Alaska sees rise in independent tourists

Posted: Monday, July 19, 2010

ANCHORAGE - At Denali National Park and some other hot tourist destinations around Alaska this summer, cruise-ship visitors have dwindled. But a small rise of independent travelers is providing some new hope for the state's tourism industry.

The cruise-ship decline was inevitable - the industry decided to remove some of its ships from Alaska, and the number of Alaska passengers is expected to be down nearly 15 percent statewide this summer.

The gloom about Alaska tourism has been palpable over the past couple years. The global recession prompted travelers to spend less money last summer; cruise lines announced plans to remove ships from the state's ports this summer; and tourism industry officials threatened steeper cutbacks if the state didn't reduce cruise-industry taxes and environmental regulations.

But much of that gloom has been replaced by optimism. In some port communities, officials and business owners say the cruise ships are fuller than usual this year and the cruise lines are not discounting tickets like they did last year.

"We're going to survive this thing," said Buckwheat Donahue, who runs the visitor bureau in Skagway, a Southeast town that relies heavily on cruise-ship tourism.

So far, the apparent small increase in the number of people traveling independently in some parts of Alaska this summer is a nice surprise for tourism businesses. Among those reporting a boost in independent-visitor traffic are lodges, tour operators and campgrounds, according to the Alaska Travel Industry Association.

"No one knew what to expect this year," explained Mark Eliason, who heads USTravel, an Anchorage travel agency and tourism company. He and some other tour business owners said they budgeted for a poor summer but are beating their expectations.

For others, sales are flat. In the Interior, some companies say their sales are still sliding. Some are up a few percentage points. But some Southcentral tour operators are rejoicing because their bookings have picked up by 20 to 30 percent.

"People are feeling upbeat," said Julie Saupe, president of the Anchorage Convention & Visitors Bureau.

Even though fewer tourists are traveling to Anchorage this year, they are spending more on a per-person basis than the tourists who came last year, Saupe said.

Tourism industry officials say it's too early to tell if the independent travel this year will substantially reduce the blow to Alaska businesses from fewer cruise-ship visits.

The Alaska Department of Revenue's preliminary data show nearly 20 percent fewer cruise passengers visited Alaska in May than in May 2009. Industry officials say they expect the overall decline in cruise passengers for the entire summer will be roughly 15 percent.

Alaska Railroad passenger loads are down nearly 12 percent so far this year and the state-owned railroad is generating roughly 10 percent less revenue. But an Alaska Railroad executive said this week that a several-percentage-point increase in independent tourists has reduced the impact of the cruise-visitor decline.

Anchorage officials are forecasting that hotel room tax revenue will decline nearly 8 percent this year, mainly due to the reduction in cruise-ship visitors. The city budgeted that it will receive roughly $500,000 less in room tax revenue this year due to the downturn. Last year, the city tax generated about $7 million.

The city also collects taxes on rental cars, and those collections are down nearly 3 percent so far this year, said Lucinda Mahoney, the city's chief financial officer.

Exact counts aren't available, but bus traffic indicates that independent travel to Denali National Park has improved somewhat while cruise-ship visits have declined, according to park spokeswoman Kris Fister.

Some tourism businesses are doing much better this summer than they did last year, when the recession kept many Alaska visitors from spending money on expensive tours.

"The campground industry is on a slow upswing," said Shannon Miller, who runs the Alaska Campground Owners Association. In recent years, campgrounds around the state have struggled due to high gasoline prices and the global economic recession.

Miller said the reports she's received from around the state show that bookings by campers are up this year, and some campgrounds are having their best year since 2005 or 2006. She said she hasn't heard from any campground that is doing worse than it did last year.

Some tour operators are reporting major sales improvements over last year.

Premier Alaska Tours, an Anchorage company that runs bus tours through Southcentral Alaska and into Canada, said its sales are up 15 to 20 percent over last year.

Most of that is due to independent rather than cruise-ship travelers, said Josh Howes, the company president.

But in Fairbanks, the tourism business seems sluggish and hotels and inns are discounting their prices on weekends when cruise-ship travelers are not in town - a boon to Alaska residents who want to travel to Fairbanks on weekends.

"There are days that you just drive through town and wonder where everybody is," said Mary Richards, who runs the Bed and Breakfast Association of Alaska. She owns the All Seasons Inn in downtown Fairbanks.

"We know short of a miracle that we will have another down year this year," Richards said.

The Fairbanks family-owned tour operator Riverboat Discovery lost 30 percent of its sales last year and expects to lose an additional 10 percent this year. That's actually better than expected. "We had budgeted for 20 percent down," said John Binkley, who used to run the company but has since handed the reins to his son, Ryan.

Several industry watchers say they expect cruise visitation to start increasing as soon as next year.

After losing 142,000 cruise passengers last year, the state is expected to get back 17,000 next year, due to companies that will bring a few new cruise ships to Alaska next year, including one run by the Disney Cruise Line, according to the Alaska Cruise Association.

This year, the state Legislature relented to cruise-industry pressure and slashed the $46-per passenger tax by $11.50 per passenger to a rate of $34.50.

Gov. Sean Parnell pushed the cruise-tax rollback to lure the major cruise lines to bring back the ships that they took from Alaska.

"We're all holding our breath for 2012," said Binkley, who runs the Alaska Cruise Association.

Cruise lines decide two years ahead of time where to deploy their ships. They usually make the decisions during the winter and make their deployment announcements in the spring, Binkley said.

The companies have indicated that their ticket prices are stronger for Alaska this year.

That's good news to Binkley. "That's the basis for their decision for bringing ships to Alaska," he said.

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