Back in business at Denali National Park/Roger Wollstadt, Wikimedia Commons

Tourism rebounding as fish fade

If federal economists are to be believed, a resurgent tourism industry in the state’s national parks might make the tourist hordes more valuable than the state’s most valuable commercial salmon fishery and possibly the entire commercial fishing business.

The new report concludes the parks generated close to $2 billion in economic traffic in 2022, near the $2 billion at which a private consultancy pegged the value of the Bristol Bay salmon fishery, the most valuable commercial fishery in the state, in 2021.

But a lot has changed since that Bristol Bay report was written. Alaska commercial salmon fisheries are this year imploding in the face of competition from salmon farmers free of the supply chain issues that have long confronted Alaska wild salmon processors.

Bristol Bay sockeye are now worth less than half of what they were worth last year to the commercial fishermen netting them, and the value of pink salmon, which make up the bulk of the Alaska salmon harvest, looks to have shrunk by as much as two-thirds in value.

Trident Seafoods, the state’s largest processor, only a week ago announced it had “reevaluated” plans to begin construction of a new processing plant in Unalaska next year, citing seafood markets witnessing an “unprecedented confluence of high inventory levels, low consumer demand, and aggressive price competition in global markets.

“These forces have driven prices down rapidly and across species, all while high global inflation and rising interest rates are driving up operating costs,” the company said. 

There are persistent though unconfirmed rumors within the fishing fleet that another significant processor is now teetering on the edge of bankruptcy.

Meanwhile, just days ago, a global seafood outlook prepared in cooperation between the Organisation for Economic Co-operation and Development (OECD) and the United Nation’s Food and Agricultural Organization (FAO) forecasted “seafood production ffor food is expected to grow over the next decade but at a slower rate than in the previous decade, largely due to a softening of demand in Asian countries, the main consumers of aquatic food.

“Fish prices will all decrease in real terms over the outlook period, down from the high levels reached in the base period,” the report said.

Alaska has been witnessing the real-term erosion of salmon prices ever since farmed salmon took over the world market. Farmed fish now set the benchmark for global salmon pricing, and there was once more bad news on that front yesterday.

“Norwegian salmon prices continue to inch downwards,” headlined Seafood Source, a trade-industry publication.

“Norwegian salmon prices continued to decline in the 33rd week of the year, continuing a downward pricing trend,” the website reported below the headline.

This trend started about three months ago, and the NASDAQ Salmon Index shows Norwegian farmed salmon prices down 32.73 percent since. As the producer of about half of the world’s farmed salmon, Norway is the dominant player in an industry that last year supplied slightly more than 80 percent of the world’s salmon, according to the farmed fish harvest data available from the FAO and wild salmon harvest data available from the North Pacific Anadromous Fish Commission.

A report prepared for the Alaska Seafood Marketing Insitute last year credited the state’s seafood industry in total with “$5.7 billion in economic output.” About 40 percent of that, or roughly $2.3 billion, was credited to the salmon sector.

What exactly those fisheries are worth now is unknown, but it is something below the old number. The market is so bad that Intrafish, another industry website, was today lamenting how the humpy “harvest (harvest) was unlikely to meet full potential” because processors have simply stopped buying fish.

That said the Alaska Department of Fish and Game’s blue sheet is reporting a harvest of more than 113 million of the fish, the smallest and least valuable of Alaska salmon. They now make up more than 66 percent of another 200 million-plus, total harvest of salmon in a state benefitting from global warming.

Three-legged stool

Alaska economist Scott Goldsmith once described the 49th state economy in general as a “three-legged stool” propped up by the oil industry, government spending, and a combination of tourism, fisheries and mining.

The stool, unfortunately, has been teetering in recent years with only government spending holding up its corner.

“Alaska’s economy has underperformed that of the U.S. as a whole since 2015,” according to the Alaska Department of Commerce, Community and Economic Development with the big crash coming with the arrival of the pandemic in 2020.

Forty-thousand jobs were lost in March and April of that year, according to Commerce’s latest Comprehensive Economic Development Strategy, and only about 60 percent of those returned in 2021.

It’s been tough going for some Alaska industries ever since the SARS-CoV-2 virus appeared on the global stage.

The exceptions are the oil industry, which remains the state’s biggest economic engine but had by the time the pandemic began already shrunk to a shadow of what it was in the 1980s, and mining, long been a bit player compared to oil, which held fairly steady during the pandemic while the fishing and tourism industries took a beating.

Visitor numbers that reached 2.4 million in Alaska in 2019 fell to almost a sixth of that at 427,000 in 2020, according to the Commerce report. They have, however, been steadily rebounding since as the latest federal report would indicate.

That report on the parks concluded that more than 2 million people visited national parks in Alaska in 2022, and once there spent more than $1.16 million in the state.

According to the Alaska Regional Office of the Park Service “that spending resulted in 16,450 jobs and had a cumulative benefit to the state economy” of nearly $1.8 billion – about 82 percent of the record $2.2 billion in 2019.”

Before the pandemic, the economic value of the national parks in Alaska had crept upward every year since 2012 when the value was put at $1.2 billion.

Alaska Region Director Sarah Creachbaum pointed to Denali National Park and Preserve north of Anchorage and Glacier Bay National Park at the northern end of the Panhandle as the big economic players.

Denali accounted for $475 million in spending and supported 6,640 jobs with Glacier Bay second in both categories at $225 million in spending and 2,820 jobs.

Other parks trailed in comparison with the biggest being Wrangell-St. Elias National Park and Preserve, 1,510 jobs producing $161 million in economic output; Kenai Fjords National Park, 1,320 jobs and $117 million in economic output; and Katmai National Park and Preserve, 785 jobs and $83.8 million in economic output. 

All of the other parks employed fewer than 500 people and most way fewer. There were only five jobs reported as connected to the Aniakchak National Monument and Preserve in Southwest Alaska. It was credited with but $520,000 in economic output. 

The 600,000-acre, uninhabited reserve is remote and can be reached only by small airplanes. A variety of other Alaska parks are similarly lacking easy access.

But the Yukon-Charley Rivers National Preserve is connected to the Alaska Road system, and still the Park Service reported only 15 jobs and $1.6 million in economic output associated with the park unit.

The parks producing the most economic output are those near communities, such as Denali’s so-called “Glitter Gulch” along the George Parks Highway, where a variety of businesses provide lodging, restaurants and other services for tourists. Most Alaska parks lack all of these things.

Nationally, the Park Service report said “the lodging sector had the highest direct effects, with $9 billion in economic output….The restaurant sector had the second greatest effect, with $4.6 billion in economic output nationally.”

Loved and hated

Tourism is something of the bastard child of Alaska industries.

Alaskans generally love the money it brings into the country’s little-populated, most northern and most western state, but the majority would probably prefer tourists – be they fellow Americans or foreigners – just send checks.

The summer season is short in Alaska, running for about four months from mid-May to mid-September, and happens to be the time that most Alaskans want to get outside.

Alaskans are tied with Montanans as the most outdoor active people in the country, according to the Alaska Division of Parks and Outdoor Recreation, and though there are fewer Alaskans (732,583) than Montanans (1.123 million) living in a state four times larger, there is a limited road system to disperse them.

Alaska’s 36,009 “lane miles” of roadway is less than a quarter that of Montana. The 49th state has fewer road miles than Connecticut.

Couple this to the fact that more than half the Alaska population lives in the vast Anchorage Metropolitan Area and pretty much wants to recreate in the same places as most of the more than 500,000 tourists flowing through Anchorage’s Ted Stevens International Airport in the summer, and it becomes predictable that the most popular areas for recreation can get crowded.

This is especially true given the Alaska definition of “crowded” as “anyone in sight who didn’t come with me.”

The situation would be worse if not for the fact that more than half of the more than 2 million visitors to Alaska each summer arrive on cruise ships that feature packaged tours that mainly involve sightseeing and generally keep people aboard the ship, a train, a bus or a plane.

Local, state and federal governmental entities have made little effort to change the nature of this tourism despite the fact visitor industry is potentially the state’s biggest growth industry. The state is, for instance, as short on hiking trails as it is on roads.

When the website Whythisplace ranked U.S. states for hiking, Alaska came 47th ahead of only Kansas, which has the lowest percentage of state and national parks of any state, and equally park short, not to mention hot and humid, Louisiana and Mississippi.

Louisiana was last in the rankings with two hiking trails per 1,000 square miles of land, the same as Alaska. Montana had 16 times as many miles of trail per 1,000 square miles.

And when Alaska is compared to the rest of the world, well, there are more hiking trails in the average valley in the Alps of France and Switzerland or in the Dolomites of Italy than in the entirety of the half-million-acre Chugach State Park at the doorstep of the state’s largest city.

Not to mention that in the Alps and Dolomite, there is easy access to huts, refugios, cafés and villages where one can grab an espresso or a beer.

What Alaska does have that can be found nowhere else is big wilderness and world-leading numbers of salmon, but the first is expensive to reach, largely restricting travel to the monied class or the extremely fit, and the latter are jealously guarded by fishing interests of all Alaska persuasions: commercial, sport and subsistence.

All of which serves to restrain the development of the tourism industry despite the growth potential, and helps to explain why the visitor industry value in Alaska is measured in a few billion dollars while in Hawaii it is measured in the tens of billions and has become to the island state what oil is to Alaska.

Hawaii collected more than $2 billion in taxes from tourists in 2019, the year before the pandemic began, and looks to be on track toward collecting that much revenue again this year. 

OK, so Hawaii is an unfair comparison. It’s a warm, tropical paradise that attracts more than 10 million visitors per year.

So how about British Columbia, Canada, where tourism generated $22.3 billion in revenue in 2019, or even Montana where tourism is now estimated to be a $7.6 billion dollar industry despite sharing a seasonality similar to that of Alaska.

There, as in Alaska, tourists appear to cluster around tourist-attractive facilities making it appear that if you build them, they will come.

If, of course, they’re wanted.

A 2021 University of Montana study found that 71 percent of Montanans agreed the benefits of tourism generally outweigh the “negative impacts,” but “for the first time since (the school began) asking the question (1992), a majority of respondents (56 percent) agreed that the state is becoming overcrowded because of more tourists.”

The percentage rose to 70 percent in Glacier Country near Glacier National Park and to 85 percent in Yellowstone Country near Yellowstone State Park, according to the study,  but “many residents also expressed that the level of crowding they currently perceive is the result of people moving to the state in addition to the number of people who simply visit each year.”

Alaska doesn’t have that problem. The economy is so bad in the 49th state that more people have been leaving than arriving every year since 2013, according to the state Department of Labor.

But some people like it that way.