Cruises boost Alaska's economy: state's coastal communities prepare for summer season.

• Author: Bohi, Heidi
• Position: TOURISM

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"We are working on getting more local businesses in port communities so they can get their products in front of cruise ship visitors."

--John Binkley, President Alaska Cruise Association

As the first cruise visitors of the summer season mosey down the ship plank that leads into any one of the Alaska towns that are the ports of call for that day's itineraries, many local residents in smaller communities can be heard grumbling quietly: the tourists have arrived. Their name tags and bag tags seem no less evident than the 3,000-foot, 100,000-gross-ton vessel docked in the center of their town.

While Alaskans poke fun at tourists' matching-logo windbreakers and the mispronunciations that are a sure sign that Alaska's cruise ship industry--the fattest slice of Alaska's visitor industry pie--is well underway, what they often overlook is that 500 ship sailings will make Alaska their final destination. Each ship carries anywhere from about 2,000 to 3,000 passengers with an average household income of $103,000. Each one of these visitors will shuffle his or her practical walking shoes into gift shops, galleries, restaurants, coffee shops, taxi cabs, museums and tour-booking companies with disposable income brought to the state for one reason--to spend. The No. 1 activity among Alaska visitors, as reported by the Alaska Visitors Statistics Program (AVSP) for the summer 2006 season, was shopping. Cruise visitors also reported buying more activities and tours that range from about $50 to $300.

Alaska ranks as one of the five states whose economy most benefits from the cruise industry, which is estimated at 14 million passengers being delivered via 400 ships (another 25 are under construction or on order for delivery between now and 2010), according to the International Council of Cruise Lines. The state has developed into a strong cruise-destination market, accounting for about five percent of the industry's national economic impact. Spending on tours and activities totals more than $300 million, closely followed by spending on gifts, souvenirs and clothing, which averages out to $934 per person, not including the cost of transportation to enter and exit the state, according to the Alaska Visitor Industry 2007 Report published this spring by the Alaska Travel Industry Association (ATIA). Of $1.5 billion contributed to Alaska by the visitor industry, the cruise population alone drops $610 million into cash registers.

It's an increasingly important industry to the state. Of the 1.63 million total visitors, cruisers account for 958,900 people, each spending a per-person average of $1,897 on the cruise alone, totaling $1.8 billion on cruise-tour packages in 2006.

At the same time, visitors and visitor-related businesses are a source of revenue for state and local governments in Alaska. Since 2003, taxes levied on the Alaska visitor industry have increased by about 600 percent. Nationally, the Travel Industry of America estimates that each U.S. household would pay $923 more in taxes without the tax revenue generated by the travel and tourism industry. Since new legislation was passed last year, now more than ever, Alaska's cruise ship industry will give back to the state. In 2007 four new taxes were passed by Alaska...