Haines wants to waive dock fees to lure more cruise ships. But will it work?

Haines has the lowest cruise ship docking fee of any Southeast port. The Haines Borough thinks waiving that fee could lure even more ships here. Economists say it’s hard to know if that strategy will work. But industry officials say it could open the door for more ships to take a look at Haines as a destination.

Haines Tourism Director Leslie Ross wants a hook when she talks to cruise lines. She wants something that will entice the companies to bring their ships to Haines and tie up at the Port Chilkoot Dock.

“What I would like to do, and what we’re working on, is to have a good strong proposal to go forward with the ships.”

Ross and borough economic development director Bill Mandeville have been working on a waiver proposal along with the Tourism Advisory Board.

There are 42 port calls planned for Haines this summer for a total of about 43,000 passengers. By borough estimates, each passenger that walks off the ships will generate around $5 in sales tax revenue for the town.

By comparison, Skagway which is just 13 miles away will see about 800,000 cruise passengers this summer.

Ross, Mandeville and the tourism advisory board suggest waiving dock fees in Haines would entice more ships to come here. They developed two options for waiving the whole fee, or a percentage of fees for cruise lines that commit to Haines.

But at least two Alaska economists say it’s not that simple.

“I think the situation you’re talking about is governed by larger principals. In the big picture I think things like port fees are relatively minor factors,” said Ginny Fay an assistant professor of economics with the Institute of Social and Economic Research University of Alaska Anchorage. She used to serve as director of the Alaska office of tourism and economic development in the Alaska Department of Commerce. She says a waiver might make cruise lines look more seriously at Haines, but there are many other factors that play into their decision about whether to come here. For example, if there’s enough infrastructure, shore excursions and money-making opportunities for the ships.

“It might be that if you waive the port fees that you might be able to convince the cruise companies that you want to have an open dialogue with them and do planning, but I think in order to have favorable investment and worthwhile investment it would be good to get the Northwest cruise folks and the companies to sit down with people in Haines and make some kind of plan.”

One of Fay’s colleagues at the university agrees that an incentive program to waive dock fees is no guarantee that cruise lines will come. Economics professor Steve Colt writes in an email that the question of whether a waiver would draw more cruise ships is almost impossible to answer objectively. He says it’s like asking if subsidizing a sports stadium will attract and a team and then if a team will attract fans.

Fay says part of the uncertainty is that cruise lines are notoriously private about how they go about choosing ports. That was illustrated when we tried to ask the cruise companies about it. One company declined to comment and three did not return emails or phone calls. But the Cruise Lines International Association of Alaska did respond.

“It sends a very positive and power message to the industry that Haines wants their business and I think that makes a big determination in how they make their ports of call,” said John Binkley, president of the association.

He says waiving dock fees would not guarantee cruise lines would come to Haines. But it could open the door for discussion.

“You’re going into those meetings with something positive to offer them rather than just telling them what a great destination Haines is,” Binkley said.

In Haines, supporters of the idea say there’s not much risk in trying a waiver program. With such low docking fees anyway, the borough would lose little by trying the idea. Most ships have enough passengers that, on average, they will provide more sales tax revenue than is lost in docking fees.

“We need an excellent incentive to bring the ships here to see what we have,” said Haines assembly member Diana Lapham. “I think once they see what we have, it’s a hand glove then their visitors are going to want to want, there will be a heightened awareness of Haines.”

But Haines resident Carol Tuynman takes a bigger view. She says that having the lowest dock fees in Southeast hasn’t lured more ships here already, so why would waiving the fees altogether make a difference? She also says that if Haines were to get an influx of visitors, does Haines have the capacity and resources to serve them and keep them coming back?

“The real question is ‘why weren’t they coming?’” Tuynam said. “We need to know why they weren’t coming not how we can lure them with zero fees. We may lure them but we make be taking a big risk that doesn’t solve the problem of how to serve them.”

The Haines Borough commerce committee will discuss the waiver proposal again on June 4th before making a recommendation to the assembly.