News

Outdoors is big biz

IMGP0110

A big investment in dipnets to fish the Kenai River/Craig Medred photo

SOLDOTNA – REI, Cabela’s and Bass Pro Shops were busy in Anchorage on Wednesday, and the dipnets were still pouring out the doors of Costco when the Outdoor Industry Association released a national report pegging 49th state outdoor activities as big business – seriously big business.

“Outdoor Recreation A Critical Player In Alaska’s Economy, Generating $7.3 Billion In Consumer Spending Annually and Directly Contributing 72,000 Jobs,” the Alaska section of the report headlined. 

At the Fred Meyer here, the busiest Fred Meyer in the country in the summer months, the Fred Meyer that pays for almost 50 percent of the local city budget through its sales tax collections, there were wader-clad anglers fresh from the Kenai River wandering the aisles and would-be Kenai fishermen trying on fresh, new dry pants.

Hint to Alaska visitors unfamiliar with fishing and the gear: If the waders have a  pocket, it goes in front on your chest,  not on your back.

Outside the store, the parking lot was, as usual this time of year, a bit of a traffic jam with the back corners plugged with parked recreational vehicles (RVs) from across the country.

This is what big business looks like. Some Alaskans detest it.

Produce a blockbuster movie that has people lining up around the block to get in, and you’ll be praised. Produce a blockbuster fishery that has people sometimes lining up to catch sockeye salmon as the Alaska Department of Fish and Game has done over the past 30 years on the Kenai, and you might find yourself vilified.

We hate visitors

“I hate tourists. And I’m not all that fond of the tourism industry,” one time Peninsula Clarion reporter Marcus Garner in Kenai once wrote.

Granted this was in a column about how having family come visit Alaska altered his perspective to the point he grudgingly confessed that after touring the state with them he “would need to adjust (his) attitude regarding tourists and tourism in general.”

But the first view reflected the true attitude of a lot of Alaskans, and it’s understandable.

After you put up with the long darkness of the Alaska winter when life on the land stumbles to a near standstill, it’s tough to share the midnight sun of summer when the land comes alive and the rivers are free of ice and filled with salmon.

It is particularly tough on the Kenai Peninsula where the tourist invasion comes not only from Outside, that other world of the unconnected 48 states south of Canada on the North American continent, but from Alaska’s urban core of the Anchorage Metropolitan Area with its more than 400,000 residents. 

That’s more than half of all Alaskans, and the Outdoor Industry report says 81 percent of them participate in outdoor recreation.

400,000 X .81 +  visitors from Outside = Oh yeah, the Kenai is destined to be crowded when the salmon show up in waves.

AK Econ 101

Whether this is a good thing or a bad thing depends largely on one’s point of view as to the state economy which is today facing tough times.

“The Alaska economy contracted at a 1.4 percent annual rate in the first quarter of 2016 according to the final count by the Alaska Department of Labor,” economist Scott Goldsmith wrote at Alaskanomics last fall. “Employment was 4.5 thousand lower in the first quarter than the previous year.  Growth slowed through early 2015 and turned negative in the second half of the year.

“Petroleum was down 13 percent, a loss of 1.9 thousand jobs.  Business services declined 4.4 percent, a loss of 1.3 thousand jobs.  Construction declined 9 percent, also losing 1.3 thousand jobs.  State government was down 5 percent, also losing 1.3 thousand jobs.”

Business services, construction and state government are all economic sectors with key links to petroleum, and the oil industry in this state is struggling.

Despite the fears of some, it’s not dying.

Considerable new oil has been found on the North Slope, and if the Alaska Legislature can give the owners of that oil some reason to believe the state won’t try to take all of the profit if it is pumped, considerable new production could be coming online in the future.

But other than oil, the state economy doesn’t have much going for it. Mining is stagnant, and if that is not enough, a lot of Alaskans are aggressively and vocally opposed to any new mining. Timber is basically dead; a shrunken industry in Alaska to begin with it is now high-centered given stagnant markets both in the U.S. and globally.

Commercial fishing is a no-growth industry for Alaska where the only economic gains are coming in the production of “value-added” products, most of which are produced somewhere other than Alaska.

“Over 7,000 Washington (state) residents directly participate in the North Pacific (ie. Alaska) commercial fisheries annually with over 34,000 direct jobs and indirect jobs in our state attributed to the Alaska seafood industry,” according to a 2016 report from that state’s Department of Commerce, which credited Alaska for $8.6 billion gross business income “from fishing and seafood companies.”

And when Alaska seafood isn’t going to Puget Sound for value-added processing, it’s going to China.

“Especially during the past decade, almost all frozen pink salmon production has been exported, mostly to China. There has been a very dramatic increase in frozen pink salmon exports to China. Note that most of this frozen pink salmon is not being consumed by Chinese people!” Gunnar Knapp, former director of the Institute for Social and Economic Research at the University of Alaska Anchorage told the Alaska State House Fisheries Committee a few years ago. “Most of it is reprocessed in China into value-added products which are re-exported to the US, EU and other markets. (This is also what is happening to US frozen sockeye and frozen chum exports to China.)”

The trend has only continued since then as has the ever-increasing predominance of the farmed salmon that now control global markets.

Alaska “only contributed around 10 percent of the world’s total salmon,” the Alaska Department of Labor noted in a November 2016 market report. “Norway, the world’s largest salmon producer, exported almost three times the total U.S. catch.”

Like it or not….

Tourism and outdoor recreation, no matter what Alaskans might think of them, pop up again and again as one of the few places Alaska can grow its economy. The business has its ups and down, as do all businesses, but the trend line in the 49th state has been steadily upward.

The number of tourists visiting Alaska in 1990 was about 600,000. The number had increased to about 1.7 million by 2008 when the country was rocked by economic crisis. Tourism slid slightly after that to a plateau of about 1.5 million, but has been on the rise again since.

Year-round visitor numbers topped 2 million in 2015, and there followed a summer that set a record when 1.8 million showed for the May through September season alone.

A lot of them came solely to ride around in cruiseships, trains, buses and small planes looking at the spectacular scenery of the nation’s wildest state, but a significant number came looking to do something – hike, fish, photograph, climb, surf the bore tide in Turnagain Arm, ski the Chugach Mountains and more.

Many bought things – puffy coats, sleeping bags, rain gear, boots, backpacks, waders, fishing rods and more.

As the Outdoor Association report notes, the outdoor recreation industry, which once appeared to be in recession, is growing again.

“People from all backgrounds continue to hike, camp, boat, fish, ski, and paddle. You name it,” REI CEO Jerry Stritzke said in a statement circulated by the Association. “It’s a rich part of the nation’s heritage. And when we follow our passion and opt outside, we create economic activity across all 50 states. This is a sustainable, growing sector of the economy—one that drives positive return-on-investment throughout the country.”

The report put wildlife viewing as one of Alaska’s top outdoor activities. The other was fishing.

Here and in the city of Kenai and especially along the banks of Cook Inlet at the mouth of the Kenai River, it was hard to not notice the consumer spending on outdoor recreation: $140 dipnet; check. $100 waders, check; $230 cooler, check.

Not to mention the $20,000-plus cost of the big truck to haul it all to the river.

Limited data

A study of Alaska sportfisheries by ISER put their value alone at $736 million in 1999. The study has never been updated. The Alaska Department of Fish and Game, which is responsible for both the environmental and economic management of fisheries in the state, has no economist on staff.

And there has never been a study done of the economic value of the Chitina personal-use dipnet fishery or the now hugely popular Kenai dipnet fishery. Many commercial fishermen have questioned the “need” for such fisheries given the expenditures some people seem willing to make on gear – nets, boats, four-wheelers and more – to catch $1,000 worth of fish to stuff in the freezer for the winter.

There is little doubt that many of these people would be economically better served to buy $1,000 worth of fish from a commercial fishermen than to spend $10,000 trying to catch $1,000 worth and failing. But the U.S. consumer economy is powered by people buying things they don’t really need.

The economic reality for Alaska is simple, too: the more people spend in state – no matter their motives – the better.  Whether the $7.3 billion in spending calculated by a consultant for an interest group is accurate is hard to say.

But there are sources that similarly point to an Alaska outdoor recreation industry worth billions.

That fishery worth $736 million in 1999 would have a value of about $1.1 billion in current dollars, according to the U.S. Department of Labor inflation calculator. 

And the National Park Services says park visitors in Alaska spent another $1.3 billion in the state in 2016.

Though the information on recreational fishing is old and limited, and the park service information applies only to park-connected spending, the information does appear to underline and reinforce the Outdoor Industry Association claim that outdoor recreation is a big and valuable business in Alaska.

Or one could just look at the flood of traffic pouring south from Anchorage to Kenai on the Seward and Sterling highways everyday and especially on weekends. Most of those people are headed off to do something outside, and they will spend goodly amounts of money to do it.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertisements

3 replies »

  1. There is little doubt that many of these people would be economically better served to buy $1,000 worth of fish from a commercial fishermen than to spend $10,000 trying to catch $1,000 worth and failing. But the U.S. consumer economy is powered by people buying things they don’t really need.

    This maybe true if you had to buy the same gear annual for just the fishery. But most of the gear needed to participate in the dipnet fishery have multiple uses for other actives and last for many years of uses. So to be more accurate you would have to prorate out the cost of gear on a per day cost, to have a more more cost per $1000.00 of fish. Example, My 2 60 quart coolers are 10 years old, they are depreciated out, my four wheeler is 10 years old, and my truck is a 94, both are depreciated out, my dip nets are15 years old depreciated out. So my costs are ice $26.00, gas $112.00,i use Hem charters $110.00, food $80.00 for a total of $328.00 for a &1000.00 of fish.

    Maybe you should have compared how much it would cost a first year commercial fisherman. Limit entry permit, new boat, nets reels, fuel, food, hired help, vehicles, personal gear ect. for how many dollars of fish?

    Compare apples with apples or fish with fish.

    Like

  2. Could you imagine if there were twice as many fish available to recreational users? The number of visitors and economic value would grow by at least double. And we are talking about going from 98% to 2%, commercial to noncommercial allocation , to a 96% to 4%. A 2% increase in fish available for the rest of the world would easily push the tourism industry past the commercial for employment by 10s of thousands and revenue by billions. Did you know the commercial industry kills 10 times more fish as bycatch than the recreational users catch? It’s simple math. Anyone needing a calculator please let me know.

    Like

  3. I’ve met interesting people from all over the world in the Freddy’s parking lot in July. Happy people who love Alaska and are excited to be here. The summertime crush is short lived but full of potential. Make the most of it. It will be dark soon.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s