It will take time for Alaska economy to recover

The steep drop in visitors to Alaska last year because of pandemic travel restrictions showed up in air, sea and land numbers - and resulting job losses - across the state.

Overall, the state lost more than 22,000 jobs between February 2020 and February 2021, according to the Alaska Department of Labor.

"Based on my forecast here, I do not anticipate a return to pre-pandemic employment levels until after 2022,"Mouhcine Guettabi, an associate professor of economics at the University of Alaska Anchorage Institute of Social and Economic Research, told the Senate Finance Committee on March 31.

It could be 2024 before the cruise ship passenger count returns to 2019 levels, Dan Stickel, chief economist at the state Department of Revenue, said in a presentation to the House Ways and Means Committee on April 1.

The department's forecast assumes no large cruise ships this year, due to the pandemic and Canada's decision to close its waters to cruise traffic. The forecast assumes a 50% recovery in ship traffic in 2022 and 75% in 2023, Stickel said.

"We hope we will be able to recover sooner than we forecast,"he told the committee.

At sea, Alaska lost the estimated 1.3 million cruise ship passengers expected to tour the state last year, and also saw a steep drop-off in Alaska Marine Highway System northbound boardings in Bellingham, Washington, and Prince Rupert, British Columbia. From almost 12,000 in 2019, state ferry boardings at the two ports fell to about 2,000 in 2020.

Passenger boardings at the Anchorage, Fairbanks and Juneau airports were all down almost 60% from 2019 to 2020, Sarah Leonard, president of the Alaska Travel Industry Association, testified at the state House Finance Committee on March 29.

Total boardings at the state's three busiest airports fell from almost 3.8 million people in 2019 to 1.55 million in 2020.

The drop was even worse at border crossings with Canada. Personal vehicles carrying 168,000 drivers and passengers crossed the border from Canada into Alaska in 2019, on the Klondike Highway to Skagway and the Haines Highway. That total fell to just under 10,000 last year, Leonard told the committee.

In Wrangell, the community went from almost 15,000 arriving passengers at the airport in 2019 to about 7,000 last year, according to statistics provided by the city.

Overall, the community had expected about 26,000 visitors last year by cruise ships, private boats and state ferries, with officials hoping for a partial recovery this summer from the smaller cruise ships and private boats that are not blocked by Canada's closure.

The job losses were deepest in communities that rely heavily on the visitor industry, Leonard told legislators.

Statewide, the leisure and hospitality industry lost 37% of its jobs between June 2019 and June 2020, she said. The Denali Borough, which is almost entirely dependent on visits to the national park and other sites, saw an 85% loss in leisure and hospitality employment and an 87% drop in jobs in the accommodations and food services sector, Leonard said.

Skagway is similarly dependent on tourism, and suffered drops of 83% and 80% in the same sectors. Juneau and Ketchikan each lost 40% to 50% of their jobs in the two sectors, she said.

 

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