Alaska’s cruise tourism industry has recovered, but not fully, from COVID-19

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Cruise ships line the Juneau waterfront on Wednesday, June 8, 2022. (Photo by James Brooks/Alaska Beacon)

Southeast Alaska, home to the heart of Alaska’s tourism industry, has largely recovered from the economic disaster caused by COVID-19, but the region still has fewer jobs than before the start of the pandemic.

A full recovery could take place in 2023, participants at the South East Conference, a regional conference on economics and local government, said. were said Tuesday in Ketchikan.

“We’re rebuilding, but we’re not there yet,” said Meilani Schijvens of Rain Coast Data, an economics firm that focuses on Southeast Alaska.

Scott Habberstad, chairman of the board of the Alaska Travel Industry Association, was cautiously optimistic.

“There are plenty of opportunities for full recovery and growth. But are we at the start of a recession and will we enter a recession? he says, bringing up the possibility of Federal Reserve interest rate hike.

“If we go into a recession, are people going to put their money in their pockets or are they going to travel?” he said.

Southeast Alaska is heavily dependent on the tourism industry and tourists who arrive in Southeast Alaska by cruise ship frequently travel to other parts of the state. The seasonal summer tourism industry employs thousands of Alaskans, some of whom depend on summer income to support themselves for the rest of the year.

Between 2019 and 2020, the number of tourists coming to Alaska dropped 82%. The number of cruise ship passengers arriving in the state fell from more than 1.3 million to 48.

Southeast Alaska has been one of the hardest hit places in the country by the resulting economic recession, Schjivens said. Companies had spent millions of dollars preparing for the 2020 tourist season only to see it evaporate.

The regional fishing industry – another economic mainstay – also suffered in 2020 from low salmon returns and low prices.

As a result, employment in Southeast Alaska fell by 9,800 jobs – 24% of all jobs in the region – between June 2019 and June 2020.

Federal aid has kept many businesses from closing permanently, Schijvens said.

“Major federal investments in the region in the form of COVID relief dollars have worked as planned. Businesses, workers and communities were able to continue in a stasis-like existence throughout the economically impoverished first period of the pandemic, giving Southeast Alaska an economy to return to in 2022,” a- she writes in Southeast by the Numbers, an annual economic report. map of the region.

As of June 2022, employment in Southeast Alaska remains 12% lower — down 5,200 — than it was in June 2019.

Statewide, employment is down 6%. For context, national employment was higher in June 2022 than it was in June 2019.

Business owners say conditions are better

Although the region has not fully recovered, surveys conducted by Schijvens found that business owners were more optimistic about the future than at any time since the start of the COVID-19 pandemic.

Of 440 people surveyed in 2021, 80% said the business climate was “bad” or “very bad,” which is an improvement from 2020. This year, that proportion has fallen to 36%.

More than three-quarters of businesses surveyed said they expected conditions to be better next year than this year.

Part of this optimism has been driven by the cruise ship industry’s rebound from COVID-19.

After the 48 passengers recorded in 2020, Southeast Alaska had 124,600 cruise passengers in 2021. This year, Schijvens expects about 1 million tourists per cruise ship.

Optimism for 2023 but unknowns remain

Next year, based on the number of sailings and projected interest, she expects around 1.3 million – roughly the same amount that sailed to Alaska in 2019, the last year before the pandemic.

Air travel has also rebounded, with passenger numbers this year only slightly lower than in 2019.

“Tourism is back, and it’s booming,” she said.

Habberstad, who also works for Alaska Airlines, is more cautious. He said there are several unanswered questions regarding 2023.

During the pandemic, Alaska was a convenient destination for Americans who couldn’t vacation overseas. Will this change? Will economic pressures force people to cut spending? Will war in Ukraine, COVID shutdowns in Asia and a strong dollar discourage international visitors from coming to Alaska?

Autumn and winter are traditionally the times when tourists book trips for the upcoming season. There are a lot of opportunities but a lot of uncertainty, Habberstad said.

“I think we’ll have a better idea in December,” he said.

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