Alaska's Shipshape(d) Economy: The financial impact of the cruise industry.
Author | Barbour, Tracy |
Position | TOURISM |
The cruise industry is crucial to Alaska tourism and the state's financial well-being. The industry includes approximately 2,180 Alaska businesses that provide tours, activities, and services to the cruise lines and their passengers, according to Cruise Lines International Association (CLIA). The businesses range from retail, restaurants, and car-rental companies to air transportation providers, hotels and lodges, day cruises, and shore excursions.
The financial effect of the cruise industry is evident across multiple sectors, including direct visitor spending, cruise line spending and payroll, crew member spending, air and ferry tickets, employment and labor income, and revenue to municipal and state governments.
Alaska, a Top Travel Destination
Alaska is one of the top three cruise destinations in the world, with about 20 percent of its cruise passengers coming from outside the United States, according to CLIA. The state welcomed 2.2 million visitors from October 2016 to September 2017, based on Economic Impact of Alaska's Visitor Industry 2017. The report, released in November of 2018, was prepared by McDowell Group for the Alaska Department of Commerce, Community, and Economic Development, Division of Economic Development.
The report also indicates that within the transportation industry, 49 percent of Alaska's visitors traveled by cruise, 47 percent were visitors who entered and exited the state by air, and 4 percent were visitors who entered or exited the state by highway or ferry. And the bulk of all travelers--86 percent, or 1,926,300--visited between May and September, while 14 percent, or 316,600, visited between October and April.
Alaska's visitor volume has been increasing fairly steadily since the low point of 2009-2010, showing an overall increase of 27 percent since that period, says Heather Haugland, a senior project manager at McDowell Group. Increasingly, more of the state's visitors are arriving by cruise ship. "For the last decade or so, cruise passengers have made up around half of all Alaska visitors, based on annual counts," Haugland says. "This proportion has been on the rise recently, as the cruise market has been growing at a faster pace than the air market."
The cruise industry, Haugland says, is very significant to the overall economic health of the state. "In addition to nearly $300 million in direct spending by cruise lines on goods, services, and payroll in Alaska, they facilitate a tremendous amount of spending from crew and passengers throughout the state," she explains, "Cruise passengers account for a sizable portion of the $2.2 billion spent in Alaska on tours, retail, lodging, transportation, and dining."
Regarding tourism in general, Haugland says, the cruise industry plays a role in the independent market in several ways: Cruise lines contribute to the state's marketing program, which is aimed at the entire spectrum of visitors; cruise lines provide additional marketing value in that their advertising exposes millions to images of Alaska, whether or not those people convert to cruise passengers; and some cruise passengers return to Alaska as independent travelers.
The state's appeal as a travel destination is not surprising to Sarah Leonard, president and CEO of the Alaska Travel Industry Association. "Alaska holds an exotic, yet safe image of a destination within the United States, offering amazing wildlife viewing, scenic landscapes and outdoor activities that Alaska is known for, and wonderfully rich cultural experiences in port communities throughout our state," Leonard says.
In fact, she says, Alaska's cruises can be the first experiences travelers have in the state. Of all Alaska's visitors--cruise and non-cruise alike--40 percent say they have visited before. And 26 percent of all cruise visitors are repeat visitors to the state. "This cycle of visitors and the continuing popularity of cruising to Alaska drives visitor numbers, which in turn generate economic activity...
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