Fuel Prices Cloud Alaska Tourism Future

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May 20, 2008 by   - () Leave a Comment

The tourism industry in Alaska, including the state’s campground owners, are uneasy over the steady hike in fuel prices this spring.
“We’re very concerned. The news here in Alaska has been that our gas prices have reached the highest in the nation, at an average of $4 a gallon,” Dave Worrell, director of marketing and communications for the Alaska Travel Industry Association (ATIA), told Woodall's Campground Management. “In remote areas, where they have to fly in the fuel, it’s $7 and $8 a gallon. In Anchorage, we’re paying $3.80, so the average doesn’t speak to it.”
“Obviously, we are very concerned how that is going to impact the long haul traffic to Alaska. It’s too early to tell for sure.”
Worrell noted that border crossings into the state topped 100,000 in 2007, which was almost 10% higher than the 2006 total. He said the travel industry would be pleased if 2008 crossings matched the 2007 level.
Ground travel into the state, however, is a fraction of the total tourist trade in the state. Alaska welcomed 1,003,000 cruise visitors last year and 684,000 “independent” visitors, which represented a combination of “fly and drive” visitors.
“Everybody is concerned about the high fuel costs,” said Dwight Dietrich, owner of Grand View Lodge & RV Park, Palmer, Alaska, and vice chairman of the Alaska Campground Owners Association (ACOA). “We don’t know (what will happen); we will have to go day by day. How do you project something like that? It’s out of our control who will get these prices back down.”
It could be worse. Much worse. The location of two oil refineries in Alaska holds the line on transportation costs of refined fuels and helps keep retail prices down, Dietrich said.
The ACOA represents 69 campgrounds in the state but less than a third of its members attended the association’s annual spring convention in Anchorage the end of April, perhaps reflecting the uncertainty of the coming season. Alaska’s camping season starts around mid-May and ends in September.
Weak Dollar Helps Tourism
On the flip side, Worrell noted that the sinking value of the U.S. dollar has made travel to the U.S. and Alaska very attractive to Europeans. “We expect to see an up tick in international travel, particularly from Europe. They tend to travel independently, stay longer and spend more,” he said.
Demographics are on Alaska’s side, too. “As more Baby Boomers retire, we think more people will make the highway trip. We already have seen some increase in overseas travelers renting RVs. A lot of those folks are crossing the border to visit the Yukon. German-speaking people tend to see Alaska and the Yukon as one destination.”
Another intangible is the marketing that ATIA does for the state.
“This year, we had an $800,000 grant (from the state) to target independent travelers above and beyond our basic budget for overall marketing for the state which was $8.6 million,” Worrell said. The grant was used this spring in TV and some newspaper advertising targeted for the Upper Midwest and the West Coast.
“It will be an interesting summer, but I remain very cautiously optimistic that some of these factors will help us maintain our business,” Worrell said.

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