Tourism industry balancing big summer expectations with worker shortage

After two pandemic-altered summers, leaders in Alaska’s tourism industry are seeing signs of a booming rebound, but it may be the latest sector hampered by a worker shortage.

2020 was catastrophic for the tourism industry, with mass business shutdowns, quarantines, bans on international travel, and a near-complete ban on cruise ships blocking many visitors from Alaska amid the COVID-19 pandemic. 2021 was beter, with more tourists willing to travel, though the cruise industry was still largely shut out of Southeast. But with the pandemic seemingly under better control and vaccines broadly available, the industry is looking for a return mostly to what was normal in 2019.

“Today, we are seeing very hopeful signs toward recovery from the pandemic,” said Sara Leonard, the president and CEO of the Alaska Travel Industry Association, during a presentation to the Legislature on March 24.

The Legislature has provided funding in the past to support tourism promotion, though that allocation in the budget has shrunken as the budget has been cut over the last six years. Gov. Mike Dunleavy has included $5 million for tourism marketing the fiscal year 2023 budget, which Leonard asked the Legislature to support and consider adding to.

Hopeful signs for the industry include packed cruise ships; operators have indicated that they have scheduled sailings for more than 1.5 million tourists to come to Alaska this year, significantly higher than the 1.3 million who arrived in 2019. Cruise passengers make up nearly half of the visitors to the state, while independent travelers make up the rest, both by road and air. Leonard said air travel is expected to be about 77% of pre-pandemic numbers nationally, with carriers adding planes and routes to Alaska this summer.

Still, industry leaders have cautioned that another surge in COVID-19 cases is among several factors that could curb the final number of visitors to the state this year.

Leonard said the industry expects that visitors will be willing to spend big on trips this year, given that they’ve been restrained for the past two. Surveys have shown that the majority of people intend to travel this summer, she said.

However, staff shortages are presenting problems in tourism, as is the case in other industries. Leonard said businesses are operating below full staffing across the state.

“In our industry, housing remains one of those roadblocks for hiring and having a workforce, especially in some rural areas,” she said.

Scott McCrae, the president and CEO of Explore Fairbanks, said staffing has been a problem there as well. Explore Fairbanks has spent years promoting the region as a winter destination, particularly for aurora viewing—so much so that “March is the new June,” he said. In general, March is as busy as some of the summer months in Fairbanks. But with staffing shortages, businesses may only be at 70-80 percent of staff.

The recruiting challenge is another source of uncertainty for Anchorage tourism businesses going into the 2022 season as well, said Julie Saupe, the president and CEO of Visit Anchorage. While there are reasons for Anchorage businesses to be optimistic, unease and uncertainty remain high, she said. COVID plays a role in that, with no guarantee that the levels of the pandemic will remain where they are, but so do rising costs of goods and fuel and difficulty staffing. She urged the Legislature to support workforce development programs in the state.

“I encourage you to invest in programs that get Alaskans ready for jobs, draw in new residents to expand the labor pool, or connect traditionally underserved communities with opportunities to join the labor force and move up in what is … a very rewarding and meaningful career,” she said.

Liz Perry, the president and CEO of Travel Juneau, echoed that call for workforce development. In 2020 and 2021, many Juneau businesses that depend on cruise travel saw an approximately 90% drop in revenue. However, independent travel bounced back some in 2021, she said, leading to the troubles in staffing. Surveys show that visitors are expecting the same levels of service prior to the pandemic when they return, she said.

“Expectations for our visitors are really pretty high,” she said. “They expect fairly high levels of services, which we find pretty astounding.”

Leonard said her group has worked with businesses in the tourism industry that have historically also relied on J-1 visas to bring in workers from overseas for the summer. However, with conflict in Ukraine destabilizing international travel in Europe and caps on J-1 visas coming into the country, it may be too late for some. Leonard said the consensus is that “if you’re not already in the program, you’re probably out of luck for this year.”

The industry is working with Alaska’s congressional delegation to try to get the cap raised, she said.

The entire state started seeing a workforce shortage last year, according to the Alaska Department of Labor and Workforce Development. The unemployment rate fell from 6.7% to 6%, in part due to large numbers of people leaving the labor force. That has led to workers having more options and employers having to increase wages to attract them. The need for workers in tourism is likely to increase this summer, too, with the cruise ships returning and the Canadian border open for vaccinated travelers again.

The Department of Labor projects the leisure and hospitality market workforce to grow by nearly 12% in Anchorage, by 10% in Fairbanks, and by 19.4 percent in Southeast. Even though that job growth is large for Southeast, domestic and international staffing will may present setbacks.

Elizabeth Earl can be reached at [email protected].