State report: Policy on Covid cost Alaska tourism sector $3 billion last year

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Gov. Mike Dunleavy sent the State of Alaska’s Impacts to Alaska from 2020/2021 Cruise Ship Season Cancellation report to the White House, detailing the economic impacts and attributing a $3 billion gross state product loss each year the cruise season does not take place.

“Alaska’s port communities have been severely impacted by the loss of cruise ships in 2020 and 2021 as a result of the pandemic. The recent extension of the conditional sail order through November 2021 by the Centers for Disease Control ensures no cruise ships will bring passengers to Alaskan communities for the 2021 season,” the governor said.

The report was completed by the Departments of Revenue; Commerce, Community, and Economic Development; and Labor and Workforce Development. It outlines the material impact of the CDC action and Canada’s decision to not allow cruise ships in its port, on the State of Alaska, local communities, and businesses.

Prior to the COVID-19 pandemic, the Cruise Line Industry Association reported 40 cruise ships visited the region, carrying 1.36 million passengers on 577 voyages in 2019, the governor said.

“Alaskans who depend on the summer tourism season to make a living waited anxiously, with hopes, that the COVID-19 vaccines would allow the return to normal, and for cruise ships to enter our ports again. The CDC’s recent decision to extend the 2020 “conditional sail order” effectively eliminates any potential for a 2021 cruise ship sailing season, and places the future of thousands of Alaskan families’ businesses in peril,” said Dunleavy in a letter to Jeff Zients, counselor to the President. 

“The negative impact of this decision to our economy and people of Alaska, specifically Southeast Alaska, is staggering. It is estimated that the cancelled cruise ship season in 2020, in addition to the potential cancellation of the 2021 season, will result in a loss to the State of Alaska’s domestic product of over $3.3 billion.”

“The severe economic losses that are impacting our port and cruise communities has a multiplier impact that trickles throughout our entire economy; resulting in lost revenues, taxes, jobs and small business closures,” said Department of Revenue Commissioner Lucinda Mahoney. “The cruise industry is crucial to the state’s financial well-being.”

Alaska has experienced significant job losses because of the pandemic and will continue to experience losses because of the CDC ruling on cruise travel. Port and Cruise line related communities have seen a collective 22,297 in job losses as compared to the previous year representing over $305.7 million in wages lost in Alaska.

“The Cruise Ship industry is a major artery of the Alaskan economy. When one vital sector hemorrhages, the entire state suffers,” said DOLWD Commissioner Dr. Tamika Ledbetter.

DCCED Commissioner Julie Anderson said, “As indicated, numerous communities and businesses are struggling to survive due to the loss of cruise ships in 2020 and 2021. It is imperative that we resolve these issues and implement programs to provide a path to sustainability.”

The impact of a no-sail order on local communities amounts to $98.6 million in lost revenue each year. Skagway saw a 48% reduction in total wage base and the total losses are estimated to exceed 100% of their annual operating budget. A 2020 survey anticipated only 26% of Ketchikan tourism-related businesses could withstand a delayed restart of the tourism industry. Interior Alaska estimated that over 160,000 cruise passengers would have visited in 2020. 

Click here to read the State of Alaska’s Impacts to Alaska from 2020/2021 Cruise Ship Season Cancellation.

6 COMMENTS

  1. The problem I see with the Woke, they usually have no exposure to the policy’s they support. Most of my woke friends are living off of trust funds, divorce settlements, and inheritances from their parents, grand parents. Absolutely zero skin in the game!

    This will ding the woke businesses owners! They wanted masks, spreading fear. Well, good luck!

  2. All such a waste, and it continues today. Granted, Dunleavy did send a letter to DC but it will fall on deaf ears. Or worse, Biden and handlers will read it and say mission accomplished, keep up the good work and keep them shut down. Wait until the fishing lawsuit kicks in here in SE Alaska, we will have no fishing to go along with no cruise ships, along with no oil production. Are we a sinking ship?

  3. The whole precept of the Wuhan virus was to wreck havoc and destruction upon the United States’ economy, in addition to handcuffing then President Trump.

    Once the Democrats saw their opportunity to make sure a “crisis didn’t go to waste”, they jumped in with both feet (boots still on) and proceeded to use the pandemic as an excuse to hobble American citizens and their livelihoods.

    In particular those states that are conservative and have a free-willed populace; the only way to bring them to their knees is via an un-elected group of a—kissing scientists/appeasers who kowtow this Administration’s orders to kill free-enterprise in its tracks. Can’t have a state that is independent and on its own, so let’s kill every chance of them making money … keep the heel of the boot firmly on the neck. I hope people wake the #$^*$@ up!

  4. Just as Israel got stabbed when they leaned on the weak staff of Egypt, Alaska is getting stabbed for leaning on the weak staff of tourism. An industry that always dries up eventually.
    We could have had power generators on the Slope providing electricity for industry … which is an open field of opportunity right now.
    We have oil and gas in abundance. We have more minerals in abundance than the rest of the US of A. We have 65 billion in reserve. Yet, we’re begging?
    The CBC has been too busy figuring out ways to get the spare change in our pockets.

  5. Is that a straight 3 billion, in hard cash … or is it a half billion compounded by an estimate of how many times it circulated in Alaska?
    Is that 3 billion adjusted, is it actually residual, after the profit outflow by non-resident parent companies?
    Sorry, but I’m so used to numbers being slanted towards agendas.

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