Before a microscopic coronavirus that has come to be called COVID-19 shifted the entire world order, Alaska’s remote and little peopled Denali Borough had a pretty good thing going.
Now it’s in the deep do-do even though the pandemic virus responsible for terrifying the planet has yet to touch this far corner of the world
The borough’s problem is that the silver-haired flood of tourists that has for many summers past descended on a short and narrow band of development on the eastern edge of Denali National Park and Preserve isn’t coming.
Those tourists were to the Denali Borough what the black gold of North Slope oil long was to the state of Alaska. Bed taxes from the hotels mainly in that strand of development known as “Glitter Gulch” covered the cost of government in the borough.
Not this year.
“The revenue loss for the 2020 season will be split across two fiscal years, breaking on June 30,” Borough mayor Clay Walker messaged this week. “We anticipate a revenue loss of $3.4 million directly tied to COVID-19 and the associated (social distancing) mandates.”
Approximately 80 percent of the cruise ship sailings expected to bring almost a million passengers to the state this summer have been canceled. Most of those cruise operations circle their passengers through the iconic Denali park before sending them south again.
Both Princess Cruises and Holland America Line own big hotels in Glitter Gulch.
“Princess Cruises, the leading cruise line in Alaska, realized early that while guests loved the experience of cruising the area, they also wanted to touch and feel the place,” Cruise Passenger magazine noted in a story last year. “Their answer to that was to start its own lodges. Denali Princess Wilderness Lodge, a beautiful timber hotel about a mile from the park’s main entrance was the first.”
The company now owns a total of four major lodges in the state and runs a variety of land tours that complement its boat tours. All of those operations are shut down for the season.
The loss of a few million dollars might not seem like much in a nation now spending trillions of dollars to try to minimize the fallout from the disease spawned by the SARS-CoV-2 virus, but $3.4 million is about 75 percent of the Denali borough’s budget.
“Annual general fund expenses are around $4.5 million,” Walker said, “which includes a $2.7 million contribution to the school district. So the impacts to the Denali Borough are acute.”
The borough – home to only about 2,100 people, would be a small town anywhere else in the country. And it isn’t the only area in Alaska being hard hit by human lockdowns designed to minimize the passage of SARS-CoV-2 from one person to another and thus spread the number of infections overs months instead of concentrating them into weeks and overloading the health care system.
This is what has been called “flattening the curve” of the bell-shaped progression of a major infectious disease. Flattening the curve is intended to save lives by ensuring the best medical care remains available to anyone who comes down with COVID-19.
But the efforts to flatten the curve have killed the tourism season for Denali – both the park and the borough – and with the death of tourism goes most of the borough’s budget. The only other industry in the borough is the Usibelli Coal Mine, the state’s only coal mine.
It employs about 115 people. By way of comparison, Peabody Energy’s North Antelope Rochelle Mine in Wyoming employed more than 10 times as many, but just laid off 170 with the global economy imploding and the demand for energy falling.
The Gillette (Wyo.) News Record reported a total of 300 miners were laid off across that state’s Powder Basin. The mines employ 4,834, more than twice the population of the entire Denali borough.
Denali jobs are expected to take a far bigger hit than those in the Wyoming coal mining industry. With the major hotels closing for the summer, bars, restaurants, raft and aerial sightseeing tours, sled-dog tours and more are expected to also close for the summer or shrink their operations back to almost nothing.
Walker is hoping the borough gets help from the federal government in the form of funding from the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law by President Donald Trump on March 27, but it remains unclear as to exactly how much of state and local government shortfalls the act will cover.
“We have communicated (our) situation to our Congressional delegation and are thankful that they are working to provide flexibility in the use of CARES Act,” Clay said, but the situation remains tenuous.
Aside from tourism, the borough has no real revenue streams. The U.S. Census Bureau reports only 639 households in the borough. To cover the revenue shortfall, each would need to pony up more than $5,300 at a time when most people in the borough are expected to be out of work.
Other small population centers in Alaska are also being hit hard by COVID-19 related economic chaos, but those with commercial fish processing plants are trying to forge ahead with business as usual. Alaska Gov. Mike Dunleavy declared commercial fishing an “essential industry” which freed it from some COVID-19 restrictions.
No such assistance was offered the tourism industry, but it is not clear that it would have mattered with cruise lines shutting down for the summer and the airlines cutting flights by 40 to 70 percent.
The Transportation Safety Administration (TSA) is reporting the number of air travelers nationwide down by more than 2 million per day or about 14 million per week. Through the first week of May, the agency reported, about 1.1 million passengers passed through American airports on their way to flights.
That weekly traffic is less than half the number that traveled on May 7, 2019, and less than 7 percent of the traffic for the first week of May 2019.
Nearly all Alaska tourists arrive in the state by airplane or boat. Canada-Alaska border crossing reports indicate only about 70,000 people per year enter the 49th state via the Alaska Highway. It’s a long drive from the Lower 48 states to the 49th one.
There would appear to be no cavalry coming to save the state’s tourism industry from an economic massacre.