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Jockeying jolts the visitor industry.


had an acceptable but not robustly strong year for

Tourism. While figures are still preliminary and a bit
 confused, the state Divi-
 sion of Tourism reports

total visitation to Alaska during the purely summer season, from June 1 to the end of September, apparently hit 727,319-either 48,389 (7.1 percent) or 21,434 (3 percent) ahead of 1987's rate. The division was still massaging conflicting data in February.

Tourism in 1987 had been down 5.4 percent from 1986's pace-a record year markedly boosted by Vancouver, B.C., hosting the world's fair, Expo'86. Thus, tourism over the past two seasons has risen just marginally, far less than the average I I percent per year growth the industry averaged from 1975 through 1985.

Last summer was an odd year in that round-trip cruises to Alaska apparently declined, by 1.6 percent, but overall cruise ship visitors increased because of the rising popularity of flying one-way and sailing the other on Alaska vacations. According to the Juneau Convention & Visitors Bureau total cruise ship passengers who passed through Juneau - the common stopping point for many cruising visitors - hit 202,130 from mid-May to late September, a hike of just more than 4,000 compared to 1987.

Passenger occupancy on cruise ships average 93 percent, but many lines offered significant late-season discount packages to boost occupancy because of soft sales at regular rates. In 1988 the state became the cruising industry's second largest market, behind only the Caribbean in volume.

Travel up the Alaska Highway by independent travelers, most in recreational vehicles, climbed 15 percent, while bookings aboard motor coaches dropped by nearly the same percentage. Travel aboard the Alaska Marine High- way rose a steady 4 percent-the biggest jump coming from passengers who boarded the ferries at Prince Rupert, B.C. There the state cut back to one ferry, instead of two, the number of boats operating out of Seattle during the summer. Airline travel to the state rose just under 9 percent overall.

According to the Alaska Visitors Association, tourists last year spent more than $700 million in the state, fueling nearly 19,000 direct jobs. But even with the overall jump in tourists, the number of gift shops, lodges and visitor concessions rose more quickly, meaning many businesses last year reported more competition and less income than in previous years.

Jerry Reinwand, a gift shop owner in Juneau and a member of the new state tourism marketing council, says, "The pie is being divided up into increasingly smaller chunks. That made it an uncomfortable year for some."

Hugh Gellert, director of the state's Division of Tourism, says he expects this coming summer will show an overall growth of 4 to 5 percent in total tourism. Independent travelers, many of whom travel in cars or recreational vehicles outside of package tours, are cosidered most likely to lead the increase.

"I should think we should be up. It's early to go by bookings, but from anecdotes from travel agents, the cruise lines and the trade papers there is a lot of talk of strong early bookings," he says.

Kathy Hildre, chairwoman of the Southeast Alaska Tourism Council, says she also expects a good summer, thanks exclusively to increases in independent travelers. "I think it will be a good year because of the independent travelers. My perception is that a lot of travelers will be returning for a second look at the state," she explains.

For some Southeast communities, however, the overall picture masks a far bleaker portrait. The problem stems from three factors, the longer-range trend for cruise ships to cut sailings to the Panhandle to take tourists on cruises to Southcentral ports like Seward and Whittier and/or Anchorage, the soft market of last year which has prompted some lines to reposition their vessels and the immediate problem affecting Exploration Cruise Lines. Exploration Cruise Crisis. Exploration, founded in 1972 by Alaska tour pioneer Bob Giersdorf, originally operated the National Park Service's 55room lodge at Glacier Bay National Park near Gustavus. In 1985, the business spun off into separate companies.

Over the years the larger cruise line acquired or leased eight smaller vessels, operating cruises in Tahiti, the Caribbean, Panama, California on the Columbia River and Alaska. Another operation started was the Catamaran Cruise Lines-Glacier Bay Yacht Tours, which ran the park's lodge, day boat and an overnight vessel. It also offered dinner cruises out of Juneau to the Tracy Arm wilderness area and a high-speed shuttle service to Glacier Bay.

In 1985 the larger cruise line sold 80 percent of its stock to St. Louis-based Anheuser Busch. The brewery, with entertainment theme parks in Los Angeles; Tampa, Fla.; and Williamsburg, Va.; and a tourism operation at Grants Farm in St. Louis, wanted out in spring 1987, and Giersdorf agreed to repurchase the stock. According to court documents, however, problems with the repurchase arose because the revised company had been chartered in Delaware.

Giersdorf in a release last Nov. 23, said he couldn't repurchase the shares from Anheuser Busch because of Delaware law and for that reason he believed Anheuser Busch was still responsible to supply capital to the company. He filed suit against the brewery last fall to offset part of the company's $40 million in losses over the past three years.

This winter the financial problems of the larger company, which had 400 employees and reported debts of $31 million, spilled over to at least temporarily infect Catamaran Cruise Lines. The operation was pulled into bankruptcy court by Alaska Airlines because the firm was slow in paying for part of last summer's air bookings.

The financial situation of Catamaran Cruise Lines is being resolved at this writing. Peter Donau, executive vice president of Catamaran Cruise Lines, said in February the company has shifted into a Chapter 11 bankruptcy status to give the company time to reorganize its finances. Donau said he expected Glacier Bay Lodge will operate normally this summer and that a day boat, probably the 225-passenger cata- maran Goldrush, will conduct day tours of the bay's West Arm as usual.

He also said it's likely that one other Glacier Bay Yacht Tours boat, the 49passenger Executive Explorer, will conduct its popular two-day and five-day cruises this summer, calling at a variety of Southeast towns. As of February, it appeared that Giersdorf's firm would not be offering catamaran service to Glacier Bay, its overnight vessel up the bay or its dinner cruise to Tracy Arm, and that none of its other smaller vessels would run. Ship to Shore Shuffle. For some Southeast ports that may mean few or no tourists coming by boat this summer. Juneau will see only 16 large cruise ships call this summer, compared to 21 last year, dropping total sailings to 229 and likely cutting tourists by at least 10,000. The Exploration Cruise Lines bankruptcy will dampen tourism in Petersburg, which may receive no boats, and in Haines, which is facing the loss of 34 of its 51 sailings of last year.

Some Panhandle towns already had been hit hard in 1987 when Princess Cruises pulled three of its ships out of Sitka to send them to Anchorage to help get passengers to its new Harper Lodge at Denali National Park. Sitka last summer played host to about 19,000 fewer passengers than the year before. This summer it will see sailings fall again to 109, compared to 139 last summer.

The region also is facing lower passenger counts because of a decision by Princess to pull its flagship, the Roy I Princess, and the Sun Princess out of Southeast tours this summer. The Cunard Princess also has left the region, and there have been other defections: the Golden Odyssey,Regent Star, Europa, Fairsky and Society Explorer also gone.

Possibly because of the changes in ships, the attractions available to tourists will be nearly stagnant this summer throughout the Panhandle. Only the historic White Pass & Yukon Railroad at Skagway is expanding service to take passengers into the Yukon for motor coach trips north.

Proposals for more major tourism facility improvements-a downtown hotel project in Juneau, a hotel-tramway project in Juneau, a tourism complex in downtown Juneau backed by Sealaska Native Regional Corp. and a new resort complex at Gustavus - all are still on the drawing boards this spring. News on the fate of three of the four is now expected by year's end.

In Southcentral, the big news relates to the future of a proposed ski resort at Eagle River, expansion at Alyeska Ski Resort at Girdwood and development of new resorts at Hatcher Pass by a Japanese firm and on the south side of Denali National Park.
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Author:Kleeschulte, Chuck
Publication:Alaska Business Monthly
Date:Apr 1, 1989
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