Story last updated at 4:45 p.m. Thursday, October 17, 2002

Tourism dollars drop this season

Study shows decline part of larger trend in Alaska travel industry

by Christine Schmid
Morris News Service-Alaska

JUNEAU -- Tourism in Alaska was greatly affected by the Sept. 11 terrorist attacks and by the unusually bad economy that has persisted throughout the 2002 tourism season, researcher Eric McDowell said last week.

McDowell, a partner in the Juneau-based research firm the McDowell Group, spoke at the Alaska Travel Industry Association convention and trade show held last week in Juneau. The convention continues through Thursday. The nonprofit ATIA works with the state to market tourism.

McDowell, who was contracted by the ATIA to survey tourism businesses, said despite this year's "Golden Age of Travel" convention theme, 2002 was not as golden as it could have been.

Half of visitor businesses in Alaska saw declines in 2002, McDowell said. Restaurants and bars, rental vehicles, taxis and sportfish businesses were the hardest hit by the bad season, which showed a decline in independent travelers and a slight increase in cruise ship passengers, he said.

Southeast Alaska saw about the same number of visitors as in past seasons, but those visitors spent less on packaged tours and in shops.

"The cruise ships had to offer significant discounts to attract passengers to their lines, and a passenger who wouldn't have come up here without the $400 discount probably isn't going to spend as much once they're here," McDowell said.

Southeast businesses that did well this season offered lower-priced packages, such as half-day fishing charters, kayak rentals and salmon bakes, he said.

The report gave a preliminary estimate of 1.2 million visitors to Alaska in 2002, about the same as last year. Cruise ship companies reported a record number of passengers this year -- 720,000, compared with 690,000 in 2001.

The McDowell Group surveyed 315 tourism-related businesses throughout the state on how their businesses performed through August 2002. The degree of impact from the tourism downturn varied significantly by region, with the Interior suffering the most and the Far North showing the least impact.

"The North had a lot of business construction and in-state travel," McDowell said.

The Interior had a significant decline in business from tourists who also cruised Southeast and a moderate decline in independent travelers.

Employment in the tourism industry was down 3 percent in 2002 -- "traumatic economic news for the state," McDowell said.

Although the slump for the Alaska tourism industry can be attributed partly to the events of Sept. 11 and the subsequent downturn in the economy, McDowell said 2002 was part of a larger trend of tourism decline in Alaska.

"Tourism growth hasn't correlated to the economy," he said. "The last half of the '90s and 2001 was a big decrease for the tourism industry. It should have grown, but it didn't."

McDowell said money for aggressive marketing is more critical than ever before, particularly as the independent travel market continues to decline.

"There is a political and philosophical issue here: Does the state of Alaska have a responsibility to its citizen business people to support their efforts in an industry where (the businesses) can't do it themselves?" McDowell said.

"The important message is that when growth stops, many, many Alaska businesses and communities are negatively affected," he said.

Christine Schmid is a reporter for the Juneau Empire.

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