Coming off a year of record hotel demand, Anchorage’s 2023 tourism outlook is promising

Tourism in Anchorage rebounded strongly last year as pandemic impacts continue to fade, with strong hotel demand helping to sharply boost municipal income from lodging and car rental taxes, according to a report by Visit Anchorage last week.

Bookings for the summer are also signaling that this year could be even better, according to tour operators and Visit Anchorage, the city’s convention and visitors bureau.

Cruise company Holland America Line reported that bookings during a recent week in January were 25% higher than in any week in January 2019, the year before the pandemic hobbled tourism, the group said.

“We are largely recovered, and I think by the end of this summer we will by any measure be recovered and even beyond that,” said Julie Saupe, president of Visit Anchorage.

Cruise ships returned to Southcentral Alaska last summer after a two-year hiatus during the pandemic, but they were only about 75% full as concerns about COVID-19 continued to spook travelers.

The ships should be more than 90% full this summer, Saupe said, speaking Thursday at the Dena’ina Civic and Convention Center.

And the so-called independent travelers who began making their way to Alaska in large numbers in 2021, unaffiliated with cruise itineraries, are expected to return in sizable numbers again this summer, Saupe said.

Last year was also important because visits grew most in January, February, March and October, bringing tour operators more business beyond the traditionally strong summer season.

That fall-to-spring season is growing as more operators offer unique winter packages, like dog sled tours and photo excursions to glaciers, Saupe said.

Lori Duvall owns 907 Tours, a small Anchorage company that shuttles tourists on guided trips in the region, and she’s seeing the growing interest.

“I’m definitely way busier this winter than I was in 2019,” she said.

On Monday, she took a group of Lower 48 tourists to the Matanuska Glacier, where they donned ice cleats for a glacier excursion with a local guide, she said.

That’s become her most popular tour year-round, she said.

She hopes to hire a third guide this summer, up from one a few years ago, though the city’s labor shortage could make that difficult, she said.

She’s also waiting on a new Ford van — it’s been on order for more than a year, a victim of pandemic-related supply-chain snafus, she said.

[A shrinking workforce is hobbling Anchorage’s economic recovery, report says]

Her business is growing in part because visitors are sharing photos on social media of winter highlights like ice caverns and downhill skiing, she said.

“Let’s face it, it’s just gorgeous,” she said. “People see ice caves or the northern lights and then they find out, ‘Gee, it’s pretty easy to get here.’ ”

This summer is looking strong, too, she said.

“The trend is very positive; we’re seeing a lot of bookings and inquiries,” she said. “It will probably be my busiest season yet.”

Rochelle Yates, group sales manager for Greatland Adventures, said a growing stream of visitors is taking advantage of the company’s winter trips, including outings from Anchorage to find the northern lights dancing across the sky.

“There’s just a whole lot to do in winter,” she said.

“Some people have never seen snow and that blows their mind,” she said. “And Alaska has this allure. It’s cooler to say you’re going to Alaska than northern Idaho.”

In summer, the company’s guided trips include picking up cruise visitors in Seward or Whittier, and heading north for stops at sites such as the Alaska Wildlife Conservation Center, an animal sanctuary, or for a ride on the mountain tram at the Alyeska Resort in Girdwood.

“We had a pretty great 2022, and 2023 is looking great as well,” she said. “Bookings are starting to come in pretty heavily.”

Visit Anchorage said highlights for 2022 include:

• Meetings and conventions in Anchorage generated more than $80 million in economic benefit that’s spread throughout the city. Nearly all major groups that canceled events because of COVID-19 have rebooked.

• Municipal tax revenue from rentals of cars, trucks and RVs is expected to jump to a record $10.8 million, after the city finishes compiling all reports. It was $9.3 million in 2021.

• Municipal bed tax revenue is expected to reach a record $39.5 million. That’s about 33% higher than in 2021, when it was just under $30 million.

Hotel demand was a record in 2022, Saupe said. It was up 6% from the year before, and above 2019 levels.

Travelers seem to be staying longer in Alaska, given that hotel demand was stronger last year despite lower passenger volume on ships and planes from 2019, she said.

Southcentral Alaska received an estimated 1.4 million tourists a year before the pandemic, Saupe said. A new visitor count is underway, she said.

Hotel room rates were higher last year, in part because of inflation and higher labor costs — a challenge that pushed hotel rates up nationally too, Saupe said.

Paula Reiswig, principal administrative officer at the Municipality of Anchorage treasury, said rates at large hotels often exceeded $400 a night last summer, up significantly from previous years. That helped push up bed-tax income.

“We expect another big boom this year,” she said. “People are starting to travel more and more, and even though prices were high last summer, people bought the rooms, so we don’t expect things to change that much (this summer).”

Short-term rentals are playing a larger role in the city’s bed tax, records show. The rentals, often listed by homeowners over platforms like Airbnb, are part of a tax category that includes bed-and-breakfasts.

The bed-tax revenue from that category has increased to around $1 million every three months, on average, about double what it was in 2019 before the pandemic.

Short-term rentals have contributed to a tight rental market, which leads to higher rents, state economists have said. They can help drive home sales prices higher, researchers have found.

The Anchorage Assembly is expected to soon consider regulations to address the issue, including possible limits on their growth.

[Facing housing crisis, Anchorage loosens rules to encourage more backyard cottages and above-garage studios]

For tourism, short-term vacation rentals provide an important alternative when hotel rooms are heavily booked, Saupe said. Families or groups sometimes prefer them as a way to spend time together in one dwelling rather than spread across multiple hotel rooms, she said.

“We need every room we have to offer,” she said.