After many years of growth, the number of cruise visitors to Alaska failed to increase in 2008 and actually declined this season. The 1.2 percent drop in visitation, along with a decline in spending, rippled through the visitor industry, which experienced as much as a 30 percent decrease this year.
By Rena Delbridge
Citing a need to draw more visitors to Alaska to stem anticipated declines as cruise ships rework their routes, the Alaska Travel Industry Association urged the House Finance Committee to approve a corporate tax credit for cruise lines that contribute voluntarily to the association.
The move is expected to net more money for marketing Alaska as a tourist destination and is supported by Gov. Sean Parnell, but the cruise industry cautioned that a tax credit for marketing isn’t a fix-all for the troubling state of affairs.
Alaska Cruise Association President John Binkley said that if lawmakers opt for a tax credit, it should be extended to others involved in the tourism industry as well – not just the cruise lines.
“Although marketing Alaska is an important component to growing the visitor business, there should be no illusion that this is the only challenge our industry faces,” Binkley said. “The cost of doing business in Alaska continues to increase and will be a critical component to address in turning around the downward trend we are experiencing.”
The cruise industry filed a lawsuit earlier this year challenging a state tax imposed on cruise visitors.
Alaska should expect to slip below 1.5 million summer visitors in 2010 as cruise ship passengers and independent travelers continue to decline, ATIA Executive Director Ron Peck told legislators. Visitors peaked at 1.7 million in summer 2007.
Marketing is critical as a general economic slump keeps more people at home and away from expensive, trip-of-a-lifetime destinations like Alaska, Peck said. The state’s contribution to ATIA’s annual budget in fiscal year 2009 was $9 million, which was combined with nearly $3 million from tourism companies and the cruise lines serving Alaska. Peck and ATIA members want to see total tourism marketing funds hit about $20 million.
“I don’t know where the cruise industry is headed,” Peck acknowledged. “I believe we can generate additional travel … with additional funding, we can change that trend.”
Brett Carlson operates a tourism business out of remote Coldfoot, a couple hundred miles north of Fairbanks along the Dalton Highway. He’s also chairman of ATIA, which has nearly 2,000 member businesses.