Tourism
Tourism
Tourism Takeaways
Insights into 2020 and beyond from visitor bureaus around the state
By Tracy Barbour
Sherman Hogue | Explore Fairbanks
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his year has been devastating for Alaska’s tourism sector, which experienced a slump in visitor numbers, substantial revenue losses, and other impacts dispensed by the COVID-19 pandemic. But what does that mean for the future of the state’s visitor industry? To address this and other important questions, visitor bureaus statewide shared their insights on Alaska’s tourism sector.

The Alaska Travel Industry Association (ATIA) is hopeful about tourism’s prospects for 2021. Improvements in rapid testing capability—and hopefully a vaccine—will go a long way toward supporting prospective travelers’ decisions to visit Alaska, says ATIA President and CEO Sarah Leonard. “ATIA has also developed industry protocols for safe business operations for tourism businesses and is promoting Alaska’s wide-open spaces as a safe travel destination,” she says. “While funding is limited, ATIA will continue to keep Alaska’s brand in the travel marketplace to encourage potential travelers to keep Alaska top of mind.”

According to Leonard, 2020 was supposed to be a record year for tourism in Alaska, building upon 2019’s more than 2.25 million visitors. The pandemic, however, brutally interrupted that trajectory. “While we will not see record numbers in the near future,” she says, “we hope to reach comparable numbers within the next two to three years.”

This summer Alaskans stepped up to support local businesses, such as the vendors at the Tanana Valley Farmers Market in Fairbanks, which have been hard-hit by a lack of travelers.

Bill Wright | Explore Fairbanks

Tanana Valley Farmers Market entrance
This summer Alaskans stepped up to support local businesses, such as the vendors at the Tanana Valley Farmers Market in Fairbanks, which have been hard-hit by a lack of travelers.

Bill Wright | Explore Fairbanks

In typical years, Alaska’s tourism industry contributes more than $4 billion in economic activity to the state, Leonard says. That includes more than $100 million in visitor-generated revenue to the state and more than $88 million to local and borough budgets. “With 99.9 percent of cruise ship sailings cancelled in Alaska, that revenue wasn’t captured this summer,” she says.

This spring and summer, ATIA ran informal industry surveys in which more than 85 percent of respondents anticipated losing more than 50 percent of their revenue in 2020. Cash flow has been a huge issue, especially when many businesses take deposits months in advance, Leonard says. She adds, “Some of our industry businesses were able to use CARES Act and other federal and state funding to cover essential costs this year.”

Leonard has learned several key take-aways from dealing with the pandemic’s impact. For example, the pandemic underscored that Alaska is in a challenging position when it comes to attracting visitors. She explains: “We’re a long-haul destination, so we don’t have the benefits of other states when it comes to short driving vacations and travel across state lines. Our industry is dependent on cruise and air for visitor travel [60 percent of visitors travel by cruise ship and 36 percent by air].”

SARAH LEONARD
ATIA

She adds: “As we look forward to the return of travel, tourism businesses will place an even greater emphasis on health, safety, and sustainable operations. People in the tourism industry are also amazingly resilient and entrepreneurial, and I’m already hearing about businesses developing new attractions, activities, and processes to promote safe travel.”

ATIA has implemented various initiatives to navigate the daunting landscape etched by the pandemic. For example, working with regional and local destination marketing organizations across the state and with the support of GCI, Alaska Airlines, ACS, the Alaska Railroad, and others, ATIA launched a “Show Up for Alaska” campaign to support in-state visitation to local tourism businesses. Explaining the significance of this effort, Leonard says, “By encouraging Alaskans to explore our own backyard, we were able to support local businesses as well as the communities that rely on taxes and user fees to support local budgets.”

The association will continue focusing on its mission to support its industry and promote Alaska as a premier travel destination. “While marketing funding will be tight this year, we will continue to promote our industry protocols for safe operations—and Alaska’s wild lands and open spaces as a safe travel destination. We are finding visitors want small-group, personalized experiences, and our businesses are developing new ways to support social distancing, enhanced cleaning methods, and other safety precautions as part of that effort. Travel and tourism will look different, but people still want to visit Alaska,” says Leonard.

“As we look forward to the return of travel, tourism businesses will place an even greater emphasis on health, safety, and sustainable operations. People in the tourism industry are also amazingly resilient and entrepreneurial, and I’m already hearing about businesses developing new attractions, activities, and processes to promote safe travel.”
Sarah Leonard, President/CEO, ATIA

ATIA is also working to mitigate the “lost season” of summer 2020. As such, the association is encouraging businesses and organizations, from small mom-and-pops to larger members, to be flexible and continue to adapt their operations for this winter’s and into next summer’s travel seasons. “Recovering from the summer of 2020 will probably not happen in one year,” Leonard says. “Businesses should plan and look out to 2021, 2022, and beyond to recover.”

Visit Anchorage’s Insights

Visit Anchorage President and CEO Julie Saupe recognizes there’s a great deal of uncertainty about 2021 and the visitor industry. There are many questions that no one has an answer for, and tourism in Alaska next year and beyond relies in part on developments that are far beyond anyone’s control, she says.

However, she maintains: “There’s a great deal to be done to preserve our place in the minds of future travelers, protect our businesses and community from adverse effects of the pandemic, and promote the destination before the new types of traveler that will emerge on the other side of all this. The recovery is still to start, and it is likely to take several years to climb back to our former heights once things do begin to rebound. It’s up to us to lay the groundwork now to ensure we bounce back better.”

In terms of the pandemic’s financial impact, the anecdotal news is dire. “We’ve heard that many Anchorage businesses report that they saw only a slim fraction of what they would normally see. Some report only 10 percent to 20 percent of what their regular business would be for summer 2020. That’s eye-opening,” Saupe says.

She adds: “Through August, hotel revenue in Anchorage was down about 60 percent compared to 2019. The effects of the pandemic are wide-reaching and ongoing. This is only a partial accounting of likely losses in tourism and in the wider community.”

In its own effort to mitigate some of the pandemic’s negative effects, Visit Anchorage plans to put $3.3 million into promotion for Anchorage in the year ahead. That’s about 60 percent of what was put into the market pre-pandemic. “Sharp, often painful cuts at the outset are going to keep us in a place to get the best returns, given the circumstance,” Saupe says.

The pandemic has indeed been an eye-opener for Saupe. Sharing her three big lessons, she says: “First, I think we all have a wider understanding of just how central travel and tourism is to Anchorage’s bottom line. No sector is spared, but we see now what tourism brings to our communities in terms of financial gains and employment. Visitation also contributes to a feel in the community in more intangible ways—when people are visiting, there’s more activity in shops, restaurants, and on sidewalks, and a bustle that I have missed.”

She continues: “Second, content and engagement are key. Even when people can’t visit, keeping us top-of-mind is vital. Despite the conditions of the moment, we have to inspire curiosity, spark a passion to visit, so when the time is right again, we’re still at the top of their list. Finally, amid big, global challenges, no one should go it alone. We have to be there for one another supporting the people who make up our community.”

JULIE SAUPE
Visit Anchorage

Visit Anchorage, like its counterparts, has engaged in various initiatives to ride out the effects of the COVID-19 pandemic. As visitation from outside Alaska dialed down in spring 2020, Visit Anchorage turned its focus to fielding local/in-state campaigns. “The support of locals has been critical for Alaska businesses,” Saupe says. “But with Alaska’s relatively small population, these only can reach a fraction of the people our efforts would typically connect with through national campaigns.”

As part of these efforts, Visit Anchorage ramped up its content creation and curation. This entailed reinforcing its photo and video libraries, along with putting together new articles, stories, and posts tailored to future visitation or incorporating health and safety best practices. For example, there were articles suggesting reading lists and recipes from Alaska anyone could enjoy at home as well as a virtual tour of Anchorage on Instagram, with stops chosen by vote.

“Apart from that, we preserved promotions budget by severely reducing and controlling costs,” Saupe says. “Unfortunately, that included staff furloughs and layoffs. It also meant eliminating all but the most cost-effective means of marketing. Often these latter cuts were decisions made for us, for example, as tradeshows were cancelled or postponed by their organizers.”

Visit Anchorage plans to take a measured approach to introducing new programs and campaigns to bring in would-be visitors. There is no crystal ball, so the best approach is to be ready when the time is right, Saupe says. “I hope that we’ve managed to strike a delicate balance this year and for 2021,” she adds.

Tour operators have developed new cleaning and distancing protocols to ensure their activities are as safe as possible, though many Alaska tourism activities are already conducted in small groups and take place outdoors, like rafting on the Matanuska River.

Ashley Heimbigner | Visit Anchorage

Alaskan rafting taking safety measures during 2020
Tour operators have developed new cleaning and distancing protocols to ensure their activities are as safe as possible, though many Alaska tourism activities are already conducted in small groups and take place outdoors, like rafting on the Matanuska River.

Ashley Heimbigner | Visit Anchorage

“Because of the continued border closures, the uncertainty with the cruise industry, continued case counts, and consumer confidence at this time, we have taken a conservative approach with our 2021 estimates. We have estimated about a 52 percent decline from 2019 actuals.”
Deb Hickok, President/CEO, Explore Fairbanks

Elaborating, she says: “On the one side, we’ve taken a clear-eyed and conservative approach to budgeting. That will keep our plans and programs in line with what we think can be expected. On the other side, we’ve sought to maximize the power and reach of our programs to ensure the best possible outcomes for our community and our industry. That’s not too different from what we do in any year. But in a time like this, it is vital. As 2020 ends, we are fielding new research, further reinforcing photo and video assets, and working to improve Anchorage.net with better functionality. These will adapt us for new traveler demands, remarketing our city to the most likely traveler post-COVID, and supporting visitor businesses devastated by COVID.”

Saupe says Visit Anchorage will continue to focus on engaging and inspiring independent travel, as it’s likely to see green shoots first. That means investing in new digital tools to help sell and doubling down on online and social engagement. “We continue to connect with travel advisors and meeting planners, laying the groundwork for a future return of group sales, meetings, and conventions,” she says.

At this juncture, Saupe is encouraging everyone to shop local and buy gift cards to tourism businesses for holiday shopping. She further urges people to “join a tour; visit an attraction; support our arts and cultural institutions—it all helps friends and neighbors and keeps our community going.”

Explore Fairbanks’ Views

Consistent with her colleagues, Explore Fairbanks President and CEO Deb Hickok is predicting a slow recovery for Alaska’s tourism sector. A full recovery is dependent on a number of variables. This includes the lifting of travel restrictions, which will be influenced by the widespread availability of rapid testing and, eventually, a vaccine. “Consumer confidence in air and cruise travel is a key to the recovery of Alaska tourism,” she says.

The estimated revenue losses for 2020 for the Fairbanks North Star Borough—which encompasses the cities of Fairbanks and North Pole—are stark. “We had originally estimated a 62 percent decrease for 2020, but we have seen numbers slightly higher than projected through August 2020; we are just below 57 percent net loss from the same time frame in 2019,” Hickok says.

Explore Fairbanks’ revenue numbers for the borough include a $3.6 million projected loss for 2020 from 2019 levels; a $2.6 million projected loss through August 2020 from 2019 levels; and a $2.3 million actual loss through August 2020 from 2019 levels.

Not surprisingly, Explore Fairbanks is taking a moderate stance with future revenue projections. “Because of the continued border closures, the uncertainty with the cruise industry, continued case counts, and consumer confidence at this time, we have taken a conservative approach with our 2021 estimates,” Hickok says. “We have estimated about a 52 percent decline from 2019 actuals.”

DEB HICKOK
Explore Fairbanks

She adds: “Explore Fairbanks’ projected hotel/motel tax revenue collections for the Fairbanks North Star Borough, including the cities of Fairbanks and North Pole, is $2,948,198, down $2,806,839 from the 2019 actual collections. We expect the decline to be greater early to mid-2021 with increases later in the year as circumstances evolve and consumer confidence grows.”

Hickok says continued federal assistance for the hard-hit travel industry is imperative to keep businesses afloat and destinations marketing. And Explore Fairbanks is working to keep its business partners informed about CARES Act funding programs. “I have a sign on my desk that says, ‘Ensure that you have exhausted every option to secure stimulus funding.’ Personally, I’m like a dog on a bone to secure funding for the organization.”

Like many visitor bureaus, Explore Fairbanks has taken active steps to respond to the pandemic. In April, the organization made the decision to cut staff and implemented across-the-board salary cuts for remaining staff to ensure that it could continue marketing. “We firmly believe that we should continue marketing,” Hickok says. “We could have easily paid our staff and done nothing, but that’s not how we roll. That’s not what we are about. I think there is a recognition from our team because they responded by working harder than ever.”

Also, in April, Explore Fairbanks developed a COVID-19 Remarketing Recovery Plan to maintain brand awareness. The goal is to reach travelers who hunkered down and are dreaming about travel and to retain market share when normal travel resumes.

An equally important marketing objective for the organization is to motivate people to plan a visit now. So, in the spring and summer, Explore Fairbanks rolled out digital, publicity, and social media tactics to local audiences. “Most recently, we launched a national push for aurora season on August 20,” Hickok says. “The winter campaign is being developed.”

Explore Fairbanks has also launched training platforms to domestic and international tour operators and travel advisors to arm them with destination information. “As normal travel resumes, they can hit the ground running in selling the region to their clients,” Hickok says. “We are also developing a similar training customized for meeting planners.”

Historically, Explore Fairbanks has been recognized as an entrepreneurial organization, and this corporate culture was critical to proactively reacting to the pandemic, Hickok says. “The team demonstrated an admirable combination of thoughtfulness and flexibility that was required to address the enormous challenges. I am continually inspired by the positive attitudes of our board, business partners, and staff in the face of adversity.”

Travel Juneau’s Reflections

Liz Perry, president and CEO of Travel Juneau, markets Alaska’s capital city for conferences and non-cruise ship travelers. She predicts that Alaska will see far fewer visitors in 2021 and beyond. As a long-haul destination, Alaska’s tourism industry may require a market cycle to reach profitability. “This means that some business will have to pivot to new or different markets/products, which many already have,” Perry says.

Perry anticipates seeing much lower revenues, in general, from previous years both on the municipal support and earned-income sides. “We expect to lose 40 percent of our usual partner revenue and anticipate flat or reduced municipal support, which was reduced by 45 percent for FY21.”

However, Perry emphasizes that making predictions or estimates about the 2021 season is tricky at best. “We’ve learned a lot about the illness over the last six months, but predicting numbers of visitors and related revenue is futile at this time, given the high level of uncertainty,” she says. “We do know that restarting needs to be slow, monitored, and with a lot of thought around safety from transmission.”

“Through August, hotel revenue in Anchorage was down about 60 percent compared to 2019. The effects of the pandemic are wide-reaching and ongoing. This is only a partial accounting of likely losses in tourism and in the wider community.”
Julie Saupe, President/CEO, Visit Anchorage

Travel Juneau has undertaken various initiatives to weather the COVID-19 crisis. For instance, the organization immediately began cutting costs wherever possible, reducing or completely cutting professional development, operational costs, and some aspects of paid marketing. “This resulted in staff furloughs, alongside salary and benefit cuts,” Perry says.

It also allowed its partners to make payments on their marketing packages and hosted a virtual travel fair since the annual live event was cancelled. “This brought our partners some additional cash they might not have had and reminded our communities to support these businesses if possible,” Perry says.

Aurora season began August 20. Explore Fairbanks is developing a winter campaign to draw visitors to the Interior.

Sherman Hogue | Explore Fairbanks

Camping under the Aurora Borealis
Aurora season began August 20. Explore Fairbanks is developing a winter campaign to draw visitors to the Interior.

Sherman Hogue | Explore Fairbanks

New initiatives are also being launched to entice potential visitors—and their spending power—back to Alaska. However, Perry says much depends on the comfort level of residents to open the state to visitors, which hinges on the number and rate of infections; the availability of fast, reliable, and inexpensive testing; and the possibility of an effective vaccine. She adds: “Without those in place, Alaska can’t come close to a full re-opening, nor should it. Our perspective is that our community’s health comes first. Setting our sights on next season and beyond, we’re launching a Juneau Cares campaign to align our visitor businesses in creating, communicating, and implementing safety protocols and mitigation plans and promoting that to prospective visitors.”

LIZ PERRY
Travel Juneau

Perhaps the best way to lessen the blow of the “lost season” of summer 2020, Perry says, is to save as much cash as possible to roll over into the next fiscal year. “We also need to take care of ourselves over the winter; many of us are burned out and stressed out,” she says.

The pandemic has taught Perry a number of important lessons. Citing an example, she says, “The high level of uncertainty with this illness, including testing for it and the lack of a reliable vaccine against it, means we cannot make predictions about when the state can fully reopen or what our visitor numbers will be in the future.”

She also recognizes the importance of staying in constant communication with Travel Juneau’s member partners, even if it’s only to be a sounding board. “These businesses are the lifeblood of our communities, and they need to know we’re in their corner and doing what we can.”