Anchorage Daily News

One of the clearest signs the U.S. economic tailspin is hammering Alaska's tourism industry is the steeply discounted ticket prices that cruise lines are offering this summer.

The state's major cruise operators -- which bring roughly 1 million people a year to ogle Alaska's glaciers and wildlife -- are offering tickets as much as 40 percent cheaper than they did last year.

The discounting is a reaction to some of the worst sales the cruise lines have ever encountered, said John Binkley, executive director of the Alaska Cruise Association, which advocates for the cruise lines in Alaska ports.

"It's very much uncharted territory for them," he said.

Cruise lines are just the tip of the iceberg. State economists have predicted the global recession will hit the state's tourism industry hardest -- a loss of 300 leisure and hospitality jobs in the Anchorage area alone, a bigger decline than any other industry.

Many tourism businesses statewide are already reporting fewer bookings for the summer, down anywhere from 5 percent to 35 percent, according to the Alaska Travel Industry Association.

Ron Peck, ATIA president, is holding out hope that many Alaska-bound travelers are just delaying their vacation purchases by a few months in hopes federal stimulus spending will jolt the economy out of its slump. Gov. Sarah Palin's vice presidential run last fall sparked an explosion of requests for the state's tourism brochures, he said. But so far the signs for a strong season are "non-encouraging," he said.

No one really has a handle on how the tourism season will go. This is when people start booking, but summer is months off and sales could improve before then.

Yet a sense of fatalism has permeated much of the industry, from bed-and-breakfast operators to flightseeing companies. While a few say their bookings are strong, most are bracing for fewer customers.

"The phone just isn't ringing," said Jerry Scholand, owner of the Kiana Bed & Breakfast in Homer.

He's resigned to some loss of business this year but he retains some hope that summer bookings will escalate over the next few months. Often, bookings start slow, he said. For example, business at his inn was good in 2002, despite gloomy predictions that fewer travelers would visit Alaska due to the Sept. 11, 2001, terrorism attacks.

"My hunch is, they'll come," Scholand said.

But this year's economic crisis is different than 9/11. This is the worst recession the United States has experienced since the Great Depression, and experts disagree how soon it will be over.

"It's a real wait-and-see kind of year," said Susie Kiger, the Alaska Railroad's director of passenger sales and marketing. After two years in a row of explosive growth in rail passenger bookings, she said reservations so far this year are "way down."

In Talkeetna, most business owners expect at least a 20 percent reduction in summer traffic, or greater, said Paul Roderick, president of Talkeetna Air Taxi, which offers Denali flights to tourists and mountaineers.

"We're going to trim some of the staff and tighten things up a bit," Roderick said.

DEEP discounting

Many who watch the cruise industry in Alaska said they feel confident that the cruise ships will be filled by the time they start sailing to Alaska.

One cruise line, Princess Tours, said it plans no reductions at its Alaska operations -- cruises and lodges -- at this point. "As of today, no decision has been made (to) cut back capacity," said Bruce Bustamante, the company's senior executive in Alaska.

Many tourism operators said they are confident that major discounts will keep the ships full.

Last year, the cheapest Alaska cruise offered by the major lines was $799 plus fees, according to ATIA.

This winter, Princess Cruises is offering summer cruises for as low as $475 plus fees.

On its Web site, Holland America Line is pitching a "Vacation Stimulus Plan," where it offers some Alaska discounts.

Two-for-one type Alaska tour packages are proliferating and that's actually created a 50 percent leap in sales for one Anchorage discounter, the Great Alaskan TourSaver, which sells a travel coupon book to tourists. "That surprised us," said co-owner Scott McMurren.

The Alaska Travel Industry Association is slashing advertising rates by 80 percent so its members can promote their businesses on its Web site at a fraction of the usual cost. "We know the businesses are hurting and we want to help them," said Peck, the ATIA president.

The big question is whether those budget-minded travelers will be willing to shell out money for tours, Alaska art or a pricey sightseeing trip, he said.

Operators in some towns are using discounts as a way to lure visitors to open their wallets. One Juneau company, Above & Beyond Alaska, has developed self-guided kayak tours that are cheaper than a guided trip, for example.

Another strategy is to target Alaskans as well as Outsiders. The owners of Above & Beyond Alaska recently started a heliski operation that offers a 20 percent discount for Alaska residents on ski trips in the Chilkat mountains and on the Juneau Ice Field.

"We're seeing strong bookings for that," said co-owner Sean Janes.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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