Haines amongst most pessimistic on future economic outlook
September 30, 2021
Haines business owners and managers who responded this past spring to a Southeast-wide economic outlook survey were among the most pessimistic in the region.
Just over two-thirds of Haines businesses expected the next 12 months to range from bad to much worse.
Cruise ship-dependent Skagway was the leader in Southeast for a glum outlook, with almost 75% checking the boxes for bad to worse. Hoonah, also heavily reliant on large cruise ships, was just behind Haines with its economically depressed outlook.
The survey results did not surprise Sally Andersen, executive director of the Haines Economic Development Corp.
Juneau-based Rain Coast Data conducted the survey for the Southeast Conference, a coalition of chambers of commerce and local governments from across the region.
The survey showed Haines was in second place, losing 25% of its jobs and wages in the pandemic-induced slowdown in 2020. Skagway was the Southeast leader for bad economic news, losing more than 40% of its jobs and wages from 2019 to 2020.
The drop in employment is an indication that Haines is more dependent on cruise ships and tourists than some people may think, Andersen said Tuesday. “I guess those cruise ships are more important to our economy than we thought.”
Though some smaller ships called on Haines this summer, it was a fraction of pre-pandemic levels.
Cutbacks to the state ferry schedule, and the “ups and downs” of its service dependability, also added to the weak numbers for Haines, Andersen said, as did the 2020-2021 closure of the U.S.-Canada border. “The road is still only one way,” she said, allowing U.S. citizens into Canada but not the other way around.
However, the outlook for 2022 is much improved, with the potential for a record 88,000 cruise ships visitors coming to town if the anticipated vessels all operate at full capacity.
Part of the reason for the bleak economic outlook among businesses in the survey is that it was taken in April, before anyone knew how many visitors would come to Southeast this year and whether the fishing season would be better than last year. Both turned out better than 2020, which wasn’t hard considering how poor that year was for both fish and tourist returns.
The results for Haines match an informal survey conducted by the Haines Chamber of Commerce around the same time, said Andrew Letchworth, assistant director at the chamber. Of the 76 members surveyed, the message, for the most part, “was we need help,” Letchworth said.
However, the outlook is starting to turn around, he said Wednesday. “The hope faucet is starting to drip a little bit.”
Commercial salmon catches were better this year, tourism started its return, and next summer is looking even better for visitor traffic. “I feel like there is a tentative hope,” Letchworth said.
After Skagway, Haines and Hoonah, the most pessimistic businesses were in Ketchikan and Wrangell, according to the Southeast Conference survey. The company’s owner, Meilani Schijvens, presented the survey results at the group’s annual meeting Sept. 14 in Haines.
The business outlook was positive in Juneau, Petersburg, Sitka, Gustavus and in Prince of Wales Island communities, according to the survey, which counted responses from 440 businesses across Southeast.
Though the outlook is improving, difficulties in hiring and getting in inventory are problems around the state, especially as the economy reopens and sales rebound, said Jon Bittner, executive director of the Alaska Small Business Development Center at the University of Alaska Anchorage.
“If businesses can’t stay open to take advantage, it’s almost like it isn’t happening,” Bittner said in a presentation at the Southeast Conference.
While waiting until 2022, businesses had been hoping that this fall “would bring a return to normalcy,” the Rain Coast Data report said. “However, the highly contagious Delta variant (of COVID-19), coupled with declining vaccination rates, has meant that infection rates are going up instead of down, threatening gains in health and economic advancement.”
The other weak indicator in the “Southeast by the Numbers” report was that the region in 2020 lost population for the sixth consecutive year, dropping from 74,500 in 2014 to 72,286 in 2020.
“The elements that created population losses in recent years, most notably the reduction of state jobs and services, have been exacerbated by the 2020 COVID economy,” the report said. “Pandemic conditions will likely lead to further population decline.”