City Weekly