Trends 2016: Peninsula cities promote, support tourism industry

  • By Kelly Sullivan
  • Tuesday, March 29, 2016 2:27pm
  • Business

While officials from the Kenai Peninsula’s five cities would not label tourism as critical to local economies, they say it is a healthy supplement.

Tax revenue from tourism-related businesses such as guiding, lodging, food service and retail raked in more than $600 million in 2015 for Kenai, Soldotna, Homer, Seward and Seldovia, which the Kenai Peninsula Borough collects and reimburses back to the cities. Recognizing the industry’s impact, governments haven’t remained passive players.

“On a scale of 1-10 I’d say a 6 or 7,” said Rick Koch, Kenai city manager. “Tourism will probably become a larger and larger player in the economy of Kenai and many other Alaska communities.”

While working with different resources, municipalities take similar measures to support progress.

In Kenai the Kenai Chamber of Commerce usually does most of the legwork, but the city has also identified a need help further develop marketing strategies, specifically for the many off-beach tourist attractions including the Russian Orthodox Church, historic buildings in Old Town, Russian Orthodox Church cemetery, as an immediate goal to help foster progress, he said.

Kenai has somewhat of a unique set of parameters on the peninsula, Koch said.

“The City of Kenai probably sees a much higher percentage of in-state visitors than other parts of the peninsula, up to 15,000 people per day during the personal-use fishery,” Koch said. “Additionally, we enjoy major support from commercial fishing and the oil and gas industries. Tourism definitely plays a role in our economy, but it is supplemental to the City of Kenai’s diverse economy.”

Jackie Wilde, Seward’s executive liaison, said it would not be smart to rely entirely or dominantly on tourism to stabilize an economy, which is more subject to fluctuations during a recession than other types of businesses. The City of Seward, like the other municipalities, takes an indirect approach to support the local lodging, tour and retail establishments that account for $2 million in estimated annual revenue, she said.

“Tourism is absolutely essential to Seward (and Alaska’s) economy, in that without tourism revenue they could not operate at current levels,” Wilde said. “Without tourism the Seward economy would also not need to operate at current levels. Rather than simple presence or absence of tourism though, the local discussion is more towards what is a good and sustainable level of tourism as relates to the rest of the economy.”

A diversity of business models stabilizes the economy, Wilde said.

Homer also aims for developing its local market for sustainable tourism.

“The City of Homer expects tourism will continue to play an important role in the City’s economy into the future,” said Jenny Carroll, Special Projects & Communications Coordinator. “In light of this, a goal in Homer’s economic development strategy is to strengthen Homer as a tourist destination, with a focus on sustainable tourism — promoting tourism growth in a manner that helps sustain the qualities of the community that attracted residents and visitors in the first place.”

In Homer, tourism accounts for roughly 16 percent of the workforce, more than Education and Health Services and Retail Trade which are both at 14 percent, she said.

To build a sustainable industry, the City of Soldotna caters to locals and tourists alike.

“We do know that businesses in visitor-related industries, such as lodging, restaurants and bars, guiding, and arts and entertainment make up a significant portion of our economy,” said Stephanie Queen, director of economic development and planning. “In recent years, Soldotna businesses in these categories exceeded $35 million dollars in annual gross sales, with restaurants and bars in the city making up approximately 70 percent of that.”

The city stays on top of legislation, and provides feedback when relevant, Queen said. Right now they are staying on top of the Alcoholic Beverage Control Board’s rewrite of the alcohol licensing code, which may impact local restaurants and breweries, she said.

Social and digital media are being used more often to promote the area, and extending existing services, such as adding more campsites to campgrounds and adding on to trails are used to reach and improve the experience for potential visitors, Queen said. The best way to approach economic development is to establish balance and appeal to year-round residents and visitors alike, she said.

“It’s important that the City work to understand and support not only tourism, but all the industries which make up our economy,” Queen said.

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