Executive Roundtable: Tourism Experts Weigh In on Alaska’s 2021 Summer Season
Alaska went from expecting 1.5 million cruise passengers in 2020 to experiencing a dearth of cruise ships coming to the state, according to Alaska Chamber President and CEO Kati Capozzi. And with half of Alaska’s visitors historically arriving by cruise ship, this greatly reduced the number of visitors who traveled within the state. Many businesses in the community were impacted—and not just in the typical, tourism-oriented cities—but also in places up north.
The effect was also felt by local governments, especially those—like Fairbanks—whose budgets rely heavily on land-touring cruise passengers to generate hotel/motel taxes. “It had an effect we are still grappling to understand,” Capozzi says. “And with the news [that] it will be a severely suppressed 2021 season, we are just trying to figure out how to get through it.”
So is Deb Hickok, president and CEO of Explore Fairbanks. Fairbanks, like many other places in Alaska, has been pounded by tourism-related losses. The leisure and hospitality industry—composed primarily of tourism or tourism-related jobs—for the Interior Region experienced a dramatic decline in jobs. The region, which includes Denali and Fairbanks, usually has an annual average of 6,000 leisure and hospitality jobs per month, peaking at 8,300 in July, says Hickok. But in 2020, leisure and hospitality averaged just 4,225 jobs per month, peaking at 5,500 in July, Hickok says, citing Alaska Department of Labor and Workforce Development statistics.
Hotel/motel tax collections also took a major hit in the Fairbanks North Star Borough region. According to Hickok, the region’s hotel/motel taxes had five years of unprecedented increase, with 2019 generating the highest numbers to date in both summer and winter. She says: “The lack of cruises to Alaska has had a devastating impact, given the important role the cruise market plays in our summer visitor season. In 2016 the Alaska Visitor Statistics Program indicated that of Interior Alaska’s 320,000 summer visitors, 41 percent, or 131,200 were on a cruise land tour. Through December 2020, hotel/motel taxes for the region showed a 54.51 percent decrease from 2019. This extraordinary growth made the unprecedented fall-off-the-cliff in 2020 even more devastating.”
Visit Anchorage President and CEO Julie Saupe echoes her peers’ sentiments saying, “In Anchorage, 2020 saw a 57 percent drop in people passing through the airport. Hotel demand in 2020 was down 33 percent year-over-year. On the employment front, the travel industry shed 4,500 local jobs in 2020.”
Saupe says the industry locally has done everything it can to diversify its offerings in the short term and to show potential travelers that it is ready to welcome them when the time is right. “We have our work cut out for us, but as conditions improve, there are some encouraging signs that travelers’ tastes in 2021 align well with what we have here in Alaska,” she says. “Looking ahead, the emphasis has to be on independent travel, which was a significant swath of Anchorage’s overnight visitation year-round, even before COVID-19.”
It has been an incredibly tough year, says Bill Popp, president and CEO of the Anchorage Economic Development Corporation (AEDC). But he doesn’t think Alaska has seen the full details and scope of the damage that was done in 2020. The lost jobs and revenue in the leisure and hospitality sector has severely affected businesses, although federal aid has helped. Many companies have resorted to minimal operation models just to keep business going while others closed completely.
However, members of Alaska’s tourism industry continue to move forward. With outward-facing service businesses—not just those in leisure and hospitality—there is a significant shift to observing strict protocols for COVID-19. “They have to assure their customers that they can interact with them and provide the experience safely,” Popp says. “We’re seeing a significant marketing shift trying to assure out-of-state visitors that they can come here safely. And I think there is a more conservative view in terms of what they expect in terms of revenue and costs.”
In Kodiak, the magnitude of tourism losses during the 2020 season was “colossal,” says Aimee Williams, executive director of Discover Kodiak. “Many of our wilderness lodges did not even have enough business scheduled to make it possible to operate,” she says. “Industry members are hoping for the best in 2021 but are remaining realistic because we understand that we have a higher-than-average vaccination rate on our island.”
Feedback Indicates Strong Interest in Alaska
So what feedback have tourism industry members received from people in anticipation of the coming season, and what are the implications? Responses have mostly been positive, such as the feedback Saupe has seen from “likely” US travelers. “Broadly speaking, travelers say they want open spaces, parklands, and natural beauty more than ever,” she says. “That’s certainly the type of thing we can deliver.”
She adds: “There’s also some indication that Anchorage and Alaska specifically are near the top of travelers’ wish lists, particularly if they’re considering destinations in the Western United States. Beyond that, there’s an opportunity to grab the attention of travelers that might normally head overseas to vacation. In light of uncertainties around international travel, these travelers may look more closely at domestic options that still pack something epic and new.”
People have indicated that they are eagerly waiting for the time when they can vacation in Alaska again. Some customers have said they miss coming to Alaska and are extremely excited about the prospect of returning to Kodiak. And the pandemic has been particularly disruptive to people who make regular trips to the area. “There are some guests who did not make it to Kodiak last season for the first time in over twenty years,” Williams explains.
Fairbanks is receiving a few travelers who are defying the pandemic to visit the state. Hickok explains: “We have been seeing a ‘trickling of intrepid’ visitors throughout last summer, aurora, and winter seasons, with noticeable blips over the Christmas/New Year holidays and President’s Day Weekend/Valentine’s Day and anticipated throughout the month of March. The summer forecast is hazier.”
A brown bear by the Karluk River on Kodiak Island.
But Hickok says, national data indicates that American travelers long to travel and are gaining more confidence as vaccinations become more widespread. “The general consensus as of now is that visitation will start out slow in May and gradually increase through the summer—which actually has been a consistent pattern for a number of years,” she says.
To compensate for the scarcity of travelers from outside, Alaska’s tourism marketers have been diligently searching for new opportunities to promote travel within the state. A prime example is the Show Up for Alaska campaign, which offered attractive deals for locals and encouraged them to get out and explore their own backyard. “A lot of Alaskans took advantage of that last year,” Capozzi says. “Instead of taking a trip down South, many Alaskans chose to stay in Alaska.”
Tourism marketers are aggressively promoting independent travel. “Alaska offers a safe, exotic place to come visit and it’s still on the confines of the US borders,” she says. “We think we have a lot to offer the independent traveler. You can spread out, be safe, and be socially distant here.
In the midst of the pandemic, safety is top of mind for almost everyone. There is an expectation that visitors have that they want to be safe when they visit the state, Popp says. Consequently, participants in Alaska’s leisure and hospitality sector are rebuilding their business model to provide services as safely as possible.
Expectations for Summer
It’s going to be difficult to be in full operation this year for any tourism operator (in terms of volume), Popp says. And it’s because of factors that businesses have no control over. “If our city and state move forward on becoming rapidly vaccinated and if we continue wearing masks and social distancing, we will see businesses have an opportunity to open up more quickly,” he explains. “It’s incumbent upon us all—not just the leisure and hospitality industry—to continue to observe social distancing, practice mask wearing, and get vaccinated as soon as it’s available to us.”
Saupe, like most of her colleagues, is doubtful about when things will return to normal. “For this summer, I don’t know that there’s a ‘back to normal’—but I do think there’s a way through to the other side,” she explains.
Continuing, she says: “Anchorage is going to have plenty for people to see and do—lots of travel options, activities and attractions open, much like with any year. Our job is really all about showing people what there is to see and do.”
In Fairbanks, tourism businesses models are very diverse, but it will take years for the hard-hit industry to recover, Hickok says. In the meantime, COVID-19 best practices will continue to remain in place. “Since April, the Explore Fairbanks website has listed detailed information on what safety and sanitation protocols businesses have established,” she says. “We are launching an Explore Fairbanks Responsibly Pledge, which will mirror pledges in place by Visit Anchorage and Discover Denali, so we have consistency throughout the Railbelt.”
Hickok says that in her thirty-nine years in the field of destination marketing, she has never witnessed such dramatic losses for the travel industry. And unless there is targeted governmental assistance for tourism and hospitality, some businesses will not survive. However, she says she is inspired every day by the fortitude demonstrated by tourism businesses. “As for Explore Fairbanks, despite staff reductions and reduced pay for the remaining staff in 2020, we continued marketing efforts with a gradual roll out starting in April 2020 to local, statewide, and national audiences at the appropriate times with nuanced messaging,” she says.
“Our hope is that vaccination levels will be high enough to make people feel safe enough to travel again. Our tourism partners, along with the bears, fish, otters, whales, eagles, and puffins, will be ready once tourism begins again.”
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She continues: “The winter version is still in process and the summer 2021 is to be fully launched by mid-April. All include Explore Fairbanks Responsibly messaging. While dramatically smaller in number, visitors from the Lower 48 are finding their way to Fairbanks and Interior Alaska.”
Like most of the state’s tourism industry leaders, Williams is not expecting the sector to make a full recovery in 2021. She does think it will be much better than 2020 but does not think everyone who is looking to travel to Kodiak will feel comfortable enough to do so. However, Kodiak is adhering to local, state, and federal government safety guidelines. William says: “Kodiak has a green, yellow, and red system for what the COVID-19 regulations are on the island. The levels are determined by the number of active cases and what the community transmission rates are. Any restrictions or guidelines would stem from those green, yellow, and red levels.”
Bird Point, south of Anchorage.
Anchorage businesses were optimistic going into 2021 that the summer tourism season would recover—not to the levels of 2019—but certainly better than 2020. At this time, companies are trying to determine what the future holds regarding local restrictions and inbound tourism volume for the summer. “Restrictions put in place by local cities and towns will be determined by COVID case counts and vaccination levels,” says Bruce Bustamante, president and CEO of the Anchorage Chamber of Commerce. “At this time, it is difficult to predict what those restrictions may be.”
He also says he does not believe all tourism businesses will be back to full operations this summer, and this will vary by the type of businesses and whether they provide service or product delivery. “The key variables that will determine tourism volume are the levels of CDC [Centers for Disease Control and Prevention] restrictions imposed on the cruise industry and the status of large passenger vessels traveling through Canadian waters,” he says.
Canadian Ban and CDC Deliver Double Whammy
The Canadian ban on large cruise ships—those carrying more than 100 passengers—through Canadian waters will have a devastating effect on Alaska tourism. The reason: Unless it is US-registered, a cruise ship that departs from Seattle for a trip to Alaska must first call at a Canadian port. And since the larger cruise lines tend to be registered with foreign nations—not the United States—that means fewer cruise tourists can come to Alaska. However, tourism had experienced significant increases year over year up to the 2020 pandemic, and then the cruise ship industry virtually evaporated. “Alaska businesses suffered the effect of completely losing cruise ship tourists for the summer, and another summer of reduced volume will be extremely impactful on these businesses,” Bustamante says.
The Canadian cruise ship ban and the CDC’s nebulous restrictions are two huge, multilayered problems. The Canadian ban could possibly be lifted later, but the CDC’s uncertain guidelines are an even bigger challenge for Alaska. The procedures are not clearly defined, leaving Alaska’s tourism businesses wondering if they will be able to meet the eventual requirements by summer. “We don’t have time on our hands to figure this out,” Capozzi says. “The tourism season is quickly approaching. These are precious days and weeks for us ahead, and if it’s not sorted out, there will be a problem.”
From Anchorage’s standpoint, Saupe says, Canada’s ban on large cruise ships means there’s work to be done to make this summer as successful as possible for the community. “Before the pandemic, between 50 and 60 percent of the municipality’s overnight visitation came from independent travelers in the summer,” she says. “Canada’s announcement is likely to have big ramifications for Alaska travel, but it’s possible Anchorage could fare somewhat better than communities that have a much greater reliance on cruise.”
Revenue and Visitor Projections
Not surprisingly, Alaska’s tourism executives are hard pressed to offer revenue or visitor predictions for this summer. Saupe, for example, says it’s difficult to make projections when so much depends on national and even global developments. “Still, we know there is pent-up demand for travel and that Alaska is very attractive to travelers who have been dreaming of open spaces,” she says. “We also have heard from potential travelers that they are watching and are aware of the incredible work done by Alaska’s health providers in getting Alaskans vaccinated.”
In addition, Saupe notes that Anchorage and Alaska as a whole rank highly on the wish lists of likely US travelers, based on research conducted by destination analysts. Anchorage, she says, was also the fourth most-searched destination for flights on Kayak, which is an encouraging indicator as people plan.
Sunrise over Potter Marsh in Anchorage.
Williams also harbors feelings of uncertainty—and hope. “Everything we are doing for the 2021 season is in a state of flux,” she says. “Kodiak had fifteen cruise ship visits planned and are down to having only five left on the official schedule. Our cruise ship schedule was scheduled to start on May 1, 2021, and now if there are any ships arriving, the first one will be on August 26, 2021.”
With tourism being a significant part of Kodiak’s economic base, not having guests come to the island is affecting many of its small businesses and artists. “Our hope is that vaccination levels will be high enough to make people feel safe enough to travel again,” Williams says. “Our tourism partners, along with the bears, fish, otters, whales, eagles, and puffins, will be ready once tourism begins again.”
Alaska is ready to have visitors, Williams says, and she encourages travelers to come whenever they feel safe to do so. “The Alaska tourism infrastructure has been working hard to create protocols to keep guests safe,” she says. “About one third of Kodiak Island’s population is currently vaccinated, and we miss seeing guests from all over the world.”
“We have our work cut out for us, but as conditions improve, there are some encouraging signs that travelers’ tastes in 2021 align well with what we have here in Alaska… Looking ahead, the emphasis has to be on independent travel, which was a significant swath of Anchorage’s overnight visitation year-round, even before COVID-19.”
Additional Insights and Reassurances
Alaska’s tourism executives offered encouragement and advice for anyone who is contemplating a trip to Alaska. Capozzi emphasizes that Alaska is open for business and a safe state to visit. In fact, she says, Alaska is the most vaccinated state and has some of the lowest COVID-19 case numbers in the country. She heartily welcomes independent travelers, urging: “We’re ready for you. It will be one of the best times to visit because it will be less crowed.”
Popp highlights that Alaska is an exotic and stunning place to vacation in the summer. He thinks 2021 will be one of the greatest summers to travel to the state because there will be less congestion, giving visitors more room to spread out and explore. Prior to COVID-19, Alaska saw up to 2 million visitors per season; this year, the state is expecting hundreds of thousands, he says. Visitors can indulge in land tours, take incredible independent trips, and enjoy some good travel bargains. And they can do so safely because of the protocols Alaska has in place. “We’re a state that has been embracing vaccinations…. I think our community will be a safe place to visit this summer.”
Fairbanks from the Chena River.
Saupe encourages people to know their responsibilities while traveling and take advantage of trip-planning resources. She says: “Together, we keep each other safe. We have a great deal of focus right now on explaining travel mandates, testing, and health and safety protocols from all levels of government in a clear, concise, and easy-to-understand way…There are many resources available to help plan a trip, including organizations like ours, and I’d anticipate that there will be opportunity to find great deals for their Alaska experience.”
Bustamante extends this enthusiastic invitation, saying: “There are still many wonders to experience in our great state, and many accommodations, restaurants and tourism operators will be open for business. We still have mountains, glaciers and wildlife to enjoy, so please make plans to come up this summer.”
And Hickok issues a short and simple plea: “Come, enjoy our open spaces, and travel responsibly.”
“The general consensus as of now is that visitation will start out slow in May and gradually increase through the summer—which actually has been a consistent pattern for a number of years.”