Sen. Lisa Murkowski, R-Alaska joined a videoconference with representatives from the Alaska Travel Industry Association on Feb. 19 to talk about the challenges and possible solutions to reviving the tourist industry in Alaska in 2021.
The largest percentage of tourists who visit Alaska arrive on large cruise ships.
The 2021 Alaska cruise ship season continues to face obstacles to resumption of sailing during the ongoing COVID-19 pandemic.
Those obstacles include meeting requirements set by the Centers for Disease Control and Prevention and the continued closure of Canadian ports to vessels carrying more than 100 passengers.
The CDC's current Conditional Sailing Order, which been in place since the No-Sail Order expired on Oct. 31, requires a stringent application process to conduct test cruises before the CDC will approve an actual cruise under the Conditional Sailing Order. There's also a complex list of protocols, procedures and other requirements to be allowed to hold an actual cruise.
Canada's closure of its ports to large cruise ships through Feb. 28, 2022, is a major barrier to the ability of ships to sail from the Lower 48 to Alaska. That's because the U.S. Passenger Vessel Services Act of 1886 requires foreign-flagged ships carrying passengers to stop at a foreign port when traveling between two U.S. ports. Most cruise ships are registered and built in foreign countries.
Canada has provided those stops previously, with ships visiting or starting from Vancouver or Victoria, British Columbia.
Murkowski, at the January ATIA meeting, said the announcement of the extension of the ban, “was a kick in the gut that already has been aching for a year or more.”
On Wednesday, Rep. Don Young, R-Alaska, announced that he has introduced the Alaska Tourism Recovery Act, which would provide a temporary adjustment to the PVSA. In a press release issued by Young’s office, the proposed legislation would “provide a temporary PVSA workaround by deeming roundtrip voyages between Alaska and Washington state as foreign voyages for the purposes of U.S. law.”
In a telephone interview Wednesday, Chere Klein, the regional director for the Alaska congressional delegation, said that Murkowski and Sen. Dan Sullivan, R-Alaska, also are working on drafting legislation targeting the PVSA regulations.
Murkowski told ATIA representatives that several ideas for solving the PVSA and CDC regulations barriers are under consideration, such as ships using a “technical stop” at a Canadian port, a temporary waiver of the PVSA or a waiver of the fees associated with violation of the PVSA.
ATIA President and CEO Sarah Leonard, who led the videoconference discussion, asked Murkowski if the PVSA could be waived through a presidential executive order.
Murkowski answered that it is possible, but not likely because that is allowed only in the interest of national defense.
The exempting of the PVSA for Alaska-bound ships is not a simple as it might appear, Murkowski warned — even a temporary one.
If ships skip Canada, she said, they aren’t only violating the PVSA, it means that the non-U.S. citizen crew members would be considered “engaged in domestic employment.” Their visas require that they must visit a foreign country every 29 days, she explained.
There still are many questions around the option of a technical stop as well, she said. Would it mean the ship only anchors off the foreign port, or would passengers be required to go ashore?
“We are covering all the angles,” she said.
She said she and other legislators have been in talks with Canadian Prime Minister Justin Trudeau as well as a Canadian Minister of the Yukon Territory as well as Canadian Customs officials concerning the closure of Canadian ports to larger ships.
She said that even though there might be a path to ease the PVSA restriction, the CDC rules pose a more daunting barrier to the resumption of cruising in Alaska.
“We might be able to unravel the knot here when it comes to the Canada limitations,” she said, “but we’re still dealing with the CDC.”
Murkowski said she had spent an evening just previous to the ATIA meeting talking to CDC representatives, asking where national health policy stands in the current state of the COVID-19 pandemic, and how long will communities have to wait to get hear the next step as well as what kind of certainty the organization could give people to allow them to make plans.
“It was a difficult conversation,” she said.
She said the biggest barrier that has come up recently in keeping the CDC from loosening restrictions has been the new coronavirus variants entering the U.S. She added that it’s expected that by the end of March, the U.K. variant will be the dominant strain the the U.S.
Murkowski then touched on federal pandemic financial relief programs that are in discussions at the federal level. She said she has been fighting hard for Alaska to receive appropriate support, as its economy has been damaged more than that of any other states. She said that Alaska has lost 33% of its revenue overall since the start of the pandemic. The state with the closest revenue loss is Hawaii, with a figure of almost 20%.
She noted that Hawaii already is ramping up its tourist economy again, however, and unlike Alaska, enjoys a year-round tourist season.
Murkowski said she is working with a bipartisan group on legislation that would focus on support for the tourist industry, as well as on increased vaccinations and testing so that visitors can return as soon as possible.
ATIA Chair and Knightly Tours President Bill Pedlar asked, in the videoconference, whether there might be a third round of the federal Paycheck Protection Program.
Murkowski said that President Joe Biden’s proposal now under consideration would focus not on the PPP but on Small Business Administration targeted opportunity grants instead. She said there is skepticism among lawmakers that the PPP wasn’t targeted enough, and money was distributed without enough guidelines.
She added that much was learned from the first distribution of the federal Coronavirus Aid, Relief and Economic Security Act funds, when seasonal businesses hadn’t been properly accounted for. She and Pedlar emphasized the need for those businesses to state their 2019 revenue to compare with current revenue to show their need for monetary support.
Josh Howes, president of Premier Alaska Tours, said that his business normally employs about 600 employees, and is employing 12 now. Cruise passengers comprise 70% of his company’s business, he said.
Howes said that clear direction from the CDC is needed immediately so that businesses can plan, and added that the problems with achieving a waiver of the PVSA are very frustrating. He added that it would be a huge benefit for Alaska if the PVSA could be waived permanently for those voyages to the state.
Murkowski answered that she agreed, and also reminded listeners that the pandemic still poses a risk that makes a certain level of CDC caution necessary as the economy and the health of citizens are balanced. What she emphasized is that the CDC representatives need to be very clear and direct in their decisions so that people can make plans.
Colleen Stephens, president of the Valdez-based Stan Stephens Cruises, echoed Howes in that the lack of clear information is a huge impediment to business planning. She also mentioned the loss of her company’s employee base as another detriment as the pandemic rolls on.
Stephens’ question to Murkowski was how the recently lapsed State of Alaska emergency declaration would affect funding and support for the state.
Murkowski said that Alaska is the first state to have no emergency declaration during the pandemic. She said she has talked to legislators about the situation, as well as Alaska Gov. Mike Dunleavy, and found that the potential impacts still are not fully known.
One area that certainly will be negatively affected, she said, is that the state is set to lose about $8 million in Supplemental Nutrition Assistance Program benefits. She said she had been communicating with the U.S. Department of Agriculture on that issue and was waiting for a response.
She said other areas that could be negatively affected by the lack of an emergency declaration are the employee retention tax credit as well as coronavirus testing site and mass-vaccination site availability. The ability of medical facilities to reallocate vaccines to areas as needed also could be impaired.
Murkowski closed her remarks by outlining her emphasis as she works with legislators to solve the problems causing Alaskans to suffer as the pandemic continues.
There’s a “whole new crop of folks” coming up with the new Biden administration she said, and educating them on Alaskan’s livelihoods, businesses, experiences and challenges is key to garnering support. She urged Alaskans to share their unique stories of how the pandemic has affected them and their businesses to help in that effort.