Two seasons, no ships? Grim forecast for Alaska: ‘Not everyone will survive’

One full season without cruise ships dealt a huge blow to the tourism-dependent businesses of southeast Alaska. A second one could be fatal.

For Alaskans, Canada’s decision this month to extend its cruise ban into early 2022 “felt like a bomb,” said Holly Johnson, president of Wings Airways and the Taku Glacier Lodge in Juneau.

“The survival of our communities is really on the line right now,” she said.

Like most operators in southeast Alaska, the vast majority — 90% — of guests on Taku Lodge flightseeing tours are cruise passengers. The company survived a 2020 closure through a combination of federal and local support and relief from landlords and even aviation insurance companies. 

“Everybody’s given to make sure that we can get through,” Johnson said. “We’ve been able to squeak by, but it’s really scary looking at another summer, and not just another summer but getting through until April ’22 …. We’re on a shoestring now to hold it together.”

But she’s not sure her business and others in the community can last for what could be 36 months with almost no revenue. 

“It looks like everyone survived last year for the most part, which says so much for Alaskan resiliency and strength,” she said. “Looking ahead to another year, that will not be the case. Not everyone will survive.”

Candace Scudero, the tour manager for Experience Alaska Tours in Ketchikan, which offers eight different excursions that all end with a crab feast, said 99% of customers come from cruise ships.

“That’s all we do,” she said. “All of our tours are based around the cruise ships and their schedules.”

When the 2020 season was canceled, Scudero said that company tried to make ends meet with some “all-you-can-eat crab feasts” for locals, renting out its George Inlet Lodge for some retreats and trying with little success to rent the lodge on Airbnb. 

“Everything we did last summer didn’t make for one good cruise ship day,” she said. 

Because 2020 was expected to be a record cruise ship season in Alaska, many companies made major investments in their offering prior to the start of the pandemic. CLIA had projected the state would get 1.4 million passengers that year.

“We’d all bought infrastructure,” said Wings Airways’ Johnson, adding that her company had purchased a new airplane. She said she knows others who bought boats or extra merchandise. “Everyone was preparing for the biggest summer we’ve ever had — so we started at our weakest point in this pandemic.”

Scudero said the same was true in Ketchikan. 

“So many people were expanding, because it was supposed to be a record year last year and this year,” she said. “People were gearing up to handle more business. I saw a lot of construction and people buying new equipment and then, boom — nothing.”

Scudero said Experience Alaska had been planning to build a new dining room and make other investments that were put on hold when the pandemic hit. Now, she said, her company is “sitting on a lot of crab. That’s gonna hurt.”

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Private enterprises are not the only ones reeling from the loss of cruising. Local Alaskan governments received $121.8 million in taxes and fees from the cruise lines while, according to CLIA, cruises contributed $1.3 billion in direct spending to the state and supported 23,000 jobs before the pandemic.

A report from Bermello Ajamil Partners, a cruise infrastructure specialist that consults for Skagway and Ketchikan, predicts that a second year without cruise tourism “will cause substantial issues and upheavals that will guide the course of community considerations and cruise tourism in southeast Alaska from now on. There will be retailers, restaurants, tour operators, venues and suppliers that will not survive and others that will change the initiatives for future cruise tourism operations.”

This is among the many concerns local officials and the cruise industry have: that the infrastructure the cruise ships and their passengers need won’t be there when the ships finally do return.

“It’s one of my biggest concerns,” said Andrew Cremata, the mayor of Skagway. “This community is the No. 1 focus I have. How to save as many businesses as we can. There is a snowball effect to all of this.”

Skagway has a year-round population of 1,000 and received 1.3 million cruise ship passengers in 2019. Cremata said cruise ship tourism supports 95% of Skagway’s economy and that the loss of the 2020 season represented a hit of about $160 million in revenue. Residents are already leaving.

“They love it here, but people have to be able to make a living, as well,” he said. 

Rather than wait for a potential but not guaranteed 2022 cruise ship season, Cremata is working on a “backup plan to survive.” 

“We can’t wait for a life preserver from the government or the cruise ship companies,” he said. “We have to tread water right now, and it’s not going to be easy.”

That includes figuring out “what we are,” which currently “is not a cruise ship port.” Cremata hopes Skagway will lure both independent travelers from the Lower 48 and regional tourists from other parts of Alaska who may not have considered Skagway in the summer because of all of the ship traffic.

“We have amazing trails, scenery, abundant wildlife — it’s the Alaskan dream,” he said. “We have wonderful people and amazing things to do. We have this amazing infrastructure of tours, restaurants and retail stores built on the success with the cruise industry. We still have those things, and it’s a wonderful destination.”