Alaska tourism: Another year without cruises could devastate local industry

The news spread quickly around Alaska’s port cities last week, through texts and emails and calls. After all the shocks of 2020, this still managed to sting: Canada was banning cruise ships again — not for another few months as expected, but until February 2022.

“I just went, ‘Oh no,’” said Patti Mackey, the president and CEO of the Ketchikan Visitors Bureau.

Because of U.S. federal law, cruise ships that come to Alaska have to also visit a foreign port, which is where Canada comes in. The government’s decision on Feb. 4 means Alaska, which got about 60 percent of its summer visitors in 2019 from cruise ships, will almost certainly miss out on another crucial cruise season, barring a waiver of the law or a change of Canadian heart.

Now, destinations and businesses that were hoping to finally scrape together a few months of revenue after the last ships departed in 2019 are left to figure out once again how to survive.

“I think we’re still in shock, to be honest; I think right now we’re all scrambling,” said Tracy LaBarge, owner of Tracy’s King Crab Shack in Juneau. “This is two years going with 95 percent of your business cut out.”

LaBarge, who caters mostly to cruise passengers, made it through last year with the help of federal aid, online sales, a cooperative landlord and locals. Still, she lost money by staying open.

“It’s such a balance,” she said. “You want to be there for people, you want tourism to come, you want to show off what you have. But how do you make that work without money?”

She expected this year’s season to get a late start, maybe in July instead of May. Large cruise lines have not sailed in the United States since last March, and the Centers for Disease Control and Prevention has not provided all the details cruise lines need to restart. That process that could take several months once it even begins, so an Alaska season starting in late April or May already seemed like a stretch.

“With Canada’s announcement, that was a gut check,” LaBarge said. “Nobody expected that.”

For now, she is crafting a strict new budget, planning to work more with her landlord and hoping for another round of relief from the government.

“I can make the decision to shut down; I don’t think I’m quite there yet,” she said. “If I shut down it’s going to be for good … For me to shut down would be just devastating after 16 years.”

In previous years, Red Onion Saloon in Skagway welcomed visitors from three or four cruise ships a day to its brothel museum, bar and restaurant. Last year, the former bordello opened twice a week for four hours for curbside pizza takeout. Instead of the thousands of brothel tours that would take place in a summer, the establishment gave one, over Zoom, to a writer’s conference. There were five or six employees rather than the typical 35.

“It was devastating,” manager Elizabeth Lavoie said.

She worries that people will leave Skagway this summer looking for work elsewhere, leaving the town with fewer people even as the destination tries to promote itself to non-cruise travelers and other Alaskans.

“I’m a little concerned that this summer could actually be, in some ways, more difficult than last summer,” she said.

But if enough of those independent travelers come, Lavoie said, she thinks the Red Onion Saloon might be able to open with a more regular schedule, especially as more locals become vaccinated.

“I hope that we can all make it through this summer with some grace and some fun and not too much hardship and be ready for 2022,” she said.

In Ketchikan, where the vast majority of visitors come by cruise ship, local businesses were already fearing for their future last year. Of those surveyed by the Ketchikan Visitors Bureau in April 2020, just 27 percent said they thought they could hold out if it took until spring of 2021 for business to start again.

Mackey, the bureau’s CEO, said she is working on a similar survey for this year. She hasn’t given up on the possibility of some kind of cruise presence, but she acknowledges that there are “significant hurdles” to making that happen.

“It’s all very up in the air and it’s very scary for those folks to think about going through another year without generating any revenue,” she said.

It’s been a crushing blow after years of growth. The state was expecting about 1.4 million cruise passengers in 2020, a record number. Ultimately, two small cruise ships tried to visit with a total of 48 passengers, according to Southeast Conference, an economic development organization for the region — and one of those trips had to be called off.

Cruise Lines International Association, a trade group, said that before the pandemic, cruise activity contributed more than $1.3 billion in direct spending to the state’s economy and supported 23,000 jobs in Alaska. A report from the Federal Maritime Commission said cruise visitors were expected to spend $800 million in Southeast Alaska in 2020.

“The impact of the suspension of cruising in Alaska has been devastating, and the prospect of another year without cruising is daunting,” CLIA spokeswoman Bari Golin-Blaugrund said in an email.

Sarah Leonard, president and CEO of the Alaska Travel Industry Association, said in an email that there had been some early optimism for this summer thanks to pent-up demand and the start of vaccinations.

“Many cruise lines had announced full sailing schedules for the summer, so we were hopeful we’d see a solid step toward recovery and many businesses would be able to stabilize,” she said.

Leonard said her group is working with Alaska’s congressional delegation to come up with solutions to safely start cruising again, and it is seeking “possible changes to complicated federal regulations” so ships could sail between U.S. ports without a stop in Canada.

Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young, all Republicans from Alaska, said they were exploring “all potential avenues, including changing existing laws, to ensure the cruise industry in Alaska resumes operations as soon as it is safe.” In a statement, the delegation called Canada’s decision unexpected and unacceptable.

The world’s largest cruise operators say they are in talks with authorities in the United States and Canada. Some have temporarily stopped selling 2021 cruises in Alaska, while others continue to offer the summer sailings for now.

Carnival Corp., which owns brands including Holland America, Carnival and Princess, said it would pursue any option that might allow for safe operation in Alaska this year. The company said it would continue to operate lodges in Denali, Fairbanks and Kenai for land vacationers.

“While this is beyond our control, we remain committed to operating any portion of our Alaska season and we are hopeful that positive progress relative to the pandemic accelerates to the point that the Canadian Transport Minister will rescind the interim order and allow cruise vacations to resume in 2021,” the company said in a statement.

Some small U.S.-flagged cruise lines — exempt from the requirement to visit foreign ports as well as the CDC’s strict return-to-cruise regulations — have said they intend to operate in Alaska this summer, though they carry just a tiny fraction of the passengers on larger lines.

Like last year, the state’s travel industry players are looking to fill the gap — or as much of it as possible — with travelers who visit by air rather than sea. Tourists have to test negative within three days of departing for Alaska or quarantine in the state until they have a negative result.

In Anchorage, which typically gets 40 to 50 percent of overnight visitors from people heading out on cruises, Canada’s decision is forcing the destination to shift priorities.

Julie Saupe, president and CEO of Visit Anchorage, had been working with others in the industry to figure out how to help cruising return as quickly as possible once the CDC released all its guidelines. Now, she said, she has a new focus.

“We still have great airlift coming into Alaska this summer,” she said. “So now we’re just rolling up our sleeves to make sure the independent traveler understands that just because there’s no cruise doesn’t mean there’s not a lot of opportunity here to come up and enjoy.”

For those who are able to make the trip, experts say, this year could be a standout without the typical summer cruise crowds.

Scott McMurren, who publishes the Alaska Travelgram newsletter and a discount coupon book for visitors, said the adventurous traveler who wants to go up on a glacier, for example, could be in for a treat.

“My God, this is the season,” he said. “Nobody’s going to be there. They’re going to take you up there, and it’s going to be fantastic.”

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