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Web posted Sunday, June 29, 2008

Visitors spending less, business owners still optimistic

By Gina Romero
For the Journal


  Tourists do some window shopping in Downtown Anchorage. Merchants and charter company owners say visitor numbers appear to be steady, but tourists are spending less money. Merchants arenÕt worried yet, as itÕs still early in the season. Photo/Gina Romero/For the Journal    
High fuel prices and a slow economy have many wondering what the 2008 tourist season will bring for Alaska.

Ron Peck, with the Alaska Travel Industry Association says that, anecdotally, the number of visitors to Alaska is positive, but people appear to be spending less.

This is on par with a national survey partly sponsored by the Travel Industry Association, where 30 percent of people polled said they plan to travel this summer but would spend less on souvenirs and shopping.

Some 23 percent said they would seek cheaper entertainment to compensate for rising prices.

Peck said cheaper shore excursions, especially those costing less than $100, are doing well.

This seems to be the case for Tom Tougas, owner of Renown Tours. A majority of customers for the Renown Tours operation out of Seward are independent travelers and people in Alaska visiting family.

More foreign travelers seem to be visiting Alaska and are booking excursions as well, Tougas said. The company's day cruises range from $69 to $139 out of Seward and are going strong.

“We are up about 3 percent over last year. Given all of the economic bad news and the fuel prices, I'm pleasantly surprised. This year is going better than we expected,” Tougas said.

Reports for similar day cruises out of Whittier are also looking positive. Bookings at Prince William Sound Glacier Cruises are steady, although the company had to include a $5 fuel charge to fill the gap this year.

“The price of fuel has gone over what we budgeted for and we thought we were being lenient with our budget,” said Kelly Bender, general manager for Prince William Sound Glacier Cruises.

But it's a different story for Kelly's husband, Mike, owner of Lazy Otter Charters and Cafe. In addition to operating the cafe, Bender shuttles outdoor enthusiasts out of Whittier for multiple day trips in Prince William Sound. Business at the cafˇ is going well, but it appears many adventure-seekers are opting to forego trips into the Sound so far this season.

“We have had 5 (percent) to 7 percent growth every year, and this year will end up flat,” Bender said. “Folks are starting to pull in a little bit, their play money is getting tighter.”

There is evidence of tighter spending patterns for other businesses throughout Alaska. In addition to his Seward operation, Tougas has ventures in Haines and reports that sales, a majority of which come from cruise ship passengers, are flat.

“As far as tours, we are seeing the lower-cost tours are selling better than the higher-cost tours. All of the cruise ships are still full, but I think people are a little more sensitive to buying the high-end products,” Tougas said.

In Fairbanks, The Great Alaskan Bowl Co. reports lower sales than usual. Scenic tours for Talkeetna Air Taxi are down a bit this year, said office manager Annie Duquette. And in Anchorage, Jana Hayenga, owner of Downtown gift shop Cabin Fever, said business in May was strong but June has flattened out.

Still, the mood among business owners is upbeat. Duquette said Talkeetna Air Taxi is having a good year despite higher fuel prices. Hayenga is optimistic about the rest of the season and is not jumping to any conclusions yet.

“July and August are our strongest months because people are thinking that is summer and are traveling then,” Hayenga said. “Until it is all over with, it is pretty hard to predict what the tourist season or summer season will bring.”

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