Juneau, AK (STL.News) Governor 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 (CDC) ensures no cruise ships will bring passengers to Alaskan communities for the 2021 season.
The report, composed by the Department of Revenue, the Department of Commerce, Community, and Economic Development, and the Department of Labor and Workforce Development, outlines the material impact of the CDC action, in conjunction with the Canadian decision to not allow cruise ships to port, on the State of Alaska, local communities, and businesses. Prior to the COVID-19 pandemic, the Cruise Line Industry Association (CLIA) reported 40 cruise ships visited the region, carrying 1.36 million passengers on 577 voyages in 2019.
“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,” wrote Alaska Governor 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.
“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.
“The cruise and tourism industries are a significant economic driver in the state,” said DCCED Commissioner Julie Anderson. “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.” Commissioner Anderson Quote”
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.