Tourism booths along the waterfront have become premium pieces of real estate for the vendors who hawk their Alaskan tours and transportation during the summer cruise season.
Every year one or more of the 11 booth permits, each with three locations, becomes available for bid. But the price keeps going up, vendors say.
Seven permits were up for auction last month for an average price of $52,000, or roughly $10,000 a month. Fifteen vendors bid on the booths.
"It is outrageous," Last Chance Tours operator Suparna said. "It doesn't matter how prime an area can be if you can't make the money back. I've been down there for 20 years and this is ridiculous. Prime or not, this is way out of line."
Suparna said she paid around $1,500 for her first permit.
One set of the 11 booths is outside the library on the raised wooden platform at the steamship dock, another is to the side of the visitors center, and a third set is next to Taku Smokeries.
The permitee has rights to a booth at all three of the locations.
Some of the one-year permits have options for renewal for a certain number of years. When a permit is expired or not renewed, it goes up for public auction.
"We haven't changed this process in the last 15 years," city Docks and Harbors Director John Stone said. "It's pretty much the way it has been since the early '90s."
Vendors rarely do not take renewal options, Stone said.
"Generally people don't walk away from these permits; they are pretty hard to get," he said.
Winning bidders this year were Adventures Unlimited, Best Tours, Last Chance Tours, Liquid Alaska, Mendenhall Taxi, Whale Tales, and Woo Hoo Tours Jet Ski.
Tour broker Adventures Unlimited retained a permit off-and-on for 10 years.
"Not every year because I thought the price was too high, and this year it was ridiculous," owner Larry Dupler said. "But I have to try and be back out there again anyway."
Dupler said he paid about $2,500 for his first permit a decade ago. Originally his booth was one of two allowed to be sales brokers. The other booths had to sell the specific tour they offered.
Now everyone is a broker, he said, and some operate multiple booths.
"With that the competition has gone up quite a bit," he said. "I'm not sure exactly what is going to happen as far as numbers and whether or not it is worth what everybody is forcing us to pay. It's going to be hard for a lot of people to make that much money down there."
Dupler's winning bid was $47,000, an amount he must pay each year of his three-year permit, or opt to not renew and take a chance on rebidding.
With an expected 15-percent decline in cruise ship visitors this summer, vendors may struggle.
"I have no idea what to do to make the business work this year," Suparna said. "It is going to be a tough year for everyone."
Contact Klas Stolpe at firstname.lastname@example.org.
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