CIRI cautiously optimistic about business in 2009
Cook Inlet Region Inc., the Anchorage-based Alaska Native regional corporation, is optimistic about 2009 and sees opportunities for the future.
"There is no doubt the recession will test Alaska businesses this year, but we remain cautiously optimistic. CIRI is prepared to pursue opportunities and these appear to be growing," Sophie Minich, the corporation’s chief operating officer, told the Anchorage Chamber of Commerce Jan. 16.
CIRI’s holdings include real estate, tourism businesses, oil field service and construction companies in Alaska, and telecommunications and hotels and resorts out of state.
"Some of our businesses are being hit by the recession but others are OK," Minich told the Anchorage chamber’s annual "Back to Business" conference.
In tourism, CIRI expects a down year but the extent of that is still uncertain. The corporation has a flexible strategy that will allow its businesses to respond as the season develops, Minich said.
"We will ensure that our costs match revenues, so we are scaling operations to meet demand. Our hotel facilities have the option to open in stages, and our tour boats have this same capability. We’re also taking steps to manage fuel costs for the tour boats by pre-buying fuel at today’s low prices," Minich said.
CIRI owns Prince William Sound Cruises and Tours, Kenai Fjord Tours, as well as two hotels, the 200-room Talkeetna Lodge and 108-room Seward Windsong Lodge.
On an upbeat note, CIRI will go ahead with the launch of a second catamaran day-cruise boat in Prince William Sound, joining one catamaran now in service there. The catamarans are stable and comfortable for passengers and offer a 45 percent savings in fuel compared to conventional single-hulled boats, Minich said.
Alaska tour companies will have a better picture of what the season might look like in March. That is when major cruise ship operators notify their Alaska partners as to what kind of volumes to expect, Minich said.
CIRI is also expanding the conference facilities at the Seward Windsong Lodge, from the capability to accommodate 80 people to facilities for 160, she said.
Minich said CIRI is bullish about its new Tikahtnu Commons mall in east Anchorage. Retail giant Target had a successful opening of its new 171,000-square-foot store last year, and two more major retailers, Kohl’s department store and Lowe’s home building products, are set to open this spring. Best Buy and Sports Authority will also open new stores there this summer, she said.
A number of small retailers, some new to Anchorage - including Marble Slab Ice Cream - have also leased space. CIRI is developing Tikahtnu Commons with Browman Development Co., which is also managing the property.
Two companies CIRI owns in partnership with Nabors Industries, a major U.S. oil field drilling companies, did well in 2008, but the group expects some challenges in 2009. Peak Oilfield Services set records in revenues and profits last year and is off to a good start for 2009 with ice-road construction on the North Slope, Minich said.
Alaska Interstate Construction, also owned by CIRI and Nabors, was busy in 2008 and has pursued a diversification strategy to pursue more public sector construction. AIC is now engaged in some of the major road projects in Anchorage, she said.
A downturn in mining activity will result in less mining-related business for both companies in 2009, Minich said.
"This year will have some challenges but there are excellent opportunities as well. Our portfolio has taken a hit but we retain significant liquidity and we are well positioned," Minich said.