An overview of Alaska tourism in 2021 was given by travel association representatives in a virtually held Alaska Legislature Arctic Policy, Economic Development and Tourism Committee meeting Thursday.
Ketchikan Visitors Bureau President and CEO Patti Mackey gave a presentation at the meeting, as did tourism industry representatives from Visit Anchorage, Explore Fairbanks and the Alaska Travel Industry Association.
The committee chair, Rep. Grier Hopkins, D-Fairbanks, led the meeting. Also present were Reps. Harriet Drummond, D-Anchorage; Sara Hannan, D-Juneau; Liz Snyder, D-Anchorage; and Tom McKay, R-Anchorage.
Alaska Travel Industry Association President and CEO Sarah Leonard began the session by outlining the topics to be covered: the effects that the COVID-19 pandemic has had on Alaska’s tourism economy, as well as the future goals the Alaska travel industry has set.
In the time period from March 2020 to March 2021, Leonard said, the pandemic has caused a loss of more than $500 billion to the U.S. travel economy.
“At our current pace, the industry isn’t expected to fully recover until 2025,” she said.
Leonard said that pre-pandemic, about 60% of Alaska’s visitors arrived via cruise ship, and more than one-third by air. The rest arrived by land or the Alaska Marine Highway.
In 2019, 2.5 million visitors to Alaska generated more than $4.5 billion in economic activity, and supported more than 50,000 directly and indirectly related jobs, which translates to about 10% of Alaska’s workforce, she said.
Large-ship cruising, as well as tourism by land, continue to be impaired by Canada’s restrictions on their borders and ports as an effort to mitigate the spread of COVID. At this time, Canadian ports are closed through February 2022.
Virtually all of the large cruise ships that visit Alaska are foreign-flagged vessels. With the ports closed, foreign-flagged ships cannot sail from U.S. ports in the Lower 48 to an Alaska port without a stop at a Canada port, due to the U.S. Passenger Vessel Services Act that requires that stop for such vessels.
A report that Leonard shared, compiled by the McKinley Research Group, compared the numbers of all travelers to Alaska from 2019 to 2020, and showed that Anchorage, Fairbanks and Juneau experienced losses of 59% across the board.
Leonard showed graphs that illustrated the percentage change in different employment sectors from June 2019 to June 2020.
The scenic and sightseeing transportation sector was the hardest hit, with a 75% decline. The leisure and hospitality employment sector, as well as the accommodations and food service sectors, were nearly even, declining by 37% and 35%, respectively. The Denali Borough and the Skagway Municipality topped both of those categories in job losses with more than 80% lost in 2020.
The Ketchikan Gateway Borough showed a loss of 50% in leisure and hospitality jobs and 40% of accommodation and food service jobs, according to the report.
A loss of 30% was realized statewide in air transportation jobs, with 40% of those jobs lost in the KGB.
A loss of 75% was seen in arts, entertainment and recreation jobs in the KGB, but Skagway topped all other areas surveyed with a loss of 87% of those jobs. The statewide percentage of job losses in that sector was 48%. Scenic and sightseeing transportation employment loss was 75% statewide, with the KGB showing a loss of 85%.
Leonard said that the statewide tourism organizations are working to spread the message that “we are ready to provide Alaska experiences.”
She added that the COVID-19 vaccine availability has been “a hot topic in our industry and has really changed the conversation for travel, in that Alaska is perceived as an even more safe destination and one that is open for business.”
Rep. Hopkins asked Leonard about the status of the effort by the federal delegation to create a work-around to the PVSA to allow large cruise ships to travel to Alaska once the Centers for Disease Control and Prevention clears them to once again carry passengers on voyages.
Leonard said that she knows that they’re in “continual” conversations about those issues at the federal level, but, “we’re hearing that the window is closing on timing for that.”
Ketchikan’s Patti Mackey spoke next about the Ketchikan Visitors Bureau's perspective on the effects of the pandemic on local tourism.
She shared a slide which listed tourism statistics for Ketchikan from 2019: 46 different cruise ships, 570 cruise ship stops, 1.2 million cruise ship passengers, 38,764 visitors by air and 3,623 visitors via ferry.
Another slide listed some of the losses in 2020 such as 52 cruise vessels, 606 port calls and 1.25 million cruise passengers.
"The cruise economy in Ketchikan makes up about 96% of the overall industry. But, we are also happy to welcome roughly 45 to 50,000 independent travelers each year," Mackey said
She also said that Ketchikan differs from other Alaska cruise ports, in that it is a significant distance from other cities and also is either the ships' first or last stop within Alaska.
As a result, she said, “Our port times are pretty limited. Juneau might see 10- to 12-hour a day visits, where Ketchikan will see people for about half that time, six to eight hours a day.”
One benefit of often serving as the last stop in a cruise itinerary, Mackey said, is that visitor spending is boosted when they realize Ketchikan is their last chance to buy the Alaska items they hadn’t purchased earlier.
“The retail revenue side of things is a very big part of the overall impact to Ketchikan,” she said.
In a normal season, cruise passengers spend about $200 million in Ketchikan during the summer season. Ship crew members spend about $7 million during a season in Ketchikan, Mackey said.
Other revenue lost to the pandemic mitigations were $19 million in state and local fees, $10 million in miscellaneous cruise line purchases and $4.3 million in sales taxes, according to an informational slide presented by Mackey.
Mackey also displayed a chart that showed unemployment numbers that jumped by a bit more than 60% in the Ketchikan area in April through July of 2020.
A recent survey conducted by the KVB showed that 70% of local businesses reported that their revenue was down 50% to 75% or more due to the pandemic.
She pointed out that a particularly devastating circumstance for businesses was that because the cruise season was predicted to expand from 2019 to 2020, many of them had prepared by investing heavily in preparation.
“Businesses purchased new equipment, they were basically out on a limb for new vehicles, new boats, or really major purchases to expand their business and to be able to accommodate the growing number of visitors,” she said.
An additional challenge was that due to the seasonality of those businesses, they’d not only invested the extra money, but hadn’t received revenue since the end of the 2019 season.
“One of the biggest fears we have is that we may have businesses that will not see any revenue whatsoever coming in their doors possibly for as long as two years,” she said.
Looking forward into 2021, Mackey said the original hopeful forecast for the season has dimmed as large cruise ships continue to be stymied in restarting. There has been a 55% decline in scheduled port calls so far. She added that if they do get the green light to restart, it takes about 60 to 90 days to become cruise ready.
A positive note, she said, is that Alaska Airlines has restarted a flight to Ketchikan that previously had been removed, and Delta Air Lines also has decided to return to serving Ketchikan with seasonal flights.
Another survey question posed by the KVB, Mackey said, was “Can your business endure a delayed restart?”
Eighteen percent said yes, if business started in May. Thirty-five percent said they could get by if the season started in July, but only 24% said “yes” if the the 2021 season was entirely canceled.
Not only was the loss of revenue a concern, but also the loss of employees as time goes on without a cruise season was a stressor that business owners expressed, Mackey said.
Although there still are expected visits from small cruise vessels and independent travelers, those expected numbers will not be anywhere close to the numbers of cruise passengers that were scheduled to visit Ketchikan in 2021.
Mackey mentioned that her greatly reduced staff of four has been working with travel professionals to create itineraries for independent travelers to make travel through multiple Alaska communities as easy as possible. The ease of embarking on a cruise ship which then carries one effortlessly through a series of stops is difficult to match for an independent traveler.
Alaska tour agencies are ramping up their messaging about tourism in the state, Mackey said, as there is much competition for visitors as communities across the country are scrambling for a return of tourism dollars.
Speaking of the financial assistance offered to businesses by the federal government, such as the Coronavirus Aid, Recovery and Economic Security Act's Paycheck Protection Program, Mackey said it has been critical to the survival of many.
“The assistance has been a godsend for so many of our businesses, but what they really want to do is get back out there and do what they do best, which is entertaining folks, showcasing our great state and of course, helping to drive our economy,” she said.
Visit Anchorage President and CEO Julie Saupe gave an overview of that city’s challenges brought on by the COVID-19 pandemic, which varied from those outlined by Mackey.
She listed the leisure and business sectors, as well as the conventions and meetings travel sectors, as the central areas of revenue loss in Anchorage.
Anchorage was an outlier compared to the rest of the state, Saupe said, in that employees of companies who needed hotel rooms in which to quarantine kept those businesses busy. However, the rate that hotels were able to charge per room were “significantly down.”
The Anchorage area saw an approximately 25% loss in tourism jobs, Saupe said. Another loss for Anchorage during the pandemic was Iceland Air at the Anchorage International Airport.
She said there continues to be widespread anxiety about how many businesses might be permanently lost due to the pandemic, referring to Mackey’s statements about the challenges businesses have faced as similar to Anchorage’s.
Saupe said that in a normal year, 40% to 50% of overnight visitors in Anchorage come from cruise passengers.
She said that as her organization prepares marketing materials, they are focusing on showing how safe Alaska is as a destination.
“Visitors are watching. That’s one of the things we learned from our research,” Saupe said. “Visitors do care what a destination is doing before they book.”
The success Alaska has realized with vaccinating residents, and the widespread news coverage of that success will help, as well, she said.
Explore Fairbanks President and CEO Deb Hickok spoke about the effects of the pandemic on her community.
She said that 40% of the job losses in Fairbanks in 2020 were in the leisure and hospitality sector. The next largest loss was in the transportation sector, she said.
41% of the Fairbanks summer tourists also are from cruise ships, she said. There are cruise-land tours that bring visitors to their area.
Princess and Holland America cruise lines are bringing land-based tours to the area, she said, offering a bright spot for their 2021 season.
Like Anchorage, Hickok said that the loss of meetings and conventions was a big loss for the Fairbanks community, showing a $2.2 million loss in 2020.
“We never — as many businesses and probably all of you — we never anticipated the depth and breadth of this pandemic,” she said.
As did Saupe, Hickok mentioned aid from the federal CARES Act funding as critical to saving many aspects of the economy of her community.
Hickok shared optimism about the opportunities brought by the anticipated independent travelers coming to Alaska in 2021.
Another note of optimism she shared was that the Fairbanks International Airport is seeing “35% more lift than summer of 2019,” adding, “That is just incredible.”
One of the reasons they are seeing more carriers, she said, is that “some of the major carriers aren’t able to do their long-haul trips to Europe and overseas, so they’re taking the longest-haul trip that they can domestically, and that would be to Alaska.”
She said that situation may create a lot of opportunity for independent and smaller-group travel.
She also shared results from recent research on the American traveler that showed Alaska communities as sitting in the top three desired travel destinations.
Municipality of Skagway Visitors Department Specialist Wendy Anderson also spoke at the meeting, and mentioned the CARES Act funds as having been critical to the support of her community during the pandemic.
Rep. Hannon spoke of the unique hardships that Skagway has experienced during the pandemic.
“How amazing Skagway has performed in the devastation, where 90% of local government revenue was lost, and Skagway had been the only growing community in Southeast over the last decade,” she said.
She also lauded the community for being able to hold in-person schooling all year, and ended her comments with a spirited call to people to visit Skagway in 2021 to support the “glamorous Gold Rush town,” in the “sunniest part of Southeast Alaska” and to patronize its local businesses.
Anderson also emphasized the “huge” role of the Alaska Marine Highway System in bringing potential independent travelers to Southeast Alaska in 2021.
“We have to support tourism marketing and the infrastructure around tourism destinations if we’re going to keep that real spirit of Alaska alive and well for our visitors and our residents,” she said.