‘Putting the company almost on life support’: Cruise ship cuts devastate Alaska tourism

Tourists walk on Skagway’s railroad dock in summer of 2016. (Emily Files/KHNS)

Taylor Vidic thought she’d be in Skagway by now, preparing for the cruise ship passengers to arrive in the tiny Southeast Alaska town.

“I was planning on taking a ferry there to get ready for my first day of work tomorrow at the Red Onion Saloon and Brothel Museum,” Vidic said last week. 

But instead, the 26-year-old is at home in Juneau, out of work and reading announcement after announcement about the coronavirus pandemic canceling cruises, closing ports and shutting down businesses.

“There’s kind of a cloud hanging above you,” she said. “You are waiting for these announcements to come out and then when they finally do, it’s kind of like you feel the wave hit.”

A 4th of July celebration at the Red Onion Saloon in Skagway in 2019. This year would have been Taylor Vidic’s her fifth season working at the saloon and brothel museum. (Photo courtesy Taylor Vidic)

Vidic said the recent cancellations from the Holland America Line and Princess Cruises felt like another painful wave. Last week, the major cruise lines called off most of their sailings to Alaska this season. They won’t run lodges or sightseeing buses in the state.

It followed news that Canada has closed its ports to cruise ships until July 1, and that the Port of Seattle has delayed the launch of the cruise season “until the resolution of the public health emergency.” Earlier this month, the federal Centers for Disease Control and Prevention also renewed its no-sail order for larger ships, and it could last through late July.

“Sadly, all sectors of Alaska’s tourism industry are having to make challenging decisions right now,” said a statement from Sarah Leonard, president and chief executive of the Alaska Travel Industry Association.

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Alaska had planned for a record-number of cruise ship passengers this year. Now, across cruise lines, at least 360 sailings to Alaska have been called off so far, around 60% of the scheduled trips, according to the Cruise Lines International Association Alaska. 

It’s a serious blow to Alaska’s economy. The cancellations mean about 700,000 fewer visitors will come to the state on cruise ships, the association said. It’s a loss of thousands of seasonal jobs, and hundreds of millions of dollars in passenger spending, plus money coming from taxes and the cruise line itself.

And those dollars are spread wide — they flow to hotels, museums, coffee shops, restaurants, flightseeing, sled dog kennels, gas stations, souvenir shops and so much more.

“There’s a trickle-down effect that will impact the entire community,” said Patti Mackey, president and chief executive of the Ketchikan Visitors Bureau.

The Norwegian Bliss is docked at Ketchikan’s Berth 3 in June 2018. (Leila Kheiry/KRBD)

In recent interviews, Alaskans who work in or with the tourism industry grasped for words to describe the impact of the cruise cancellations so far this year: A punch in the gut, Mackey said. Devastating, said others. Unprecedented. Scary. A blow that’s bringing a pillar of the state’s economy to its knees.

“I believe it’s over half of the tourists that come to the state every year come on cruise ships,” said Jason Bickling, the executive director of the Seward Chamber of Commerce. “The loss of that is heavy”

The Kenai Peninsula town normally welcomes its first cruise ship in early May and its last one at the end of September, Bickling said. Now, it’s erasing May and June sailings from its calendar, and waiting to learn more. Bickling said it’s hard to remain hopeful that many cruise ships will come in late summer. And, even if they do, who will be onboard?

“It’ll just be kind of a wait-and-see game to see if some of those other cruise ship companies decide they’re able to operate this summer,” he said.

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Neal Fried, an economist with the Alaska Department of Labor and Workforce Development, said the timing of the coronavirus in the United States is an extra punch for Alaska, hitting the state as it prepares for the summer, when its biggest chunk of economic activity usually takes place.

“A lot of that’s not going to happen this year,” Fried said. 

Park ranger Charlotte Henson leads a group of visitors on a walking tour of Skagway in summer of 2016. (Emily Files)

Alaska businesses will not hire like they normally do for the tourist season, eliminating thousands of seasonal jobs, he said. In 2018, the number of people employed in visitor-related industries in Alaska ballooned from about 4,300 in January to more than 23,000 by July. Many of those jobs are filled by non-residents, Fried said. 

Still, some Alaskans also depend on the seasonal employment, like Vidic. 

At this point, Vidic said she doesn’t know when she’ll return to work in Skagway. She applied for unemployment. Like many of her co-workers, she earns the bulk of her income during the tourist season.

“I think we’re all kind of, you know, hoping for the best but expecting the worst,” she said. “There might be ships come July, but I’m not holding my breath on that with how the world has been looking as of late.”

Cameron Brockett, left and Taylor Vidic in 2017, dressed in their usual work attire on the stairs of the Red Onion Saloon. (Photo courtesy Taylor Vidic)

At Premier Alaska Tours, company president Joshua Howes is also wrestling with keeping people employed. 

His Anchorage-based company provides transportation services to tour operators and cruise lines, moving passengers by bus and train around the state.  

Early this year, he said, the company prepared for a busy summer. They were finalizing menus for the train and orders for luggage tags. They planned to hire back hundreds of employees for the season. Then, everything changed.

“We’re now kind of at a point where we’re putting the company almost on life support,” he said.

The company is down to about 15 workers, furloughing some year-round employees and not hiring more than 500 seasonal staff.

In his 20 years at the company, Howes said, he has never experienced a crush of business like this. He’s concerned about other companies too, and whether they’ll survive it.

“There are so many small companies out there that I just worry about whether or not they’ll be able to go from September of 2019 to potentially May of 2021 with zero revenue,” he said.

Reach reporter Tegan Hanlon at thanlon@alaskapublic.org or 907-550-8447.