As the weather warms at last in the north with the snow melting and the now long days growing ever longer, it is time for Alaska residents to take a deep breath before the full-on invasion of summer visitors, relax and think money, money, money.
The upside of more than 2 million tourists rushing in to temporarily swell the Charleston-size population in the Land of the Midnight Sun is that they come north with pockets full of cash.
Lots and lots of cash.
“The University of Alaska Center for Economic Development (CED) estimates that
in-state consumer spending related to outdoor recreation trips amounts to nearly $3.2 billion annually,” according to its latest report.
And that’s a low-ball estimate, said Nolan Klouda, the CED’s executive director.
“In some cases,” he said, “we don’t have perfect data.” In those cases, the Center picked the lowest estimate of economic value.
“The numbers are very conservative,” Klouda said.
Still, the spending figure in the March 2019 study ticked up from that in a study of 2017 Alaska tourism conducted by the McDowell Group for the Alaska Department of Commerce, Community and Economic Development. That study put spending somewhat lower at $2.8 billion but pegged the visitor industry’s economic output at $4.5 billion.
Cruise on in
The state’s big money makers, according to the CED study, are wildlife viewing, fishing and hunting in that order. Those three activities generate more than 95 percent of spending with cruise-powered wildlife viewing far and away the state’s biggest draw.
Driven by cruise-ships tours and day-boat cruises such as the glacier tours out of the port of Whittier and the wildlife tours out of the port of Seward, the wildlife viewing category accounts for about two-thirds of the economic activity.
The cruise/tour business is three times the size of the $654 million sport fishing business, which is in turn about four times the size of the $162 million hunting business, according to the study that pulled together data from the U.S. Fish and Wildlife Service, the Alaska Department of Fish and Game, the National Park Service, the Alaska Division of Park and Outdoor Recreation.
“While this (data) does not create an entire picture of all of the outdoor recreation related activities in the state – most notably it misses the impacts of local activities
and equipment expenditures – it does speak to the size and impact of the economy,” the study said.
The value of the short, busy summer season to the Alaska economy clearly jumps out in the accounting of recreation spending.
Traditional winter sports – downhill skiing/snowboarding ($3 million), cross-country skiing ($4 million) and snowmachining ($49 million) – comprise less than 2 percent of annual consumer spending in the state, the study says.
A seasonal favorite of many Alaskans but an attraction for few tourists, downhill skiing/snowboarding is dead last as an economic engine. The sport might power the ski-resort community of Girdwood about 35 miles southeast of Anchorage, but its reach doesn’t go far beyond that valley enclave of about 2,000 people.
Other sports on the list falter as economic drivers because the costs of entry are generally low. In terms of participation, bicycling in Alaska is seven and a half times as popular as downhill skiing/snowboarding, the study says, more than five times as popular as all-terrain and off-road vehicle recreation, almost three times as popular as cross-country skiing, two and a half times as popular as snowmachining, and nearly as popular as camping and hunting.
And yet it generates a paltry $2.9 million in consumer spending – $1 million less than cross-country skiing, $46 million less than snowmachining, and $159 million less than hunting – all sports that either require much bigger investments in gear or confront tourists with other costs.
Snowmachines are costly for anyone. Nonresident hunters are required to hire costly guides to escort them when pursuing most big-game animals in the state. Many resident hunters contract with costly air taxis services to reach remote hunting areas.
Growth
Along with snapshotting the Alaska outdoor recreation industry, the CED report focuses heavily on opportunities for expanding outdoor reaction not only as a driver of tourism growth but as a quality of life attraction and marketing backdrop to attract new businesses to the state.
On the tourism front, it notes that if existing visitors were to spend but one additional day recreating in Alaska,”these visitors would (spawn) $64.5 million in new spending in Alaska, creating 1,154 additional jobs. The labor income from these jobs would be over $40 million.”
And if only half of Alaska residents – already the most outdoor active people in the nation – “spent one additional day engaged in an outdoor trip, they would spend over $34 million,” the study says. “In the process, that spending would create 610 jobs with a payroll of over $21 million.”
On the business front, the study outlines the successes other states and communities have found in selling themselves as business friendly on a variety of fronts.
“The Idaho Department of Commerce counts ‘recreation technology’ among eight key industries targeted for growth by state policymakers,” the study says. “To strengthen the Idaho brand in outdoor gear, the Idaho Department of Commerce launched Tested in Idaho as a marketing campaign.”
The program is intended to help promote outdoor-related businesses in Idaho and encourage them to stay in Idaho. Alaska has seen some significant start-ups in recreation technology only to have some of them leave the state.
Fatbikes, another modern piece of “recreation technology,” were born in Alaska. They’ve done a better job of hanging on. Two bike companies – Fatback Bikes and 9-Zero-7 – still call Alaska home. But they battle for sales in a market dominated by major bike manufacturers with much bigger budgets for promotion and advertising.
The same is true of Anchorage-based Relevate Designs, which revolutionized bike-packing packs and now faces global competition from an army of copy cats.
Individually all of the still-in Alaska companies push the state as part of their brand, but there is no coordinated effort to market these companies and others in the bigger context of Alaska Tough versus Idaho Tested.
The CED report sees that and other weaknesses in selling Alaska as an opportunity.
“The economic impacts of outdoor recreation are wide reaching in Alaska, but the potential for growth may be even greater still,” the report concludes. “Strategic development of opportunities in emerging areas of the outdoor economy could contribute to Alaska’s development as a destination for visitors.
“The quality of life component of outdoor recreation helps Alaskans stay happy and healthy, especially in the winter. However, a thriving outdoor recreation industry can help attract and retain workers as they move through their career. In the process, they fill workforce shortages that might otherwise constrain the state economy.”
What the report doesn’t address is whether Alaskans want this. Growth entails change, and change invariably brings with it some difficulties.
Efforts of the Matanuska-Susitna Borough to help grow sportfishing businesses along the streams and rivers at the head of Cook Inlet have been stymied by the Inlet’s commercial fishermen who have long harvest 75 percent or more of the Inlet’s salmon and think of those fish as theirs.
A vicious fish war now rages there.
Meanwhile, the loss of “wilderness” fishing opportunities on the fabled Kenai River on the Peninsula of the same name south of Alaska’s largest city has angered some long time Alaskans. So, too, the two-lane Seward Highway running south from Anchorage to the Kenai that now runs bumper-to-bumper with traffic for good parts of the summer.
There are some Alaskans who today look upon the coming tourist season not as an opportunity but as a scourge. It is hard to believe this could be in the least densely populated state in the nation, but it is – largely because more than half of the state population now lives in the sprawling urbanity of the Anchorage metro area with only three roads out.
One goes south to dead ends on the Kenai. One goes north to Fairbanks. One goes east to Canada. Most Alaska outdoor recreation concentrates in the corridors along those roads, and as a result it can sometimes get a little crowded.
Still, the state has plenty of wilderness. Get 10 miles away from almost any of those Alaska roads, and you are sure to find it.