By Gretchen Wehmhoff
with reporting by Melinda Munson
Last week, two major cruise lines announced reductions in Alaska sailings, confirming what Skagway residents already knew – the cruise ship season was sinking ship by ship.
Cruise Line Agencies of Alaska (CLAA) updates their online calendar weekly. Each week shows fewer arrivals in Skagway. As of Friday, with the exception of the American Constellation, a smaller ship, arriving June 14, there are no scheduled arrivals until July 3. At that time, there will be 1 to 4 ships docking daily in Skagway – for now. Ships normally start sailing up Lynn Canal in May.
Skagway, a small port town at the northernmost tip of the Southeast Alaska panhandle, depends on the economic blast of the summer cruise season to get through the winter. With 1,000 year-round residents, Skagway bursts into a bustling gold rush town filled with up to 12,000 – 15,000 people a day meandering the streets before returning to their ships or boarding buses and trains to travel on to the Yukon and Interior and Southcentral Alaska.
In March, as word spread of COVID-19 infecting hundreds of passengers on the Diamond Princess, docked in Japan, Skagway city leaders and business owners knew trouble was coming. The cruise industry announced a sixty-day pause in service.
Skagwegians started preparing for things to get worse. Businesses had to pass the bad news on to hundreds of seasonal workers that they may not have a job this summer.
Mike Healy of the Skagway Brewing Company recently laid off 75% of his staff.
“That was my toughest day as a business owner.”
Healy says he’s keeping his expectations low. Lately, the restaurant has only been open for three hours on Friday and Saturday with curbside service during the COVID-19 stay-at-home orders. While the isolation orders were lifted Friday, his restaurant won’t be opening their dining room.
Changes to state alcohol laws such are temporarily allowing businesses to offer curbside service and delivery of closed container alcohol. The new rule opens up some options.
Healy is hoping for “some actual business from cruise ships” and further government financing, although that hasn’t materialized.
“We have not received any funds,” he said.
Last week, Holland America Line and Princess Cruises cancelled their land excursions. Princess will leave their five wilderness lodges in Interior Alaska shuttered and Holland America will not operate their land itineraries through Yukon and Denali National Park, impacting bus and train traffic heading out of Skagway.
Both companies hope to have two vessels each sail in Southeast Alaska, the Emerald Princess, Ruby Princess and the Koningsdam and Eurodam. This is down from the five Holland America ships and seven Princess ships that sailed to Skagway in 2019.
Cruise lines are partially responding to federal mandates and port closures.
The Port of Seattle placed a hold on the start of the cruise season until the public health emergency is assuaged. Canada is prohibiting ships with over 500 passengers from docking in Canadian ports.
On March 14, the Centers for Disease Control and Prevention (CDC) mandated that large passenger ships not embark any passengers or crew for 30 days in the United States. In early April, the CDC renewed the order, extending it into July unless the CDC or the Secretary of Health and Human Services rescind the order. Some smaller ships are exempted.
Skagway Tourism Director, Cody Jennings said, “CLAA has advised us that they do expect additional changes. This current schedule is approximately a 60% reduction in sailings from what was estimated previously.”
According to the Skaway Municipal website, in 2019, 983,917 passengers disembarked from 446 cruise ships docked in Skagway over the season. This doesn’t include over 397,940 ship crew and visitors who arrived via the Alaska Marine Highway System (9,640), smaller marine vessels (31,010), rail (10,667), the highway (113,253) and air (5241).
With visitor numbers increasing steadily over the past three years, the number of cruise passengers in the 2020 season was expected to top 1.1 million.
Cruise Lines International Association (CLIA) is concerned “about the unintended consequences” the CDC April 9 order has in “singling out the cruise industry.”
CLIA contends in a press release that the cruise industry has “been proactive in its escalation of health and sanitation protocols and was one of the first industries to announce a voluntary suspension of operations.”
Dwindling cruise ship sailings impact just about every Skagway business and resident. Employers and stores are weighing the value of salvaging the season. Some have decided to cut loses and not open their doors.
Klondike Tours owners Greg and Billi Clem plan to stay in the game.
“I’ve got a feeling there are going to be a lot of companies that won’t open their doors,” said Greg. “Bottom line is we are going to be open.”
Billi Clem believes the season may not resemble making a living, but the Clems are hoping to survive the summer.
Greg says it could be a success as long “as my business breaks even.”
“It [staying open] helps my employees, it helps the community.”
Local business owner, Karla Ray is concerned for the entire town.
“We are a community that runs almost exclusively on a small business engine, it is woven into every fiber of almost every project that happens here. As community members, volunteers, parents and consumers, we are very concerned about our community and the health and viability going forward,” she said.
Ray and her husband, Duff, are working a 14-month budget projecting a 75% loss of revenue. The hope is that sales from independent travel such as RV tourists, Alaskans vacationing at home and Chilkoot trail traffic may bring in some revenue.
Ray isn’t hopeful that the cruise ships will show up at all as the cancellations mount. She has had to rescind job offers for summer employees and is attempting to cancel merchandise orders, although well over 50% of her stock is already in the stores.
The Rays operate Klothesrush, Duff’s Outfitters, Kone Kompany and Grizzly’s. Their clothing store, Blueberry Boutique, won’t be opening this summer.
Reaching out for federal dollars from the Payroll Protection Plan (PPP) and the Economic Injury Disaster Loan Emergency Advance (EDIL) hasn’t been fruitful. While some expenses could be forgiven or worked out, Ray anticipates that even if they could borrow a large loan to get through 2021, they are looking at “years to recover.”
It’s a pretty bleak outlook,” she said.
Editors note: This article was edited to clarify specific numbers of seasonal visitors.