Locals rejoice as the first big cruise ship returns to Alaska

The joy in the air at the dock in Sitka, Alaska, on Wednesday was palpable.

Royal Caribbean's 2,143-passenger Serenade of the Seas had just become the first big cruise ship to return to Alaska in nearly two years, and business and tourism leaders from as far away as Anchorage were on hand to celebrate.

"I'm getting chills," Sarah Leonard, the president and CEO of the Alaska Travel Industry Association, told TPG as she watched cruisers stream off the ship on their way to bear-watching tours and guided forest hikes.

Leonard's organization represents more than 600 Alaskan businesses and other entities that have a connection to tourism in the state — everything from some of the very tour companies that were leading Wednesday's outings for Serenade of the Seas passengers to fishing lodge operators and hotels.

Many of these businesses have seen their revenue drop to almost nothing since the COVID-19 outbreak was declared a pandemic in March of 2020, and the return of big cruise ships to Alaska starting this week is a "lifeline" for them to stay in business, Leonard said. "It's a big deal."

Just a few steps away from Leonard, fifth-generation Sitka resident Chris McGraw echoed what she said and was equally ebullient.

His family owns the dock at which Serenade of the Seas tied up, and it had just begun pouring a significant sum into building a taproom, restaurant and shops near the dock to cater to arriving cruisers when the COVID-19 pandemic brought cruise visits to a halt. It also was in the midst of expanding the dock to accommodate bigger ships.

"Our revenue was 98% reliant on cruise traffic, and that went to zero," said McGraw, noting that some of the building work had to be slowed down due to financial constraints.

The arrival of Serenade of the Seas ends a long, dark period during which the only thing to do was to "hunker down, spend as little money as possible and try to survive," McGraw said.

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Alaska and its residents have been particularly hard hit by the worldwide shutdown of cruising.

Tourism is an inordinately big part of the Alaskan economy, and cruise ships play an outsized role in bringing tourists to the state. In a typical year, Alaska draws about 2 million visitors. Of those, nearly 1.2 million (almost 60%) come by cruise ship.

In some Southeast Alaska towns such as Juneau and Ketchikan, the percentage of visitors that come by cruise ships is even higher. In Juneau, the number is above 90%.

The nearly two-year halt to cruising in Alaska -- until Wednesday, a big cruise ship hadn't visited the state since the end of the 2019 cruise season, in September of that year -- has hurt local communities in a much broader way than some might have initially expected.

Nearly 7 miles down the road from the McGraw's dock, at the local Allen Marine shipyard, owner Dave Allen noted that the shutdown of cruising led to job losses in Sitka that went far beyond just tourism jobs.

Allen's shipyard builds and renovates day-tour boats. It also operates such boats for whale-watching tours, scenic tours, salmon bake tours and more in several Southeast Alaska towns, with cruise ships delivering the bulk of its customers. The company normally employs about 180 people year-round, the vast majority of whom Allen had to furlough one terrible weekend in 2020 when he "realized the plug was being pulled" on cruising for the year.

"That was welders, electricians -- really high-skilled people," Allen said, talking outside just steps away from the shipyard building where his family has been building boats for decades.

Allen added that there was a knock-on effect from his operations shutting down for other businesses in Sitka that weren't directly involved in tourism.

"We buy our parts from the automotive store down here," he noted. "We buy wood from the building supply. We spend a huge amount on [local] fish for our salmon bakes."

Allen said the shutdown of his tour boat operations -- he operates around 45 vessels of various sizes in Southeast Alaska -- even affected small local family businesses that provide locally made items sold on board.

"We were shut down, so they were shut down," he said.

Allen said he had taken on a lot of debt over the past year just to stay in business, and at times it has been psychologically tough.

"It really was beginning to feel like [the cruise restart] might not ever happen. [It was] every day waking up and just feeling the impending doom of what the heck are we going to do with 45 vessels? What are we going to do?" he said. "That impending doom [feeling] was hard to break."

Even the local bird sanctuary in Sitka was affected by the shutdown of cruising.

Jennifer Cross, the executive director of Sitka's Alaska Raptor Center, a sanctuary for injured Alaskan birds of all types, told TPG on Wednesday that cruisers paying admission to visit the center and making donations are normally the source for about half its annual budget.

The well-known Southeast Alaska institution rescues and rehabilitates about 200 bald eagles, golden eagles, owls and other birds each year.

"It was devastating to us losing that revenue that we rely so much on," Cross said during an interview at the center. "We were able to maintain our core staff, but it was really hard."

Despite such hardships, Rachel Roy, the executive director of Sitka's Chamber of Commerce, was upbeat on Wednesday about the future of Sitka -- a town of just 8,493 people where tourism vies with fishing as the biggest driver of the local economy.

"A lot of small business owners [in Sitka] didn't open their businesses at all" over the past year, said the born-and-raised Sitka resident, who was on hand at the pier to welcome Serenade of the Seas when it arrived early on Wednesday. "When we lost the cruise passengers, it impacted the ability of those owners to make it through the winter."

The comeback of cruise ships means the town finally can start returning to normal.

"We made it through," she said.

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