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Across Alaska: Cruise ships to give ‘a shot in the arm’ for Juneau’s economic recovery

Downtown Juneau, Alaska, as seen from the water.
Downtown Juneau, Alaska, as seen from the water.(KTUU)
Updated: May. 25, 2021 at 5:18 PM AKDT
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JUNEAU, Alaska (KTUU) - Darren Boutin is very ready to welcome tourists back to Juneau. The owner of the Alaska Shirt Company was forced to lay off 43 out of 50 staff members as the COVID-19 pandemic cancelled the 2020 cruise ship season.

“It’s been tough, it’s been really tough,” Boutin said.

But then President Joe Biden signed a bill that will allow large cruise ships to return to Alaska. They’re set to start arriving in Juneau in late July, but not in the numbers that would come in a normal year.

“It’s a good start,” Boutin said. “To restart cruising and hopefully be ready to go full speed next year.”

The plan now is to hire back staff to work the shortened season.

Liz Perry, executive director of Travel Juneau, said there is reason for optimism. The COVID-19 vaccine has been a “game changer” and is seeing Americans ready to travel.

“The addition of these ships, as few as they may be, will make a difference for a lot of our partners,” Perry said.

Mirroring a nationwide trend, Juneau is seeing a shortage of rental cars later in the summer. Remote lodges are booked out and some B&Bs are booked solid.

“We may see a really big finish to the season that we just didn’t get last year,” Perry said.

But cruise ships will likely not be the silver bullet for all of Southeast Alaska’s economic woes.

Reecia Wilson, a part-owner of five waterfront restaurants, described the 2021 cruise ship season as a “shot in the arm.”

She said only three restaurants would be open for the summer: the Hangar on the Wharf, Alaska Fish & Chips Co., and Roma Bistro on the Wharf. Twister Fish Company Alaska Grill and Pier 49 will remain closed.

“A 10-week season would not justify the cost of ramping the business up, the cost of ramping a business down,” she said. “We didn’t build this business overnight and we’re not going to rebuild it overnight.”

Robert Venables, executive director of Southeast Conference, explained those kinds of decisions would likely be seen across the region. While a partial cruise ship season will help, it may not make every business owner whole again.

“The question is, is there enough volume there to do more than pay for fixed costs, to be in operations, pay for staff and make the businesses operate?” He asked.

The Legislature and Gov. Mike Dunleavy have both proposed giving aid to tourism businesses from the latest round of federal COVID-19 relief. Around 7,000 jobs were lost in Southeast in 2020, many of them from tourism.

“That sector not only took it the hardest, but it has the capacity to bounce back the quickest,” Venables said.

The loss of a 2020 cruise ship season saw a $10 million hit to the city’s sales tax revenue, representing around 20% of the total, according to Jeff Rogers, Juneau’s finance director. It’s unclear what a shortened 2021 season will mean, but there is evidence of spending increasing in other sectors.

“We have reasonably good sales tax returns for the January, February, March-period, higher than we expected which suggests that the situation is improving slightly faster than we thought it would,” Rogers said.

Tourists didn’t come to Southeast Alaska in 2020 and neither did chum salmon. There has been a push to declare a region-wide fisheries disaster after the poor returns.

“This year, the expectation is there will be more fish coming this way,” Venables said. “Prices are starting to boost up a little bit.”

More fish, some tourists and spending ticking upwards. Southeast Alaska, the region of the state hardest hit economically during the pandemic, may be beginning to reverse its fortunes.

“Finally, I think there’s a sense of cautious optimism that’s starting to emerge,” Venables said.

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