Gov. Mike Dunleavy figures it would be a $3.3 billion loss over two years for Alaska as a result of the federal government shutting down the cruise ship industry.
The Centers for Disease Control and Prevention has extended its conditional sail order through November as a result of the novel coronavirus, two months after what would be the 2021 cruise ship season.
That means two seasons of economic loss in Alaska, amounting to about $164 million in Southeast and $54 million in Ketchikan. Or $82 million region-wide and $27 million here annually.
Alaska state agencies experienced a $20 million decline in tourism-related revenue in 2020, the majority of which is as a result of no cruise ships. The agencies anticipate a $134 million decrease in 2021 compared to 2019.
The state’s unemployment insurance trust fund has paid $1 billion over the past 14 months, according to the Dunleavy administration. The fund had a balance of $492 million preceding the advent of COVID-19. It has decreased to $265 million.
State figures show 22,297 job losses since the pandemic began, which represents more than $305 million in lost wages.
Of the $3.3 billion total, the administration’s data attributes more than $2 billion to lost revenue for Alaska’s businesses.
These figures are catastrophic in a state and a region where tourism is either a significant or the area’s major industry.
The State of Florida filed a lawsuit against the federal government, arguing that the CDC shouldn’t be able to mothball a major industry. But, compared to Alaska, Florida has a well diversified economy.
By any measure, this is a disaster in Alaska.
Dunleavy sent a copy of a report on the State of Alaska’s Impacts to Alaska from 2020/2021 Cruise Ship Season Cancellation to the White House.
The report, which was written by the state Department of Revenue, the Department of Commerce, Community and Economic Development, and the Department of Labor and Workforce Development, illustrates the catastrophic effect on Alaska.
Specifically, it shows what the loss of 40 cruise ships embarking on 577 voyages with 1.36 million passengers each year has on Southeast and the state.
The Cruise Lines International Association and cruise lines have been maneuvering to accommodate health and safety concerns in the case the CDC were to allow the cruise ships to sail in Alaska. Officials in their Florida headquarters believe a season can be handled despite the pandemic, especially given that proof of vaccination or COVID-19 tests could be required of potential passengers.
If the CDC relented, then the feds also could temporarily lift the Passenger Service Vessel A ct and allow the foreign-flagged ships to sail between two U.S. ports. Currently, such ships sailing out of an American port must tag a foreign one before sailing into another U.S. port.
The federal government has been helpful in regard to financially assisting individuals, families, businesses and local governments. But, for Alaska, and Southeast specifically, the fallout from the virus is as unique as Alaska.
The full Dunleavy report is available at https://gov.alaska.gov/wp-content/uploads/sites/2/04.08.21-Jeff-Zients-CDC-Cruise-Ship-Ban.pdf.
Meanwhile, Dunleavy announced Friday intent to help rescue the 2021 season with a tourism aid initiative. The initiative includes directing federal COVID funds to “one of the largest tourism campaigns in state history;” providing grants to tourism-dependent businesses and creating traveler incentives; gathering feedback for the Legislature from the communities affected by the CDC extension; potentially pursuing litigation against the CDC; and urging Congress to exempt the cruise ships from the PVSA while the Canadian ports are closed to the cruise ships.
Nothing less should be done.