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Tourism could prove bright spot in Alaska's dark economic outlook

  • Author: Annie Zak
  • Updated: June 23, 2016
  • Published January 21, 2016

Many sectors of Alaska's economy are bracing for a downturn as oil prices drop and lawmakers try to solve a $3.5 billion budget deficit. But Anchorage's tourism industry may have less to worry about.

That was the main message delivered by Julie Saupe, the CEO of Visit Anchorage, at a luncheon hosted by the city's nonprofit marketing organization on Thursday to deliver its annual report.

"Tourism is on the rise … we are anticipating a good year," Saupe said.

The Alaska Department of Labor and Workforce Development projects the leisure and hospitality sector in Alaska -- which includes hotels, restaurants and bars -- to grow by 300 jobs this year, with about 200 of those in Anchorage.

That's on top of 700 jobs added in the sector across the state last year.

More people are coming to Alaska, too; Saupe said that annual Alaska visitation topped 2 million people for the first time in 2015.

The Labor Department also predicts a strong tourism season this year across the state, especially in the summer. In a recent report, the department cited a prediction from the Alaska Travel Industry Association that tourism will grow by 2 to 3 percent this year, and "the cruise ship industry projects its passenger count will top the 1 million mark for the first time."

Meanwhile, tanking oil prices are taking a toll on jobs in other sectors in the state. This week, oil prices dropped to their lowest point since 2003. Alaska is expected to lose 2,500 jobs overall in 2016, directly related to the drop in oil, according to the Labor Department. That would be the state's first annual jobs loss since 2009.

In its annual report, Visit Anchorage found that bed taxes collected in the city -- an indicator of money spent on hotels -- has risen steadily since 2011 to an estimated $26.4 million last year.

A recovering economy in the Lower 48 and low fuel prices also might contribute to more people visiting Alaska.

But that doesn't mean the sector is entirely without worry as the Legislature swings into session in Juneau this week.

"There is significant cause for concern," Saupe said. "The budget situation means Alaska's tourism marketing program faces likely budget cuts in the next fiscal year … The resulting impacts of reduced tourism marketing trickle down to communities and companies of all sizes if they go on long enough."

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