Study: Cruise ship jobs worth $15.2 million

Posted: Wednesday, January 24, 2001

A new report says the cruise ship industry generated the equivalent of 748 year-round jobs in Juneau with a payroll of $15.2 million in 1999. Juneau's share accounted for nearly half of the jobs the industry created in four Southeast towns studied.

The report, The Economic Impacts of the Cruise Industry in Southeast Alaska, examined spending, tax revenue and jobs associated with the industry in Juneau, Ketchikan, Sitka and Haines during the 1999 tourist season.

"Anecdotally, people understand that the industry had grown," said Loren Gerhard, director of Southeast Conference, which sponsored the study, "and we wanted to measure that."

The conference is a membership organization that includes municipalities, chambers of commerce, visitors bureaus and others. The conference is interested in infrastructure development in the region, Gerhard said.

"(The report is) not going to please everybody, including some of the cruise ship companies," Gerhard said.

Economists and others contacted by the Empire had not seen the report and wouldn't comment on it. Gerhard said the report's executive summary would be available soon on the conference's Web site, www.seconference.org.

Gerhard said the study was paid for with a "sizable" grant from the cruise ship industry with the understanding that the industry wouldn't have any editorial input or oversight.

Results of the project held no big surprises, said Eric McDowell, managing partner of The McDowell Group, which authored the report. The study doesn't address the effect of shortened cruise ship stays in Juneau last summer, McDowell said.

The study also doesn't take into account the quality of life, social or government benefits or costs of the industry to each community.

Costs and benefits were concerns of Robert Reges, co-founder of Cruise Control, a group formed to address the impacts of tourism on Juneau.

Reges, who said he hadn't seen the study, wondered about the wage and profit leakage, or money that is paid in wages or spent on goods and services in Juneau, but is taken Outside and doesn't circulate in the community.

The study states leakage is a factor, but was not studied directly, only referenced in relation to a 1999 study done about the industry's impact on Skagway. The town wasn't included in the new study. Wrangell and Petersburg weren't examined because they are small cruise markets, according to the report.

Each of Juneau's 748 year-round equivalent jobs has an estimated $20,400 average income, according to the report. Year-round equivalent jobs combine seasonal jobs to make a comparable one-year job. For instance, three seasonal tourist jobs lasting four months equal one yearly job.

The estimated 748 jobs account for 5 percent of total employment in Juneau, but only 3 percent of payroll, the report said. The highly seasonal jobs, were they year-round, would pay about half of what Juneau's average job pays.

The actual number of people employed in cruise-related jobs in the four Southeast towns studied peaked in July 1999 at about 5,100, according to the report.

Juneau fared better in spending by cruise passengers, lines and crew than other towns in the report. The McDowell Group estimated the three groups spent $181 million in Southeast, of which $90 million was spent in Juneau. Passengers accounted for more than 80 percent of the spending, according to the report.

Juneau also came out ahead in the amount of sales taxes collected. The report estimated Juneau collected more than $2.8 million in cruise-related sales taxes. Ketchikan nearly equaled that amount and Sitka and Haines combined for just over $1 million collected.

The cruise industry is growing while other parts of Southeast's economy, such as fishing and fish processing, timber and government have been flat or in decline. The number of cruise passengers grew from 235,000 to nearly 600,000 in the '90s, a 154 percent increase, the report said.

"It is safe to assume that cruise-related employment has increased in relation to total cruise activity," it said.

Mike Hinman can be reached at mhinman@juneauempire.com.



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