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Alaska’s Tourism Industry
Background
Alaska is like no other place. It has more mountains, glaciers, and wildlife than just about anywhere else in the world. Alaska is a popular destination, and while the industry has seen a decrease in visitors in the past few years due to cruise ship redeployments, tourism business are hopeful new policy changes will reverse that decline and bring more people than ever back to Alaska.
The tourism industry is made of several different components: cruise lines, air service, and highway/ferry traffic to Alaska. There are also thousands of businesses that depend on the passengers coming to Alaska to take their tours, dine in their restaurants, and stay in their guest rooms. Visitors benefit a multitude of Alaskans in different ways.
Facts & Economic Impact
- In 2010, 1.5 million people visited Alaska. This is a decline of 7% from 2009 and 11.8% from 2008, a peak year in Alaska tourism. The decline is attributed mostly to the 2006 ballot initiative, which posed excessive taxes and inequitable environmental laws on the cruise industry. As a result, cruise lines began deploying their ships elsewhere, causing a decline in the amount of cruise passengers coming to Alaska.
- Of the 1.5 million visitors in 2010: 58% (878,000) came by cruise, 37% (551,600) came by air, and 5% (76,000) came by highway or ferry.
- Direct visitor industry spending is more than $2 billion annually, including fares paid to travel (air, cruises, etc.) and expenditures while in the state. This spending figure increases to $3.4 billion when labor income from visitor industry jobs is factored in. Visitors to Alaska spend an average of $830 during their visit.
- Tourism is the second-largest private sector employer, and accounts for one in eight Alaskan jobs. The most recent available data indicates that the tourism industry generates over 36,000 direct and indirect jobs, 8% of Alaska employment, and $1.1 billion in combined labor income. The industry boasts a 78% resident hire rate.
- The average age of Alaska visitors is 52 years old.
- One in three Alaska visitors are repeat travelers to the state. Many of those who return are independent travelers who first came to Alaska on a cruise ship.
- 2010 brought a significant drop (14.5%) in cruise volume due to redeployed ships – about 140,000 less cruise passengers came to Alaska. 2011 is estimated to bring 27 ships to Alaska, cruising 447 voyages and carrying 887,000 passengers.
- In 2007, four new taxes were levied on cruise companies and their passengers as a result of the cruise ship ballot initiative: a $46 head tax, $4 state ocean ranger tax, 33% gambling proceeds tax and a corporate profits tax. In 2010, the State of Alaska reduced the head tax and agreed to review other components of the ballot initiative, prompting some cruise lines to add ships to Alaska beginning in 2012. Often, cruise lines make their decisions a few years in advance, resulting in their 2010 decision to add ships to the 2012 market. Princess Cruises added a ship to result in 50,000 more passengers visiting the state, Disney returned with 38,000 passengers, and Holland America Line increased its capacity by 6%, resulting in 11,000 more passengers.
- Long before the 2006 ballot initiative, the cruise industry made great strides to develop responsible practices. Companies spent millions of dollars on ship upgrades to operate under standards more stringent than required by state and federal agencies. The systems on board these ships are highly technical and more effective than Alaska’s own land-based systems. The industry continues to research and develop innovations to minimize environmental impacts. These efforts include adopted practices containing to air, water, solid waste, and more. To the cruise industry in Alaska, the oceans are home and the livelihood of the companies. Ignoring impacts on the environment would result in those companies being unable to operate in Alaska.
- 46 Alaska Communities and Boroughs collected 69.8 million in sales and bed taxes and docking fees for the year 2009. The State of Alaska collected $138.8 million in taxes and revenues associated with cruise industry taxes, fishing and hunting licenses, ferry and railroad revenues, vehicle rental taxes, and corporate income taxes.
- Alaska’s tourism industry invests heavily in the state, spending hundreds of millions of dollars on capital expenditures, construction, operating equipment, marketing, and contributions to non-profit organizations.
Web Links
Sources
- Alaska Department of Commerce, Community and Economic Development
- Alaska Travel Industry Association
- Alaska Economic Performance Report
- North West & Canada Cruise Association
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