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After weak 2009 season, industry operators look for steadier future

Posted: Thursday, February 18, 2010

Operators of Kenai Peninsula businesses that rely on summer tourist dollars are hoping to hold the line following a weak 2009 season.

Photo By M. Scott Moon
Photo By M. Scott Moon
James Milner of Franklinton, La., levels his camper after pulling into Kenai last June with his wife, Cathy. Tourism businesses are keeping a nervous eye on the economy and hope business holds steady after a tough year in 2009.

Shanon Hamrick, the executive director of the Kenai Peninsula Tourism and Marketing Council, said Alaska's Playground, as the Peninsula is sometimes coined in marketing campaigns, likely won't see visitor numbers like those of record year 2008 until 2013 at best.

At the end of the 2009 summer season, local tourism operators reported that their business ranged from flat to down 60 percent over 2008.

Lodges and fishing charter businesses bared the brunt of the hit last, according to Hamrick, particularly those who relied on corporate trips.

The Peninsula's tourism industry, which has historically seen only growth through its history, is adapting to change brought on by a global recession.

"After all the growth we've seen for years and years, we're looking at holding the line and being flat this year," Hamrick said. "Looking at that as being positive isn't something we're used to and it's probably the reality for this year."

Hamrick said the recession has changed the spending habits of Americans.

While the long-term impacts of these changes for the Peninsula still aren't clear, the short-term impacts are.

"People who are traveling are doing it more cheaply than in the past," she said. "Budget vacations are big, and finding discounts is really big."

Hamrick said savings programs like KPTMC's Passport to the Kenai was a big hit with both locals and tourists alike last year.

The booklet, designed to look like a passport, features pages on 13 Peninsula communities as well as coupons and special offers that they can use while visiting them.

If users get a stamp from 10 of the communities, they're eligible to win a grand prize return vacation with airfare included.

Hamrick said when she talks with her members she continues to remind them of the need to aggressively market themselves.

"We're always looking at every way we can to get in front of visitors," she said. "We just need to stay on top of them."

So far, she said members are indicating that they're doing OK with bookings, but are nervous about what's yet to come.

She said the council is also keeping tabs on international as well as in-state travel trends.

She said she expects to see a 10-percent decrease in international travelers, most of whom come from Germany.

An unknown variable that could sucker punch international travel however, is the potential for future global outbreaks of the swine flu.

"The swine flu is a big unknown," she said. "Right now things are leveled out, but if there is a big up tick we will definitely see a hit in our international travel."

Between the tight-fisted vacationers and the still wobbly recovery of the global economy, Hamrick said she expects to see continued contraction for the Peninsula's tourism industry.

She said she's heard through members that there will be about 40 fewer Kenai River guides this season, and expects to see contraction of the charter fishing fleets in both Homer and Seward.

Last year the Kenai River industry saw about 40 fewer guides.

Seward also suffered a blow last year following the stormy 2008 fishing season that left many operators unable to get out to their fishing grounds.

Hamrick said that despite the dismal tourism market, KPTMC has actually seen an increase in membership as operators look for help marketing themselves or find they can no longer rely on overflow business.

"We haven't seen a big decrease in membership. We usually have about 10-percent attrition each year but we have actually seen the opposite," she said.

There are a few nuggets of good news though.

Hamrick said that with the cruise ship industry expected to bring 120,000 fewer seats on their boats because of redeployment for next season, the airline industry is picking up the slack and offering more seats on their end.

This bodes well for the central Peninsula according to Hamrick, which relies less on cruise passengers and more on independent travelers.

The state is also continuing to garner no shortage of publicity at the national level either. She pointed to the political activity of former governor Sarah Palin as well as the numerous television shows featuring the state as examples.

Website traffic to the KPTMC homepage and the number of online requests for information that are being filled out are also up 20 percent, she said.

Meanwhile, the downshift in the economy has taken some operators out of the market, and that's making the competition between the remaining businesses less fierce than it was in the past.

Finally, just as Americans in the Lower 48 are more apt to stay close to home, Alaskans are less likely to go Outside for their vacations, increasing the in-state market.

"It's an important component to the visitor industry, especially down here on the Kenai Peninsula," Hamrick said of in-state tourists. "While they're not our optimal visitor, they tend to stay with friends or at campgrounds and cook for themselves, they still spend money on fishing charters, they buy gas and they shop in our grocery stores."

Hamrick said the Interior offers a particularly promising market.

"Fairbanks is a good market full of military people looking for an Alaskan experience," she said. "They eat it up when we go up there for sport shows and they're so happy we're there and giving them information."

While Fairbanks markets itself to the Southcentral region as a travel destination, Hamrick said her organization is limited by the amount of capital they have and can't launch expensive TV ads in the Interior as Fairbanks has done in this region.

Another bright spot on the horizon this summer is the Hoka Hey Motorcycle Challenge. The 7,000-mile cross continental motorcycle race that starts in Key West, Fla., and ends in Homer will bring an estimated 5,000 bikers and their families to the Peninsula.

Hamrick said they are expecting the riders to arrive in waves because of the nature of the race, and are beginning to collaborate with the City of Homer and the organizers of the ride on the logistics.

She said, for example, that while the riders will be rolling in on their bikes, not all of them will be riding out, and many may ship their bikes home, so coordinating those services will be critical.

While there was some initial concern about the ride, Hamrick said it's a big positive for the area.

"I think it's pretty cool, it's not like the Hells Angels," she said. "Everyone who's coming had to be invited and they were all screened."

Dante Petri can be reached at dante.petri@peninsulaclarion.com



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