Businesses want to see more visitors this season

Posted: Friday, May 28, 2010

Memorial Day weekend brings the first major flush of visitors to the Kenai Peninsula, and area businesses dependent on tourist dollars are hoping they'll keep on coming.

Photo By M. Scott Moon
Photo By M. Scott Moon
Andy Shelton guides Robert M. Lacey and his son Robert down the Kasilof River on Thursday afternoon. The two are in Alaska from the San Jose, Calif., area. Tourism operators are hoping to do as well or better than they did last year, industry leaders report.

Following a dismal tourist season last summer, most Peninsula, and indeed statewide tourist industry leaders are hoping to hold the line or do slightly better than they did a year ago.

"We're predicting for Alaska in general to be up from last year but we're not going to make up for declines that we had for last year over 2008," said Shanon Hamrick, executive director of the Kenai Peninsula Tourism and Marketing Council.

Since the onset of the recession, many in the tourism industry have used 2008 as a benchmark.

According to Neal Fried, an economist with the Department of Labor, that might be possible, especially on the Peninsula.

While cruise ship passenger capacity will be down this season, Fried said the impact of that will likely be felt more in other parts of the state.

"The Kenai Peninsula has a more diverse visitor industry then any other part of the state," Fried said, noting that the region depends on a mix of cruise ship passengers, independent travelers, instate visitors and seasonal residents, among others, while offering a range of services.

He explained that other regions of the state tend to rely solely upon a single segment of the tourist industry and might have more limited offerings. He noted the Interior as an example, and said it depends more heavily on cruise ship passengers making their way north.

The somewhat brighter outlook here is also a reflection of what's occurring across the Lower 48, he said.

Fried said that the industry appears to be making a rebound in other popular tourist destination states like Nevada and Hawaii, and he thinks Alaska would likely be the same were it not for the decreased cruise ship capacity.

"If it hadn't been for that loss, my guess is people would have predicted a better year this year and those segments that are not at all tied to the cruise ship industry, I would think they would have a better year," he said.

The tourist industry, he explained, is one that is directly correlated to the health of the national economy, and typically responds to its changes more quickly than, say, commodity markets, for example.

"Most people are feeling better about the economy, consumer confidence is up, even employment, it's not coming back rapidly but we've had four straight months of growth," he said.

Fried cautioned however that until late fall, it will be impossible to truly gauge the impact of the season.

Paul Miller, who owns Trustworthy Hardware and Fishing in Soldotna, a regional bell weather, said that until last week, he's seen sales that have been 3 to 4 percent better than last year.

Their summer season starts at the beginning of May, steadily picks up for them through the third week of July, Miller said.

Hamrick said that based on reported bookings and conversation with her members that fishing lodges and guide services, especially on the Kenai River, will likely feel the biggest pinch this summer.

Hamrick attributed the drop largely to a decline in incentive based trips.

A poor economy has meant that many corporations that once paid to send their top employees to area lodges for fishing trips as a reward have declined steeply.

Other vacation packages seem to be doing better, however.

"Activities based on things such as rafting, horse back riding and sight seeing are doing pretty well," she said.

Mark Bell is a pilot and co owner of High Adventure Air, based outside of Soldotna on Longmere Lake. He sees "a dab" of business from a number of different operators providing him a sense of how the regional tourist industry is doing.

"I've talked to a lot of people and there's a lot of people who are way down," he said.

Bell's flight service, which offers sightseeing trips, bear viewing, guided fly-out fishing and hunting trips, has been in operation since 1984. He said last year was the toughest they've seen.

This year he, like many, are hoping to hold the line or make modest gains.

"Right now it appears that we're probably about the same as last year and things are still trickling in," he said.

Since the recession, Bell said he's been forced to step up his marketing.

"When something like this hits, you start hustling," said Bell, "We're out advertising more than normal and we're on the move."

That's something Hamrick said her organization has emphasized to all her members.

But not all businesses are seeing the need to do things differently.

"We're not really doing anything different," said hardware store owner Miller. "Even with Walmart in town, were just going to do things the way we do it."

Miller said he wasn't sure why he was up this year compared to last, and was initially expecting to see his sales down right now because of the arrival of the superstore in Kenai.

"I don't quite understand it and that's kind of dangerous because if you don't understand why you're up, you could be down that much just as easy," he said.

Visitor behavior may well be changing, too.

"People aren't spending as freely as the used to and they're not spending as much," Hamrick said.

On top of this, she said tourists are finding that it's a buyers market when booking a vacation on the Kenai.

"They're definitely looking for discounts, and value," she said. "They're negotiating with our members. They'll call and say they think they can do better somewhere else."

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



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