In the Nov. 14 edition of the Empire, Kim Metcalfe criticizes Empire publisher Don Smith's editorial comments regarding the tough economic conditions in Hawaii caused by recent downturn in travel. Don urges us to pay attention because, like Hawaii, we are heavily dependent on tourism for our economic health.
First, Kim tries to assure us that the cruise ship passengers will continue to increase next year because we have a few extra cruise ships that were diverted here from other parts of the world. I hope she is right, but as of now, it is my understanding that cruise ship bookings for the 2002 season are off 50 percent over last year at this time. Extra capacity doesn't necessarily mean extra passengers. My guess is that we will end up with more ships, but fewer passengers. We also may see more bankruptcies in the cruise ship industry.
Second, Kim tells us that because cruise companies will have to discount prices to try to win passengers, they will try to take larger percentages from local businesses for selling shore side tours and will try to sell more gifts on board to make up the difference. Unfortunately, the economic reality for the cruise companies is that if bookings are lower and the price of cruises goes down, the companies will see reduced profits, or worse yet, losses in 2002. Taking larger percentages from the shore tours would drive up costs for the excursions, thereby reducing the number of passengers who choose to spend money on them. I seriously doubt the cruise companies are even thinking about that option. Even if they did, the amount of money involved is very small in comparison to the loss of revenue caused by the discounting and lower level of bookings.
Third, Kim says the Empire should investigate why Goldbelt is laying off employees in their tourism business when we have so many tourists coming to Juneau. The reason for that seems pretty obvious. Goldbelt is serving the small cruise ship and ferry market, which was down in 2001 and may be worse in 2002. Goldbelt also suffered significant lost income from a ship grounding accident in Glacier Bay. Business at the tram is adversely impacted when the economy of the Lower 48 is in recession and travelers chose to spend less money. Less business means less local employment, whether it is in the large cruise ship companies or a local company dependent on tourism.
I believe Don Smith's editorial was right on point. Juneau is now heavily dependent on government and tourism. The first is at risk due to a possible legislative more. The second is vulnerable both because of a world-wide recession and our own local attitude. For all those who lived here during the economic downturn in the 1980s, let's remember what it was like: Severely reduced property values, reduced local tax income, little or no construction projects, and an exodus of Juneau residents to better job markets. While we continue to debate how we should deal with tourism issues as a community, let's not discount the economic value of that industry to Juneau and let's not forget that its future in Juneau may not be as robust as in the past.
Reed R. Stoops of Juneau is a lobbyist and partner in ownership of the South Franklin Street cruise dock.
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