‘It has just been devastating’: This state could face an entire year with almost no tourists
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Just a few months ago, Premier Alaska Tours was gearing up for a record summer tourist season. The Alaska-focused tour company — one of the state’s biggest — was expecting tens of thousands of customers for its multiday trips to classic destinations like Denali National Park. Including seasonal workers, it planned to have around 600 people on the payroll.
Then the coronavirus outbreak emerged, and cancellations began flooding in. Over a period of about 60 days, nearly all of Premier’s business for the summer just “evaporated away,” said Josh Howes, the company’s president. As a result, over the past few months, he’s had to tell hundreds of seasonal workers they’re no longer needed. He’s had to furlough most of his year-round employees, too.
The company’s employee count as of this week: 15.
“It has just been devastating,” says Howes, noting the company relies on Alaska’s short summer tourist season for all its annual income. “At this point, we have zero business on the books for June. We have a couple of groups still hanging on for July and August, a few more for September. But I don’t have a whole lot of faith that any of those will actually materialize.”
If they don’t, Howes says, Premier is facing something unprecedented: More than a year without a single dollar of income. And it’s not alone. All across Alaska, businesses that rely on the state’s brief summer tourist season — from big tour operators and hotels to mom-and-pop guiding companies — are confronting the reality of what could essentially amount to a lost year.
“It’s a major deal,” says Kara Tetley, a tourism official in Juneau, which gets 94% of its visitors from cruise ships that won’t be coming this year. “We rely heavily on tourism.”
This is turning out to be a tough year for many tourist destinations in North America, of course. From Hawaii to Florida, visitation is likely to be down significantly over the coming months. But no other major destination is facing an existential crisis quite like Alaska.
Thanks to the state’s short tourist season, which doesn’t really get going until mid-May and is mostly over by early September, many tourism-related companies in Alaska are bracing for revenue declines for the year approaching 80%, 90% or even 100%.
Or, as Howes put it, “We could potentially go from September 2019 to May 2021 with zero revenue.”
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
A year without cruise ships
Like many other states, Alaska is beginning to ease restrictions that have kept tourists away. On Saturday, it began allowing travelers to enter the state without undergoing a mandatory 14-day quarantine (visitors still will need to show proof they are free of COVID-19).
Alaska tourism officials also note that some of the state’s biggest attractions, such as Denali National Park, are beginning to reopen after coronavirus-related closures. At Denali, the bus tours on the park road — the way many out-of-state visitors see it — are tentatively scheduled to reopen on July 1, as are the park’s visitor centers.
A number of lodges, inns, restaurants and tour operators around Denali and other key tourist locations also have reopened or are reopening soon, according to tourism officials. Alaska relaxed its closure order for restaurants more than a month ago.
“If travelers are able to visit Alaska this summer, they will find many accommodations, tours and attractions open,” said Sarah Leonard, the president and CEO of the Alaska Travel Industry Association.
Yet the eased travel restrictions and reopenings are too late to save the bulk of the summer tourist season. A large percentage of the tourists the state had been expecting already have been lost.
In part, that’s because cruise ships won’t be heading to Alaska this year. Cruise lines that operate all but the tiniest of vessels have had to cancel all sailings to the state for 2020 due to a coronavirus-related “no-sail” order from the U.S. Centers for Disease Control and Prevention (CDC) and a cruise ship ban imposed by Canada. Ports on the West Coast of Canada such as the Port of Vancouver are integral to most Alaska sailings.
Among major North American destinations, Alaska is relatively unusual in its reliance on cruise ships to deliver a large percentage of its visitors. In a typical year, Alaska draws about 2 million visitors. Of those, nearly 1.2 million — or almost 60% — are cruisers. That’s a massive chunk of Alaska’s tourist base that’s gone for the year.
The cruise cancellations will have a devastating effect on coastal tourist towns such as Juneau, Skagway and Ketchikan, where nearly all visitors are cruisers. But even interior destinations such as Denali and Fairbanks will see large segments of their tourist business disappear due to cruise cancellations.
That’s because many cruisers to Alaska extend their trips with a guided land tour of the state. These add-on tours almost always include a stop at Denali and, in some cases, bring additional stops in Fairbanks, Anchorage, Talkeetna and the Kenai Peninsula. Often, cruisers book these tours through their cruise lines, which package the cruise and land tour as one seamless “cruise tour” experience.
Indeed, land tours to interior destinations are such big business for the cruise lines that the two biggest cruise operators in the state — Princess Cruises and Holland America — own their own lodges as well as railcar and bus tour operations. Princess alone has five lodges in Alaska with more than 1,600 rooms. Holland America operates a major lodge complex at the edge of Denali National Park with more than 500 rooms.
In a blow to the state’s tourism industry, both Princess and Holland America announced in April that none of these lodges would open for the 2020 season. Without cruisers coming to fill most of the rooms, opening them for the year didn’t make sense.
Cruise tourists aren’t the only big segment of visitors that Alaska has mostly lost for the summer. As Premier’s Howes will tell you, Alaska also has lost most of the visitors who were coming to the state on non-cruise related land tours.
About 40% of Premier’s business is organizing land-based tours of Alaska for University alumni groups and other groups that book through outside tour companies and travel agencies. About 60% of the company’s business comes from organizing tours sold through cruise lines.
“As a society, we’re not quite ready to do that concept of social gathering,” Howes said, explaining the steady stream of cancellations. “We’re not at that point where being with 20 or 30 or 40 other people on a bus or a train or a boat or a cruise ship is [OK]. We’re just not there yet.”
The net effect of widespread cancellations from both cruise lines and tour groups is an almost complete shutdown of the “group” segment of travel to Alaska for 2020. And that’s the segment that accounts for the vast majority of visitors to the state. Despite being known as a land of rugged individualism, Alaska is a place where most visitors come in groups.
The impact on Alaskans
The downturn in tourism already is having profound effects on Alaska’s economy. For starters, it’s led to a wave of layoffs and furloughs among Alaskan workers.
While the tourist industry isn’t the biggest contributor to the Alaskan economy — the oil industry is bigger, and the fishing industry is important, too — it’s one of the biggest employers in the state, accounting for one out of every 10 jobs, noted Leonard.
“This includes not only [tour-related companies] that are unable to open or are running at extremely limited capacity, but also places like restaurants, breweries [and] hotel launderers that rely on a busy summer to carry them through the winter,” she told TPG.
Leonard said a recent Alaska Travel Industry Association survey of businesses that rely on tourism found they already had laid off more than half their employees. Revenue for the year among the businesses was down 50%.
In addition to the layoffs, Alaskans suddenly face the reality of life without some of the conveniences that come with living at the center of a major tourist destination. Without tourists to fill seats, some restaurants and bars won’t be reopening this summer, and — perhaps more significantly — many of the flights that Alaskans rely on to get around and out of the state won’t be operating.
From June through August, air carriers will fly just 40% of the flights they flew between Alaska and the Lower 48 during the same period last year, according to Cirium schedule data.
“There’s a lot of things that we take for granted that exist because of the [tourist] industry,” Howes noted. “Flights in and out of Alaska are very limited now because there is just not a big demand for them. If you want to fly someplace now, you kind of have to pick and choose where you go.”
In April, Alaska’s biggest carrier, Alaska Airlines, announced it was reducing capacity in April and May by 80%. As part of the capacity cuts, the airline parked more than 25 aircraft, according to Atmosphere Research data.
Howes said he sees the tourism downturn having a significant impact on the seafood industry, which sells a lot of its products to businesses related to tourism.
“The seafood folks,” he said, sell fish to the cruise lines, hotels and restaurants — and without tourism, “the price of fish is going to go down.”
Tetley, who is the destination marketing manager for Juneau’s tourist office, Travel Juneau, and a Juneau resident, said some of the retail shops in the center of the town of 35,000 remain closed — a blow not just to locals who would want to shop at them but the locals who run them. Many of Juneau’s retail outlets rely heavily on summer tourists to stay in business.
“A lot of people think that it’s nothing but chains at these cruise ports, and we do have a few of those, but for the most part, these are [businesses] run by local families,” Tetley said. “They live here year-round. Their kids go to school here.”
Tetley said local businesses in Juneau that rely on tourists are still trying to figure out how to survive what could be a summer without tourists. One company that normally offers foodie tours to cruisers, Juneau Food Tours, has begun selling a “taste Alaska” subscription box of local foods to non-Alaskans by mail. A whale watching tour company is selling mechanical services to locals out of its boat shop.
“For those that are surviving, they’ve having to come up with very different business plans,” Tetley said, adding that Juneau had been expecting more than 1.4 million cruise visitors this year, a new record. “We do rely heavily on the benefits of having those cruise passengers here.”
Tetley added that the damage from a lack of cruise tourists this year could unfold slowly over several years in port towns such as Juneau.
“There will be a trickle-down effect that I think a lot of communities maybe don’t see right away,” she said. “For example, some of the sales taxes [that Juneau collects on tourist spending] won’t be coming in, and we won’t have the passenger fees.”
Juneau collects $8 from every cruise passenger arriving in Juneau through two different passenger fees folded into the “port charges” cruisers see on their bills. There’s also a $34.50-per-passenger fee the state collects from cruise lines on behalf of cruisers, some of which works its way back to Juneau.
Between those fees and city sales taxes, Juneau brings in around $25 million a year from cruisers, which amounts to more than $700 for every permanent resident in the city, according to an analysis published in 2019 by Alaska Public Media.
The money goes to pay for everything from downtown infrastructure to — in the case of the sales taxes — schools, firefighters, public libraries and even swimming pools for locals.
“It’s education, it’s childcare services. Now the [tax] money that would normally go to those things is going to have to [stretch] further,” Tetley said. “What’s going to happen is locals who have nothing to do with tourism are going to see their housing taxes go up.”
In short, it could be tough times in Alaska’s tourist towns for a while.
Not that the situation is all bad. When asked if there was any silver lining at all to the tourist downturn, Tetley admitted to at least one small positive: She and other Alaskans involved in tourism finally will have some downtime during the most glorious months in the state.
“Even those that have had their companies devastated, they are like, ‘On the brighter side, at least I’ll get to enjoy this beautiful summer,'” Tetley said. “Although we all love what we do, it is very demanding. It’s seven days a week [during the summer], and everybody is, like, ‘Wow, I might actually get to enjoy a weekend or just take off work on a sunny day.”
Alaska without the crowds
For travelers who do venture to Juneau and other parts of Alaska this summer, it could be an extraordinary time to visit.
Without cruisers, visitors who find their way to Juneau this summer will find its hiking trails, museums and other attractions uncrowded in a way they haven’t been for decades.
Not everything will be open, of course. In Juneau, the Mount Roberts Tramway that takes visitors to a spectacular viewpoint and hiking trails above town is closed; flightseeing tours to the Taku Glacier Lodge aren’t running; and some whale watching tours have shut down.
But Tetley said some small fishing and whale watching boats are restarting tours, a bike rental shop has reopened and you still can get a flightseeing tour to a glacier. Plus restaurants are starting to reopen and most hotels are open or reopening, including — starting June 15 — the city’s most notable property for points travelers, the Four Points by Sheraton.
“Our community is open,” Tetley said to would-be tourists. “It’s not going to be open like it always has been open … but [visitors should] come, absolutely. We’d love to have you.”
Among other major destinations in the state, it’s hit-or-miss as to what will be open for the summer. While Glacier Bay National Park is officially open, most of its infrastructure — including its one lodge, restaurant, visitor center and park concessionaire-run glacier boat tours — are shut down for the year. But the situation looks more promising at Denali National Park, which is expected to come to life on July 1.
Already, more than a dozen tour-related companies around Denali including bike rental firm Bike Denali, rafting outfitter New Wave Adventures and hiking tour operator Denali Backcountry Guides are open for business, according to the Denali Chamber of Commerce. More than a dozen lodges, inns and bed and breakfasts are open, too, with several more scheduled to reopen later this month and in July. The Denali Chamber of Commerce offers a list of what’s reopening online.
With visits expected to be down sharply, Denali National Park on select dates this summer will be allowing cars to travel further down the park road than is normal, into areas usually only accessible via a bus tour. But visitors will need a permit to do so, and the permits will be limited and only available within 14 days of arriving at the park. Permits will cost $55 per car.
And driving the park road at Denali is not something to be taken lightly, as it’s a winding gravel road with steep slopes that narrows in spots. It offers few facilities.
Beyond Denali, many other places in Alaska that tourists go to hike, bike, raft, kayak and camp — including state parks and national forests — will be open for the summer, too. And, as Leonard noted, they’re the perfect places to visit during an era where social distancing is the norm.
“Alaska is lucky that so much of what draws visitors is our wide-open outdoor spaces and natural beauty,” Leonard said. “For those who want to enjoy the outdoors, there are socially distanced ways to do that.”
Among notable getaway spots in the state, the 301-room Alyeska Resort, which is nestled in the Chugach Mountains southeast of Anchorage, will reopen on Friday along with the resort’s tram to the top of Mount Alyeska (visitors must wear masks to ride), spa and several of its eateries. In accordance with government rules, the resort’s pool, hot tub and gym will remain closed. The resort’s bike park will reopen July 3.
A few very small vessels that operate multiday trips around Southeast Alaska also may soon resume operations. The CDC’s “no-sail” order for passenger ships doesn’t apply to very small vessels with just a few dozen cabins such as those operated by Alaska tour specialist UnCruise Adventures. UnCruise Adventures vessels have just 11 to 43 cabins.
Alaskan Dream Cruises, American Cruise Lines and Lindblad Expeditions are three more companies that operate very small vessels that might be able to resume some Alaska touring in the coming months.
The Alaska Marine Highway ferry system that connects many isolated towns along the Alaska coast, including such tourist hot spots as Skagway, Haines and Ketchikan, also is running, albeit with fewer vessels, reduced capacity and new procedures designed to eliminate the chance of COVID-19 transmission.
As for flights, the good news is there still will be nonstop service to Alaska from several major hubs in the Lower 48 this summer, despite a sharp cutback in the overall flight count. As in the past, Alaska Airlines will offer the most options. The carrier will connect Anchorage (ANC) to Chicago (ORD), Los Angeles (LAX), Portland, Oregon (PDX), San Francisco (SFO) and Seattle (SEA). It will also offer flights between Seattle and Fairbanks (FAI), Juneau (JNU), Ketchikan (KTN) and Sitka (SIT).
While consolidating some routes in the contiguous U.S. in recent months, Alaska Airlines has continued to serve all its destinations within the state of Alaska. The airline provides vital air service around the state, including to many communities that have no other connections to the outside world.
The commitment to the interior routes follows the April 5 bankruptcy of RavnAir, the largest regional airline in the state. RavnAir shut down after bookings plummeted up to 90% as travel ground to a halt due to the coronavirus pandemic.
In response to RavnAir’s shutdown, Alaska Airlines began seasonal service to Dillingham (DLG) and King Salmon (AKN) earlier than originally planned and also added an unusual “milk run” flight to Adak (ADK) at the western end of the Aleutian Islands by way of Cold Bay (CDB). The routing is likely to be an AvGeek favorite, in part because it brings an Alaskan Airlines 737 to a town with barely 100 residents.
The new rules of Alaska travel
As noted above, Alaska on Saturday lifted its requirement that visitors undergo a mandatory 14-day quarantine upon arrival. But the policy change came with a big caveat: Visitors will have to prove they don’t have COVID-19 before being allowed to travel freely in the state.
The new rules, which are a bit complex, require that arriving visitors fulfill one of the following:
- Show proof they tested negative for COVID-19 within 72 hours of departing for Alaska.
- Show proof they tested negative for COVID-19 within five days of departing for Alaska, and then take a second test for COVID-19 upon arrival that also comes back negative. Visitors will have to minimize interactions in the state until receiving the second test result.
- Take an initial COVID-19 test upon arrival in Alaska that shows a negative result, and then self-quarantine at their own expense while waiting for a second test that must occur seven to 14 days after arrival. After taking the second test, visitors will have to minimize interactions until the test result comes back negative.
Travelers who do not meet any of the above requirements will have to undergo a 14-day quarantine at their own expense upon arrival before continuing on in their travels.
For acceptance, the COVID-19 test results visitors must present upon arriving in the state must be from a specific type of test known as a PCR swab test. Antibody or serology tests are not acceptable.
Prior to arrival in Alaska, visitors also must complete the State of Alaska Travel Declaration Form online and also print a copy or have electronic proof of the form with them when arriving in Alaska. Paper copies will be available to complete at Alaska ports of entry.
State officials say visitors will be provided with a voucher for a COVID-19 test in cases where they need to be tested upon arrival or retested later. But visitors will have to pay for the cost of lodging and meals if they are forced to self-quarantine upon arrival.
Visitors should also be prepared to face up to 14 days of isolation in the state at their own expense if they test positive for COVID-19 after arriving. They will not be allowed to travel within the state or fly out of the state until either 14 days of isolation has passed or they are cleared by a public health nurse after receiving a subsequent negative test.
Alaska tourism officials also note that travel to or from remote Alaska communities that are not connected to the state’s road system remains prohibited except for critical personal needs or to provide critical infrastructure services.
Visitors also should check with local jurisdictions they plan to visit in Alaska about additional coronavirus-related restrictions. In Anchorage, for instance, the mayor on Friday imposed new rules by executive order that limit the sort of interactions out-of-state visitors can have with locals after first arriving in the city.
The new rules for visiting Anchorage include a prohibition on dining in at restaurants or visiting museums until a visitor has tested negative for COVID-19 twice. The first test must take place just before a visitor arrives in Anchorage and the second test cannot take place until at least seven days after the visitor arrives in the city. Until the second test is back, visitors can access food from restaurants via takeout or curbside delivery only.
Some of these rules may seem drastic. But Alaska is in the enviable position of having mostly kept the new coronavirus at bay, and it wants to keep it that way. As of Tuesday, the state only had recorded 573 confirmed cases of COVID-19 and 11 related deaths since the outbreak began. That confirmed case count is one of the lowest of any state in the nation and more than 300 times lower than hard-hit states such as New Jersey and New York.
Keeping the coronavirus from spreading is critical in a state like Alaska where many towns have limited medical infrastructure due to their small size and are remotely located, Tetley said. Despite being the state capital, Juneau, for instance, is not accessible by road. The only way to get in or out of the mountain-lined city is by airplane, boat or ship.
“We have 10 respirators in Juneau, period,” Tetley noted. “We’ve been very cautious since the beginning [of the coronavirus outbreak], and I think Alaska as a whole has been very cautious, and I think that’s served us really well.”
Even people who have jobs dependent on tourism see the need to be cautious about allowing visitors to come rushing back in, she said.
“I feel like even though businesses are hurting right now … [we] still are very conscious of how much worse [a bigger outbreak] could hurt the community.”
Additional reporting by Edward Russell.
Planning a trip to Alaska? These stories can help:
- 8 activities to try on your next visit to Alaska
- Unforgettable Alaska winter adventures for families
- Why you should travel to Alaska now
- How to find the right Alaska cruise for you
- How to book Alaska awards from just 5,000 miles
Featured photo courtesy of Princess Cruises
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.