Steve ColtInstitute of Social and Economic Research

University of Alaska Anchoragesteve_colt@uaa.alaska.edu

Rev. 3 Feb 2003

Tourism and Alaska’s Future:An Economics Perspective

2

Our Fragile Economy:per capita income is down from

1990 to 2000

Alaska -2% (total change)

Anchorage -1%

Mat Su Borough +2%

Rest of coastal AK

-5%

Kodiak Island -15%

Ketchikan Borough

-2%

3

Our Fragile Economy: Real Income Growth Since 1990

$813

$251

$78

- $500 $0 $500 $1,000$1,500$2,000$2,500$3,000

Millions of 1998 $

LABORINCOME

INVESTMENTINCOME

GOVTTRANSFERS

(INC PFD)

4

Our Fragile Economy:Federal Aid per Person

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

98 $

Alaska

Wyoming

New York

North Dakota

Montana

US Average

1990 GROWTH 1990 TO 1995 GROWTH 1995 TO 1999

5

Our Fragile Economy:Farmed salmon dominates world

marketsWorld Salmon Supply

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

thou

sand

s of

met

ric

tons

Other Wild

Alaska

Farmed

6

Value of Alaska salmon is down

Wholesale Value, Ex-Vessel Value, & Processing Margin After Adjusting for Inflation: All Alaska Salmon

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

1800.0

Note: "Processing Margin" = First Wholesale Value - Ex Vessel Value

FirstwholesalevalueEx-vesselvalue

Processingmargin

7

AK Economy looks like US

Employment Mix by Industry (2000)

0%

5%

10%

15%

20%

25%

30%

35%M

ilitar

y

Extr

act

Infr

astr

uctu

re

Man

ufac

ture

Trad

e

Prof

essi

onal

Hos

pita

lity

Ed/H

ealth

/Gov

Alaska

Anc-MatSu

US

8

Alaska looks more like US over time

Employment Mix by Census Class of Worker

0%

20%

40%

60%

80%

100%

AK 1990 AK 2000 ANC-MatSu

US 2000

Self

Govt

Private Wage

9

84,000 Alaska Jobs Depend on Healthy Ecosystems (circa 1998)

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Indirect

Direct

10

Tourism Industry (nonresidents)

• Marine environment is a major attraction

• “Soft adventure” is fastest growing segment, but…

• Many residents dislike the associated impacts (e.g., helicopters)

17,000 direct jobs

26,000 total jobs

11

Overall Tourism Growth has Slowed

Summer Visitor Arrivals 1989-2001(May - September)

-

100

200

300

400

500

600

700

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2001

tho

usa

nd

s o

f a

rriv

als

Cruise

Domestic Air

Highway

Ferry

12

What About Soft Adventure?…guided rafting on Chugach National Forest

0

1000

2000

3000

4000

5000

6000

7000

8000

1994 1995 1996 1997 1998

Cli

en

t d

ays

Sixmile

Granite/Portage

Kenai

Copper River

Year

13

Guided and Charter-Supported Kayak Trips in PWS

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Ind

ex (

1987

-88=

1.0)

Blackstone (P22)

Harriman (P09)

Culross Perry (P26)

Nellie Juan (P25)

Knight Island (P27)

Eshamy (P30)

Year

14

Recreation Industry (residents)

• Hard/impossible to measure - overlaps with tourism and sport fishing

• Important to many residents as a key benefit of living in Alaska (“permanent tourists”)

7,200 direct jobs 9,800 total jobs

15

Nonresidents want Alaska Fish!

-

50

100

150

200

250

30019

89

1990

1991

1992

1993

1994

1995

1996

1997

1998

Nu

mb

er

of

Lic

en

ses

(000

)

Non-resident

Resident

Source: CNF calculations using data from ADFG (1989-98)

16

(circa 2000)

Endeavor to position Alaska as a year round destination, i.e., winter tourism

Increase total visitor expenditures statewide; endeavor to maintain or increase per trip expenditures. Attract a diverse mixture of visitors who travel to and within Alaska by a variety of travel modes. Increase independent visitation to Alaska. Increase visitation to non-urban Alaska. Maintain or Increase the average length of stay in Alaska. Maintain or increase the rate of new and repeat visitation.

17

The Challenge of Capturing Value….

•From Drive-Through visitors•From Virtual visitors

18

Disposition of Alaska Lands

104

44

152

736

State

ANCSA

Conservation

Other Fed

Other Private

Total 375 million acres

19

Chugach National Forest Visitation

Total RVDs = 2.5 million

Viewing from railroads

1%

Viewing - other 4%

Viewing from cruise Ships 47%

Viewing from autos/buses

49%

Winter use 2%

Other 11%

Fishing 8%

Hiking 7%

Camping 21%

Viewing scenery, wildlife, fish

51%

RVD = recreation visitor day.

20

Kenai NWR:

• $21 million on-site expenditures• PLUS, $28 million additional sport

fishing expenditures depend on refuge habitat

• $49 million total 950 jobs

21

Kenai National Wildlife Refuge:292,000 visits (1997)

sportfish sport hunting

incidental nonconsumptive

22

Kenai National Wildlife Refuge:$21 million visitor expenditure

(1997)

sportfish sport hunting

incidental nonconsumptive

23

sportfi sh

sport hunting

incidental

nonconsumptive

Visits

Expenditures

Kenai NWR

24

Bristol Bay NWRs:

• $21 million on-site expenditures• PLUS, $28 million additional sport

fishing expenditures depend on refuge habitat

• $49 million total 950 jobs

25

Bristol Bay Wildlife Refuges:20,453 visits (1996)

fishing hunting vis. Ctrs other

26

Bristol Bay Wildlife Refuges:$2.4 million visitor expenditure

(1997)

sportfish sport hunting

incidental nonconsumptive

27

Visits

Expenditures

fishing hunting vis. Ctrs other

sportfish sport hunting

incidental nonconsumptive

Bristol Bay NWRs

28

The Challenge of Capturing Value….

•Use value–Consumptive–Nonconsumptive

•Option value•Existence Value

29

Capturing the Value• The Potential:

– Average AK $ per person per trip?– $1,258 in 2001– Of which, how much on gifts/souvenirs?– $119– how much on Alaska Native arts/crafts?– $92– How much on clothing?– $58

30

Why do People Visit Alaska

Why do People Live in Alaska?

31

32

Reactions:

• Overall Numbers?• Numbers by Mode?

33

Reactions:

• Where do people derive value?

34

Reactions:

• Who are our “visitors?”