2018-12-27 Work Session
PUBLIC HEARING
Ordinance No. FY2019-12
Ordinance No. FY2019-13
Ordinance No. FY2019-15
CONTRACTS
Contract No. FY2019-15
ORDINANCE FOR INTRODUCTION
Ordinance No. FY2019-01B
OTHER ITEMS
Confirmation of a Mayoral Appointment
Appointment of One City Representative and One Borough
Representative
AGENDA ITEM #2.a.
KODIAK ISLAND BOROUGH
STAFF REPORT
DECEMBER 27, 2018
ASSEMBLY WORK SESSION
SUBJECT:
ORIGINATOR:
RECOMMENDATION:
DISCUSSION:
ALTERNATIVES:
FISCAL IMPACT:
OTHER INFORMATION:
AGENDA ITEM #2.a.
o
o
o
o
o
o
o
o
o
AGENDA ITEM #2.a.
o
o
o
o
o
o
o
o
o
o
o
AGENDA ITEM #2.a.
AGENDA ITEM #2.c.
KODIAK ISLAND BOROUGH
STAFF REPORT
DECEMBER 20, 2018
ASSEMBLY REGULAR MEETING
SUBJECT:
ORIGINATOR:
RECOMMENDATION:
DISCUSSION:
ALTERNATIVES:
FISCAL IMPACT:
OTHER INFORMATION:
AGENDA ITEM #2.c.
1
2
3
4
5
6 KODIAK ISLAND BOROUGH
7 ORDINANCENO. FY2019-13
8
9 AN ORDINANCEOF THE ASSEMBLY OF THE KODIAK ISLANDBOROUGHCALLING FOR
10 A SPECIAL BY-MAIL ELECTION TO SUBMIT TO THE QUALIFIED VOTERS THE QUESTION
11 OF ABOLISHINGTHE MISSION LAKE TIDEGATE SERVICE AREA
12
13 WHEREAS,
14
15
16 WHEREAS,
17
18
19 WHEREAS,
20
21
22
23 WHEREAS,
24
25
26 WHEREAS,
27
28
29
30 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
31 BOROUGH THAT:
32
33 Section 1:
34
35
36
37 Section 2:
38
39
40
41"Shall theKodiak Island Borough exercise the powers necessary to abolish
42 the Mission Lake service area as indicated on the attached map?”
43 YES
44 NO
45
AGENDA ITEM #2.c.
46 Section 3:
47
48
49
50 Section 4:
51
52
53 Section 5:
54
55
56
57 Section 6:
58
59
60 Section 7:
61
62
63 Section 8:
64
65
66
67
68
69 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
70 THIS __________ DAY OF _______________, 2019.
71
72
73
74
75
76
77
78 VOTES:
79
80
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.c.
AGENDA ITEM #2.d.
KODIAK ISLAND BOROUGH
STAFF REPORT
DECEMBER 27, 2018
ASSEMBLY WORK SESSION
SUBJECT:
ORIGINATOR:
RECOMMENDATION:
DISCUSSION:
ALTERNATIVES:
FISCAL IMPACT:
OTHER INFORMATION:
AGENDA ITEM #2.d.
SOUTHWEST ALASKA MUNICIPAL CONFERENCE
COMPREHENSIVE ECONOMIC
DEVELOPMENT STRATEGY, 2018
NOTE: An electronic version of this document and its appendices can be found online at www.swamc.org
Prepared for the United States Department of Commerce
Economic Development Administration
AGENDA ITEM #2.d.
ACKNOWLEDGEMENTS
A special thanks to:
The People of Southwest Alaska
SWAMC Board of Directors
SWAMC Municipal and Associate Members
SWAMC Business Council Members
SWAMC Economic Summit CEDS Strategic Planning Session Attendees
Shirley Kelly, Economic Development Administration
2 018 Update by SWAMC Board and Staff
Original Five Year CEDS
Prepared by Agnew Beck
AGENDA ITEM #2.d.
TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................................ 1
CHAPTER 1: INTRODUCTION ................................................................................................... 6
CHAPTER 2: SUMMARY BACKGROUND ............................................................................. 11
CHAPTER 3: SWOT ANALYSIS .................................................................................................. 38
CHAPTER 4: SWAMC WORK PLAN ......................................................................................... 65
CHAPTER 5: SWAMC ACTION PLAN ..................................................................................... 70
AGENDA ITEM #2.d.
LIST OF ACRONYMS
AEA Alaska Energy Authority
AMHS Alaska Marine Highway System
ANCSA Alaska Native Claims Settlement Act
APICDA Aleutian-Pribilof Islands Community Development Association
ARDOR Alaska Regional Development Organization
AVSP Alaska Visitor Statistics Program
BBEDC Bristol Bay Economic Development Corporation
BBNA Bristol Bay Native Association
BBNC Bristol Bay Native Corporation
CBSFA Central Bering Sea Fishermen’s Association
CEDS Comprehensive Economic Development Strategy
CDQ Community Development Quota
EDA Economic Development Administration
EDD Economic Development District
FSMI Fisheries, Maritime and Seafood Initiative
PCE Power Cost Equalization
SAVEC Southwest Alaska Vocational & Education Center
SWAMC Southwest Alaska Municipal Conference
AGENDA ITEM #2.d.
EXECUTIVE SUMMARY
INTRODUCTION
The strength of Southwest Alaska Municipal Conference (SWAMC) is the organizations ability to
organize data and networks into actionable information. A Comprehensive Economic Development
Strategy (CEDS) is the product of ongoing planning and outreach with the SWAMC Board,
businesses, membership, attendees to SWAMC's Annual Economic Summit, and an ongoing public
review process. Building on these relationships and findings the CEDS is updated continually
throughout the 2015-2019 period, representing the most current account of economic activity
available. The CEDS is a guiding document for SWAMC’s efforts, providing background and
direction for working with partners, allocating funding and prioritizing efforts that support economic
development in the region, while also addressing resiliency. The CEDS analyzes strengths, weaknesses,
opportunities and threats and proposes actionable strategies that enhance the potential of Southwest
Alaska.
THE SOUTHWEST ALASKA MUNICIPAL CONFERENCE
SWAMC is the regional economic development organization representing Southwest Alaska, serving
the three sub-regions of: the Aleutian/Pribilof Islands, Bristol Bay, and Kodiak. A 501(c)(4) non-
profit, SWAMC is the designated State of Alaska Regional Development Organization (ARDOR) and
Federal Economic Development District (EDD) entity tasked with expanding public-private
partnerships and growing the Southwest Alaska region based on sound strategic planning efforts.
Organized as a regional membership organization, SWAMC advocates the collective interests of
Southwest Alaska people, businesses, and communities. The 11-member Board of Directors is
comprised of two municipal officials and one associate member from each sub-region, plus two
regional at-large seats. In addition to providing a regional voice and setting strategic direction, the
Board serves as the regional CEDS Committee. SWAMC works closely with members and partners
to provide perspectives and recommendations to support economic development in the region.
DRAFT SWAMC Comprehensive Economic Development Strategy 2015-2019: Executive Summary 1
AGENDA ITEM #2.d.
SWOT ANALYSIS: Regional Strengths, Weaknesses, Opportunities and Threats
Strength, weaknesses, opportunities and threat (SWOT) Analysis, helps identify actionable strategies.
Primary sections of the CEDS, including the SWOT Analysis and Work Plan, are organized by five
key topics that have emerged through the planning process (background research and stakeholder
outreach), including: Workforce Development, Resources, Infrastructure, Energy and Partnerships.
WORKFORCE DEVELOPMENT – Businesses and organizations note the
difficulty of training and maintaining a stable, qualified, reliable workforce in
Southwest Alaska. Southwest Alaska sees a large influx of nonresident seasonal
employees, in part due to the lack of workforce development in the region for
residents. In recent years, statewide and regional efforts have begun to identify and
address workforce development needs, especially in the fishery, seafood and maritime
industry.
RESOURCES – Southwest Alaska has an abundance of natural resources. The
region has world-class fish stocks and rich mineral deposits. The SWAMC region also
has scenic natural landscapes and other intrinsic value that draw external interest to
the region, supporting the basic sector economy. Responsibly managed resources can
provide many generations of non-renewable development and conceivably eternal
value from renewables to grow regional wealth for Southwest Alaska.
INFRASTRUCTURE – Southwest Alaska is a large region with a small population
and many dispersed communities. The region has a substantial base of port
infrastructure and harbor services; however, great distances add expenses to existing
services and costs to develop and maintain infrastructure for air transportation.
ENERGY – Energy costs are high in Southwest Alaska and contribute to higher
costs of doing business and an increase in the cost of living for regional residents.
Southwest Alaska has an abundance of renewable energy options that have the
potential to offset the current high costs of energy but remain largely stranded based
on current technology.
PARTNERSHIPS – Businesses; local, state and federal government; Alaska Native
entities; regional non-profits; and communities all contribute to the economic
development and employment picture in Southwest Alaska. SWAMC supports
existing local and regional economic development efforts and aims to identify new
partnerships that can affect change and build regional wealth.
DRAFT SWAMC Comprehensive Economic Development Strategy 2015-2019: Executive Summary 2
AGENDA ITEM #2.d.
AGENDA ITEM #2.d.
SWAMC VISION
Vibrant and livable communities for Southwest Alaska.
SWAMC MISSION
Support the collective interests of Southwest Alaskans, businesses, and
communities; promote long-term economic opportunities through improved
quality of life and responsible development.
SWAMC GOALS, OBJECTIVES AND STRATEGIES: 2015-2019
1)GOAL: Support Regional WORKFORCE DEVELOPMENT Initiatives
Objective 1: Training and Education – Promote professional development that prepares
Southwest Alaska residents to contribute to the region’s economic development potential.
Objective 2: Applicable Training – Promote workforce training that is closely aligned with
needed skills.
2)GOAL: Support Access to and Development of RESOURCES
Objective 1: Fisheries Development – Promote fisheries that provide a sustainable
income base to the communities, businesses, and residents of Southwest Alaska.
Objective 2: Tourism Development – Promote investment in new and existing tourism
opportunities that grow and retain regional wealth by taking advantage of the region’s
intrinsic ability to draw outside interest.
Objective 3: New Resource Development – Promote resource development that does
not threaten other renewable resources that sustain the regional economy.
3)GOAL: Support INFRASTRUCTURE Improvements
Objective 1: Strategic Infrastructure Investments – Promote infrastructure that facilitates
and supports the region’s social, cultural, and economic development needs.
Objective 2: Community Planning – Promote long-term visions, goals, and plans for
sustainable community development.
SWAMC Comprehensive Economic Development Strategy 2015-2019: Executive Summary 4
AGENDA ITEM #2.d.
4)GOAL: Improve ENERGY System Efficiency
Objective 1: Energy Efficiency – Promote energy systems that stabilize or reduce the
long-term cost of power by increasing the energy efficiency.
Objective 2: Ownership of Energy Systems– Promote local ownership of energy
planning, decision-making, and projects.
Objective 3: Supply of Low-Cost Power – Promote projects that supply low-cost power.
5)GOAL: Support Regional PARTNERSHIPS
Objective 1: Regional Economic Planning – Promote a regional Comprehensive
Economic Development Strategy, with sub-regional and local planning efforts.
Objective 2: Communications – Promote partner networks and activities of the
organization, region, state, and federal interests.
Objective 3: Advocacy – Promote local, regional, state and federal policies that benefit the
region, its communities, businesses, members and key partners.
Objective 4: Organizational Effectiveness – Maintain leadership from a Board of
Directors, representative of regional interests, and a productive and committed staff that
assure a financially secure organization, and pursue regionally collective interests.
PRIORITY STRATEGIES (PROGRAMS, PROJECTS, ACTIVITIES)
Support our Municipal Members
Support Youth Mentorship and Skills-Gap Training Programs
Strengthen and Diversify Alaskan Manufacturing
Understand Operating Environment and Resource Needs of Business
Promote Energy Planning and Infrastructure Development
Maintain a Data Library and Publish Economic Trends
Host SWAMC Economic Summit and Membership Meeting
SWAMC Comprehensive Economic Development Strategy 2015-2019: Executive Summary 5
AGENDA ITEM #2.d.
Kodiak Harbor 1st annual SWAMC Business Council meeting Airplane in Port Alsworth
CHAPTER 1: INTRODUCTION
PURPOSE
The Comprehensive Economic Development Strategy (CEDS) is the product of an ongoing regional
planning process. The CEDS provides an overview of economic indicators and identifies projects and
actions that will support economic development and increase regional wealth in Southwest Alaska. The
CEDS aims to highlight the region’s economic development strengths, challenges and opportunities
and proposes strategies and actions that enhance the economic development potential of Southwest
Alaska. As federal funds in the region continue to decline, it is increasingly important that the public,
private and non-profit sectors in the region work together to grow the region’s economy. Southwest
Alaska Municipal Conference (SWAMC) uses the CEDS to help these partners collaborate and work
strategically to leverage the resources and strengths of the region.
The Southwest Alaska CEDS is prepared, in part, as a requirement of the region’s designation as an
Economic Development District (EDD) by the Economic Development Administration. The
document also fulfills SWAMC’s obligation as an Alaska Regional Development Organization
(ARDOR) to develop a regional plan. The CEDS is updated every five years; this 2015-2019 CEDS
builds upon the efforts of previous CEDS planning efforts. The CEDS is the guiding document for all
of SWAMC’s efforts and provides staff with the background and direction they need for working with
partners, allocating funding and prioritizing efforts that support economic development in the region.
WHO IS SWAMC?
The Southwest Alaska Municipal Conference (SWAMC) is a non-profit regional economic
development organization for Southwest Alaska, serving three sub-regions of Southwest Alaska: the
Aleutian/Pribilofs, Bristol Bay, and Kodiak. This area corresponds to the incorporated boundaries of
the Aleutians East Borough, the Bristol Bay Borough, the Kodiak Island Borough, and the Lake and
Peninsula Borough, as well as two federally designated census areas – the Aleutians West Census Area
SWAMC Comprehensive Economic Development Strategy 2018 6
AGENDA ITEM #2.d.
and the Dillingham Census Area. SWAMC is the designated State of Alaska Regional Development
Organization (ARDOR) and Federal Economic Development District (EDD) entity tasked to pursue
public-private-partnerships based on sound strategic planning efforts. One of the most important roles
of an EDD is to develop and maintain a Comprehensive Economic Development Strategy (CEDS)
for the region.
The SWAMC membership includes municipal members such as cities and boroughs, and associate
members, representing businesses, village and tribal councils, and nonprofit organizations. SWAMC
provides an important link between the public and private sector with a coalition of local government,
business, and non-profit members, all with an interest in Southwest Alaska. To see a full list of SWAMC
members and partners, please see interactive chart also available on SWAMC’s website at
www.swamc.org.
SWAMC BOARD OF DIRECTORS & CEDS STRATEGY COMMITTEE
SWAMC is a regional membership organization that advances the collective interests of Southwest
Alaska people, businesses, and communities. To ensure the organization remains broad in scope and
inclusive in mission, the Board of Directors sets policy and strategic direction. The 11-member Board
of Directors is comprised of two elected municipal members and one associate member from each
sub-region plus two, regional at-large seats. The SWAMC Board also serves as the CEDS Strategy
Committee, overseeing and providing guidance throughout the planning process, and development of
the final document. The Board of Directors serves as the previously approved Overall Economic
Development Program (OEDP) Committee and the CEDS Committee since 1991. The following list
includes current SWAMC Directors, as of July 2017.
SWAMC Comprehensive Economic Development Strategy 2018 7
AGENDA ITEM #2.d.
OFFICERS
Rebecca Skinner, President -- Kodiak Municipal, Seat, Kodiak Island Borough Assembly
Layton Lockett, Vice President -- Aleutians/Pribilofs Municipal Seat; City of Adak
Myra Olsen, Treasurer -- Bristol Bay Municipal Seat, Lake and Peninsula Borough
REMAINING BOARD
Mayor Frank Kelty -- At Large Seat B, City of Unalaska
Paul Gronholdt – Aleutians/Pribilofs Associate Seat, Commercial Fisherman
Mayor Alice Ruby – Bristol Bay Associate Seat, Bristol Bay Economic Development
Corporation, City of Dillingham
Laura Muller – Kodiak Associate Seat, Spruce island Development Corporation
Mayor Glen Gardner, Jr. – Aleutians/Pribilofs Municipal Seat, City of Sand Point
Candace Nielsen – At Large Seat A, City of Cold Bay
Mary Swain -- Bristol Bay Municipal Seat, Bristol Bay Borough
Charles Davidson, -- Kodiak Municipal Seat, City of Kodiak
In addition to acting as the governing body and CEDS strategy committee, the Board is
establishing a Fisheries Committee to provide greater oversight and understanding of the
main economic resource in the SWAMC region. The Fisheries Committee will initially
consist only of Board members but may be expanded to include other SWAMC members at a
future date. This is particularly timely due to work in Congress to reauthorize the Magnuson
– Stevens Fisheries Conservation and Management Act.
THE SWAMC BUSINESS COUNCIL
To enrich SWAMC’s working relationship with the business community in Southwest Alaska, and to
gain critical perspectives of people that own and operate businesses in the region, SWAMC convened
the SWAMC Business Council in December of 2013. The Business Council is comprised of 18 industry
leaders representing primary sectors in Southwest Alaska including fisheries, Alaska Native
corporations, banking, communications, transportation, retail and other businesses. By identifying the
primary industries that drive the region’s competitiveness and create economic activity and
coordinating a face-to-face discussion with representatives of those sectors, SWAMC is better able to
align public and private sector goals. The non-fiduciary Business Council complements the SWAMC
Board, which is largely composed of municipal and tribal representatives.
The objectives of the Business Council include:
Share and incorporate feedback from membership on focus areas identified by Business
Council members, to clarify achievable objectives for SWAMC;
Collection and aggregation of known and unknown (gaps) data;
Help businesses in the region better outline their individual, industry and collective needs;
SWAMC Comprehensive Economic Development Strategy 2018 8
AGENDA ITEM #2.d.
Identify what resources are needed to retain and expand regional economic activity; and
Inform SWAMC’s overall Economic Development Strategy and advocacy efforts to support
regional strengths and plan for resiliency.
Facilitate ongoing networking and communication opportunities to support business-to-
business, business-to-government and government-to-government relationships on the
region’s economy.
As outlined in the “Process” section below, the December Business Council meeting, as well as pre-
and post-member surveys and interviews, was an important first step in the CEDS development. In
their feedback, Business Council Members helped SWAMC identify preliminary economic
development/business climate issues, challenges and opportunities for the region, and a list of potential
strategies for improving the area’s business climate and increasing economic development
opportunities. SWAMC aims to continue working with Southwest Alaska business leaders, facilitating
conversations, and partnering with business leaders to champion and implement economic
development strategies in the region, including direct implementation, updating and evaluating of the
CEDS.
STRATEGY DEVELOPMENT
Outlined below are the main steps in the SWAMC Comprehensive Economic Development Strategy
planning process. The CEDS was developed by SWAMC with assistance from Agnew: -Beck
Consulting. The process began in December of 2013 and ended in July of 2014.
th
The CEDS planning process began with SWAMC's Business Council Meeting on December 16,
2013. After reviewing key indicators and data points for the region, Business Council Members
provided feedback on the benefits and challenges of doing business in Southwest Alaska. They also
discussed ways to build on the region’s strengths through a preliminary set of recommendations for
improving the Southwest Alaska business climate and quality of life for all Southwest Alaska residents.
The group also shared specific roles SWAMC can play in implementing and supporting strategies that
will have a broad, positive impact on the region’s economy.
Results from the meeting, as well as feedback from subsequent one-on-one conversations with business
council members, were reviewed and revised by the SWAMC Board. The finalized results, in the form
of “preliminary CEDS strategies” were shared back at a CEDS planning session with SWAMC
thth
members at the March 6 and 7 SWAMC Annual Economic Summit. At the Summit, participants
had the opportunity to review, discuss and add to the list of preliminary strategies. They also gave
feedback on what SWAMC should focus on over the next five years by voting their top five priority
strategies. Workforce Development, Collaborative Partnership Efforts and Energy/Infrastructure
needs were confirmed as priority action items.
SWAMC Comprehensive Economic Development Strategy 2018 9
AGENDA ITEM #2.d.
An important component of the planning process included research and analysis of past and current
trends for the region. The previous 2010-2014 CEDS contains a wealth of background information on
the geography, history, demographics and natural resources of Southwest Alaska. This collection of
baseline data supported an in-depth regional SWOT analysis, as well as clearly-defined actionable items
for SWAMC and partners to address. The complete collection of baseline data is available in the
appendices attached to this report.
Feedback from membership, business, and others in the SWAMC network, in coordination with
development of the baseline data library, were compiled to create the content and foundation for the
updated CEDS. The project team also reviewed current local and regional planning documents to
ensure CEDS strategies align with these efforts and to identify opportunities to expand partnerships.
Working with the SWAMC Board, the project team also added a detailed framework for tracking the
progress of plan implementation.
UNDERSTANDING REGIONAL NEEDS
Continued efforts to understand the needs of communities and businesses in Southwest Alaska are
implemented through SWAMC's Energy Planning and Business Retention and Expansion projects.
The Energy Plan, Phase I - Resource Assessment, and Phase II - Outreach, have been completed and
now moving into Phase III - Energy Solutions, the energy committees have been initiated in each of
the three sub-regions of Aleutians, Bristol Bay and Kodiak. Working with regionally representative and
community supported stakeholders the committees are tasked with identifying community priority
projects to address the high costs of energy and explicitly outline necessary steps to improve energy
systems. Due to the technical nature and complexity of community scale energy projects, SWAMC
works closely with over 50 technical programs and 90 financing programs that provided input and
direction on pathways communities must take to improve their energy future. After communities
develop roadmaps to achieve priority energy projects, committee discussion provides regional input,
support and learning that helps align the effort.
As the regional partner on the Statewide Business Retention and Expansion (BRE) project, SWAMC
is coordinating outreach with four Boroughs, two census areas, three communities and many more
regional entities to form a strategic approach to understanding strengths and weaknesses within the
existing businesses climate. Through targeted surveys by geographic location and industry sector, this
partnership develops personal relationships with businesses, and collect empirical data so that the
necessary resources, programs or regulations support economic activity, where non-profit and
government act as partners in prosperity. The continued outreach efforts to support and be a partner
to the Southwest Alaska Business community derive directly from the successful findings with the
SWAMC Business Council.
SWAMC Comprehensive Economic Development Strategy 2018 10
AGENDA ITEM #2.d.
CHAPTER 2: SUMMARY BACKGROUND
The regional economy must be understood to establish strategic priorities. This chapter provides an
overview of the people, regional wealth, industrial clusters, infrastructure and resources that comprise
the foundations of Southwest Alaska. This chapter identifies compelling data, relevant trends and
economic indicators that help define Southwest Alaska strengths, weaknesses, opportunities and threats
(SWOT), and ultimately, highlights strategies from which to build economic resilience. The rest of the
baseline data library can be found in the Appendices.
GEOGRAPHY
Southwest Alaska is a vast area
Table 2.1: Southwest Alaska Area by Boroughs and Census Areas
that includes portions of
Land Area Water Area Total Area
mainland Alaska as well as
Borough or Census Area(sq. miles)(sq. miles)(sq. miles)%
hundreds of islands. The
Aleutians East Borough6,988.108,023.515,011.616.0%
region, which stretches nearly
Aleutians West Census Area4,397.009,719.714,116.515.0%
1500 miles across, encompasses
Bristol Bay Borough504.9382.8887.70.9%
four incorporated boroughs
Dillingham Census Area18,675.002,253.620,928.4022.3%
and two federally recognized
Kodiak Island Borough6,559.805,463.812,023.7012.8%
census areas: the Aleutians East
Lake & Peninsula Borough23,782.007,125.030,907.0032.9%
Borough, the Aleutians West
Southwest Region Total60,906.8032,968.593,874.80100.0%
Census Area, the Bristol Bay
Source: U.S. Census Bureau and Alaska Department of Community & Economic Development
Borough, the Dillingham
Census Area, the Kodiak Island Borough and the Lake and Peninsula Borough. It is bordered by the
Yukon-Kuskokwim region to the northwest, the Bering Sea to the west, the North Pacific Ocean to
the south, the Gulf of Alaska to the south and east, and portions of the Kenai Peninsula Borough and
an unorganized portion of Southcentral Alaska to the east and northeast. From Anchorage, Alaska’s
largest city and population center, it is 180 air miles to the nearest Southwest community of Port
Alsworth. In contrast, to reach the westernmost Attu Island, it would require a flight of nearly 1,700
miles. There is no overland connectivity to the region from other areas (Anchorage); primary
transportation to and from the region is by boat and/or plane. There are a few places where various
communities within close proximity has connectivity such as Naknek and King Salmon or Dillingham
and Aleknagik.
The combined area of the four boroughs and two census areas equal 93,875 square miles. Of the total
area, nearly 61,000 square miles is land mass and an additional 33,000 square miles is water surface,
including the State water boundaries extending three miles from land. It is an area roughly equivalent
to the State of Oregon, the tenth largest state in the U.S., or 16.5% of the total area of the state. See
Table 2.1 for information on land area for each of the region’s boroughs and census areas.
SWAMC Comprehensive Economic Development Strategy 2018 11
AGENDA ITEM #2.d.
Southwest Alaska boasts a wide variety of landscapes and physical characteristics including estuaries
and lagoons; wetlands and tide flats; rocky islands and sea cliffs; exposed high-energy coasts; rivers,
streams and lakes; boreal forests/taiga; alpine and low arctic tundra; glaciers and barren alpine; and
temperate rainforests. Southwest Alaska has nearly 12,000 miles of shoreline, which accounts for nearly
40% of the shoreline for the State of Alaska. In comparison, the contiguous 48 states have a combined
shoreline of 16,900 miles. See Figure 2.1 for a topographical map of the region. As the map shows, a
shallow continental shelf follows the near-shore landmass, accompanied by deeper water in the western
Bering Sea, and extreme depths of the Aleutian Trench. Historically, sea ice forms annually from the
Pribilof Islands to the Bering Sea, extending into Bristol Bay, south to Egegik, but remains ice-free
year-round south of this line. Due to its proximity to a very active section of the Pacific Ring of Fire,
the region is home to many active volcanoes and experiences frequent earthquakes.
Figure 2.1: Topography of Southwest Alaska
Source: National Geographic Map Maker, 2014
SWAMC Comprehensive Economic Development Strategy 2018 12
AGENDA ITEM #2.d.
CLIMATOLOGY & OCEANOGRAPHY
There are four climatic regions in
Figure 2.2: Average Monthly Temperatures
Southwest Alaska: Western
(30-year time period, 1981-2010)
Maritime, Southcentral, West
60
Coast, and Interior. The weather
of Southwest Alaska is relatively
40
warm and mild compared to other
parts of the state. Wind and rain
20
are prevalent across the marine
0
environment, turning to snow
JanFebMarAprMayJunJulAugSepOctNovDec
inland and along the mountains,
although variation exists across
ADAKDILLINGHAM
the vast geography. Figure 2.2 and
DUTCH HARBORKODIAK
Figure 2.3 display average
ANCHORAGE
monthly temperatures and
Source: The Alaska Climate Research Center
precipitation for select
Figure 2.3 Average Annual Temperatures for Selected Southwest
communities in the region.
Regions
Average temperatures range
from a high of 56.1°F in
Illiamna in July to an
average low of 15.1°F in
Dillingham in January.
Precipitation varies widely
across the region;
Dillingham receives an
average of 25.32 inches of
precipitation a year while
Kodiak receives an average
of 78 inches per year. In
comparison, the statewide
Source: National Weather Service
average is 19.49 inches per
year. Climate dramatically influences daily life in Southwest Alaska. The local economy is based almost
entirely on fishing, and having reliable weather information is critical; and critical to traveling long
distances over air and sea. In addition to standard weather forecasts, marine and aviation forecasts are
of particular importance to the region.
SWAMC Comprehensive Economic Development Strategy 2018 13
AGENDA ITEM #2.d.
Ocean basin topography, currents, the extent of sea ice, water temperature and other environmental
characteristics influence the productivity of the region’s salt water environments. The Kushiro Current
flows across the Pacific Ocean from Japan, splitting into two currents as it approaches North America.
One current, the Alaska Current, turns north creating a counterclockwise flow into the Gulf of Alaska.
Currents from the North Pacific move through passes in the Aleutian Chain into the Bering Sea.
Currents in the Bering Sea are very complex, but generally tend to move counterclockwise. The
interaction of ocean currents with nutrient-rich freshwater runoff from the region’s uplands is part of
what makes the area such a productive fisheries ecosystem. A shallow continental shelf follows the
near-shore landmass, including the entire eastern Bering Sea, north and east of the Pribilof Islands,
accompanied by deeper water in the westerns Bering Sea, and extreme depths of the Aleutian Trench
). The last Ice Age left deep scars in the remaining land formation, which over the
(www.gi.alaska.edu
centuries of heavy rainfall have creates some of the biggest lakes in Alaska, fed by mineral rich glaciers,
creating abundant and rich fresh water rivers. The Alaska Department of Fish & Game lists 3,174
entries for Southwest Alaska in the Catalog of Waters Important for the Spawning, Rearing or
Migration of Anadromous Fishes (Jay Johnson, ADF&G, personal communication,
www.adfg.alaska.gov).
Figure 2.4: Land Ownership in Southwest Alaska
Source: Alaska Department of Natural Resources
HISTORY, CULTURE & LAND OWNERSHIP
Southwest Alaska has over 29,300 residents living in fifty-four communities within the region. The
people of Southwest Alaska are a diverse mix, with roots in the Alaska Native cultures of Yupik,
Athabascan, Aleut and Alutiiq, overlaid with over 100 years of Russian heritage and western influences,
especially development of commercial fisheries. The Alaska Native Claims Settlement Act of 1971
(ANCSA) addressed which lands Alaska Natives owned by right of traditional use and occupancy.
ANCSA provided for the creation of regional and village corporations to receive settlement
SWAMC Comprehensive Economic Development Strategy 2018 14
AGENDA ITEM #2.d.
compensation in the form of cash and various land rights. The boundaries of three ANCSA regional
corporations are wholly or partially contained in Southwest Alaska, including 47 village corporations
also established by ANCSA. Some village corporations have become wealthy organizations that
contribute substantially to local economic resiliency.
Figure 2.5A: Population 2013-2017
Source: http://labor.alaska.gov/research/index.htm
Figure 2.5B: Percentage Change in Population 2013-2017
Source: http://labor.alaska.gov/research/index.htm
SWAMC Comprehensive Economic Development Strategy 2018 15
AGENDA ITEM #2.d.
Land ownership patterns in Southwest Alaska mirror that of the rest of the state. The federal
government is the largest landowner, followed by the State of Alaska, and then, collectively, the largest
private land owners – the ANCSA Native
Figure 2.6 Migration In and Out of Southwest Alaska
corporations (see Figure 2.4). The
1600
majority of federally owned lands in
1400
To Southwest
1200
Southwest Alaska have been set aside for
1000
public use. The National Park Service and
From Southwest
800
U.S. Fish and Wildlife Service units are
600
managed primarily for resource
400
200
protection, fish and wildlife conservation,
0
and recreation. The Bureau of Land
Management manages for multiple use
purposes including timber production,
fish and wildlife, recreation, water and
mining. Management of these lands is Source: Alaska Department of Labor and Workforce
Development, Research and Analysis Section (based on PFD
based on priorities and compatibility
Filing data).
among various uses. The remaining
federal land is designated for special purposes, such as military reservations.
The State of Alaska owns significant land holdings throughout the region. Major state land units in the
region fall into several broad categories: tidelands and submerged lands, parks, game refuges and
sanctuaries, and critical habitat areas. State park lands include Wood-Tikchik State Park, the largest
state park in the nation at 1.6 million acres.
Native Corporations make up the largest private landowners in the region. Native lands in the region
have been developed in a variety of ways including: logging; tourism facilities and activities; residential
real estate development; federal and state land acquisition through the EVOS Council habitat
restoration activities; mining; and gravel and rock sales. Other private landowners, including individual
and community holdings, comprise less than 1% of the remaining land in the region. The University
of Alaska and the Alaska Mental Health Trust both have modest land holdings within Southwest
Alaska.
PEOPLE OF SOUTHWEST ALASKA
Populations throughout the region were mostly static 2000-2010. According to the 2010 Census there
are 29,769 people living in the Southwest Region. Almost half (13,592) of these residents live in the
Kodiak Island Borough. See Figure 2.5 for trends by borough and census area. These numbers estimate
permanent full-time residents and do not include temporary or seasonal residents. The population of
some communities in Alaska can vary by as much as 20% due to the influx of seasonal tourism, fishing
and construction workers.
SWAMC Comprehensive Economic Development Strategy 2018 16
AGENDA ITEM #2.d.
Figure 2.8: Southwest Population by Age + Gender,
2014 Estimate
Estimates from the Alaska
Department of Labor and
Workforce Development indicate
that there is a net migration out of
the region (see Figure 2.6). Between
2011 and 2012 - 2,507 residents
moved to the region and 2,656
residents left the region for a loss of
149 residents. However, population
changes due to natural increases
(births minus deaths) are resulting in
a steady population over time.
The Southwest region is very
diverse. As seen in Figure 2.7, 40
percent of the population is white,
Source: Alaska Department of Labor and Workforce Development,
Research and Analysis Section; U.S. Census Bureau
followed by 28% who are American
Figure 2.7: Population by Race, Southwest Alaska
Indian and Alaska Native and 18 percent
who are Asian. There is significant
Native
Other
Identified
variation in demographic composition in
Hawaiian
3%
by two
and
each borough/census area. The primary
or more
Pacific
8%
Alaska Native groups in the region
Islander
American
1%
include Aleut, Alutiiq and Central Yupik White
Indian
40%
peoples and cultural traditions.
and
Alaska
Native
Fifty-six percent of the population in
28%
African
Southwest Alaska is male, which is higher
Asian
American
18%
than the statewide average of 52 percent.
2%
Most of this difference is accounted for
Source: Alaska Department of Labor and Workforce
by the gender composition of the
Development, Research and Analysis Section (based on 2010
Census data).
populations in the Aleutians East
Borough and the Aleutians West Census Area. In each of these two sub-regions, the population is
comprised of nearly two-thirds males and slightly more than one-third females. A full distribution of
the population by gender and age can be seen in Figure 2.8, with females in blue and males in green.
In terms of education, school district enrollment has been holding steady across the region, see Figure
2.9. 57% of the population has gone to secondary school compared with 64% of the population in the
state. 32% have some college but no degree. Nineteen percent of the population has a bachelor’s degree
or higher compared with 27% in the state. Given the small sample size these numbers should be
considered general estimates due to high margins of error.
SWAMC Comprehensive Economic Development Strategy 2018 17
AGENDA ITEM #2.d.
Figure 2.9: Level of Educational Attainment, 2012
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Less than 9th9th to 12thHigh schoolSome college,AssociatesBachelorsGraduate or
gradegrade, nograduate,no degreedegreedegreeprofessional
diplomaincludesdegree
equivalency
NOTE: These figures include the Bethel and Wade Hampton Census Areas, which are not in the SWAMC region.
Source: Alaska Department of Labor and Workforce Development, Research and Analysis Section; U.S. Census
Bureau.
REGIONAL EMPLOYMENT & EARNINGS
EMPLOYMENT
The labor force in Southwest Alaska is largely structured to respond to the direct demands of the
commercial seafood industry, as well as support functions ancillary to that industry. Unfortunately,
employment and industry data is somewhat limited due to high self-employment numbers, limited
reporting, proprietary information of large sole-owner processing facilities and other factors.
Figure 2.10: Total Labor Force Estimates
16000
Lake and Peninsula
Borough, AK
14000
Kodiak Island Borough, AK
12000
10000
Dillingham Census Area, AK
8000
Bristol Bay Borough, AK
6000
Aleutians West Census
4000
Area, AK
2000
Aleutians East Borough, AK
0
Source: U.S. Bureau of Labor Statistics
SWAMC Comprehensive Economic Development Strategy 2018 18
AGENDA ITEM #2.d.
The total labor force saw a small decline in the 1990s and has been slowly increasing since (see Figure
2.10). In 2012 there were 15,621 residents in the labor force. A recent change in the way labor force
statistics are calculated by the Alaska Department of Labor & Workforce Development rendered labor
data prior to 2010 incomparable to data from 2010 and onward. Figure 2.11 reflects newly calculated
unemployment rates from 2010 onward. The most notable change is shown in the Lake and Peninsula
Borough’s unemployment rate, which now hovers around 15%.
Table 2.2 Non-Employer Statistics for the Southwest Region
2007 2008 2009 2010 2011
Number of
Firms 3,573 3,536 3,439 3,525 3,544
Number of
Receipts 158,927,000 164,713,000 152,490,000 172,789,000 188,949,000
Source: U.S. Census Bureau and the IRS.
Figure 2.11: Unemployment Rate, 2013-2017
Source: Alaska Department of Labor + Workforce Development, Research + Analysis
SWAMC Comprehensive Economic Development Strategy 2018 19
AGENDA ITEM #2.d.
Figure 2.12: Nonresident Workers by Place of Work, 2013
Source: Alaska Department of Labor and Workforce Development, Research and Analysis Section
Southwest Alaska also has high self-employment numbers. The U.S. Census Non-employer Statistics
is based on the number of business income tax returns submitted by firms without any employees.
Table 2.2 shows that the number of non-employer firms stayed fairly steady at around 3,500 firms. The
total receipts have been steadily increasing over the past five years. Over half of these firms are
businesses related to the fishing industry. These numbers are based on the submitter’s address, so if an
individual fishes in the Southwest Alaska region, but lives and completes taxes outside the region, the
numbers will not be captured here.
In general, Southwest Alaska hosts many nonresident workers. Workers come from other parts of the
state and from the contiguous United States for seasonal work in fishing, tourism, construction and
more. Unfortunately, most of the labor force and employment figures in this section do not capture
these migratory workers. Figure 2.12 shows the percentage of nonresident workers for various regions
around the state. Southwest Alaska has some of the highest nonresident worker figures in Alaska, with
Aleutians East Borough (74%), Bristol Bay Borough (74.2%) and Aleutians West Census Area (52.6
percent) seeing the highest percentages of nonresident. The employment of non-American labor is
subject to Federal labor laws and quotas that can vary from year to year. This adds a level of
unpredictability to labor availability.
REGIONAL EARNINGS
Per capita income for the region varies by borough and census Area (see Figure 2.13). Over the twenty-
year period between 1992 and 2012, the region saw an average increase in per capita income of 18%.
Aleutians East Borough and Aleutians West Census Areas both experienced declines over that period
of -19% and -13.7%, respectively. In 2012, per capita income in Bristol Bay Borough, Kodiak Island
Borough and Lake and Peninsula Borough was higher than the national average of $43,735 and lower
SWAMC Comprehensive Economic Development Strategy 2018 20
AGENDA ITEM #2.d.
than the national average in Aleutians East Borough, Aleutians West Borough and Dillingham Census
Area. This trend continues into 2013 per capita incomes reported by the US Bureau of Economic
Analysis, though each region represents steady growth in their per capita income, a trend that was not
always present in the past 20 years.
Figure 2.13: Per Capita Income, 1992-2012 (adjusted for inflation)
$60,000
$50,000
$40,000
$30,000
1992
2002
$20,000
2012
$10,000
$0
AleutiansAleutiansBristol BayDillinghamKodiakLake andAlaskaUnited
EastWestBorough,CensusIslandPeninsulaStates
Borough,Borough,
Borough,CensusAKarea, AK
AKarea, AKAKAK
Source: US Bureau of Economic Analysis: US Census Data
Figure 2.14 shows employment trends over time for some of the largest sectors. Fishing and
government are the two largest employers in the region. Combined government (tribal, local, state and
federal) employed 8,500 residents while seafood processing employed 5,300 residents in 2012. In 2014,
government employed only 8,250 residents while seafood processing employed 5,600 residents. These
figures do not include self-employed residents, many of whom fish. Self-employment information can
be found later in this chapter under “Industry and Occupation Trends.”
SWAMC Comprehensive Economic Development Strategy 2018 21
AGENDA ITEM #2.d.
Figure 2.14: Southwest Employment Trends Over Time
SW Employment Trends Over Time
7,000
6,000
5,000
Local Government
Seafood Processing
4,000
Tribal Government
3,000
State Government
2,000
Federal Government
1,000
0
200320042005200620072008200920102011201220132014
Source: Alaska Department of Labor and Workforce Development, Research and Analysis Section.
TAXES
At a statewide level, the tax climate in Alaska is relatively favorable compared to other U.S. states. The
Tax Foundation compiles an annual State Business Tax Climate Index. Alaska ranks fourth out of all
the states (a rank of 1 is most favorable for business). The three states with a higher ranking are
Wyoming, South Dakota and Nevada. See Table 2.3 for a breakdown of Alaska’s tax ranking.
Table 2.3 State Business Tax Climate Index, 2015: Alaska
Individual Unemployment
Overall Corporate Sales Tax Property
State Income Insurance Tax
Rank Tax Rank Rank Tax Rank
Tax Rank Rank
4 30 1 5 24 32
Alaska
Note: A rank of 1 is more favorable for business than a rank of 50.
Source: Tax Foundation, 2015 State Business Tax Climate Index. Data comes from October 28, 2014.
A particularly relevant fact to the Southwest Alaska region is the fisheries business tax. The
fisheries business tax is assessed on fisheries businesses and persons who process or export
fisheries resources from Alaska. The Division collects fisheries business taxes primarily from
licensed processors and persons who export unprocessed fish from Alaska. The State also levies
the fishery resource landing tax on processed fishery resources. The Southwest region includes
additional taxes that vary at the municipal level. These taxes are levied in a variety of ways
including through property taxes, sales taxes, bed taxes, fuel taxes, liquor taxes and natural
resources taxes.
SWAMC Comprehensive Economic Development Strategy 2018 22
AGENDA ITEM #2.d.
INNOVATION
The U.S. Economic Development Administration (EDA) publishes an Innovation Index for
comparing regions to the U.S. in order to assess innovative capacity. The innovation calculation uses
measurable inputs and outputs from a region to evaluate what is driving innovation and where there is
room for improvement. The scores are compared to the United States as a whole, which is given a
baseline value of 100. Higher scores mean that a region is performing better than the country; scores
lower than 100 mean that the region is not performing as well at the country as a whole. In 2014, the
SWAMC region received a relatively low overall score of 74, less than Alaska’s score of 88.8. In 2015,
the region moved up to a score of 85.2, an increase of over 10 points, while Alaska only grew to 90.5
points. This growth in the last year is mirrored in the subcategories, with the region nearly closing gaps
with Alaska in certain sectors. Productivity and Employment, for example, features the region and
Alaska with only a .01 point difference. Data for the SWAMC region still indicates that the region
excels in the number of large establishments per 10,000 workers (1.43 establishments per 10,000
workers compared with 1.1 for the U.S.), job growth to population growth ratio (a ratio of 4.88
compared to .69 for the U.S. between 1997 to 2008), and slightly lower unemployment rates (6.9
percent compared to 6.6 percent for the U.S.). Figure 2.15 shows how the SWAMC region scored
compared to the state and the U.S.
Figure 2.15: Innovation Index Indicators
Red = SWAMC region
Yellow = Alaska
Blue = United States (baseline)
The index is calculated using the following indicators:
Human Capital
Economic Dynamics
Productivity and Employment
Economic Well-Being
Sub-scores for the each indicator are below.
Productivity and Employment (Change in High-Tech
Human Capital (Educational Attainment, Technology-
Employment, Job Growth, Gross Domestic Product Per
based Knowledge Applications, Population Growth Rates)
Worker, Average Patents per 1,000 Workers)
SWAMC Comprehensive Economic Development Strategy 2018 23
AGENDA ITEM #2.d.
Economic Dynamics (Average Venture Capital, Economic Well-Being (Average Poverty Rate, Average
Establishment Churn, Broadband Density + Penetration, Unemployment Rates, Average Net Migration, Average
Establishment Sizes) Growth in Per Capita Personal Income, Compensation)
Source: Innovation Index (partnership between U.S. Commerce Department's Economic Development Administration, Purdue Center
for Regional Development, Indiana Business Research Center, Indiana University's Kelley School of Business and others).
INFRASTRUCTURE
Southwest Alaska is a large region with a small and dispersed population. Maintaining infrastructure is
difficult given challenging logistical costs of mobilization. Although, the resource rich region provides
a market incentive to develop expensive infrastructure in order to access resources. Some of the highest
capacity fishing communities in the nation are located in Southwest Alaska. Expensive infrastructure
is also justified given the military and scientific geo-location, particularly because Southwest Alaska is
the U.S.'s nearest region to Asia and the Arctic. The geography limits overland connectivity, leaving
water and air as the primary modes of inter-community transportation.
WATER
Transportation by boat is the most common means of transporting goods to and around Southwest
Alaska. Unalaska’s deep-water port is one of the most productive cargo ports in the United States,
along with Kodiak and Bristol Bay ports, as an anchor for both regional fishing as well as domestic and
international cargo. The Alaska Marine Highway system serves the Kodiak hub year-round, and the
southern Aleutian Chain as far as west as Unalaska during the summer months, May-September; no
scheduled marine services are available for communities of the Bering sea and communities east of
Unalaska. As seen in Figure 2.16, Kodiak sees the highest ridership. The sharp drop in Port Lions in
2012 is likely due to inconsistent ferry service due to summer dock work. Ridership dropped in all ports
in 2013 due to the M/V Tustumena being out of service for an extended time. Normal service resumed
2014 and ridership trends rose. The M/V Tustumena was out of service most of the summer of 2017
due to the need to replace critical steel portions of the vessel. Money was appropriated in the 2017
State Capital Budget to match Federal funding to construct a new vessel to replace the Tustumena.
Given the high per-capita costs of operating Alaska Marine Highway System (AMHS) and State budget
shortfalls, a growing concern in Southwest Alaska is the long-term sustainability of reliable ferry service.
SWAMC Comprehensive Economic Development Strategy 2018 24
AGENDA ITEM #2.d.
SWAMC participated in an effort led by the Southeast Conference to look at operational models and
practices that could reduce the level of State subsidy for the AMHS.
Figure 2.16 Alaska Marine Highway System: Ridership Trends, 2008-2014
Kodiak Ridership: EmbarkingKodiak Ridership: Disembarking
12000
11500
11500
11000
11000
10500
10500
10000
KodiakKodiak
10000
9500
9500
9000
85009000
2008200920102011201220082009201020112012
Aleutian Ridership: Disembarking
Aleutian Ridership: Embarking
1800
2000
Port
Port
Lions
1800
1600
Lions
Dutch
Dutch
1600
1400
Harbor
Harbor
1400
1200
King
King
1200
Cove
Cove
1000
Akutan
1000
Akutan
800
800
Sand
600
Sand
600
Point
Point
400
400
Chignik
Chignik
200
200
Cold Bay
Cold Bay
0
0
20082009201020112012
20082009201020112012
Source: Alaska Marine Highway System
SWAMC Comprehensive Economic Development Strategy 2018 25
AGENDA ITEM #2.d.
AIR
Aviation is the principle means
Figure 2.17: Airfare Premium Prices, 2000 and 2012
of transporting people to and
$1,200.00
within the communities
2000 Inflation Adjusted
throughout the Southwest
$1,000.00
region. A lack of
2012 Real Prices
$800.00
interconnected roads means
passenger and light goods such
$600.00
as mail and perishable food
typically move by air. Extreme
$400.00
weather, poor visibility, long
distances, limited airport
$200.00
infrastructure, and low
$-
economies of scale all present
DillinghamKingKodiakSand PointUnalaska
challenges to the use of air as a
Salmon
primary mode of travel.
Source: Bureau of Transportation Statistics (BTS)
The cost of flying has increased significantly over the past decade. Figure 2.17 shows 2000 inflation
adjusted and 2012 real prices for airfare to select communities, to highlight that costs have risen faster
1
Adjusted for inflation, prices increased between 11 percent and 23
than inflation vis-a-vis air service.
percent over the 12 year period.
ROADS
There is limited overland connectivity in Southwest Alaska. Connector road that do exist are short and
connect communities that are in close proximity; none over approximately 25 miles in length.
COMMUNICATIONS
The SWAMC region has limited communication infrastructure. Connect Alaska compiles maps and
information on the availability of broadband and internet connectivity around the state. Figure 2.18
shows that like other rural regions of the state, Southwest Alaska has limited broadband availability.
Broadband connectivity, defined as the availability of download speeds of at least 768 Kbps and upload
speeds of 200 Kbps, varies widely across the region. Table 2.4 shows the number of households with
broadband service in each sub-region.
1
Bureau of Transportation Statistics, Research and Innovative Technology Administration. (2013). Average
Domestic Airline Itinerary Fares by Origin City. Retrieved April 18, 2014 from
http://www.transtats.bts.gov/AverageFare/default.aspx
SWAMC Comprehensive Economic Development Strategy 2018 26
AGENDA ITEM #2.d.
Table 2.4 Households with Broadband Service
Area Number of Estimated Percent Estimated Total
Households of Households w/ Households w/
Broadband Service Broadband Service
Aleutians East Borough 553 ND ND
Aleutians West Census 1212 ND ND
Area
Bristol Bay Borough 423 76 323
Dillingham Census Area 1563 94 1465
Kodiak Island Borough 4630 91 4202
Lake and Peninsula 553 80 440
Borough
Total 8934 73 6495
Source: Connect Alaska
Table 2.5 Connection Availability and Monthly Costs in the SWAMC Region*
Fiber Satellite Microwave
Network Connection
Service Level
Basic Fastest Basic Fastest Basic Fastest
$50 for $130 for $60 for $200 for - -
Kodiak Region
10 Mbps 22 Mbps 1 Mbps 2 Mbps
- - $60 for $200 for $24 for $150 for
Bristol Bay Region
1 Mbps 2 Mbps .512 Mbps 6 Mbps
- - $65 for $110 for - -
Aleutian Region
.512 Mbps 1.5 Mbps
*Prices as of November 1, 2012
Source: SWAMC
Dillingham and Kodiak have more households with broadband service at 96% and 91% respectively;
2
Bristol Bay Borough and Lake and Peninsula Borough have broadband coverage of 76% and 51%. In
the Aleutians, Dutch Harbor, Cold Bay, King Cove, and Sand Point have 1 Mbps broadband service
3
available from TelAlaska. Table 2.5 shows connection availability and costs in the SWAMC region as
of November 1, 2012. This table shows that cost varies across the region, with prices ranging from $24
for 0.512 megabits per second ($0.05 per bit per second) for basic microwave in Bristol Bay to $200
4
for two megabits per second of data via fast satellite connections in Kodiak and Bristol Bay. While
2
Connect Alaska. (2014, May). Facts and Figures.Retrieved June 10, 2014, from Estimated Availability of
Broadband Service by Borough, Census Area and Municipality: http://www.connectak.org/sites/default/files/facts-
figures/files/ak_may_2014_table_5.pdf
3
Dave Goggins, TelAlaska, personal communication, July 29, 2014
4
Southwest Alaska Municipal Conference. (December 2012). Regional Applications for a Digital Economy.
Accessed June 16, 2014 from http://www.swamc.org/files/RegionalApplicatonsDigitalEconomy_FINAL.pdf.
SWAMC Comprehensive Economic Development Strategy 2018 27
AGENDA ITEM #2.d.
network connection services still remain limited in many areas, recent investments in microwave and
fiber optic networks are slowly bringing increasing levels of service to Southwest Alaska.
Figure 2.18: Broadband Availability in the State of Alaska
Source: Connect Alaska, 2013
HOUSING
The housing stock in Southwest Alaska varies greatly between communities. According to interviews
and conversations within the SWAMC network, many communities are experiencing shortages of
affordable and adequate housing. Table 2.6 shows information on housing units, average household
size and overcrowding percentages for the six boroughs/census areas as well as for the state. Four of
the six areas are experiencing higher overcrowding levels than the state as a whole; in the Dillingham
Census Area, 18% of occupied housing units are overcrowded, followed by 13% in the Lake and
Peninsula Borough and 9% in both the Aleutians West Census Area and the Kodiak Island Borough.
Table 2.6 Housing Units and Household Size
Housing Units Household Size
Housing occupied for seasonal(%) of occupied Avg.
Borough/Census Area
units sale/rent /vacant units that are Household
overcrowded size
Aleutians East Borough
535 336 46 153 3.6% 2.3
Aleutians West Census Area
2,268 1,255 184 829 9.0% 2.4
Bristol Bay Borough
952 424 43 485 4.5% 2.4
Dillingham Census Area
2,416 1,369 128 919 18.0% 3.5
Kodiak Island Borough
5,323 4,445 112 766 9.0% 2.9
Lake and Peninsula
1,605 562 45 998 13.0% 2.7
Borough
Statewide 6.0% 2.7
Source: Cold Climate Housing Research Center, 2014 report.
SWAMC Comprehensive Economic Development Strategy 2018 28
AGENDA ITEM #2.d.
ENERGY
Energy costs in Southwest Alaska are generally high with significant variability between communities.
Annual household energy costs range from $6,260 in the Kodiak Island Borough to $8,410 in the Lake
and Peninsula Borough. All SWAMC regions experience energy costs that are higher than the state
average of $4,681 per year and most regions are more than three times the national average of $2,146
per year (see Table 2.7). Affordability is an issue for some communities although the region has fewer
households spending over 30% of their income than the rest of the state and the nation. There are a
number of energy cost saving programs in the state that are available to help reduce energy costs,
including the Home Energy Rebate Program and Alaska Housing and Finance Corporation (AHFC)’s
Weatherization Assistance Program. Participation in these energy programs varied widely across the
region: 40% of Lake and Peninsula Borough households participated in a program, while only 4% of
households participated from the Aleutians West Census Area.
Table 2.7 Energy use, cost, and participation in energy programs
Households
Energy use/sf Annual Energy % In Energy Spending Over 30%
(BTUs) Cost Programs of Income on
Housing
108,000 $6,300 29% 21%
Aleutians East Borough
Aleutians West Census
120,000 $ 6,620 4% 26%
Area
142,000 $ 7,030 22% 16%
Bristol Bay Borough
134,000 $ 6,320 22% 20%
Dillingham Census Area
117,000 $ 6,260 16% 34%
Kodiak Island Borough
Lake and Peninsula
139,000 $ 8,410 40% 24%
Borough
Municipality of
141,000 $ 2,790 23% 35%
Anchorage
137,000 $ 4,681 21% 31%
Statewide
$ 2,146 n/a 37%
Nationwide
Source: Cold Climate Housing Research Center, 2014 report.
The Alaska Energy Authority’s Power Cost Equalization (PCE) program subsidizes the cost of
electricity for approved rural communities. The PCE subsidy has helped buffer households from the
increasing rise in energy costs. Figure 2.19 shows the residential energy cost per kilowatt hour before
and after the PCE subsidy. While the program helps buffer households from increasing energy costs,
it only applies to residential energy costs. As a result, commercial energy costs remain very high in
Southwest Alaska.
SWAMC Comprehensive Economic Development Strategy 2018 29
AGENDA ITEM #2.d.
Figure 2.19: Residential Energy Costs and PCE Reimbursements, 2011
$1.00
$0.90
$0.80
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$-
Residential Rate after PCE ($/kWh)PCE reimbursment rate ($/kWh)
Source: Alaska Energy Statistics and UAA's Institute for Socioeconomic Research; published November 2012
RESOURCES
FISH
Southwest Alaska’s economy is largely centered on the region’s abundant marine resources. Southwest
Alaska is home to four of the top ten ports in the United States by volume and six of the top ten ports
in the United States in terms of value (Figure 2.20).
Regional fishery landings declined in 2008-2010 but then increased to almost 5 billion pounds in 2011
and 2012 (Figure 2.21). Similarly, fishery values dipped in 2009 but have otherwise been steadily
increasing, and total price per pound has increased from roughly $0.28 to $0.34.
SWAMC Comprehensive Economic Development Strategy 2018 30
AGENDA ITEM #2.d.
Figure 2.20: Top 10 Ports in the U.S.
Source: NOAA National Marine Fisheries Service, Office of Science and Technology.
Figure 2.21: Total Alaska Fisheries Value + Landings Trends
3,000
$2,000
$1,800
2,500
$1,600
$1,400
2,000
$1,200
1,500 $1,000
$800
1,000
$600
Landings, Metric TonsValue, Dollars
$400
500
$200
$-
0
2003200420052006200720082009201020112012
Source: National Marine Fisheries Service
SWAMC Comprehensive Economic Development Strategy 2018 31
AGENDA ITEM #2.d.
The Western Alaska Community Development Quota (CDQ) Program is a federally managed
economic development
Table 2.8: CDQ Figures for Southwest Alaska CDQ Groups,
program. Three of the six
2006-2010
CDQ groups established by
APICDA CBSFA BBEDC TOTAL
annual
the program are in
investments in
Southwest Alaska: the
fishery-related $4,700,000 $6,800,000 $10,000,000 $ 21,500,000
Aleutian Pribilof Islands
endeavors, 2006-
Community Development
2010
direct + indirect
Association (APICDA), the
employment*, 129 138 241 508
Bristol Bay Economic
2006
Development Corporation
direct + indirect
employment*, 226 179 709 1114
(BBEDC), and the Central
2010
Bering Sea Fisherman’s
jobs: % that go
Association (CBSFA).
to member 39% 84% 95% 82%
residents (2010)
*note: APICDA's employment numbers only include direct employment
These three organizations
represent 24 of the 65
Source: Alaska DCCED: Decennial Review Reports, January 2013
communities under the
CDQ umbrella (within a fifty nautical mile radius of the Bering Sea coast). In 2013, Alaska’s
Department of Commerce, Community and Economic Development (DCCED) released the decennial
review of the CDQ groups, which includes information from 2006-2010. Table 2.8 includes the
highlights of the decennial review. According to DCCED’s reports, the CDQ groups invested a
combined $21.5 million dollars each year in the region over the five-year period. In 2010, the CDQ
groups employed a combined 1,114 workers (direct and indirect), with an average of 82% of jobs going
to member residents in the region. Nearly all jobs supported by BBEDC and CBSFA went to residents:
95% and 84% respectively, and 39% of jobs supported by APICDA went to member residents.
MINING
The Southwest region has rich mineral wealth due to its history of volcanism. However, much has
remained inaccessible due to the harsh climate, high energy costs and limited transportation and
infrastructure. Interest in the region’s minerals has increased over the past decade. According to a 2012
report by the Alaska Miner’s Association The Economic Impacts of Alaska’s Mining Industry In 2010, over
half (52%) of mining expenditures in Alaska were made in the Southwest Alaska ($137 million). Several
mining projects, if developed, have the potential to increase the region’s employment over the next
several years, including Donlin Gold (outside of SWAMC boundaries) and the Pebble Project.
SWAMC Comprehensive Economic Development Strategy 2018 32
AGENDA ITEM #2.d.
OIL & GAS
The region has offshore oil and gas deposits in the North Aleutian Basin. The North Aleutian Basin
was withdrawn from developmental consideration by presidential designation.
TOURISM
Compared with the rest of the state,
Table 2.9: Tourism-related jobs in Southwest Alaska,
2012
tourism growth in Southwest Alaska is
very modest. Higher costs, complicated
travel logistics, and a limited
transportation infrastructure impedes
visitation and tourism development in
the region. However, recent interests
and investment in tourism are
encouraging. At a statewide level, the
Alaska Partnership for Economic
Development (APED) recognizes that
tourism is a growing industry in Alaska
with considerable potential for
additional growth. Using 2012 Alaska
Department of Labor data, APED
Business Type # of Jobs: Core # of Jobs: Linked
compiled information on the tourism
Businesses Businesses
cluster, including the distribution of
Lodging 324 0
tourism jobs around the state. The
Attractions 44 0
report concluded that the tourism
Transportation 10 710
industry employs approximately 2,177
Retail 0 722
people in Southwest Alaska, which is
Dining 0 367
about 5 percent of the total tourism
Info +
0 0
sector employment for the state. Table
Booking
2.9 shows the approximate number of
TOTAL: 2177
378 1799
jobs per business type that are directly
jobs
and indirectly related to tourism in the
Source: The Alaska Partnership for Economic Development
region.
The Alaska Department of Commerce, Community and Economic Development (DCCED)’s 2011
Alaska Visitor Statistics Program (AVSP) provides some interesting insights about tourism in
Southwest Alaska. It should be noted that the AVSP report includes the Y-K region, which is not
within the SWAMC region. Table 2.10 shows that visitors to the Southwest region stayed on average
over a week, longer than visitors to any other part of the state. Two-thirds of visitors to the region
SWAMC Comprehensive Economic Development Strategy 2018 33
AGENDA ITEM #2.d.
were visiting for
Table 2.10: Visitation Information
Vacation or Pleasure.
Out of State Visitors: Average Southwest Region: Trip Purpose
Figure 2.22 shows the
Length of Stay by Region (days)
amount of industry
Southeast 5.7 5.5 Vacation/pleasure 66%
spending in the region
16%
Southcentral 5.8 5.9 Friends/relatives
during the 2011-2012,
Interior 4.3 4.2 Business Only 12%
Southwest 7.3 7.5 Business/pleasure 6%
2012-2013, and 2013-
Far North 6.1 5.7
2014 seasons.
Source: Alaska Visitor Statistics Program (AVSP) VI -Summer 2011
Figure 2.22: Visitor Industry Economic Impacts by Region, 2011-2012, 2012-2013, and
2013-2014
Source: Alaska DCCED: Economic Impact of Alaska's Visitor Industry, 2013-2014 update
While still only a fraction of the overall statewide impacts, spending increased from $116 million to
$120 million and created an additional 100 jobs between the 2011-2012 and the 2012-2013 seasons.
That increase leveled out in the 2013-2014 season, with jobs available remaining the same and the
Southwest industry only seeing a $1 million rise in revenue.
SUBSISTENCE
Subsistence, defined as the customary and traditional uses of wild foods and resources, is an important
aspect of the economy of Southwest Alaska. Subsistence resources account for a substantial portion of
all economic activity and value in many of the communities in the region. Subsistence enhances food
security in rural communities. In some communities, opportunities for year-round employment in the
SWAMC Comprehensive Economic Development Strategy 2018 34
AGENDA ITEM #2.d.
cash economy are limited. Subsistence practices supplement any earnings from the cash economy serve
as an alternative to public assistance, and mitigate the impact of the extreme seasonality. Subsistence
data is limited and there is very little information available for Southwest Alaska.
INDUSTRY AND OCCUPATION TRENDS
As discussed above, the Southwest Alaska region’s economy is largely based on seafood. Due to many
factors including seasonality of employment, proprietary information of large single-owner processing
facilities and the high numbers of self-employed individuals, creating an accurate employment and
industry profile of the region is challenging. Nonetheless, it is helpful to look at the available indicators
to better understand the economy of Southwest Alaska.
In 2016, SWAMC funded and released A Linked Economy: Southwest Alaska’s Economic Linkages to the State
and Beyond, a report that updated an earlier 2004 version. Like the earlier version the study evaluated
the region’s contributions and economic value to the state of Alaska and the nation as a whole. This
information clearly showed the economic value of Southwest Alaska to the State as a whole and gives
a helpful perspective on the importance of the region’s economy and the scale of the region’s fishing
industry. According to the report, total industry output for the region represented about 6% of the
total output of the state ($2.2 billion out of $38 billion for the state in 2004 dollars). Fish processing in
the region accounts for 67% of statewide fish processing employment and 68% of fish processing
output in Alaska.
Table 2.11 Southwest Alaska Employment Location Quotient by Sector (US = 1)
Industry 2008 2009 2010 2011 2012
Base Industry: Total, all industries
1.00 1.00 1.00 1.00 1.00
Natural resources and mining
- - - - -
Construction
- 0.34 - - -
Manufacturing
4.40 3.32 3.41 3.53 3.46
Trade, transportation, and utilities
0.70 0.68 0.70 0.68 0.69
Information
- - - - -
Financial activities
0.58 0.58 0.57 0.50 -
Professional and business services
- 0.19 - - 0.19
Education and health services
- - - - -
Leisure and hospitality
0.53 0.49 0.48 0.47 0.46
Other services
0.57 0.56 0.58 0.54 -
Unclassified
- - - - -
Source: US Dept. of Labor, Bureau of Labor Statistics
SWAMC Comprehensive Economic Development Strategy 2018 35
AGENDA ITEM #2.d.
The U.S. Department of Labor publishes Quarterly Census Employment and Wages (QCEW) data
which includes the number of people employed in all industries for a particular region. The QCEW
data for Southwest Alaska is limited because employment information for some of the largest
employers is kept confidential. Table 2.11 uses location quotient calculations to compare the
concentration of employees in various industries to the rest of the nation between 2008 and 2012. The
U.S. is established as a baseline of 1; values above one indicate a higher concentration of industry
employment in the SWAMC region, and values lower than 1 indicate a lower concentration of
employment for that industry in the SWAMC region. Of the industries with available information, the
manufacturing industry is the one with a location quotient higher than the U.S. This is unsurprising
because Manufacturing includes seafood processing, which is one of the largest sources of employment
in the region.
Looking at non-employer statistics is a helpful way to understand the self-employment picture for the
region. Non-employment data comes from IRS tax returns and includes data for all establishments
with no employees. In 2011 there were 3,404 non-employer firms in the Southwest Alaska region that
generated a combined $183 million. Figure 2.23 shows the number of non-employer establishments
for the top 12 industry classifications. In 2011 there were 1,906 non-employment firms in the
agriculture, forestry, fishing and hunting classification. This is further evidence of the high number of
individuals involved in the fishing industry in Southwest Alaska.
Figure 2.23: Number of Nonemployer Establishments by Industry Classification, 2005-2011
Educational services
Arts, entertainment, and recreation
Real estate and rental and leasing
Accommodation and food services
Administrative and support and waste…
Transportation and warehousing
Health care and social assistance
Construction
Retail trade
Professional, scientific, and technical services
Other services (except public administration)
Agriculture, forestry, fishing and hunting
0200400600800100012001400160018002000
Number of Nonemployer Establishments
Source: Nonemployer Statistics, U.S. Census Bureau
Table 2.12 shows the top occupations for the Southwest Alaska region between 2010 and 2012. This
information includes Wade Hampton and Bethel Census Areas, which are not in the SWAMC region.
The information comes from the Alaska Department of Labor and Workforce Development’s
SWAMC Comprehensive Economic Development Strategy 2018 36
AGENDA ITEM #2.d.
Occupational Database, which only includes occupational information for Alaska residents. It does not
include federal workers, military individuals, the self-employed or nonresidents. Among residents
employed in the region, the most popular occupation in 2012 was Meat, Poultry, and Fish Cutters and
Trimmers with 1,024 individuals. This is a sharp increase from the year before, when there were 731
resident employees working in that occupation.
Table 2.12 Occupations, 2010-2012
Job 2010 2011 2012
Meat, Poultry, and Fish Cutters and Trimmers 703 731 1,024
Teacher Assistants 855 922 869
Construction Laborers 939 933 851
Cashiers 539 598 583
Laborers and Freight, Stock, and Material
559 583 533
Movers, Hand
Source: Alaska Department of Labor and Workforce Development, Research and Analysis
Another useful analytic tool for comparing the industry and sector performance of the region is through
cluster analysis. A cluster is a geographic concentration of interconnected businesses, suppliers, services
providers and institutions. The Alaska Partnership for Economic Development prepared a cluster
analysis for the SWAMC region as a part of a statewide cluster analysis in 2010.
Figure 2.24: Southwest Clusters
Source: The Alaska Partnership for Economic Development. Date comes from IHS Global Insight, 2009.
SWAMC Comprehensive Economic Development Strategy 2018 37
AGENDA ITEM #2.d.
Figure 2.24 shows the results from the Southwest Alaska cluster analysis. While the data is from 2009
it still provides a useful overview of clusters in the region. The size of the circle indicates the relative
size of employment for a particular cluster. The y-axis includes the employment concentration ratio,
which is the same as a location quotient; a score of 1 is equal to the baseline U.S. level. The x-axis
measures “Industry Dynamism, which the report defines as the relative growth rate. This figure is
determined by adding up the real gross output of each industry along with the compound annual
growth to forecast the long-term potential of a particular cluster. Notably the Fishing and Seafood
Processing cluster has a location quotient of 301.6. The community and social services cluster, while
small in comparison, has a location quotient of 2.2 times the national average and industry dynamism
estimated to be 4.1 percent. Other clusters with location quotients higher than the national average
include the Military cluster, Federal Government cluster, Travel and Tourism cluster and Logistics and
International Trade cluster.
This CEDS document focuses primarily on the following existing and emerging clusters:
Fishery, Seafood and Maritime Cluster
Transportation, Shipping and Logistics Cluster
Travel and Tourism Cluster
Government Cluster
These clusters will be discussed in more detail in the following chapters.
CHAPTER 3: SWOT ANALYSIS
(STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS)
INTRODUCTION
The key to increasing Southwest Alaska’s regional wealth and overall economic productivity is
leveraging the area’s strengths (S), taking advantage of existing and future opportunities (O), while also
mitigating the region’s weakness (W) and outside threats (T). A “SWOT analysis” helps determine what
regional assets could be better leveraged to build local and regional capacity, support economic growth
and develop strategic direction for the Southwest Alaska region. The strategic direction that develops
from this process helps to outline programs, projects and activities towards achieving SWAMC’s
economic development mission (see SWAMC Work Plan, Chapter 4); the analysis also highlight area’s
where SWAMC must engage other regional, state and federal partners to be successful. The SWOT
analysis also discusses Southwest Alaska’s economic resiliency, or ability to ensure long-term economic
success, viability and durability; it highlights the ways in which the region is prepared and can be
responsive to change. SWOT analysis categories are further explained below.
Strengths – Existing relative competitive advantages. What is the state of the regional
economy? What sectors and clusters are growing? What is driving these improvements?
(Existing/Internal Advantages)
SWAMC Comprehensive Economic Development Strategy 2018 38
AGENDA ITEM #2.d.
Weaknesses – Existing relative competitive disadvantages. (Existing/Internal Disadvantages)
Opportunities – Occasions for regional improvement or progress. How is the region
positioned in the national and global economies? (External/Potential Advantages)
Threats – Threats to regional improvement or progress. How is the region not positioned in
the national and global economies? (External/Potential Disadvantages)
OVERVIEW
Southwest Alaska’s rich marine resources are the foundation of the region’s economy. As highlighted
in the background in Chapter Two, the fishing industry is the region’s largest employer and contributor
to the Southwest Alaska economy. At the same time, the public sector also employs many residents in
the region, which provides steady income and benefits to Southwest Alaska. Despite its small
population, the region also continues to secure both federal and state funding for many of the area’s
projects and programs. This speaks to the region’s strong political will and ability to effectively advocate
for local and regional level programs and projects. Adding to these strengths is the area’s natural
landscape and abundant outdoor recreation opportunities. The potential for both consumptive and
non-consumptive recreation activities include world-class wildlife viewing, hunting, fishing, boating,
hiking, snow-machining – the options are endless for an experience at the edge of the Last Frontier.
Despite its strengths and potential opportunities, Southwest Alaska is still a relatively small population
5
spread over a very large area (less than 30,000 people over 60,000 square miles). As a result, the region
has limited communication infrastructure, high energy costs and major transportation challenges.
Declines in state and federal funding further threaten the region’s economic resiliency. Add to these
threats and regional weaknesses the fact that even when there are potential job opportunities outside
of the region, a lack of proper training, substance abuse issues, non-competitive salaries, high cost of
living, and numerous other barriers, make it difficult for residents to connect with job opportunities.
Today, many entry-level jobs are left unfilled, or they are taken by an influx of nonresident or seasonal
employees. This trend is most prevalent in the region’s thriving fishing industry, although most of these
jobs are held by nonresident workers. In recent years, statewide and regional efforts have begun to
identify and address workforce development needs, especially in the fishery, seafood and maritime
industry.
Outlined below is a detailed explanation of these various regional strengths, weaknesses, opportunities
and threats, organized by key focus area including: workforce development, resources, energy,
infrastructure and partnerships. This chapter, coupled with the SWOT graphic presented in the
Executive Summary, set the stage and helps inform the Work Plan presented in Chapter Four. The
SWAMC Board of Directors, Business Council, and Members participated in SWOT development to
identify goals, objectives and strategies that support the region’s strengths and mitigate existing
challenges and potential threats.
5
U.S. Department of Commerce, US Census Bureau State & County QuickFacts. Retrieved on May 27, 2014 from
http://quickfacts.census.gov/qfd/maps/alaska_map.html
SWAMC Comprehensive Economic Development Strategy 2018 39
AGENDA ITEM #2.d.
STRENGTHS
Southwest Alaska is fortunate to have a diverse array of resources, partners and assets that support the
regional economy. The area’s abundant regional, state and federal partnerships and investment,
combined with the region’s marine animals, minerals, stranded energy potential, geostrategic location
and natural environments comprise the base of Southwest Alaska’s existing competitive advantage.
Illustrative examples of these regional strengths follow.
“Unique beauty of the land, water, and
cultural heritage.”
“Location and proximity to natural
resources.”
“Working with a group of people who are
used to looking outside of the box for
answers to complex problems.”
-SWAMC Business Council members,
"What is the primary advantage of doing
business in Southwest Alaska?"
WORKFORCE DEVELOPMENT
There have been extensive recent efforts to identify and address the region’s workforce needs.
Southwest Alaska is well-positioned to expand and improve the residential workforce due to its young,
trainable population. With increased training and the opportunity to develop a roadmap for connecting
workers to these programs, there is potential to hire qualified local residents. Current efforts and
potential SWAMC partners in the workforce development focus area include:
Job Growth – Jobs are being created faster than people are moving to the region. The job
growth to population growth ratio between 1997 and 2008 was 4.88, which is more than four
6
times the national average of 0.93.
SWAMC Labor Force – The region’s population is relatively young and the labor force has
been slowly increasing since it dipped in the late 1990s (see Background chapter for trend
information).
Training – The University of Alaska’s Fisheries, Seafood and Maritime Initiative (FSMI) was
created in 2011. FSMI brings together business, academic, policy and community leaders who
are working to identify workforce, economic and scientific needs related to Alaska’s Fishery,
Seafood and Maritime industries. FSMI will ultimately release recommendations on how to
develop and sustain programs that fulfill the workforce development needs of Alaska.
Confronting Substance Abuse – Partners in the region are working to develop strategies that
address substance abuse concerns, one of the largest barriers to employing local residents, and
6
U.S. Commerce Department's Economic Development Administration (2010). Innovation Index. Retrieved May 20,
2014 from Stats America: http://www.statsamerica.org/innovation/innovation_index/region-select.html
SWAMC Comprehensive Economic Development Strategy 2018 40
AGENDA ITEM #2.d.
keeping them employed. For example, the ‘A Team’ – a partnership between the Aleutian
Pribilof Island Community Development Association, Aleut Corporation, Aleutian Housing
Authority, Aleutians East Borough, Aleutian Pribilof Islands Association, held a substance
abuse conference - Reclaim Alaska, focusing on support and prevention. SWAMC held a follow
up component with all members of the region in coordination with the Annual Economic
Summit and Membership Meeting based on stakeholder requests for information on this
important and challenging subject.
SWAMC Programs – SWAMC’s Science, Technology, Engineering and Math (STEM)
Program explores developing human capital to take advantage of locally available resources that
can support the regional economy over the long-term. As part of the SWAMC STEM Program,
the organization’s Broadband Initiative promotes anchor institution use of technology and
broadband internet to expand learning, working, collaborating and living, through access to
communication technologies. This program supported the Kodiak Public Library in opening a
new Innovation Center featuring advanced computer hardware and software to provide
training opportunities to the local population. Other successes were participation in Kodiak
and Bristol Bay Science Night, which highlights local providers of science-based careers and gets
students excited about STEM opportunities in their communities; each attracted 200 attendees.
The Kodiak event has become so popular that it is now an annual event, managed by the
Kodiak School District. Additionally, SWAMC STEM Coordinators travel to regional
communities in conjunction with Junior Achievement, a valuable program covering financial
literacy and workforce skills, identified as critical gaps by private sector leaders. Programs
currently under development include engagement with student and citizen scientists to collect
baseline date for education as well as building foundations for future development projects,
such as mariculture and renewable energy projects. Successes in the STEM program point to
the need and interest of actively engaged citizens in areas important for developing local
potential.
AKCIS – The Alaska Career Information System (AKCIS) is an internet-based workforce
development tool available to any Alaskan resident through the Alaska Commission on
Postsecondary Education (ACPE). Many schools within the region already have access to the
tool through their classrooms. However, a lack of training leads to underutilization of the
software. A potential partnership with ACPE could allow for more thorough training and
frequent use of AKCIS, which includes resume-building, interview preparedness, and
workforce readiness assessments.
RESOURCES
The SWAMC region has an abundance of raw resources. In particular, the region boasts one of the
most productive fisheries in the world. Southwest Alaska also has mineral, oil, and gas deposits, some
of which are in development and others which are being considered for development. The region has
intrinsic value, including beautiful landscapes, abundant wildlife, welcoming communities and strong
cultural identities. Outlined below are key highlights of the area’s critical resource base, including
current figures on how the region rates compared to other fishing regions of the world, and
community/regional infrastructure that supports fisheries, and potentially other resource development
industries (e.g., oil, gas, mineral development, tourism, etc.).
SWAMC Comprehensive Economic Development Strategy 2018 41
AGENDA ITEM #2.d.
Strength of the Fishery – The commercial fishing industry harvests 5.6 billion pounds each
7
year from Alaska waters, equivalent to 54 percent of all US domestic harvest. The majority of
Alaska landings occur in state and federal waters in the SWAMC region. According to NOAA’s
Office of Science and Technology, in 2012 communities in the SWAMC region had six of the
top ten ports in the United States in terms of value and four of the top ten ports in terms of
8,9
volume (see Background chapter for the complete list of top ports).
Seafood Processing –Eighteen communities offering land-based processing facilities, and 22
vessel based processors support the logistics of moving product from mobile vessels to global
10
markets. Seafood processing in Alaska employs residents year-round. As stated by a
SWAMC Business Council member: “When a processor opens a new facility, you have to
hide if you don’t want to work.” Akutan is the self-proclaimed largest processing plant in
11
North America, though confidentiality obscures this fact. Saint Paul offers both the
northernmost processing facility in the United States, as well the largest crab processing
12
facility in the U.S. Trident Seafoods employs thousands of workers in its many seafood
processing facilities. According to Trident’s website, the Akutan shore plant is the largest
seafood production facility in North America, processing over three million pounds of
13
seafood daily and housing up to 1,150 employees. Saint Paul is home to the largest crab
processing facility in the world, processing 500,000 pounds of crab daily and employing up to
14
400 workers in peak season. Unisea’s principal seafood processing facility on Amaknak
Island in Dutch Harbor which processes Pollock, crab, halibut, cod and more, and employs
15
up to 1,200 employees during the winter fishing season. Icicle Seafoods also has shore plant
facilities in Egegik, Larsen Bay and Wood River, which collectively employ about 1,000
16
employees. Peter Pan Seafoods has major processing facilities in King Cove, Dillingham and
Port Moller, employing 500, 320 and 140 people respectively during peak production
17
periods. Kodiak Island has 13 state registered fish processing facilities, ranging in size from
family owned boutique smokehouses to large scale industrial operations capable of processing
7
National Marine Fisheries Service. 2014. Fisheries Economics of the United States, 2012. U.S. Dept. Commerce,
NOAA Tech. Memo. NMFS-F/SPO-137, 175p. Available at:
https://www.st.nmfs.noaa.gov/st5/publication/index.html.
8
NOAA. (2012). NMFS. Retrieved May 22, 2014, from Leading Ports by Dollar Results:
http://www.st.nmfs.noaa.gov/pls/webpls/MF_LPORT_YEARD.RESULTS
9
NOAA. (2012). NMFS. Retrieved May 22, 2014, from Leading Ports by Poundage Results:
http://www.st.nmfs.noaa.gov/pls/webpls/MF_LPORT_YEARP.RESULTS
10
State of Alaska Division of Environmental Health. (2014). Food Safety andSanitation Program. Retrieved May
22, 2014, from Land Based Processors: http://alaska.state.gegov.com/alaska/seafood_listing.cfm?step=land-based
11
Trident Seafoods. (n.d.). Company. Retrieved May 22, 2014, from Alaska Plants:
http://www.tridentseafoods.com/company/plants_alaska.php
12
Trident Seafoods. (n.d.). Company. Retrieved May 22, 2014, from Alaska Plants:
http://www.tridentseafoods.com/company/plants_alaska.php
13
Trident Seafoods. (n.d.). Company. Retrieved May 22, 2014, from Alaska Plants:
http://www.tridentseafoods.com/company/plants_alaska.php
14
Trident Seafoods. (n.d.). Company. Retrieved May 21, 2014, from Alaska Plants:
http://www.tridentseafoods.com/company/plants_alaska.php
15
Seafood Business Magazine (June 2009). Celebrating 50 Years of Seafood Processing. Retrieved May 27, 2014
from
http://www.seafoodbusiness.com/uploadedFiles/SeaFoodBusiness/Site_Content/2009SFBJune_Alaska50thAnniversa
ry.pdf
16
Icicle Seafoods (n.d.). Retrieved May 27, 2014 from http://www.icicleseafoods.com/operations/
17
Peter Pan Seafoods (n.d.) Retrieved May 27, 2014 from http://www.ppsf.com/facilities/index.aspx
SWAMC Comprehensive Economic Development Strategy 2018 42
AGENDA ITEM #2.d.
18,19
1.5 million pounds of fish per day. In all, Kodiak Island employs 1,856 fish processor in
20
peak season. The floating Catcher-Processor Vessels that operate in the region are some of
the most sophisticated commercial vessels in the world.
The Community Development Quota Program (CDQ) – The CDQ Program brings
money to coastal fishing communities throughout the region. These funds support economic
development, education, fisheries, tourism, workforce development and other community
development activities and facilities throughout the region. Three of these organizations
operate in Southwest Alaska and contribute to in-region investments: Aleutian-Pribilof Islands
Community Development Association (APICDA), The Bristol Bay Economic Development
Corporation (BBEDC) and the Central Bering Sea Fishermen’s Association (CBSFA). Between
2006 and 2010, these three organizations spent a combined $21.5 million dollars each year. In
2010, the CDQ groups employed a combined 1,114 workers (direct and indirect), with an
21
average of 82 percent of jobs going to member residents in the region.
Community Quota Entities (CQEs) – In 2002, the North Pacific Fishery Management
Council took action to address the decline of halibut and sablefish quota shares held by
residents of small, coastal communities and the negative economic impacts of the decline. The
council voted to allow 42 eligible remote, coastal communities with few economic alternatives
to form non-profit corporations called Community Quota Entities. CQEs purchase catcher
vessel quota shares and lease the resulting Individual Fishing Quotas to community residents
22
on an annual basis. The Alaska Department of Commerce, Community and Economic
23
Development provides loans of up to $1 million to CQEs to purchase quota shares. There
24
are currently 14 SWAMC communities eligible to participate in the CQE program.
Geostrategic Location – Located in the geostrategic location of the North Pacific between
Asia, North America and the Arctic, air and marine supper highways direct the flow of
commercial aircraft and vessels moving goods, services and people through Southwest Alaska
to every major region of the world. Six airlines pass through airspace in the region daily. 4,443
vessels transit between Asia and America on an annual basis, and as the Arctic opens up,
25
traffic through the Bering Sea reached 484, up 123 percent from 2008-2012. The geospatial
location of Southwest Alaska has been of increasing military importance lately as Asian
Powers maneuver for geopolitical prestige, the Russian Empire flexes muscle and many
18
State of Alaska Division of Environmental Health. (2014). Food Safety and Sanitation Program. Retrieved May
22, 2014, from Land Based Processors: http://alaska.state.gegov.com/alaska/seafood_listing.cfm?step=land-based
19
Trident Seafoods. (n.d.). Company. Retrieved May 22, 2014, from Alaska Plants:
http://www.tridentseafoods.com/company/plants_alaska.php
20
Alaska Department of Labor and Workforce Development. (2012). Retrieved June 24, 2014, from Reserach and
Analysis: http://live.laborstats.alaska.gov/odb/odb.cfm?a=000150
21
Alaska Department of Commerce, Community and Economic Development (January 2013). CDQ Program
Decennial Review. Retrieved May 22, 2014 from http://commerce.alaska.gov/dnn/dbs/CDQInformation.aspx.
22
North Pacific Fisheries Management Council. (2010, March). Retrieved June 24, 2014, from Review of the
Community Quota Entity (CQE) Program: http://www.npfmc.org/wp-
content/PDFdocuments/halibut/CQEreport210.pdf
23
Alaska Department of Commerce, Community, and Economic Development. (n.d.). Loan Programs.Retrieved
June 24, 2014, from Community Quota Entity:
http://commerce.alaska.gov/dnn/ded/FIN/LoanPrograms/CommunityQuotaEntity.aspx
24
National Oceanic and Atomospheric Administration. (2014, March 17). Alaska Fisheries.Retrieved June 24, 2014,
from Eligible CQE Communities, Halibut IFQ Regulatory Area Location, Community Governing Body :
https://alaskafisheries.noaa.gov/rr/tables/tabl21.pdf
25
Marine Exchange of Alaska. (n.d.). Marine Exchange of Alaska. Retrieved May 21, 2014, from Port Information -
All Regions: http://www.mxak.org/ports/all_regions.html
SWAMC Comprehensive Economic Development Strategy 2018 43
AGENDA ITEM #2.d.
262728
nations jockey for access to the Arctic. Southwest Alaska is also biologically strategically
positioned between the North Pacific and Arctic Oceans, where nutrient rich ecosystems are
uniquely plentiful and diverse in marine fish, bird and mammal species. The Pribilof Islands
of Saint Paul and Saint George are placed on important migration routes for nearly all fish,
birds and mammals that populate the rich Bering Sea.
Mineral Development – The SWAMC region has recently seen an increase in mining
investment and exploration. According to a 2012 Alaska Miners Association publication, 52
percent of statewide expenditures in 2010 spent on mining exploration were made in Southwest
Alaska.
Natural Environment – Drastic mountains, vast and numerous fresh-water lakes and rivers,
wetlands, forests, mysterious island archipelagos, volcanoes and productive ecosystems with
abundant natural wildlife create demand for outside visitors to explore the region. The
mountains, rivers, lakes, wetlands, forests, archipelagos, volcanoes and wildlife in the region
also help shape the identity of communities and provide subsistence opportunities for many
residents.
Tourism Development – The area has three units in the national park system: Lake Clark
National Park and Preserve, Katmai National Park and Preserve, and Aniakchak National
Monument and Preserve. The region also has numerous national wildlife refuges, national
historic landmarks and state parks, including the largest state park in the country: Wood-
29
Tikchik State Park at 1.6 million acres and Round Island. These areas are open for public
recreation and can be a big draw for visitors. While still modest compared to other areas of the
state, tourism is one of the growing industries in the region. Between summer 2011 and 2012,
total visitor industry spending increased from $116 million to $120 million and employment
30
impacts went from approximately 1,400 jobs to 1,500 jobs. In 2011, out-of-state to Southwest
Alaska spent an average of $1,514 per person, which is considerably higher than the average of
$941 among all Alaska visitors. This figure excludes the cost of transportation to enter/exit the
state but does include travel costs within the state. The most popular activities for visitors to
Southwest Alaska were wildlife viewing, fishing and cultural activities. Over half the visitors
said they were likely to return to the state in the next five years, compared with 38 percent for
31
visitors statewide.
26
U.S. Department of Defense. (April 1, 2014). Defense Officials in Ukraine for Consultations. Retrieved May 22,
2014 from http://www.defense.gov/news/newsarticle.aspx?id=121949
27U.S. Department of Defense. (2013). Annual Report to Congress: Military and Security Developments Involving
the People’s Republic of China, 2013. Retrieved May 23, 2014 from
http://www.defense.gov/pubs/2013_china_report_final.pdf
28
Joint Base Elmendorf-Richardson. (September 2013). Alaskan Command. Retrieved May 23, 2014 from
http://www.jber.af.mil/library/factsheets/factsheet.asp?id=5286
29
Alaska Department of Natural Resources. (2014). Wood-Tikchik State Park.Division of Parks and Outdoor
Recreation. Accessed June 16, 2014 from http://dnr.alaska.gov/parks/units/woodtik.htm
30
Alaska Department of Commerce, Community and Economic Development. (2012-2013). Economic Impact of
Alaska’s Visitor Industry.Retrieved April 18, 2104 from
http://commerce.alaska.gov/dnn/ded/DEV/TourismDevelopment/TourismResearch.aspx
31
Alaska Department of Commerce, Community and Economic Development. (March 2012). Alaska Visitor
Statistics Program VI: Summer 2011. Retrieved April 18, 2104 from
http://commerce.alaska.gov/dnn/ded/DEV/TourismDevelopment/TourismResearch.aspx
SWAMC Comprehensive Economic Development Strategy 2018 44
AGENDA ITEM #2.d.
ENERGY
Southwest Alaska has significant potential for renewable energy projects. Recent planning efforts and
statewide programs have helped communities identify projects and tasks for addressing the high cost
of energy.
Stranded Energy Potential –The Alaska Energy Authority’s Renewable Energy Atlas of
Alaska identifies many Gigawatts of power potential – Wind, Tidal, Ocean, River, Hydro,
32
Geothermal, Biomass and to a lesser extent Solar – available to Southwest Alaska, far in
excess of the 2.2 Gigawatts of currently installed power available to the entire State of
33
Alaska. The convergence of the North Pacific and Bering Sea creates massive potential for
ocean and tidal energy in Southwest Alaska. Likewise, the Aleutians are the epicenter of many
North Pacific storm systems that move eastward along the Aleutians, hitting Bristol Bay and
Kodiak regions, providing an amazing source of wind power. The collision of the Pacific and
North American Plate, which formed much of the regional geography including Kodiak,
Aleutian Range and the Aleutian Islands, also creates geothermal energy. See “Opportunities”
below for more details related to the region’s stranded energy.
SWAMC Energy Planning – Under contract with AEA, SWAMC is assisting the State with
an energy gaps analysis/needs assessment for Southwest Alaska communities, through the
Regional Energy Planning process. This work will help the State in identifying the region’s
energy needs and will help them prioritize energy projects. Through this process, SWAMC can
also help the State and other partners in identifying those communities that are well positioned
for new, innovative energy technologies. Facilitated by SWAMC, this collaborative project is
currently identifying multiple resources to address a wide range of energy issues from home-
owner energy audits, to community-wide efficiency upgrades, to region-wide energy supply
projects.
Attractive for Emerging Energy Projects – When energy prices are low, new projects are
not always feasible because the slight savings from the new project do not offset the cost of
development. With rising energy costs, new energy projects become more feasible because the
savings are significant enough to offset the initial development costs. Furthermore, there is
public incentive to support investments in regions with excessive costs of living. Regional
examples of emerging energy projects are the ocean tidal power project in False Pass, in-river
hydrokinetic in Igiugig and waste-to-heat/power incinerators in Dillingham and Egegik. When
successful, these projects reap big rewards. For example, cheap renewable power in Kodiak
allows investments to stay in-region and low-cost. This creates a competitive advantage for
companies, especially natural resource companies that have large energy demands, and cost
advantages for citizens that have more disposable income.
Strategic Location for Energy Distribution – Unalaska, which has the westernmost
container terminal in the state, serves as the staging area for supplies and fuel to the Bering Sea
marine fleet, and also for many communities in Western Alaska. In 2006, the Port of Dutch
32
Alaska Energy Authority. (April 2013). Renewable Energy Atlas of Alaska. Retrieved May 23, 2014 from
http://www.akenergyauthority.org/PDF%20files/2013-RE-Atlas-of-Alaska-FINAL.pdf
33
Fay, Ginny, Alejandra Villalobos Meléndez, and Amber Converse. (June 2012). Alaska Energy Statistics
1960-2010.Retrieved May 23, 2014 from http://www.iser.uaa.alaska.edu/Publications/2012_06-
EnergyStatSummaryHighlights_2010.pdf
SWAMC Comprehensive Economic Development Strategy 2018 45
AGENDA ITEM #2.d.
Harbor saw almost 1.2 million short tons of freight move through the Port, which includes
34
both foreign and domestic receipts and shipments.
Balancing the Cost of Energy – Alaska Energy Authority’s Power Cost Equalization (PCE)
program provides significant relief to rural communities with high residential energy costs,
35
reimbursing up to 70 percent the cost of energy in some communities.
INFRASTRUCTURE
Southwest Alaska is comprised of geographically separate, but geostrategic, industrialized
communities with good harbor, air and communication infrastructure, with capacity to supply
services. For example:
Marine Infrastructure – The marine infrastructure of Southwest Alaska supports one of the
richest fisheries ecosystems in the world. Six of the top ten fishing port, by value, are located
in the SWAMC region. Strategically located ports, capable of supporting harvesting and
processing of fisheries resource, spread from Kodiak Island to Adak, St. Paul and Bristol Bay.
This includes ports of refuge every few hundred miles. In addition to providing the lifeline to
the area’s fisheries, the marine infrastructure supports other vital community services ranging
from basic supply of food, shelter, fuel, marine supplies to specialized services. Some
community-specific detail is outlined below:
o Community infrastructure supports a fleet of 1,487 boats, each of which serves as an
36
individual business, albeit mobile, moving between communities.
o Twenty-two communities offer harbor facilities capable of servicing and supporting
harvest vessels, and offering supply stations for food, fuel, gear and all aspects of
support necessary to effectively execute the commercial fisheries of the Western Gulf
of Alaska, Aleutian Islands and Bering Sea. The port of Kodiak offers export facilities
and staging areas for transport to domestic markets, and transshipment to international
markets.
o The Port of Dutch Harbor is the only International port in Alaska and moves 752
million pounds of product on an annual basis. The Port of Dutch Harbor is also a deep
draft, year-round ice-free port, a designated “Port of Refuge,” providing a suite of
services to vessels in the Bering Sea region. The port is capable of receiving catcher
boats from small 32 foot catcher vessels to the most sophisticated catcher/processor
vessels and 800 foot cargo ships, making it one of the most important domestic and
international cargo ports in the United States. With fuel storage of 20 million gallons,
37 and annual marine sales of 70 million gallons, Unalaska supports communities and
commercial activity throughout the Bering Sea and North Pacific. Unalaska has long
34
City of Unalaska. (April 2009). Port and Harbor Ten-year Development Plan. Retrieved May 27, 2014 from
http://www.ci.unalaska.ak.us/sites/default/files/fileattachments/Ports%20and%20Harbors/page/503/port_and_harbor_
10-year_development_plan.pdf
35
Alaska Energy Authority and UAA’s Institute for Socioeconomic Research. (November 2012). Residential Energy
Costs + PCE Reimbursements, CA 2011. Retrieved December 2013 from
http://iser.uaa.alaska.edu/Publications/2012_11-AlaskaEnergyStatisticsCY2011PreliminaryTables.xlsx
36
Alaska Commercial Fisheries Entry Commission. (2012). CFEC Public Lookup Database. Retrieved April 18,
2014 from http://www.cfec.state.ak.us/plook/
37
Alaska Department of Environmental Conservation. (2010, July). Retrieved May 23, 2014, from Total Maximum
Daily Loads (TMDLs) for Petrochemical Hydrocarbons in the Waters of Dutch Harbor and Iliuliuk Harbor in
Unalaska, Alaska: http://www.epa.gov/waters/tmdldocs/DutchHarbor_Final%20TMDL_7-28-10.pdf
SWAMC Comprehensive Economic Development Strategy 2018 46
AGENDA ITEM #2.d.
served as the staging area for a range of activity throughout the Bering Sea and Arctic
coasts, including Outer Continental Shelf Arctic hydrocarbon exploration.
o Kodiak is home to the largest Coast Guard institution in the Pacific Area and serves as
the headquarters for marine safety with a jurisdiction of over four million square miles
in the Bering Sea, North to the Arctic, West to the Russian border and east to Central
38
Gulf of Alaska. The community supports the largest diversified fishing fleet in Alaska,
including harvesting and processing of all commercially viable fisheries, domestic
shipping and services to meeting the needs of all vessels up to 150 foot, and basic
support for other vessels of any size, including 1,000 foot cruise ships. Two boat lifts,
a small one for boats up to 50 feet, and a large one for boats up to 150 feet, increase
the community’s capacity to service marine vessels, with expanding capacity of specialty
service firms.
o St. Paul is surrounded by 250 miles of ocean in every direction, and thus serves as
natural refuge for any vessels transiting the Bering Sea. While ice does engulf the island,
it is generally new ice, which vessels can pass, allowing nearly year-round ice-free ports
in the North Pacific.
o Bristol Bay communities sit at the headwaters of the most productive sockeye salmon
run in the world, and provide the necessary infrastructure to harvest, process and move
up to 100 million pounds of salmon annually.
Communication infrastructure in Southwest Alaska has expanded substantially in recent years.
Adequate communication infrastructure is critical for successful natural resource management,
educational advantages and better connection to domestic and global networks of family and
friends; with an overall effect of more opportunity and a better quality of life. Advanced fiber
optic cable connects Kodiak, home to 40 percent of SWAMC’s regional population, with the
Bristol Bay receiving a hybrid fiber/micro-wave system linked into the global backbone,
reaching another 40 percent of the SWAMC population; the Alaska Peninsula, Aleutian and
Pribilof Islands are serviced by satellite service. Expanded communication infrastructure has
enhanced and improved the productivity of the region to create new businesses, increase the
speed of information transfer. For example, while still somewhat limited, internet connectivity
has begun to revolutionize life in rural Alaska. GCI’s recent TERRA project upgraded several
Bristol Bay communities to a new microwave network and expanded a new high speed fiber
39
optic network into several Lake and Peninsula communities. Residents of Port Alsworth, for
40
example, now have access to download speeds of up to 6.0 Mbps. The increasing availability
of the internet has opened up access to shopping and business opportunities. For example,
Amazon Prime has become a frequently used means of shipping inexpensive globally available
supplies.
Air Transportation – Air transportation is the primary means of regional travel; all
communities in the SWAMC region have capabilities to receive air service, ranging from dirt
runways to some of the largest runways in Alaska (e.g., Cold Bay at 10,180 ft., Adak at 7,790
41
ft., Shemya at 10,004 ft., King Salmon at 8,901 ft. and Kodiak at 7,880 ft.). These runways
38
U.S. Department of Homeland Security. (September 2013). Air Station Kodiak.United States Coast Guard.
Retrieved May 22, 2014 from http://www.uscg.mil/d17/airstakodiak/
39
GCI. (n.d.). GCI TERRA. Retrieved June10, 2014, from TERRA Southwest: http://terra.gci.com/maps-
locations/terra-southwest
40
GCI. (2014). Retrieved June 10, 2014, from Residential Internet Plans: http://www.gci.com/internet/plans
41
Federal Aviation Administration. (2014). NFDC. Retrieved May 27, 2014 from National Flight Data Center:
https://nfdc.faa.gov/xwiki/bin/view/NFDC/WebHome
SWAMC Comprehensive Economic Development Strategy 2018 47
AGENDA ITEM #2.d.
provide occasional emergency landing services for the airline superhighway over the North
Pacific. On October 30, 2013, Delta Flight 208 made an emergency landing in Cold Bay in
route from Tokyo to San Francisco. Additionally, a service industry for supporting and
maintaining small aircraft exists in Dillingham, King Salmon, Cold Bay and Kodiak. Air service
is limited by the capability of the runways, which in some communities are too short for cargo
and larger commercial air carriers.
The Kodiak Launch Complex – The Alaska Aerospace Corporation (AAC) maintains the
Kodiak Launch Complex (KLC) on Kodiak Island. AAC works with both national and
commercial organizations, primarily doing satellite launches. The Launch Complex brings
direct and indirect benefits to the region through local contracting, local hire and increased
visitation to the region. The Kodiak Launch Complex offers the advantage of location, with a
wide-open southern launch corridor and an unobstructed down-range flight plan over relatively
open-ocean. The location is ideal for launching expendable launch vehicles with payloads
42
requiring low-Earth polar or sun-synchronous orbits.
Military Strategic Location – Shemya Alaska offers a military strategic location. It currently
houses the COBRA DANE L-band large phased array radar system, monitoring activity
43
throughout the Pacific Ocean.
PARTNERSHIPS
Southwest Alaska is fortunate to have an interconnected network of businesses, organizations and
communities that work closely with one another to achieve shared goals and to improve the economy
of the region.
State and Federal Presence in the Region – New money is constantly entering the region
through salaries, contracts and transfer. The large federal and state presence in the region, in
the form of land ownership and major facilities, precipitates that public employees oversee and
manage these resources; salaries of which inject new cash into the economy. Government
funding employs regional residents directly and brings in additional funds through grants,
infrastructure funding, statewide programs and more. Many of the federal and/or state
infrastructure projects inject new capital into the region and are often followed by new support
businesses to help address contractor needs (e.g., building materials and equipment, housing,
food, gas, etc.). There is also an inflow of government transfers tied to Alaska Native corporate
dividends, as well as federal subsidies that go to residents that fall below the poverty line.
SWAMC as a Convener/Coordinator/Facilitator – SWAMC’s key strength is to coordinate
resources and to pursue shared interests within the region and between regional and non-
regional partners. SWAMC acts as a mediator between people, businesses, institutions,
communities and government. Specifically, SWAMC:
o Maintains a network of over 115 members, and an additional 75 associates pursuing
shared interests, maintaining individual networks for Energy, Infrastructure, Basic
Sector Resources, Tourism, Natural Resources, Fisheries, Workforce Development and
Economic Development. A complete list of SWAMC members and associates is listed
on the organizational website, www.swamc.org.
42
http://www-pao.ksc.nasa.gov/kscpao/nasafact/kodiak.htm.
43
Missile Defense Agency. (2013, October 21). Retrieved May 22, 2014, from COBRA DANE Upgrade:
http://www.mda.mil/global/documents/pdf/cobradane.pdf
SWAMC Comprehensive Economic Development Strategy 2018 48
AGENDA ITEM #2.d.
o The SWAMC Business Council, who convened for the first time in December 2013, is
intended to help guide SWAMC’s economic development efforts while also establishing
a forum for business leaders in the region to network with one another and identify
shared opportunities. According to Business Council Members, local municipalities, as
well as the State of Alaska, are both very supportive and willing community and
economic development partners. See the introductory chapter and appendices for a
detailed description of the Business Council.
o SWAMC acts as a liaison between communities and the Alaska Energy Authority
(AEA). SWAMC currently has contracts with the AEA for conducting Energy Planning
in the three sub-regions of Southwest Alaska. Though the Energy Planning process
SWAMC connects with local governments, utilities providers, CDQ’s, Tribal groups,
and local development interests to open dialogue on energy issues and priorities for
communities in the region. In addition to SWAMC’s energy planning, SWAMC plays
an active role in identifying and helping to enact community energy projects such as
the tidal project in False Pass.
WEAKNESSES
Many of the same regional strengths are also inherent weaknesses. The vast and rugged environment,
coupled with the extreme weather and swings in seasonal abundance, creates difficult transportation
linkages, increasing costs to mobilize capital, with high costs to develop and maintain infrastructure.
Together, these challenges yield low population levels and difficult economic development
conditions. The primary economic engine in the region is based on a fully capitalized resource,
fisheries; this resource is constrained from value-added activities by the cost of energy. Illustrative
examples of these regional weaknesses follow.
“The cost of living drives wages up and
makes it difficult to retain qualified
employees.”
“Small markets. Economies of scale are
hard to find.”
“High transportation and energy costs.”
-SWAMC Business Council,
‘What is the primary challenge of doing
business in Southwest Alaska?’
SWAMC Comprehensive Economic Development Strategy 2018 49
AGENDA ITEM #2.d.
WORKFORCE DEVELOPMENT
Businesses and organizations note the difficulty of training and maintaining a stable, qualified, reliable
workforce in Southwest Alaska. Many businesses hire out-of-state employees because local residents
are either not qualified and/or uninterested in the jobs available. Unemployment remains high while
job positions remain vacant. The high costs of living and challenges found in remote communities can
add additional barriers. Specific examples of these and other barriers are outlined below.
Lack of Education, Training– A 2012 FSMI Education and Training Gap Analysis of the
44
Fisheries, Seafood and Maritime Workforce noted statewide:
o Technical skills are in short supply;
o Access to information and training is difficult;
o There is a lack of exposure to industry skills and opportunities at a young age; and,
o In general, it is difficult to find qualified people in rural regions.
Flat Population Growth and Aging of the Fleet – The population of Southwest Alaska has
remained relatively stagnant and has experienced slower growth than the rest of Alaska.
Additionally, many residents in the fishery, seafood and maritime industry are nearing
retirement age. There is a perceived “graying” or aging of Alaska’s fishing fleet, and what is
understood to be a small pool of younger fisherman to take their places. A more definitive
assessment of this perceived problem is being assessed by researchers at the University of
Alaska Fairbanks and the Alaska Marine Conservation Council. The project, titled “Graying of
the Fleet in Alaska’s Fisheries: Defining the Problem and Assessing Alternatives”, is funded by
the North Pacific Research Board. The project started in August of 2013; research results are
anticipated for release in late 2017.
Communication Infrastructure – This list echoes many of the concerns that were voiced by
Business Council representative. Many Business Council members stated they frequently have
trouble finding interested and qualified candidates in rural communities. Explanations range
from a lack of training, subsistence activity conflicts, and substance abuse with local residents,
to lack of interest from workers outside of the region due to remoteness, lack of housing and
high costs of living. As stated by one Business Council member: “When I have employees in a
town who can’t function because email, voicemail or cell phones don’t work, it can be very
difficult to do business. If it takes three hours to get ahold of someone and they’re sitting in
Dutch Harbor with a $1,000-an-hour tug, that’s a big lost cost to me.”
Technology and Training – Additional concern related to education and training
opportunities is the relatively expensive and slow communication technologies available in
many parts of Southwest Alaska. Training institutions in the region, like SAVEC, and the UAF
Bristol Bay and Aleutian campuses, that would like to expand their offerings with cost effective
and more elaborate digital training courses are unable to do that with existing communication
infrastructure.
Non-Resident Employment – Many jobs in the region are filled by non-residents. For
example, the number of Southwest Alaska residents employed in the fish processing workforce
is less than 20 percent, with some variation across regions: two percent in Bristol Bay, 16
45
percent in the Aleutians/Pribilof Islands and 51 percent in the Kodiak Region.
44
University of Alaska (May 2012). Education and Training Gap Analysis for the Fisheries, Seafood, Maritime
Workforce.Retrieved April 28, 214 from https://www.alaska.edu/files/fsmi/FSMFinalReport5-14-12.pdf
45
Alaska Department of Labor and Workforce Development. (2012). Research and Analysis Section. Retrieved May
20, 2014 from http://laborstats.alaska.gov/seafood/seafoodaleutians.htm;
http://laborstats.alaska.gov/seafood/seafoodbristol.htm;http://laborstats.alaska.gov/seafood/seafoodkodiak.htm
SWAMC Comprehensive Economic Development Strategy 2018 50
AGENDA ITEM #2.d.
Data Gaps – The lack of relevant participation data, especially with commercial fishing crew,
is a data gap which presents difficulties collecting baseline data to improve conditions for the
largest single labor force in the region. Another good example – there is no workforce
development database for tracking employment opportunities, training opportunities and
skilled laborers in the region. The information that is available is scattered and difficult to find.
RESOURCES
The SWAMC region has an abundance of raw resources. However, many of these resources are difficult
to access and take energy and infrastructure to transport, process, and add value to them, optimally
moving them up the value chain to become more profitable end products. Following are some of the
specific regional barriers to increasing the value of Southwest Alaska’s resources.
Extreme Weather – While Southwest Alaska is relatively warm by Alaska standards, high
winds are prevalent throughout the region, with the highest winds in the Aleutians and Gulf
Coast. The low pressures that generate wind also create a prevalence of low cloud cover, fog
and precipitation. This combination of wind and obstructed visibility from precipitation (often
rain), places additional strain on the transportation networks, reducing service and increasing
costs of operation.
Resource Fluctuation – Seafood, which is the essential driver in the region, is subject to
natural fluctuations. These fluctuations happen on natural biological and economic cycles,
subjecting the regional economy to constant uncertainty. Halibut stocks are currently
experiencing a biological fluctuation, where Pacific Biomass has dipped considerably from the
46
high of 22,500,000 metric tons that occurred in the mid-90s. Salmon markets experienced
economic fluctuation, when ex-vessel value peaked at around $2.30 in 1988 and fell to $0.60 in
2000. In 2017, the ex-vessel value was around $1.10.
Seasonality of Resource Utilization and Employment – Many of the key industries and
employment in Southwest Alaska are seasonal in nature, including fishing, tourism, mining and
construction. This means that unemployment rises in the fall and winter months. In Aleutians
East Borough, for example, between 2014 and 2016 the average unemployment rate was 2.6
47
percent in July and rose to 6 percent in December.
Adding Value to the Resource – Alaska’s fisheries resources are fully utilized, and because
the resource is managed for long-term returns, the short-term extraction is effectively capped.
Over the long-term, new commercial fisheries resources are not expected to proliferate, which
leaves only two means of incorporating new money into the regional economy: increased
ownership, which allows resource rents to flow back to the region, and increasing value for
each unit produced. Due to the maturity of the fishery, and high costs of entry, vastly increasing
local ownership opportunities is limited. Fish permits are prohibitively expensive for younger
fishermen, making it difficult for the next generation to enter the industry. When permits are
owned by nonresidents they contribute less to the regional wealth as that revenue generally
leaves Southwest Alaska. Due to the high costs of energy for operations, including capital
mobilization, utilization, and transportation, value added processes are limited.
46
Trends in Groundfish Biomass and Recruits per Spawning Biomass. (2014). Boldt, Jennifer. Retrieved May 27,
2014 from NOAA: http://access.afsc.noaa.gov/reem/ecoweb/html/ecocontribution.cfm?id=33
47
Alaska Department of Labor and Workforce Development. (2013). Alaska Local and Regional Information.
Retrieved April 18, 2014 from
http://live.laborstats.alaska.gov/alari/details.cfm?yr=2012&yr=2011&yr=2010&dst=01&dst=03&dst=04&dst=02&ds
t=06&r=6&b=0&p=0.
SWAMC Comprehensive Economic Development Strategy 2018 51
AGENDA ITEM #2.d.
Potentially Conflicting Resource Development – Abundant resources can lead to conflict
as to best use, and concerns for trading one resource for another. The North Pacific Fisheries
Management Council manages primarily for the long-term sustainability of the fisheries; they
also balance allocation of rights to different groups, within the fishing industry. The Pebble
Mine claims to be one of the biggest of its kind in the world, and brings the potential to diversify
the regional economy, although concerns from the fisheries sector about developing mines at
the expense of fish (and culture) has left the project’s future uncertain.
ENERGY
High energy costs in the region lead to higher costs of doing business. Some larger businesses and
processing sites have elected to generate their own power because local utilities are either unable to
provide sufficient levels of power at an affordable costs. Specific barriers to economic development
caused by lack of local access to cheap, renewable energy are outlined below.
High Cost and Logistics – Many communities struggle to import energy due to high costs
and the logistical challenge of bringing fuel into remote locations. High costs of energy act as
a tax on the disposable spending power of local populations, and an increased cost of doing
business for firms.
Access to Stranded Renewable Energy Sources – The cost and technological ability to
access abundant stranded energy supplies prevents many local sources of energy from entering
the local economy.
Lack of Comprehensive Planning – A comprehensive energy plan is still in development.
Energy investments in the region is sporadic and does not always include appropriate analysis
and foresight. While some intertie and strategic planning has been done on a small scale in
Southwest Alaska, the region as a whole does not currently have an energy plan to guide
investment.
Need for Public-Private Partnerships – Entities with the capacity to develop their own
power often do, forgoing partnerships with small capacity communities that could benefit from
greater integration between the largest users. In some communities where the public utility
simply does not have the capacity to provide consistent, reliable, cheap power to big processors,
some public-private partnerships have been forged. Within the last five years, the City of
Unalaska partnered with Unisea and other large processors in the community to assess the
potential for a natural gas supply that could meet the needs of community residents while also
satisfy high energy demands of large processing and storage facilities.
INFRASTRUCTURE
Communication, transportation, housing and other infrastructure is essential to life and the economic
viability of the region. However, the harsh environment, small populations, distant communities and
poor transportation linkages contribute to the difficulty and expense of maintaining infrastructure in
rural Southwest Alaska.
Geography and Connectivity – The lack of overland connectivity limits transportation
options to air and sea, raising the cost of moving goods, services and people. Vessels are an
efficient means of moving goods, although scaling capabilities to meet needs in small, and
variable sized communities creates further inefficiencies. While vessels are well equipped to
move a large quantity of any one item, using vessels to serve communities with many different
SWAMC Comprehensive Economic Development Strategy 2018 52
AGENDA ITEM #2.d.
needs provides for inefficient designs that would be otherwise more capable. The ocean south
and east of the Aleutians is ice-free year-round, although sea fast ice forms in Bristol Bay, as
48
far south as Egegik, including the Pribilof Islands, completely eliminating marine
transportation. An alternative, and often the primary means of transportation for most
communities is flying. Flying is fast and flexible, although it is also very expensive, and does
not effectively move bulk goods. Air services also is constrained by economies of scale, with
often long distances servicing a small population, with limited community infrastructure,
allowing for only small aircraft to service the community. There is no probability of an overland
route being established to the Southwest Alaska region in the foreseeable future.
Capital Mobilization and Maintenance – The limitations to regional transportation linkages
precipitate that moving, establishing and maintaining infrastructure is relatively expensive and
slow in comparison to most other regions. Further complicating projects, are the projected
tightening of public budgets which are a primary source of infrastructure funding in the region.
As projects are delayed, the cost increases, and infrastructure becomes more strained and aged
with time, which further reduces the efficiency of maintaining existing and new capital projects.
Many facility and/or industry-specific projects are privately funded, primarily associated with
specific types of resource development. Many Southwest Alaska coastal communities have
aging port facilities in need of repair, infrastructure that would normally help facilitate private
investment weighs on, potentially reducing private investment.
The Alaska Marine Highway – The Alaska Marine Highway System currently services
Southwest Alaska with the M/V Tustumena, the oldest vessel in the State fleet. The ferry has
been in service since 1964 will likely be retired in another 5-10 years. The Tustumena spent
almost a year out of service starting in October 2012 and was again in dry dock for most of the
summer of 2017, removing one of the primary channels of transportation for Southwest Alaska
while repairs were underway. A new ferry to replace the M/V Tustumena has been designed
and State funding to match Federal Highway funds was appropriated in the 2017 Capital
Budget. A new vessel should be constructed in the next four to five years.
Limited, Unreliable, Costly Air Service and Poor Infrastructure – Southwest Alaska has a
small number of airline operators serving many communities; in some communities there is
only one commercial operator providing flight services. Flights are expensive and increasing in
cost; service is often unreliable. Typical flights to Adak, Unalaska and Saint Paul cost between
49
$500 and $1,000 per one-way flight. For less money, individuals can sometimes purchase one-
50
way tickets from Anchorage to Paris ($812), London ($609), or Honolulu ($358). In a recent
series of land use planning community meetings and stakeholder interviews in Unalaska, one
of the most repeated statements was: “Extend our runway and bring in new air carriers.”
Airport infrastructure is limited and inadequate in many communities. Of the 66 airports in the
region, many have runways that are insufficient in length or width to handle cargo and/or more
than eight passengers. For communities that are considering processing plants as economic
development projects, insufficient runway length and surfaces are an issue.
48
Source: Alaska Center for Climate Assessment and Policy using the Sea Ice Atlas Tool created by the IARC,
viewing Feb 2013.
Retrieved 27 May 2014. Sea Ice Atlas Tool: http://seaiceatlas.snap.uaf.edu/explore
Project description located at: https://accap.uaf.edu/?q=project/digital-sea-ice-atlas-alaska-waters
49
Bureau of Transportation Statistics, Research and Innovative Technology Administration. (2013). Average
Domestic Airline Itinerary Fares by Origin City. Retrieved April 18, 2014 from
http://www.transtats.bts.gov/AverageFare/default.aspx
50
Prices from a searchof flights on kayak.com, conducted on May 16, 2014.
SWAMC Comprehensive Economic Development Strategy 2018 53
AGENDA ITEM #2.d.
Poor Communication Infrastructure – Cell phone reception is limited throughout the
Southwest region. In some locations the issue is contractual: certain carriers hold exclusive
coverage rights to communities. Internet connectivity in the region is also variable and often
51
inadequate. 90 percent of Kodiak Island Borough households have access to download speeds
52
of over 10 Mbps. In contrast, the fastest available residential internet access in the Aleutians
53
clocks in at 1 Mbps. In some communities, faster network connection services are available
but the costs are prohibitively high for many businesses and households.
Limited Affordable, Quality Housing – Some communities are experiencing housing
shortages and have limited land availability for constructing new homes. In Dillingham Census
Area, 18 percent of occupied units are overcrowded, followed by 13 percent in the Lake and
54
Peninsula Borough and nine percent in the Kodiak Island Borough. These numbers are
significantly higher than the state and nationwide rates of six and four percent, respectively. In
recent interviews of Unalaska residents for a community land use project, one newcomer to
the community had moved four times in one month in search of available, affordable housing.
In that community, and many others in the region, there are developable lands for housing,
however, the cost of construction and lack of collaborative fundraising have been barriers to
55
constructing new housing developments.
Aging Industry Facilities – The commercial fish processing industry in Southwest Alaska has
some of the oldest plants in the state, many are decades old. Aged infrastructure adds costs to
updating processes that could be more easily implemented in new builds. An assessment of
Dutch Harbor processing facilities, while some of the most sophisticated manufacturing plants
in the state, were not as efficient with energy use as could be with diesel as the main source of
energy. They were constructed in a period of low diesel prices; energy efficiency was not a
concern or priority. As the price of energy rises, the cost of efficiency becomes more important.
Sustainability of The Kodiak Launch Complex – The Alaska Aerospace Corporation
(AAC) maintains the Kodiak Launch Complex (KLC) on Kodiak Island. KLC is not launching
enough rockets to be sustainable – they need at least one or two additional launches a year. As
a public corporation of the State of Alaska, its continued funding might be at risk unless the
Complex is able to increase annual launch numbers.
PARTNERSHIPS
Local, regional, state and federal – public and private – partnerships and collaborations are key to the
success of any project. In Southwest Alaska, there continue to be some challenges with forging new
and expanding old business partnerships. There is continued tension and a perceived lack of
understanding with federal partners. Perhaps because of the size of the area, and the challenging
51
Connect Alaska. (October 2013). Borough Profiles.Retrieved April 18, 2014 from
http://www.connectak.org/mapping/state
52
Connect Alaska. (2014, May). Facts and Figures.Retrieved June 10, 2014, from Estimated Availability of
Broadband Service by Borough, Census Area and Municipality: http://www.connectak.org/sites/default/files/facts-
figures/files/ak_may_2014_table_5.pdf
53
Dave Goggins, TelAlaska, personal communication, July 29, 2014
54
Wiltse, N., Madden, D., Valentine, B., Stevens, V. (2014). 2013 Alaska Housing Assessment. Cold Climate
Housing Research Center. Prepared for: Alaska Housing Finance Corporation.Retrieved April 18, 2014 from
http://www.cchrc.org/2013-alaska-housing-assessment.
55
Wiltse, N., Madden, D., Valentine, B., Stevens, V. (2014). 2013 Alaska Housing Assessment. Cold Climate
Housing Research Center. Prepared for: Alaska Housing Finance Corporation.Retrieved April 18, 2014 from
http://www.cchrc.org/2013-alaska-housing-assessment.
SWAMC Comprehensive Economic Development Strategy 2018 54
AGENDA ITEM #2.d.
communication infrastructure, there are still not enough regional partners working together, across
subregions, to address common issues. Specific examples are outlined below.
Communication with Federal Partners – Communication between the business community
and local/state government entities is mostly positive and productive. In contrast, interactions
with federal government agencies can be strained and frustrating for Southwest Alaska business
owners and leaders. Different federal agencies have different rules and procedures, making
permitting and licensing processes confusing, expensive and difficult to navigate. As one
Business Council member put described: “It’s important that we’re all good stewards and
operators but it’s getting to be where it’s harder and harder to get through the day because of
the levels of redundant paperwork. A lot of it is redundant. You’d think the different agencies
could get together. For example, why should my captains have to carry three different picture
IDs for three different agencies?" Additionally, recent federal regulatory changes have made
the business climate in the region more challenging. Many of these regulations address issues
that are not applicable in Alaska but that are enforced here. From one Business Council
member: “The federal government increased the mandatory rest time that pilots need. We had
to hire 25 new pilots. Pilots are the most expensive employees on my payroll. We also recently
saw a 30 percent cost in the increase in the costs of our health care.”
Inconsistent Regional Collaboration – Despite some existing partnerships between regional
workforce development entities and the region’s educational institutions, there are still limited
training and education opportunities to train residents for the necessary technical and
specialized skills.
Lack of Support for Local Business Community – Dillingham and Kodiak are the only two
communities in the region with a Chamber of Commerce office. Chambers support economic
development and promote business interests.
OPPORTUNITIES
Stranded and underutilized resources offer the best opportunity for future growth in Southwest Alaska.
The stranded wind, geothermal, hydraulic and tidal energy resources in the region contain immense
energy potential. Business leaders interested in currently inaccessible arctic resources and other deep-
sea minerals will likely utilize Southwest Alaska’s infrastructure as a launching point for future resource
development. The institutional strengths of the region’s CDQs and Alaska Native Corporations, and
their ability to access new partners, resources, and economic development opportunities, is a promising
starting point for increasing the region’s wealth.
SWAMC Comprehensive Economic Development Strategy 2018 55
AGENDA ITEM #2.d.
“Southwest Alaska has tremendous
potential to grow and ultimately, looking
out 50 to 100 years become a key area
globally for arctic development and
transportation.”
The region is virtually unexplored for hard
rock mineral resources. It’s a real frontier
where we may find a mineral deposit
ultimately worth billions.”
-SWAMC Business Council
WORKFORCE DEVELOPMENT
While there are extensive workforce development needs in the region there are many efforts underway
to address the issue and find solutions, including increased partnerships between regional entities and
public and private partners outside of the region. These efforts are bringing together businesses,
governments, Alaska Native Corporations and educational institutions.
Public and Private Investment in a Skilled, Trained Workforce – As described earlier in
“Strengths”, existing and potentially increased investment by the region’s Alaska Native
Corporations and CDQ groups, as well as continued investment by the University of Alaska,
in providing scholarships, training opportunities, comprehensive programming, learning
facilities, and multiple modes for taking coursework, is key to providing the necessary and
appropriate education and training for Southwest Alaska’s future workforce. In May 2014, the
University of Alaska’s Fisheries, Seafood and Maritime Initiative (FSMI)’s multidisciplinary
team released the Alaska Maritime Workforce Development Plan. This plan contains actionable
56
directions and strategies to strengthen Alaska’s maritime sector. The Alaska Commission on
Post-Secondary Education is also training local educational groups on using the new workforce
development tool Alaska Career Information System (AKCIS) effectively.
Maturation of the Cluster Model of Economic Development, and success in similar markets,
such as recent successes in Iceland, provide a future model that Alaska may follow to coordinate
workforce and economic development.
RESOURCES
Increased local resource ownership, value-added activity, Arctic expansion and expanding tourism
activities are the best opportunities to contribute to the long-term health of the regional economy.
Specific examples include:
Resource Ownership – Regional proximity and associated knowledge with coastal marine
resources provides local populations with a competitive advantage for utilizing marine
56
University of Alaska. (May 2014). Alaska Maritime Workforce Development Plan.Retrieved May 22, 2014 from
http://www.alaska.edu/files/fsmi/AK-Maritime-Workforce-Dev-Plan_Low-Res_5-6-14.pdf
SWAMC Comprehensive Economic Development Strategy 2018 56
AGENDA ITEM #2.d.
resources. While outside populations may consider spending a disproportionate time in
Southwest Alaska an inconvenience, the local population may be more willing to commit to
long-term execution of fisheries in the region. Given the special knowledge and lower costs,
local residents are well positioned to become resource owners over time. Limited access to
capital, the largest barrier to becoming permit holders or owners, could be overcome through
management and financial policies. For example, Bristol Bay Economic Development
Corporation currently offers a permit buy-back program to increase the number of locally
57
owned permits.
Increased Demand for Seafood Products – According to a presentation on Alaska Salmon
Market trends, ex-vessel value for salmon has seen a dramatic increase in the last decade. World
58
demand for salmon has increased, and Alaska salmon is growing in popularity in Europe.
More Processing in the Region – Only a proportion of seafood processing happens in the
region. Typically the first round of processing (initial filleting and freezing) doubles the value
of the resource, while the second round (preparation, packaging) doubles it again. If more of
this value-added processing is done in Southwest Alaska, more money will come back into the
region as a result of the raw resource; moving up the value-chain.
A Place for Eco and Adventure Tourism – The vast and dramatic landscape that creates
difficulties for transportation linkages, add to the region’s remoteness, mystique, abundant
natural wildlife and overall natural beauty and are a tourism draw, especially for recreational
fishermen, adventurers and travelers looking for ecotourism opportunities. Growing classes of
newly wealthy are looking for new and exciting adventures, and may be willing to spend extra
59
money for a unique experience. Adventure tourism is growing as well – the market rose 65
60
percent between 2009 and 2012. Southwest Alaska’s abundance of public lands and proximity
to national and state parks also make it a desirable location for U.S. and international travelers.
Increase in Mining Activity – The region has seen an increase in mining exploration as
multiple mine sites in Southwest Alaska are considered. The mining exploration process brings
employment and investment to the region; in 2010, $137 million was spent on mining
61
expenditures in Southwest Alaska. Future mining development would employ residents and
bring in new energy and infrastructure investments to the region.
Arctic and OCS Resources – Nearly all year-round, deep-sea ports available for accessing
arctic and Outer Continental Shelf (OCS) resources in the Arctic and North Pacific Ocean are
found in the Aleutians and Southern Gulf of Alaska. The Arctic and OCS represent some of
the least understood environments on earth, and thus a great opportunity for new resources
57
Bristol Bay Economic Development Corporation. (n.d.). Permit Loan Program. Retrieved May 22, 2014 from
http://www.bbedc.com/?page_id=187
58
Knapp, Gunnar. (April 2012). Trends in Alaska Salmon Markets. University of Alaska’s Institute of Social and
Economic Research. Retrieved April 28, 2014 from
http://www.iser.uaa.alaska.edu/Publications/presentations/2012_04_12-TrendsInAKSalmonMarkets.pdf
59
Rising Global Per Capita Wealth, 2013 Global Wealth Report by Credit Suisse Research Institute: Global Wealth
Reaches New All-Time Highretrieved from: https://www.credit-suisse.com/us/en/news-and-expertise/research/credit-
suisse-research-institute/news-and-videos.article.html/article/pwp/news-and-expertise/2013/10/en/global-wealth-
reaches-new-all-time-high.html
Note particular surge of growth in Chinese tourism, Presidential support noted on May 23, 2014at:
http://www.forbes.com/sites/kenrapoza/2014/05/23/obama-opens-floodgates-to-chinese-tourists/
60
Concurrent growth occurring in adventure tourism, retrieved from: http://www.adventuretravelnews.com/new-
adventure-tourism-report-reveals-263b-market-up-65-per-annum-since-2009
61
Alaska Miner’s Association. (January 2012). The Economic Impacts of Alaska’s Mining Industry. Retrieved May
22, 2014 from http://www.alaska.edu/files/bor/120412Ref04_AK_Mining_Industry_Economic_Impacts.pdf
SWAMC Comprehensive Economic Development Strategy 2018 57
AGENDA ITEM #2.d.
and exploratory possibility. The impetus for this development will be driven by private
organizations and federal interest with capabilities and incentive to invest in regional
communities.
ENERGY
Southwest Alaska has an abundance of renewable energy options that have the potential to offset the
current high costs of energy. Recent efforts to coordinate energy planning have been successful; further
expanding these efforts could greatly benefit communities experiencing high energy costs.
Stranded Energy Potential and Supporting New Models– Improving renewable energy
technology means that energy investments are becoming more feasible. The success of pilot
projects from around the world can offer additional information to guide future investments.
As described earlier, regional examples of emerging energy projects are the ocean tidal power
project in False Pass, in-river hydrokinetic in Igiugig and waste-to-heat/power incinerators in
Dillingham and Egegik.
Bulk Fuel Programs – Bulk fuel purchases are the opportunity to be an effective means of
lowering energy costs. The formation of regional purchasing groups can increase purchasing
power and help lower fuel prices.
Energy Efficiency Programs – There are a number of statewide energy efficiency programs
available in Alaska, including Alaska Housing and Finance Corporation (AHFC)’s
Weatherization Assistance Program and the Home Energy Rebate Program. As a whole, these
funds have historically been underutilized. This is likely due to a combination of a lack of access
to capital for upfront improvement costs, potential tax liability, limited program outreach and
limited availability of vendors to conduct assessments. While most of Southwest Alaska has
seen high participation rates in these programs, some areas have low homeowner participation
rates such as Aleutians West Census Area and Kodiak Island Borough (four percent and 16
62
percent, respectively). Homeowners in these areas could benefit from the cost savings of these
energy programs. Low participation rates in Aleutians West Census Area and Kodiak Island
Borough represent an opportunity for SWAMC to work with AHFC to do direct outreach to
homeowners and business facility owners that could benefit from these and other energy
efficiency programs.
63
Alaska natural gas development has the potential to bring lower cost energy to rural Alaska.
Unalaska is investigating a LNG through a pilot project to begin next year.
INFRASTRUCTURE
The opportunities to expand and improve Southwest Alaska’s communication, housing, transportation
and other infrastructure are dependent on the willingness to invest by both regional and external
partners. In some cases, the return on investment is years off, as may be the case with arctic
development and transport. In other instances, such as the housing and water/sewer projects described
below, the direct benefits of cash investment are or will be realized by improved community
62
Wiltse, N., Madden, D., Valentine, B., Stevens, V. (2014). 2013 Alaska Housing Assessment. Cold Climate
Housing Research Center. Prepared for: Alaska Housing Finance Corporation. Retrieved April 18, 2014 from
http://www.cchrc.org/2013-alaska-housing-assessment.
63
White, Bill. (March 2014). Guide to Alaska Natural Gas Projects.Office of the Federal Coordinator: Alaska
Natural Gas Transportation Projects. Retrieved May 28, 2014 from http://www.arcticgas.gov/guide-alaska-natural-
gas-projects.
SWAMC Comprehensive Economic Development Strategy 2018 58
AGENDA ITEM #2.d.
infrastructure and lower costs of living in rural communities. In all cases, SWAMC plays a key role in
bringing together creative, innovative groups that can brainstorm, research, invest, and potentially
implement new infrastructure in Southwest Alaska. These innovative projects and investments have
the potential to create new jobs, businesses and overall regional wealth. Specific examples include:
Arctic Transport – A new book released by the University of Calgary Press addresses the
64
recent increase in activity in the Arctic and discusses potential opportunities. The book
concludes three emerging opportunities: resources, security and science. While Arctic shipping
has long been a topic of discussion, the book concludes that Arctic shipping is unlikely to
become a widely used transportation medium over the next few decades due to seasonal
restrictions, lack of infrastructure and the need for expensive ice-breaking cargo carriers.
However, the region is seeing slight increases in traffic. For example, a Norwegian Carrier is
planning to stop in Dutch Harbor on its way back to South Korea this July to pick up seafood
and carry it over the pole for delivery.
Arctic and OCS Infrastructure Support – Infrastructure for early exploration of potential
resource development of the Arctic and Outer Continental Shelf (OCS) is currently available
in the Southwest Region. Future well development and/or production will require specialized
equipment and the construction of shore-side support infrastructure. The impetus for this
development will likely be driven by private organizations and federal interest with capabilities
and incentive to invest in regional communities.
Housing and other Community Infrastructure – Research groups around the world are
engaged in helping populations in remote, rural communities identify new technologies and
systems for driving down the cost of living and improving quality of life. Two recent efforts
include the Aleutian Housing Authority’s “Living Aleutian Home Design” competition and the
65
State of Alaska’s Department of Environmental Conservation’s Water and Sewer Challenge.
In both cases, consultants, including architects, housing experts, engineers, and planners from
around the globe have been invited to submit and test their best ideas for designing, creating
and constructing creative, affordable housing and community water and sewer systems for
Alaska’s most remote communities.
64
Zellen, Barry Scott. (June 2013). The Fast-Changing Arctic: Rethinking Arctic Security for a Warmer World.
University of Calgary Press. Accessed May 16, 2014 from http://uofcpress.com/books/9781552386460
65
Living Aleutian Home Design announcement, http://www.akbizmag.com/Alaska-Business-Monthly/May-
2012/Spanish-Team-Wins-Living-Aleutian-Home-Design-Competition/; and, the State of Alaska Water and Sewer
Challenge website, http://watersewerchallenge.alaska.gov/.
SWAMC Comprehensive Economic Development Strategy 2018 59
AGENDA ITEM #2.d.
Expanding Communication Infrastructure – Recent investments in microwave and fiber
optic networks are slowly bringing increasing levels of network service to Southwest Alaska. A
particularly large
Figure 3.1 Proposed Route for Arctic Fiber Optic Cable
project, the
Quintillion Arctic
Fibre cable, plans
to link Anchorage
and Seattle to a
cable extending up
to Alaska’s North
Slope. As seen in a
preliminary map of
the project, the
proposed cable
will pass by the tip
of the Aleutian
Islands. There is
no current plan for
a spur cable to
service Southwest
Alaska, although
Source: Arctic Fibre.
the cable may
provide opportunities for expanding service in the future. Marine surveys for the project began
66
the summer of 2014. Phase one connecting Nome, Kotzebue, and four North Slope
communities is expected to come online in early 2017. In the meantime, Quintillion is currently
67
evaluating Unalaska and Dutch Harbor as a possible landing site for future construction. If
the zone is selected as a landing site, fiber optic internet connections would be available within
the next few years.
PARTNERSHIPS
Southwest Alaska is comprised of many partners working together toward shared goals. Many of these
partnerships, especially the newly-formed partnerships, have potential to grow and expand.
ANCs and CDQs – The region’s three Community Development Quota (CDQ) organizations
and three Alaska Native Corporations (ANCs) are well funded, organizationally sound and
committed to developing regional capacity. Leaders from all six groups sit on the SWAMC
Business Council.
Southwest AKs Geostrategic Location – Over the past five years there has been a national
geopolitical shift with an increased interest in strategy and security to the Asia-Pacific region.
Southwest Alaska is strategically positioned and may benefit from increased federal
infrastructure, investment and resources as a result of its strategic position.
66
Smith, Matthew F. (May 30, 2014). Arctic Subsea Fiber Optic Cable Project Begins Summer Marine Surveys.
KNOM Radio Mission. Accessed June 16, 2014 from http://www.knom.org/wp/blog/2014/05/30/subsea-arctic-fiber-
optic-cable-project-to-begin-summer-marine-surveys/
67
QuintillionNetworks, personal communication, May 7, 2015.
SWAMC Comprehensive Economic Development Strategy 2018 60
AGENDA ITEM #2.d.
Fisheries Workforce Development – FSMI’s collaborative mix of public and private sector
participants continue to facilitate conversations and move forward on workforce development
strategies that address fishery, seafood and maritime industry needs.
SWAMCs Increased Role as Convener/Networker/Liaison – SWAMC recently compiled
a regional map and associated database that includes contact information for members and
nonmembers, organized by region and by sector. This interactive tool will be available on
SWAMC’s website as a resource. The networking map can be used to chart out the areas
SWAMC is involved in. Additionally it can be used to see the connections between private and
municipal entities. The newly-formed SWAMC Business Council also brings together business
leaders for meetings and conversations that encourage cooperation and coordination between
Southwest Alaska private, public and non-profit partners. Council and other SWAMC members
have stated that these networking opportunities have been helpful and worthwhile; reaping
rewards in the form of new partnerships, strategies, and economic development projects.
THREATS
Conditions and trends occurring outside the region pose challenges to the economic viability of
Southwest Alaska. Increased cost of living due to increased energy and transportation costs, could limit
economic opportunities for business expansion and retention, making it more difficult for the region’s
young people to secure career-oriented jobs. A warming climate is also predicted to shift fisheries
resources north, threatening the region’s fisheries-dependent coastal communities. Public budgets that
have historically supported the bulk of community and regional infrastructure projects may no longer
be available. Long-term economic planning for resilient communities, a resilient region, can be
challenging with this uncertain future. Understanding threats to the region’s economic viability is one
step toward anticipating issues and developing strategies that can buffer and mitigate the harmful
effects of potential threats. Specific threats by focus areas are outlined below.
“The cost of living negatively impacts all
business as it contributes to not being able
to put a competitive product on the market
whether that is healthcare, fish or
financing.”
“As a region we’re still seeing outmigration
so the business climate is getting worse.”
“The two biggest problems we face stem
from substance abuse and awful
transportation.”
-SWAMC Business Council
SWAMC Comprehensive Economic Development Strategy 2018 61
AGENDA ITEM #2.d.
WORKFORCE DEVELOPMENT
Effective workforce development is dependent on the stability of the market to provide people with
opportunity to find gainful employment and employers some ability to employ productive members of
the team that contribute to the overall good of the organization. Outward migration and high costs of
living threaten to undermine recent efforts to support workforce development in Southwest Alaska.
Net Outward Migration – A globally connected world provides greater exposure to outside
opportunities. Outward migration and high costs of living threaten to undermine recent efforts
to support workforce development in Southwest Alaska. The effect of an outward draw from
rural communities can be very damaging to their competitiveness and ability to meet future
workforce needs. While total population is holding steady due to a higher number of births
than deaths, the region is experiencing a net outward migration. Between 2011 and 2012, there
was a net migration loss of 300 individuals; Aleutians West Census Area was the only region
68
that saw a net gain, with a net gain of 41 individuals. Anecdotal evidence suggests that some
tribal offices are relocating out of rural communities to Anchorage. If the costs of living
continue to rise, it will become even more difficult to attract and retain a qualified workforce,
and increase the cost of doing business in the region. Additionally, most organizations have
offices and conduct business in Anchorage, making it challenging for local businesses who do
not have a presence outside of Southwest Alaska.
Changing Resource Base – When a particular resource base shifts the opportunities arising
from that resource base will change, and a new dynamic will be required to train and mobilize
the workforce. Changing climatic conditions may already be forcing fish population biomass
69
north. In order to meet these changing conditions, employers may ultimately shift their
workforces to new locations, thus threatening employment in communities where the
availability of seafood resources are decreasing.
Reduction in Public Training Funds – Many workforce development and training
workshops are covered through a mix of fee for service, but also offset by public funds to make
the courses affordable.
RESOURCES
Resources form the economic base for Southwest Alaska, and are subject to changes in behavior, stock
distribution and overall abundance. These changes are based on the complex interaction of
environmental factors.
Impact of Climate Change on Southwest Alaska Fisheries – A 2013 Ocean Acidification
Risk Assessment by the Alaska Center for Climate Assessment and Policy, UAF, NOAA and
other partners concluded that out of the entire state, the Southwest Alaska region is at the most
risk for negative impacts of ocean acidification due to the region’s high levels of subsistence
and commercial fishing, combined with the region’s heightened socioeconomic vulnerability
70
(based on economic stability, food accessibility, job diversity, educational attainment). For a
68
Alaska Department of Labor and Workforce Development. (August 2013). Alaska Local and Regional Information.
Retrieved May 27, 2014 from http://live.laborstats.alaska.gov/alari/
69
National Oceanic and Atmospheric Administration. (July 2012). Climate & Fish Sticks. Retrieved May 23, 2014
from http://www.climate.gov/news-features/climate-and/climate-fish-sticks
70
Alaska Center for Climate Assessment + Policy, University of Alaska Fairbanks, National Oceanic + Atmospheric
Administration et al. (December 2013). Ocean Acidification Risk Assessment for Alaska’s Fishery Sector.Retrieved
May 20, 2014 from https://accap.uaf.edu/?q=project/ocean-acidification-sensitivity-index-oasi
SWAMC Comprehensive Economic Development Strategy 2018 62
AGENDA ITEM #2.d.
map showing the scores and ranking by region, see the Appendices. A 2015 published study
revealed that it is the region’s commercial dependency on salmon, king crab, and tanner crab
that pose risk to the economic well-being of Southwest Alaska. The study determined that
salmon and crustacean species will most immediately be negatively affected by ocean
acidification, impacting profits for fisheries in the region. The study urged communities in the
71
region to increase their adaptive capacity to respond to a potential decline in fish stocks. No
current measures to respond to ocean acidification in Southwest Alaska are underway at this
time.
72
Competing Producers – Farmed salmon competes with wild salmon in the world market.
Demand for salmon has been increasing and many consumers are willing to pay a premium for
73
the cost of wild salmon. However, continued expansion of salmon farming has the potential
to reduce the overall market value of salmon.
Environmental Protections Limit Resources Development – While often necessary,
efforts to protect the natural environment and the region’s flora and fauna can put additional
burdens on local industry. For example, the Steller sea lion was listed as an endangered species
in 1990 under the Endangered Species Act. Since its listing, various restrictions and regulations
74
on fishing have had a negative impact on the region’s fishing industry.
Bycatch - Ineffective use of resources leads to lost economic potential. While very few stocks
in Alaska are classified as overfished, and the general consensus is that Alaska manages stocks
for long-term sustainability, resource conflicts still arise as is evidenced in periods of low
abundance, and further conflicted by the presence of bycatch. Continued conflict over best use
75
of the resource will perpetuate ineffective use of the resources.
Impacts of Mining on Fisheries Unknown – Existing and potential mining projects have
the potential for large-scale spills or accidents, with the potential to affect natural resources
such as fish supply.
Increased Competition for Adventure and Eco-Tourism – Southwest Alaska is contending
in what is becoming an increasingly competitive international market for adventure travel and
outdoor activities. Simultaneously, other adventure destinations in locations such as Chile,
76
Ecuador, Japan and Iceland are growing in popularity.
ENERGY
Energy prices in rural Alaska are volatile and continue to rise. High energy costs result in higher costs
of doing business and increase outward migration as residents leave due to increases in the cost of
living. Many residents of Southwest Alaska identify the price of energy as the single greatest risk to the
long-term sustainability of communities in the region.
71
Ocean acidification risk assessment for Alaska’s fishery sector. Prog. Oceanogr. (2015).Mathis, J.T., et al.,
http://dx.doi.org/10.1016/j.pocean.2014.07.001
72
Trends in Alaska and World Salmon Market. (2013). Knapp, Gunnar. Retrieved May 27, 2014 from
http://www.iser.uaa.alaska.edu/Publications/presentations/2013_02_07-GK_TrendsInAlaskaSalmonMarkets-
73
Trends in Alaska and World Salmon Market. (2013). Knapp, Gunnar. Retrieved May 27, 2014 from
http://www.iser.uaa.alaska.edu/Publications/presentations/2013_02_07-GK_TrendsInAlaskaSalmonMarkets-
74
Hui, T.C.Y. (2011). Stellar sea lions and fisheries: competition at sea? University of British Columbia, Vancouver.
75
Food and Agriculture Organizations of the United Nations. (2011). Review of the State of World Marine Fishery
Resources. Retrieved May 23, 2014 from http://www.fao.org/docrep/015/i2389e/i2389e.pdf
76
George Washington University and the Adventure Travel Trade Association. (December 2012). Adventure Tourism
Development Index: 2011 Report. Retrieved May 27, 2014 from http://cdn.adventuretravel.biz/wp-
content/uploads/2012/11/atdi_2011_report.pdf
SWAMC Comprehensive Economic Development Strategy 2018 63
AGENDA ITEM #2.d.
No Cheap Alternatives – Current technology is generally not able to provide the energy needs
of Southwest Alaska at a cheaper delivered cost of power than existing energy systems. If no
alternative energy system replaces existing non-renewable supplies of energy, prices will likely
rise further, potentially to the point that the viability of some communities are compromised.
Reduced Public Investment – To date a great deal of public expenditure has been diverted
to investments in solving regional energy needs, which may not be the case if public budgets
tighten.
INFRASTRUCTURE
The infrastructure in Southwest Alaska is vulnerable to a number of environmental and political factors.
Climate change is already affecting coastal communities, and the region experiences frequent
earthquakes and occasional volcanic eruptions. The region’s heavy reliance on federal and state funds
for the construction and maintenance of infrastructure leaves communities particularly vulnerable to
reductions in the availability of public funds.
Natural Environmental Changes – Southwest Alaska’s location along the Pacific Ring of
Fire means the region is subject to relatively frequent earthquakes and occasional volcanic
eruptions. According to the U.S. Geological Survey and the Alaska Volcano Observatory, 36
77
of the 41 active volcanoes in Alaska are in Southwest Alaska. According to the Alaska
Earthquake Information Center (AEIC) there are over 200 earthquakes with magnitude 4 and
78
greater per year in the region from Kodiak Island westward through Attu Island. There were
about 60 earthquakes with magnitude seven and greater in that region in the past 100 years.
While eruptions and earthquakes with magnitudes large enough to cause damage are infrequent,
large events do have the potential to negatively impact the region’s economy.
Climate Change Impact on Existing Infrastructure – Climate change threatens many
coastal communities in Southwest Alaska. Some communities are already struggling with
erosion, melting permafrost and flooding as a result of climate change.
Decline in Private Investment – Diminishing federal and state investments in public
infrastructure may reduce private investment in the region.
Postal Services - Potential cuts to postal services and rural mail delivery would be catastrophic
to the region’s economy.
Alaska Marine Highway System - Reduced funding for the Alaska Marine Highway will
mean less revenue from tourism for cities usually visited frequently over the summer.
Maintenance on the M/V Tustumena in the summer of 2013 caused a dramatic drop in visits
to Southwest Alaska towns (see figure 2.16). Reduced service has been already scheduled for
2015, due to State budget shortfalls. The Tustumena was out of service most of the summer in
2017 due to extensive corrosion repairs.
77
U.S. Geological Survey. (September 2000). Historically Active Volcanoes in Alaska – A Quick Reference.
Retrieved May 22, 2014 from http://www.avo.alaska.edu/pdfs/usgsfs118-00.pdf
78
Natalia Ratchkovski, Ph.D., Seismologist, Alaska Earthquake Information Center, Personal communication, June
19, 2003
SWAMC Comprehensive Economic Development Strategy 2018 64
AGENDA ITEM #2.d.
PARTNERSHIPS
Currently, the only real threats to Southwest Alaska’s growing regional, state, federal partnerships are
recent and anticipated budget cuts and increased federal regulation and oversight. SWAMC, in
partnership with regional, state and federal partners must strategize how to effectively grow, diversify
and sustain the region’s economy, as well as be an effective advocate for effective regulations that
protect resources without financially burdening local and regional businesses.
Overbearing Government Regulation – As described by the SWAMC Business Council,
government regulations are overbearing and cost private business money and difficulty of doing
business, which translates into lower regional economic potential. Rural Alaska generally has
increased costs of doing business, and the effect of onerous regulations may create an outsized
burden for industry in the Southwest Region.
Reliance on Public Funding – Currently, the region is heavily reliant on public funds for
employment and infrastructure; Southwest Alaska’s economy is vulnerable to federal and state
funding cuts. As competition increases for a limited and dwindling pool of federal and state
resources, SWAMCs role as convener, coordinator and regional advocate will be become
increasingly vital to the long-term success of the region.
CHAPTER 4: SWAMC WORK PLAN
SWAMC VISION
Vibrant and livable communities for Southwest Alaska.
SWAMC MISSION
Support the collective interests of Southwest Alaskans, businesses, and communities and promote
long-term economic opportunities through improved quality of life and responsible development.
1)Goal: Support Regional WORKFORCE DEVELOPMENT Initiatives
Objective 1: Training and Education – Promote professional development that prepares
Southwest Alaska residents to contribute to the region’s economic development potential.
Objective 2: Applicable Training – Promote workforce training that is closely aligned with
needed skills.
Strategies – Programs, Projects, Activities
Coordinate shared interests and concerns across the region through active engagement with
SWAMC membership to align private sector goals with institutional training curriculum.
Weigh in on Workforce Innovation and Opportunity Act as it is implemented across Alaska.
Coordinate business needs with learning institutions to align goals and facilitate
communication, relevant to job training, job seeking and skills for the types of work that are
available in the region.
SWAMC Comprehensive Economic Development Strategy 2018 65
AGENDA ITEM #2.d.
Maintain SWAMC's Workforce Development programs and facilitate awareness of meaningful
and available local employment opportunities.
Partner with the Alaska Process Industry Career Consortium (APICC) to document and come
up with strategies to address workforce issues in maritime trades.
2)Goal: Support Access to and Development of RESOURCES
Objective 1: Fisheries Development – Promote fisheries that provide a sustainable income
base to the communities, businesses, and residents of Southwest Alaska.
Objective 2: Tourism Development – Promote awareness and opportunity of the region’s
intrinsic natural value, access to unique experiences and abundant wildlife.
Objective 3: New Resource Development – Promote new resource development activities
that do not threaten other renewable resources vital to the region.
Strategies – Programs, Projects, Activities
Collect and analyze baseline data to maintain a regional data library to better understand the
economic development trends and needs of the region.
Attend regulatory and policy meetings and monitor their effects on the regional resources.
Advocate for policies, management, and environmental initiatives that promote a healthy
business environment and community livability.
Advocate public investments that facilitate private sector resource activity.
Investigate regionally competitive valued added economic development activities.
Research marketing activities that increase the value of resources.
Maintain a strategic plan for access and development of resources.
3)Goal: Support INFRASTRUCTURE Improvements
Objective 1: Strategic Infrastructure Investments – Promote infrastructure that facilitates and
supports the region’s social, cultural, and economic development needs.
Objective 2: Community Planning – Promote long-term visions, goals, and plans for
sustainable community development.
Strategies – Programs, Projects, Activities
Advocate for regional transportation projects and vital transportation links, including runway
and harbor investments that ensure vital air and marine transportation linkages.
Advocate for improved communication infrastructure and research opportunity for
commercial and community usability of available technology.
Research information infrastructure solutions that meet national standards and offer
applications which improve the utility of new communication infrastructure for businesses and
communities.
Assist communities with programs, grants and loans to help expand their infrastructure.
SWAMC Comprehensive Economic Development Strategy 2018 66
AGENDA ITEM #2.d.
Manage EDA EAA grant to develop strategy for public/private partnership to bring broadband
to the Alaska Peninsula and Aleutian/Pribilof Islands.
Represent Southwest Alaska interests in the Southwest Alaska Transportation Plan.
Advocate services that reduce transportation costs and improve community livability and
economic development opportunities.
Maintain an economic geography dataset for Southwest Alaska that recognizes Southwest
Alaska’s contribution to statewide economic wealth and identifies key capital investments for
improving regional competitiveness.
Participate and assist in development of reforms to the Alaska Marine Highway System to
reduce the level of State support and subsidy for this vital transportation service.
Advocate for construction of vessel (funding has already been secured) to replace the
obsolete M/V Tustumena.
4)Goal: Support ENERGY Infrastructure that Reduces the Delivered Cost of Power and
Increases Regional Efficiency
Objective 1: Energy Efficiency – Promote energy systems that stabilize or reduce the long-
term cost of power, by increasing the efficiency of every unit used.
Objective 2: Ownership of Energy Systems– Promote local ownership of energy planning,
decision-making, and projects.
Objective 3: Supply of Low-Cost Power – Promote projects that supply low-cost power.
Strategies – Programs, Projects, Activities
Research cost competitive, renewable, and local sources of energy that increase livability and
economic development activity in the region.
Investigate new sources of cheap energy.
Advocate emerging energy prototype systems in regions where existing high prices offer a price
advantage capable of offsetting initial development costs.
Coordinate stakeholder feedback to aggregate best practices, local priorities, and other local
knowledge to improve energy systems.
Collect and distribute energy data to better inform energy system decisions.
Assist communities with technical and economic analysis of energy projects.
Continue with strategic energy planning, including direct assistance to communities.
Encourage the development of a statewide energy plan through incorporation of the Alaska
Energy Authority’s Regional Energy Planning process.
Investigate co-op development and other organizational means of achieving economies of scale
for providing cheaper power.
Encourage and facilitate a plan, with technical feedback from program providers, with direction
from community stakeholders to improve efficiency of buildings and infrastructure.
Manage Department of Energy. Office of Indian Energy grant to build capacity and plan for
alternatives that may stabilize or reduce long term energy costs in SWAMC communities.
SWAMC Comprehensive Economic Development Strategy 2018 67
AGENDA ITEM #2.d.
Manage USDA Rural Energy for America Program to improve energy efficiency and
bring down energy costs for small businesses and fishing vessels
5)Goal: Support REGIONAL PARTNERSHIPS
Objective 1: Regional Economic Planning – Promote a regional Comprehensive Economic
Development Strategy, with sub-regional and local planning efforts.
Objective 2: Communications – Promote partner networks and activities of the organization,
region, state, and federal interests.
Objective 3: Advocacy – Promote local, regional, state and federal policies that benefit the
region, its communities, businesses, members and key partners.
Objective 4: Organizational Effectiveness – Maintain leadership from a Board of Directors,
representative of regional interests, who guide activities of a productive staff, manage a
financially secure organization, and pursue regionally collective interests.
Strategies – Programs, Projects, Activities
Continue to offer forums and events that bring stakeholders together, especially SWAMC's
Economic Summit and Membership Meeting, which assembles regional stakeholders together
for face-to-face discussion and exchange.
Expand networking opportunities to reach more stakeholders.
Continue engagement with local, state and federal institutions.
Advocate for Southwest Alaska interests to Alaska’s Legislature in Juneau and congressional
delegates in Washington, D.C.
Advocate for more local decision-making.
Maintain a Comprehensive Economic Development Strategy that is updated annually and
rewritten every five years.
Coordinate regional economic planning efforts and research the economic needs and
challenges of Southwest Alaska.
Maintain and distribute an organizational map of partners pursuing similar development and
community goals, complete with partners’ contact information.
Collect and maintain an Asset Map of new and existing development activity.
Identify and encourage areas of regional competitiveness which could lead to new business
opportunities.
Conduct strategic planning efforts to coordinate multiple partners pursuing similar objectives.
Maintain personal communication between communities, businesses, members, partner
organizations, and the general public to build understanding about the region, its economy, and
the needs of its residents.
Engage municipal and associate members in leadership assignments to help guide policies.
Increase membership investments and participation in SWAMC.
Follow-up on insights gained from BRE interviews to advocate for businesses.
Continue Manufacture Alaska Extension (MAKE) partnership through December 31,
2018 and assist in its transition to new provider for State of Alaska.
SWAMC Comprehensive Economic Development Strategy 2018 68
AGENDA ITEM #2.d.
Explore and pursue, if feasible, funding from MEP program for manufacturing
assistance in Southwest Alaska.
Manage Department of Energy grant by collaborating with regional nonprofit
organizations to provide services to build capacity and plan for reducing energy costs.
Manage USDA Rural Energy for America Program in concert with contractors and
Native nonprofit organizations to improve energy efficiency and bring down energy
costs for small businesses and fishing vessels.
PRIORITY STRATEGIES (PROGRAMS, PROJECTS, ACTIVITIES)
Support Youth Mentorship and Skills-Gap Training Programs
Strengthen and Diversify Alaskan Manufacturing
Understand Operating Environment and Resource Needs of Business
Promote Energy Planning and Infrastructure Development
Maintain a Data Library and Publish Economic Trends
Host SWAMC Economic Summit and Membership Meeting
Produce and distribute monthly newsletter to share economic development
information affecting the SWAMC region.
SWAMC Comprehensive Economic Development Strategy 2018 69
AGENDA ITEM #2.d.
AGENDA ITEM #2.d.
AGENDA ITEM #2.d.
T
KODIP
ALASKA T TM
Quarterly Report-FY2019 Quarter 1
• Executive Director —
o Member of Chamber of Commerce Board, Local Emergency Planning Committee, Local
Non-profit Network, Economic Development Special Committee, Noon Rotary, and Chair
of the Small Business Forum
• Board of Directors —
o Held regular board meetings on July 19`h, August 16`h, September 13'h
• Chocolate Lover's Fling -
o Discover Kodiak held its annual fundraiser at the Afognak Center on September 29, 2018.
There were about 180 guests in attendance at the event. Switched focus of event to help
it raise awareness of Discover Kodiak and our members.
• Visitor Guide —
o The Discover Kodiak annual photo contest ended in August and winner were chosen from
the entrants. The top winners were Dake Schmitt and Jonathan Harper.
•
Cruise Ship —
0 18 of the 19 cruise ships scheduled for the season have been completed.
o The 2019 draft cruise ship schedule is out and has 31 cruise ships listed for next season.
http://claalaska.com/wp-content/uploads/2018/08/Kodiak--KDK-2019.pdf
o Discover Kodiak led seven shore excursion tours, "The Taste of Kodiak" leads guest
through town to sample local items. Businesses that participated this quarter include
Harborside Coffee, Bear Town Market, Aquamarine Cafe, EI Chicanos, Monk's Rock,
Kodiak Island Brewing Co., and The Chartroom.
o Met with Viking Cruise Lines when their representative visited the island
• Visitor Center —
o 14,027 people came through the Visitor's Center this quarter.
• Social Media
o We are focusing on Facebook and Instagram
o Facebook currently has 37,792 likes — up from 37,685 last quarter
o Instagram currently has 1,775 followers— up from 1,405 last quarter
o We use a mix of Discover Kodiak staff, Discover Kodiak member, and Kodiak visitor
material on both of these platforms.
•
Advertising —
• Alaska Travel Guide, Alaska Magazine, Milepost, Lovin' Life After 50
o Kodiak was named one of the Best Small Towns to Visit in 2018 in June. We are getting a
lot of attention from the Smithsonian article.
https://www.sm ithsonia nm ag.com/travel/20-best-sma I I -towns -visit -2018-180969125/
• Conventions
o Denali Oncology Group had about 75 people on the island for their annual convention
during the last week in September.
o FY19 will see more focus on attracting small conventions to Kodiak
o Alaska Salmon Fellows will be herein next quarter with about 50 people
• Miscellaneous
o Requested that Alaska Airlines add Seattle to Kodiak direct flights for summer 2019
o Scheduled visit with Ambassadors from Holland in October 2018
Quarterly Report- FY2019 Quarter 2
• Executive Director —
o Member of Chamber of Commerce Board, Local Emergency Planning Committee, Local
Non-profit Network, Noon Rotary, Small Business Forum, Membership Committee for the
Alaska Travel Industry Association. Additional roles in the community include
participation on the Board of Directors at Threshold Recycling Services and St. Mary's
School. Applying to be on the Alaska Travel industry Association Marketing Committee.
• Board of Directors —
o Attended regular board meetings on October 18th, November 15th, December 13`h
• VisitorGuide—
o The Discover Kodiak annual Visitor Guide was completed and printed. A small shipment
of guides arrived on the island mid-December and the main shipment will be delivered to
Anchorage and Kodiak just after the new year.
• CruiseShip—
o The cruise ship schedule for the 2019 currently has 31 visits.
o Total passenger count for the season is 28,560.
o Total hours that cruise ships will occupy Pier 2 is approximately 275 or less than 8.5% of
the time between May 7, 2019 and September 20, 2019.
o Assisting non -profits, Kodiak Baptist Mission and Native Village of Afognak to develop
cruise ship excursions for the 2019 season.
• VisitorCenter—
o Adding new art to the Visitor Center walls. Also added handicap height approved seating
to be more accommodating to our visitors.
• Website—
o Discover Kodiak is designing anew website to be able to present a more graphic story of
Kodiak while simplifying the first impression that visitors will get of Kodiak. The new site
will be ready for launch in the third quarter.
• Social Media
o We are focusing on Facebook and Instagram
o Facebook currently has 37,792 likes —down from 37,792 last quarter
o Instagram currently has 2052 followers —up from 1775 last quarter
o We use a mix of Discover Kodiak staff, Discover Kodiak member, and Kodiak visitor
material on both of these platforms.
•
Advertising —
o Alaska Travel Guide, Alaska Magazine, Milepost, Lovin' Life After 50, Travel Alaska
Website, Alaska Trip Planning Guide from the Alaska
• Conventions
o Alaska Salmon Fellows was herein Kodiak over the course of two weeks facilitating
courses to about fifty students in the program via the Kodiak Harbor Convention Center.
• Miscellaneous
o Requested and still working on Alaska Airlines Seattle to Kodiak direct flights for summer
2019
o Met and toured with two Ambassadors from Holland. Toured Trident Seafoods and
Ocean Beauty Seafoods. Brought fish processing representatives from all available
sources together at a lunch at Kodiak Hana.
m
E
a)
E
Z
n
r
c
m
a
0
U
W
O
N
W
0
0
I,
W
OO
O
W
O
O
O0
O
O
O
O
O
O
I
O
O
O
C0
M
W
m
N
M
M
(n
0
d'
W
W
W
W
Ln
W
,.y
m
W
m
W
m
O
T
W
O
W
W0
1D
O
w
N
O
N
m
N
W
Ln
V
n
Ol
N
d'
'7
N
N
N
V
V
�T
m
m
N
C
m
.--I
e-1
'y
W
W
m
m
N
m
m
00
00
m
m
VV0O
00
O
00
0
00
00
V
00
O
d'
0o
d'
50
V
V
00
Vl
0O
Bob
BO
m
m
0
W
.-i
a
v
am
m
ui
m
oo
.�
n
n
.-�
(n
ti
m
ui
n
m
r,
rn
am
*
r,
m
of
n
m
r,
m
i.
N
v
(n
W
W
m
n
n
n
n
n
m
r�
N
m
n
m
r,
m
Ln
n
n
I,
W
N
r�
R
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
O
O
O
O
O
O
O
O
O
O
0
0
0
0
0
0
0
0
0
0
m
O
O
0
0
0
0
0
0
0
0
1l
N
n
w
w
1,
w
m
w
N
H
w
V
c{
w
w
w
Q1
O1
V
N
V
1�
n
V
w
C
to
O'1
V
O
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
O
O
O
O
O
O
O
O
O
O
O
m
0
0
0
0
0
0
0
0
0
0
w
w
W
w
w
w
w
w
w
w
w.
r,
N
ti
w
w
W
m
�
w
r,
m
w
N
w
N
m
W
N
w
000000000
00.E
00.
000.
00
00000
00000
ajL
C
C
s
C
C
Y
C
E
m
-D
E
O
c=�
IY/1
r
E
Ecu
L
v
E
L
v
E
(N
E
c
E
v
E"
C
al
O
.'o
O
O-
m
m
E
O
O
m
O
m
-p
H
m
p0
m
Cf
(n
Y
Y
E-Ovv�
fl.�
=
c
av
CL
-0
m
m
m
o
7=
C
w
m
W
m
m
J
L
E
min
W
W
Y
W
ai
E
v
a,
c�
0
a(
E
v
°
m
m
Y
Y
m
`m
.0
m
c
Qo
aci
Y
a
E>
o
s
E
E
m
m
0
v
v"
E
>
0
w
O
>
VI
N
vl
N
Q
Q
>
>
Q>
Q
N
Q
Q
VI
Q
m
Cf
Q
�
U
in
i7
in
Q
O
V)
K
m
u
m
M
N
m
u
N
u
u
u
u
u_
a)
u_
u
u
u
u
`
.`
N
w
ai
C
-p
L
m
m
C
L
m`
VI
m
L
'�
N
m
m
L
m
N
m
m
m
L
m
m
N
L
m
a)
E
E
E
E
E
cu
E
E
E
a
m
C
a
Y_
v
E
m
U
Q
Q
Q
Q
Q
J
Q
Q
E
m
a
=
Q
J
Q
C
2>
"O
O.
'O
bD
m
C
U
N>
Q
al
u
Y
'^
C
C
C
C>
C
c>
C
H
u
C�
v
m>
_
(n
u
m
m
m
m
N
m
m
N
m
Q
0
m
m
N
m
O
2�
m
O
2
U
0
0
0
0
O
>
0
2
2
2
2
2
2>
2
2
2
m
2
a
w
w
00T
H
N
C)
N
N
r-4
cii
L
W
N
Occ
N
N
N
T
aJ
W
aJ
a)
w
N
O1
m
r,
N
H
]
H
Y
N="
L
a1
-
L
m
m
>.
C
al
n
T
~
N
T
H
Y
Y
N
m
m
m
m
m
m
m
m
2
N
m
w
C
T
7>
j
w
j
M
O
Y-0
E
>
>-
r
—>
��¢
�oa3�
aEa
aE
m
T
>:
m
m>
>>
'�
>
m
T
�'
m>
Q
m
Q>
Q
Q
v
N
v
a
v
m
Y
'O
m
m
m
m
'O
'O
m
T
m
'O
m
"O
T
'O
>
m
T
T?
Q
a/
(n
O_
N
m
h
j
m
m
m
al
(n
N
C
C
G
C
'O
al
d
.D
a)
�
al
m
'm
_O
Vl
>-
m
Vl
JO
"O
3
a=+
O
O
s0+
-O
'O
O
'p
L
alcu
.a
~
li
W
ate+
W~
.�
_O
>j
Vf
F
Vl
j
7
>j
~
N
F
O
L
C
3
j
LL
m
TO,
X
7
�
•'1 N T O VI b N y P �„� �y H P H ti H m � O N T N N N J P O
•'� N v'1 N N N N N ry ry N P P
m
0
H
0
0
O
0
Q
Vr
0111 W 17iWHO] I'AM ei
Why is tourism important?
Tourism creates Alaska jobs, supports Alaska communities, and generates
general fund revenue for the state. By REINVESTING Vehicle RentalTax(VRT)
revenues* - generated by the travel industry - into tourism promotion, we
can ensure Alaska's travel resource is developed for the maximum benefit
of all Alaskans.
*Per statutory language, the Alaska Legislature may appropriate the balance in the vehicle rental tax account
for tourism development and marketing.
Sources: Alaska Visitor Volume Report Summer 2017 and Alaska Visitor Volume Report Fall/Winter 2015/16 to 1017/18, McDowell Group
tion
or
Alaska
-M 2.;,g
�M
Li
VW
t WA,
it
as ol. �lv
I '21a -V I IA410% 'IN,
'Al
Tourism is a renewable natural resource that can only be expanded through destination marketing. Now is the
time to reinvest in an industry that contributes millions of dollars to Alaska's economy. All Alaskans - not just
those of us in the travel industry - depend on a robust state marketing program to bring visitors to Alaska.
ICY STRAIT
Case Study: Icy Strait Point lam
IUM
In 2001, Icy Strait Point in Hoorah broke ground on America's only private
cruise ship destination. Today, Icy Strait Point employs 160 Alaskans in a
town of fewer than 800 people.
The jobs here at Icy Strait Point give our kids the opportunity to interact
with people from all over the world. We develop customer service skills
and learn how to live off of the land, using the resources we have here.
- Lawrence Howland (left)
My job at Icy Strait Point gives me the opportunity 1 had been looking for
my whole life. It brought me back to my family ties in Hoonah.
- Enoch Rhodes (right)
Today, Alaska is second -to -last in the nation for State support of destination marketing, just above Delaware's
$2.4 million. Reinvesting in Alaska's tourism industry promotes the state as the premier tourism destination for
visitors, supporting our communities and Alaska workers. We need to do better.
Total Tourism Advertising Budgets
(in millions, public and private funds)
Source: U.S. Travel Association, Destination B.C.
I i i
i i 1
I
I ..
O
as
•]01)18
Tourism Works for Alaska - ATIA A' A A
The Alaska Travel Industry Association (ATIA) is the leading statewide, membership trade association for Alaska's
tourism industry. With more than 670 members, we advocate for a healthy tourism industry and promote Alaska 6Anchora10 E. Sth Ave., 99501
Anchorage, AK lean
a5 the premier travel destination. 90].929.08421 AlaskaTl0.org
",I
1.
NL
1?
LT 4..
W,,' A.1 ldc'!
A
lilt
N'.
C
..2
...
V4.
'11N
14C.-
:;;.I
CPV Tax
Payments to City and Borough
Fiscal Year
Kodiak Borough
City of Kodiak
2007
$
-
$
-
2008
$
21551.50
$
21551.50
2009
$
12,394.00
$
12,394.00
2010
$
12, 743.00
$
12;743.00
2011
$
71881.00
$
71881.00
2012
$
16,311.00
$
16,311.00
2013
$
11,736.50
$
11,736.50
2014
$
21300.00
$
21300.00
2015
$
61962.50
$
61962.50
2016
$
15,127.50
$
151,127.50
2017
$
15,444.00
$
151444.00
Total 07-17 $ 103,451.00 $ 103,451.00
Alaska Department of Shared Taxes and Fees Annual Reports
K✓y�
U•'7� .if:irli• a d•.r
A
. � {';.'rldl`������ till �•v rT •r,...']4�i 3 � �A.� i"rM'l�!��r� iJ�•:
-x- l.� . I i ��i u r te+ : '3�..somi l'w7 TT4• � S F . ' � _�' r'I l,.1 Fi1'.i� `$1� a •....a' �
Are you a travel agent?
Yes No
Have you decided to visit Alaska?
Yes, most likely in 2019
Yes, most likely in 2020
Most likely in the next 3 years, but don't know when
Someday, but don't know when
Haven't decided
2. Have you previously visited Alaska?
O Yes
No
3. Do you have children at home?
O Yes
No
4. Highest level of education attained?
High School
Attended College
Graduated College
O Post Graduate
C S. What is your age?
Yom fhf TreuflAleske.com LiftT,-,m
47�
Are you interested in:
6. Travel to Alaska?
Air
State Ferry
Cruiseship
Package Tour
Driving the Highway
7. Accommodations you are interested in:
Lodges, Resorts, & Cabins
Hotels & Motels
Camping Facilities
Bed & Breakfasts
Airbnb / VRBO
8. Activities in Alaska
Day Cruises
Native Cultural Attractions
Fishing
Flightseeing
Guided Hiking, Canoeing/Kayaking, Raft Trips
Wildlife/Nature Tours
Winter Activities
McDowe II
GROUP
December 26, 2018
Aimee Williams
Executive Director
Discover Kodiak
100 Marine Way, Suite, 200
Kodiak, Alaska 99615
Via email: director@kodiak.ora
Dear Aimee:
Please consider this letter McDowell Group's professional services proposal to conduct a Kodiak Island Visitor
Profile and Economic Impact Analysis, for Discover Kodiak. Our scope of work, budget, and timeline are detailed
below.
Summer Visitor Profile
The proposed study would profile Kodiak Island Borough's out-of-state, summer visitor market based on data
from the survey conducted in summer 2016 for the Alaska Visitor Statistics Program (AVSP). Detailed results will
be provided on the following subjects:
• Alaska trip purpose
• Trip package purchase and package type
• Transportation
• Length of stay and lodging used in Kodiak
• Activities in Kodiak
• Visitor spending in Kodiak by category (lodging, tours, etc.)
• Trip planning behavior
• Demographics
Shoulder Season Analysis, Updated Visitor Volume, and Outlook
Recognizing that it has been two years since the last time Kodiak visitor volume was estimated, we propose an
analysis of Kodiak visitor traffic based on several years of traffic and other indicator data. We would also
supplement the above summer market profile with research into the shoulder seasons of April, October, and
November, in order to capture fishing and hunting visitors during these months.
Sources of information would include:
• Alaska Airlines: enplanements of outbound passengers (the number of passengers flying out-of-state,
excluding those bound for in-state destinations), by month.
Bureau of Transportation Statistics: air passenger traffic activity at the Borough's smaller airports.
9360 Glacier Highway Suite 201 • Juneau, Alaska 99801 • Telephone 907.586.6126
www.mcdowellgroup.net
• Alaska Marine Highway System: embarkations/disembarkations, by month, including passenger
origin information as available.
• Cruise Line Agencies of Alaska: passenger volume onboard ships that contract with CLAA, for the last
several years as well as planned 2019 capacity, and information regarding 2020 as available.
• Small cruise lines: passenger volume onboard ships that do not contract with CLAA, planned 2019
capacity, and information regarding 2020 as available.
• Bed tax revenues: Kodiak Island Borough bed tax revenues, by quarter, and recent trends.
• Fish and Game license/tag data: the number and type of non-resident fishing and hunting
licenses/tags purchased from ADF&G, in Kodiak. Origin of license purchasers as available.
• Interviews with fishing and hunting lodges: we would interview a sample of fishing and hunting
lodges in order to understand volume and spending patterns throughout the year, particularly during
the months of April, October, and November.
This information, combined with the summer visitor profile, will inform an analysis of Kodiak's current visitor
volume trends and outlook. McDowell Group will develop marketing recommendations for Kodiak, based on
traveler profiles and travel research and booking patterns. Our firm brings to this project extensive experience
in market research and destination marketing.
Economic Impact Analysis
Accompanying the visitor profile and volume analysis will be an analysis of local economic impacts resulting
from spending by out-of-state visitors. Spending would be based on 2016 AVSP data, updated for inflation to
reflect 2018 visitation, and supplemented with data on shoulder season visitors. Additional sources may include
cruise lines, tour operators, and accommodations providers. The final report would include:
• Direct non -Alaska resident visitor spending, total and by sector
• Estimated cruise line spending in Kodiak (in addition to vessel docking fees)
• Total jobs and labor income resulting from visitor industry -related spending (including direct, indirect
and induced employment)
• Role/importance of the visitor industry in Kodiak's overall economy
• Municipal revenues including:
o Sales tax revenues attributable to out-of-state visitors
o Bed tax revenues attributable to out-of-state visitors
o Dockage/moorage revenues
This economic impact analysis will focus on non -business travel -related visitation. Non-resident travel to Kodiak
related to Coast Guard base operations, seafood industry activity, Alaska Aerospace operations, and other
commercial/governmental related travel to Kodiak will not be included in the economic impact analysis.
Recognizing that visitor spending is an important source of economic activity for outlying communities such as
Port Lions and Larsen Bay, we will describe visitor industry activity in these and other borough communities and
to the extent possible quantify economic impacts.
Proposal to Conduct Visitor Research for Kodiak Island McDowell Group • Page 2
Sources of data for measuring the economic impact of the visitor industry and its role in the Kodiak economy
will include Alaska Department of Labor and Workforce Development, Bureau of Economic Analysis, Bureau of
Labor Statistics, and U.S. Census Bureau, among others. Analysis of multiplier effects will be based on IMPLAN,
modified to reflect Kodiak -specific conditions. IMPLAN is a widely used model for measuring direct, indirect and
induced effects of commercial and industrial activity.
Timeline and Budget
The budget for the Kodiak Island Visitor Profile and Economic Impact Analis as proposed is $20,000. This
includes all research and analysis tasks associated with completion of the project; a PDF version of the report;
and a presentation of results via teleconference. We can begin the project in January 2019 and deliver the draft
report within 60 days of project approval.
We would be pleased to provide an in-person presentation of the results, which would increase costs by
approximately $1,500, depending on travel logistics and direct travel costs. We can address this optional
component once the analysis is complete if preferred.
About McDowell Group
McDowell Group is Alaska's leading tourism research and consulting firm. We assist our clients at every stage
of tourism development including market assessments, feasibility studies for public and private developments,
business and marketing plan development, and community planning.
We have conducted numerous studies measuring the economic impacts of Alaska's visitor industry, including
several statewide impact studies (forthe State of Alaska), as well as Southeast Alaska, Ketchikan, Mat -Su, Juneau,
Kenai Peninsula, and Haines. We have also analyzed the impact of the cruise industry in Alaska. We have
completed dozens of visitor survey projects, including six out of seven Alaska Visitor Statistics Programs for the
State of Alaska since the program began in 1985. The most recent edition (2016) was based on surveys of nearly
6,000 visitors to Alaska. In addition to statewide survey projects, we have conducted a number of community-
based visitor surveys, most recently for Juneau, Valdez, and Ketchikan. Our tourism planning studies include
work in Juneau, Haines, Mat -Su, Ketchikan, Petersburg, Anchorage, and Kodiak (for Koniag, Inc.).
McDowell Group also brings to this project a familiarity with Kodiak and its economy through such projects as
an analysis of the economic impact of Kodiak's seafood industry, a cost/benefit analysis of hatchery investment
in Kodiak, a feasibility study for a Kodiak maritime heritage museum, a feasibility study for a Kodiak ferry system,
multiple health care and education studies for Kodiak Area Native Association, and a study of the economic
benefits of the Alaska Aerospace Corporation.
Thank you for your interest in our professional services.
Sincerely,
Heather Haugland
Senior Project Manager
Proposal to Conduct Visitor Research for Kodiak rsland McDowell Group • Page 3
A,1 br J'%, -Al
14
Ip 10-11
ri
I-
rl
fUQ 'A
4. -)jRj,j I I.:$: 1.
If ov,
A4
. ...... .
vA A'. yp";
I A
I,
out - I; Vr. A:
.1
."Yqui . zp;, ,A
11 .1,2-
-'av T Mlir I joi
If
;-A as
T
Py 1—
w. "J" x0 'n"',
va,
qd- fl tji,
s 6(: '
Kenai Peninsula Visitor Profile
and Economic Impact Analysis
Summer 2016
DRAFT
Prepared for.•
Kenai Peninsula Tourism Marketing Council
August 2017
McDowell
�� �0
GROUP
Kenai Peninsula Visitor Profile
and Economic Impact Analysis
Summer 2016
Prepared for.•
Kenai Peninsula Tourism Marketing Council
Prepared by.•
McDowl 11
GROUP
McDowell Group Anchorage Office
1400 W. Benson Blvd., Suite 510
Anchorage, Alaska 99503
McDowell Group Juneau Office
9360 Glacier Highway, Suite 201 August 2017
Juneau, Alaska 99801
Website: www.mcdoweligroup.net
Table of Contents
Introductionand Methodology......................................................................................................... l
Introduction.....................................................................................................................................................................................1
Methodology..................... ........................................................ _........................................................ _......................................... 1
TripPurpose and Package.................................................................................................................. 3
AlaskaTrip Purpose ................... »........................................................ _....................................................................................... 3
AlaskaPackages.............................................................................................................._.............................................................3
Length of Stay, Lodging, and Destinations......................................................................................4
Lenothof Stav.................................................................................................................................................................................4
Activities............................................................................................................................................... a
SatisfactionRatings............................................................................................................................9
Satisfaction with Overall Experience ......................................... _..............................
_.............. _........................................... 9
Comparedto Expectations ......................................... »........... »........ »......................................................................................
9
Valuefor the Money ...................................................... _.......... _........................................................................................
_.... 10
RecommendingAlaska................................................................................................................................................_._.........10
Previous and Future Alaska Travel..................................................................................................11
PreviousAlaska Travel......................................................................................_.......................................................................11
Returningto Alaska....................................................................................................................................................................11
TripPlanning.....................................................................................................................................13
TripPlanning Timeline...............................................................................................................................................................13
InternetUsage and Booking....................................................................................................................................._............14
Websites/Apps Used for Planning/Booking ........... _.........................................................................................._.._........14
TravelAgent Usage.....................................................................................................................................................................17
Usage of State of Alaska Information Sources................................................................................................................17
Usage of Other Information Sources ..................... .............................................................................................................
18
Demographics....................................................................................................................................19
Partyand Group Size................................................................................................................................................................19
Genderand Age...........................................................................................................................................................................20
HouseholdCharacteristics........................................................................_.............................................................................21
Expenditures...................................................................................................................................... 23
EconomicImpact Analysis................................................................................................................24
VisitorTraffic.................................................................................................................................................................................24
DirectSpending andImpacts..................... »... ».....................................................................................................................
25
Total Economic Impact,
Role in the Kenai Penin
Borough Economy
Introduction and Methodology
Introduction
The Kenai Peninsula Tourism Marketing Council contracted with the McDowell Group to profile summer 2016
visitors to the Kenai Peninsula Borough based on data from the recently completely Alaska Visitor statistics
Program 7 (AVSP). AVSP is a statewide survey of Alaska visitors commissioned by the Alaska Department of
Commerce, Community, and Economic Development and the Alaska Travel Industry Association. AVSP 7
included surveys of 2,043 out-of-state travelers who visited the Kenai Peninsula Borough either for a day or
overnight visit, between May and September 2016.
This study presents results for all Kenai Peninsula Borough visitors, as well as for subgroups based on the mode
of travel (air, cruise, highway/ferry) and visitors' trip purpose (vacation/pleasure, visiting friends/relatives,
business or business/pleasure). The report concludes with an analysis of economic impacts resulting from
spending by these visitors.
Methodology
VISITOR PROFILE
The AVSP visitor survey is administered to a random sample of out-of-state visitors departing Alaska at all major
exit ports, including airports, highways, cruise ship docks, and ferries. The survey includes questions on trip
purpose, transportation modes, length of stay, destinations, lodging, activities, expenditures, satisfaction, trip
planning, and demographics. The summer 2016 AVSP includes survey of 5,926 out-of-state visitors to Alaska,
including 2,043 who visited the Kenai Peninsula Borough. Seventy-eight percent of Kenai Peninsula Borough
visitor surveys were conducted in person, with the remainder filling out the survey online (survey invitation cards
were distributed at Anchorage Airport). All data is weighted by transportation mode according to estimated
traffic by month and location.
The table on the following page shows how each market is defined for purposes of this study, along with their
respective sample size, estimated volume, and maximum margin of error. Note that the highway/ferry market
includes any visitor who entered or exited Alaska via highway or ferry, some highway/ferry visitors may have
traveled to the Kenai Peninsula via air. Likewise, the air visitor market may include some visitors who traveled to
the Kenai Peninsula via ferry.
ECONOMIC IMPACT ANALYSIS
This economic impact analysis estimates employment and labor income resulting from visitor spending on the
Kenai Peninsula during summer 2016. Visitor volume to the peninsula was estimated based on the AVSP study,
which included visitor traffic estimates to various communities and regions in Alaska. Average visitor spending
by category/sector was based on AVSP survey results, and applied to visitor volume to arrive at total direct
spending and employment estimates. McDowell Group developed a custom model for estimating multiplier
effects. The econometric modeling program IMPLAN was used to estimate specific model inputs.
Kenai Peninsula ✓isitorProfile and Economic ImpactAnalysis, 5ummer2016 McDowell Group • Page 1
Table 1. Sample Sizes and Margins of Error
Transportation Mode
Air - Entered andexited Alaska by air; excludes cruise passengers
1,221
326,500
±2.8%
Cruise - Spent at least one night aboard a cruise ship
622
205,200
±3.9%
Highway/Ferry - Entered andexited Alaska by highway orferry;
200
31,100
±6.9%
excludes cruise passengers
Trip Purpose
WP - Traveled to Alaska for vacation/pleasure
1,594
433,400
±2.5%
VFR - Traveled to Alaska to visit friends or relatives
327
95,700
±5.4%
BUS - Traveled to Alaska for business or business/pleasure
122
33,800
±8.9%
Total
2,043
562,800
±2.2%
Kenai Peninsula Visitor Pmrile and Economic Impact Analysis Summer 2016 McDowell Group • Page 2
Trip Purpose and Package
Alaska Trip Purpose
• Seventy-seven percent of Kenai Peninsula visitors traveled to Alaska for vacation/pleasure, 17
percent were visiting friends/relatives, and 6 percent were traveling for business or
business/pleasure.
• Air visitors were more likely than cruise or highway/ferry visitors to be visiting friends/relatives (28
percent, versus 1 and 14 percent, respectively). They were also more likely to be business travelers
(10 percent, versus <1 percent and 4 percent, respectively).
• Almost all cruise travelers (99 percent) visited Alaska for vacation/pleasure
Table 2. Trip Purpose (%)
Vacation/pleasure (V/P) 77 62 99 82
Visiting friends or relatives (VFR) 17 28 1 14
Business and pleasure 4 6 - 4
Business Only 2 4 - -
Alaska Packages
• Nearly half (48 percent) of Kenai Peninsula visitors purchased a multi -day package anywhere in
Alaska during their trip.
• Of non -cruise visitors who purchased a multi -day package, 27 percent participated in a fishing
lodge package while in the state.
Table 3. Packages (%)
Purchased multi -day package (including cruise)
Yes 48 17 100 5
61 3 12
Package type (Base: non -cruise, purchased package)
Fishing lodge 27 28 -
27
Rail package 17 17 - `
18
Adventure tour 15 15 - `
15 `
Wilderness lodge 13 13 - *
14
Motorcoach tour 12 12 - *
12
Rental car/RV package 11 11 - "
11
Hunting 1 1 -
1
*Sample size of highway/ferry, visiting friends or relatives, and business visitors who purchased a multi -day package too small for analysis
Kenai Peninsula Visitor Profile and Economic Impact Analysis Summer 2016 McDowell Group • Page 3
Length of Stay, Lodging, and Destinations
Length of Stay
• Kenai Peninsula visitors reported spending an average of 11 nights in Alaska and 5 nights in the
Kenai Peninsula during their trip.
• Highway/ferry travelers report staying significantly longer, at 21 nights in Alaska and 9 nights in the
Kenai Peninsula.
• Business travelers also report longer stays in the Kenai: 9 nights, compared to 6 nights among VFRs
and 4 nights among vacation/pleasure visitors.
Table 4. Length of Stay in Alaska (%)
1-3 nights
2
3
-
5
1
1
15
4-7 nights
27
38
14
9
22
47
35
8-14 nights
57
45
79
33
64
37
30
15-21 nights
9
10
6
19
9
8
10
22+ nights
5
4
1
35
4
7
10
Average # of nights in Alaska
11
10
11
21
11
11
12
Average # of nights in Kenai
5
5
2
9
4
6
9
Peninsula
Kenai Peninsula Visitor Profile and Economic /mpactAnalysis, 5ummer2016 McDowell Group • Page 4
Lodging
• The most common lodging type used by Kenai visitors (while in the Kenai) was hotel/motel (42
percent), followed by campground/RV (20 percent), lodge (15 percent), and friends/family (15
percent).
• Cruise passengers were much more likely to use hotels/motels (70 percent) compared to air (41
percent) and highway/ferry visitors (17 percent). Highway/ferry visitors were much more likely to
use campgrounds/RV (65 percent), while air visitors used a variety of lodging types.
• Vacation/pleasure and business visitors were equally likely to stay in hotels/motels at 47 percent;
this compares with just 23 percent of VFRs. Not surprisingly, VFRs were the most likely to stay with
friends/family while in the Kenai (46 percent).
Table S. Lodging Types Used in the Kenai Peninsula (%)
Hotel/motel
42
41
70
17
47
23
47
Campgrounds/RV
20
17
3
65
22
17
3
Lodge
15
15
21
4
18
7
13
Friends/family
15
18
1
11
5
46
21
Bed & Breakfast
8
9
4
2
8
6
3
Vacation rental
7
8
2
2
6
8
7
Wilderness camping
3
2
-
11
3
3
2
Other
4
5
<1
3
4
2
12
Note: Percentages may add to more than 100 percent due to visitors using multiple lodging types
Kenai Peninsula Visitor ProAle and Economic Impact Analysis, 5ummer2016 McDowell Group • Page 5
Destinations
The following table details locations visited by Kenai Peninsula visitors during their entire trip to Alaska,
including both day and overnight visits.
• The most common destination among Kenai Peninsula visitors was Seward at 78 percent. The most
common non -Peninsula destinations were Anchorage (92 percent), Denali (45 percent), Juneau (40
percent), and Ketchikan (39 percent).
• While low percentages of cruise travelers report visiting other Kenai Peninsula destinations, other
popular destinations visited by air and highway/ferry visitors include Homer and Kenai/Soldotna.
• Nearly all (9S percent) Kenai Peninsula air travelers report spending a day or overnight in
Anchorage.
Table 6. Destinations Visited (Day or Overnight) (%)
Southcentral
100
100
100
100
100
100
100
Kenai Peninsula
100
100
100
100
100
100
100
Seward
78
70
92
68
85
56
51
Homer
29
40
9
59
27
40
24
Kenai/Soldotna
22
34
2
32
18
34
43
Other Kenai Peninsula
23
34
4
46
20
37
23
Anchorage
92
95
89
87
92
93
87
Talkeetna
24
27
21
30
28
13
10
Girdwood/Alyeska
19
28
7
22
19
21
19
Palmer/Wasilla
18
25
5
47
17
26
22
Whittier
14
21
4
17
15
13
10
Portage
13
18
4
20
13
12
14
Valdez
8
9
1
38
9
3
3
Prince William Sound
4
6
1
3
4
2
3
Other Mat -Su
3
4
<1
6
3
3
2
Interior
5o
45
So
95
58
22
21
Denali Nat'l Park
45
40
49
57
54
14
12
Fairbanks
24
19
25
58
27
11
14
Glennallen
6
5
1
38
6
2
3
Tok
5
2
<1
70
5
4
4
Healy
5
6
1
14
6
2
1
Delta Junction
3
3
<1
23
3
2
2
Copper Center
3
3
1
7
3
1
1
Chicken
2
1
<1
20
2
1
-
Other Interior
3
3
1
15
3
2
<1
Southeast
43
6
99
32
55
3
9
Juneau
40
3
98
6
50
2
9
Ketchikan
39
1
99
4
49
2
6
Skagway
34
1
84
20
43
1
5
Kenai Peninsula Visitor Profile and Economic Impact Analysis, 5ummer7016 McDowell Group • Page 6
Hoonah/Icy Strait Point
23
<1
60
1
30
1
1
Glacier Bay Nat'l Park
10
2
22
4
12
1
4
Sitka
7
1
16
3
8
1
4
Haines
4
1
7
18
5
1
1
Southwest
5
5
7
4
6
2
5
Kodiak
3
1
6
2
4
-
2
Far North
2
2
1
11
2
2
4
Note: Table shows destinations visited by 3 percent or more of all Kenai Peninsula visitors
Kenai Peninsula Visitor Proflle and Economic Impact Analysis Summer7016 McDowell Group • Page 7
Activities
• Wildlife viewing (36 percent), day cruises (26 percent), hiking (22 percent), and fishing (22 percent)
were the most popular activities among visitors to the Kenai Peninsula. A higher percentage of both
air and highway/ferry travelers report participating in these activities compared to cruise visitors.
Activity participation differed somewhat by trip purpose. For example, VFRs and business visitors
were more likely to participate in wildlife viewing (51 and 45 percent, respectively) compared to
vacation/pleasure visitors (32 percent). VFRs were particularly likely to participate in fishing (41
percent), compared to 17 percent of vacation/pleasure and 22 percent of business.
Table 7. Activities in the Kenai Peninsula (%)
Transportation Mode Trip Purpose
All Visitors Air Cruise Hwy/Ferry V/P
Wildlifeviewing 36 52 16 21 32
VFR BUS
51 45
Birdwatching 10 15 4 6 10
13 10
Day cruises 26 38 8 32 26
27 16
Fishing 22 35 1 42 17
41 22
Guided 14 22 1 26 13
17 14
Unguided 11 19 <1 18 7
28 11
Hiking/nature walk 22 34 8 20 21
28 18
Culture/history 11 12 10 7 11
14 5
Museums 9 10 8 5 9
12 -
Historical/cultural 2 2 1 1 1
3 1
attractions
Native cultural 1 1 1 2 1
<1 1
tours/activities
Gold panning/ <1 1 - <1 <1
<1 2
mine tour
Camping 5 7 <1 17 5
6 1
City/sightseeing 3 4 2 9 4
4 2
tours
Dog sledding 3 4 2 <1 3
2 1
Flightseeing 3 5 1 1 3
4 1
Kayaking/canoeing 3 4 1 2 3
3 3
Raking 2 3 <1 <1 1
3 1
Biking 1 1 - 3 1
1 <1
ATV/4-wheeling 1 1 1 1 1
1 1
Salmon bake/crab 1 1 <1 2 1
-
feed
Kenai Peninsula Visitor Prorile and Economic Impact Analis, Summer 2016 McDowell Group • Page 8
Satisfaction Ratings
Satisfaction with Overall Experience
• Nearly all Kenai Peninsula visitors were satisfied with their experience in Alaska, with only 2 percent
being either neutral or dissatisfied. Similar high satisfaction levels were reported by all
transportation and trip purpose groups.
Table 8. Satisfaction with Overall Alaska Experience (%)
Very satisfied
77
73
82
71
78
74 68
Satisfied
21
24
16
26
20
24 29
Neither/neutral
2
2
1
2
2
1 4
Dissatisfied
<1
1
<1
1
<1
1 -
Verydissatisfied
<1
<1
-
-
<1
<1 -
Compared to Expectations
Only 4 percent of travelers reported that their trip did not meet their expectations.
Table 9. Alaska Trip Compared to Expectations (%)
Much higher than expectations
29
28
30
33
31
22
Higher than expectations
37
40
35
25
37
38
About what you expected
31
29
32
36
29
37
Below expectations
3
3
1
5
3
2
Far below expectations
1
<1
1
1
1
<1
Business -only visitors were screened out of this question
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer -2016 McDowell Group • Page 9
Value for the Money
• Nearly one half (48 percent) of respondents said that the value of their Alaskan experience for the
money paid was about the same as other destinations they visited in the past 5 years.
• Travelers visiting relatives or friends and cruise passengers were most likely to report the
comparative value of their trip being better or much better than other destinations.
Much better 11 10 12 10 10 13 "
Better 19 18 21 16 19 22 "
About the same 48 47 48 50 48 44 "
Worse 20 22 16 24 21 19 "
Much worse 2 3 2 0 2 3 "
"Business -only visitors were screened out of this question.
Recommending Alaska
• Nearly all respondents report being likely or very likely to recommend Alaska to friends and family,
with only 2 percent unlikely or very unlikely to recommend Alaska.
Table 11. Likelihood of Recommending Alaska to Friends/Family (%)
Very likely
82
81 85
79 83
79 75
Likely
15
17 13
13 14
18 23
Unlikely
1
1 1
2 1
1 -
Very unlikely
<1
<1 -
- <1
1 1
Don't know
1
1 <1
2 1
<1 1
Kenai Peninsula Visitor Profile and Economic Impact Analysis 5ummer7016 McDowell Group • Page 10
Previous and Future Alaska Travel
Previous Alaska Travel
• Nearly two-thirds of Kenai visitors were on their first trip to Alaska.
• Repeat Alaska visit rates were higher among highway/ferry (50 percent) and air visitors (46 percent)
than among cruise visitors (24 percent).
• Repeat rates were also higher among VFRs (65 percent) and business visitors (63 percent),
compared to vacation/pleasure visitors (30 percent).
• Fourteen percent of visitors said they had been on an Alaska cruise prior to this trip.
Table 12. Previous Alaska Travel (%)
First trip to Alaska 62 54 76 50 70 35 37
Been to Alaska before 38 46 24 50 30 65 63
Average # of vacation trips 4 5 2 5 4 6 5
(base: repeat travelers)
Been on Alaska cruise before 14 12 17 22 15 12 13
Returning to Alaska
• Nearly two-thirds (63 percent) of visitors said they were likely or very likely to return to Alaska in
the next five years. Cruise visitors were less likely to say they would return (46 percent). Business
travelers and VFRs showed high likelihood rates (84 and 86 percent, respectively).
Table 13. Likelihood of Returning to Alaska in the Next Five Years (%)
Very likely
40
50
25
40
32
67
72
Likely
23
24
21
20
24
19
12
Unlikely
23
14
35
22
28
6
5
Very unlikely
7
4
11
11
8
2
1
Don't know
7
7
7
6
8
5
10
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer7016 McDowell Group • Page 11
• Among those very likely to return to Alaska in the next 5 years, 28 percent said they were most
interested in fishing on their next trip.
• Those who are very likely to return also report being most interested in wildlife viewing, visiting
friends and family, visiting Denali National Park, or seeing the northern lights.
Table 14. Most interested in experiencing on your next Alaska trip (%)
Base. Very likely to return to Alaska within rive vears
Fishing
28
34
12
*
27
29
27
Visiting friends/family
8
11
1
2
25
2
Wildlife
8
6
11
11
3
6
Denali
8
7
9
7
9
5
Northern lights
7
7
8
`
8
6
7
Cruise
5
1
13
*
7
1
2
Hiking
5
3
9
*
5
4
5
Flightseeing
3
1
10
"
5
1
2
Glaciers
3
3
4
4
1
5
Destination
3
3
2
`
3
4
-
Other
15
16
16
15
9
31
Don't know
7
8
5
`
7
9
9
Sample size of highway/ferry visitors very likely to return to Alaska within five years too small for analysis. Only responses of 3 percent or
more shown in table.
Kenai Peninsula Visitor Profi/e and Economic Impact Ana/ys/s, Summer 2016 McDowell Group • Page 12
Trip Planning
Trip Planning Timeline
• The average traveler decided to visit Alaska 8.0 months in advance of their trip and booked travel
arrangements 5.3 months in advance.
• Despite highway/ferry travelers deciding to visit Alaska more than a year before their trip on
average, cruise passengers booked their travel arrangements the farthest in advance.
Table 15. Trip Planning by Quarter (%)
How far in advance did you decide to come on this trip to Alaska?
Before July 2015
14
8
22
July -Sept 2015
18
15
21
Oct -Dec 2015
15
14
17
Jan -Mar 2016
23
28
17
Apr -Jun 2016
21
25
16
July -Sept 2016
8
9
7
Average # of months
8.0
6.5
9.5
How far in advance did you
book
your major travel arrangements?
Before July 2015
4
1
10
July -Sept 2015
11
5
20
Oct -Dec 2015
14
11
19
Jan -Mar 2016
26
31
21
Apr -Jun 2016
30
37
20
July -Sept 2016
14
15
10
Average # of months
5.3
4.0
7.2
27
17
5
6
23
19
16
9
13
17
12
6
18
22
29
24
15
18
29
35
5
7
9
20
12.5
8.7
5.8
4.6
1
5
1
6
13
3
4
8
16
7
4
12
26
29
16
32
27
43
43
41
12
17
32
4.4
5.9
3.4
2.5
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer7016 McDowell Group • Page 13
Internet Usage and Booking
• Three in four visitors to the Kenai Peninsula (76 percent) used the internet to plan their trip, and
two-thirds (66 percent) used the internet to book some portion of their trip.
• Air travelers were more likely to book a portion of their trip over the internet (79 percent), compared
to cruise visitors (52 percent) and highway/ferry visitors (36 percent).
Table 16. Internet Usage for Trip Planning/Booking (%)
Used internet
76
85
66
65
74
85
70
Booked over internet
66
79
52
36
63
81
62
Did not use internet
21
12
32
30
23
13
25
Don't know
3
3
2
5
3
2
5
• Among those who booked a portion of their trip over the internet, travelers were most likely to
have booked airfare (58 percent) and lodging (36 percent) online.
• Rates differed significantly among the various markets. For example, 76 percent of air visitors
booked airfare online, compared with 40 percent of cruise and 13 percent of highway/ferry. In terms
of trip purpose, VFRs were the most likely to book airfare online at 79 percent, compared to 53
percent of vacation/pleasure and 55 percent of business.
Table 17. Trip Components Booked Online, Including via Apps (%)
Base. Booked some Portion of trio online
Airfare
58
76
40
13
53
79
55
Lodging
36
44
27
20
38
26
41
Vehicle rental
24
38
8
4
24
20
33
Tours
22
19
27
15
26
6
16
Cruise
16
3
36
3
21
3
-
Overnight packages
4
4
5
1
5
<1
3
Ferry
1
1
<1
6
1
1
1
Websites/Apps Used for Planning/Booking
• When asked for the specific websites/apps used to plan their trip (see table, next page), Kenai
visitors most frequently cited airline websites (52 percent), Google (34 percent), and TripAdvisor (28
percent). One out of 20 (5 percent) cited a CVB or Chamber.
• Visitors were also asked which sites they used to book their trip (see table, subsequent page). The
most common booking sites were airline websites (52 percent), cruise line websites (19 percent),
and car/RV rental sites (16 percent).
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer 2016 McDowell Group • Page 14
Table 18. Websites/Apps Used to Plan (%)
Base. Used the internet to plan or book any portion ofA/aska
Airline websites
52
60
42
19
49
67
52
Google
34
33
32
53
37
21
31
TripAdvisor
28
26
30
31
32
12
17
Cruise line websites
24
4
63
5
30
6
-
Car/RV rental websites
18
26
6
6
19
12
28
Tour company websites
18
19
17
11
21
7
16
Expedia
17
18
14
10
17
17
11
Hotel/lodge/RV park
16
16
13
20
16
10
21
Hotels.com
9
10
8
4
10
6
8
Booking.com
8
10
5
11
9
6
6
AirBnB
7
9
4
4
8
3
6
Kayak.com
7
9
4
3
6
10
5
Travelocity
6
6
6
7
6
7
6
Yelp
6
5
8
8
7
2
3
Alaska App
6
8
2
9
7
2
9
AAA.com
6
4
7
14
7
2
4
Facebook
6
5
7
4
6
3
5
Priceline
5
6
6
2
6
4
4
Orbitz
5
5
5
5
5
5
4
CVB/Chamber
5
2
8
15
5
2
2
CruiseCritic.com
4
1
12
-
6
-
-
Alaska Marine Highway
4
4
3
21
5
1
3
VRBO
4
5
1
3
3
5
4
LonelyPlanet.com
3
3
2
1
3
<1
1
Hotwire
2
2
2
1
2
2
-
Alaska.org
2
2
1
1
2
<1
-
APR
1
1
2
<1
2
<1
-
VacationsToGo
1
<1
3
-
1
1
-
Instagram
1
1
<1
3
1
1
-
Costco
1
1
1
<1
1
2
-
NPS
1
1
1
2
1
-
-
Hipmunk
1
1
1
<1
1
1
-
ADF&G
<1
1
-
-
<1
<1
-
Concur
<1
1
-
-
-
-
6
Twitter
<1
<1
-
<1
<1
<1
1
HotelTonight
<1
<1
<1
-
<1
-
-
CheapOAir
<1
<1
-
-
<1
1
-
Other
5
5
5
10
5
5
5
Note: Caution is advised when interpreting highway/ferry results due to small sample sizes (64 respondents for trip planning)
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer 2016 McDowell Group • Page 15
Table 19. Websites/Apps Used to Book (%)
Base: Used the internet to Plan or book anv Portion of Alaska
Airline websites
52
60
42
21
49
66
56
Cruise line websites
19
3
52
4
24
3
1
Car/RV rental websites
16
23
4
3
17
10
25
Tour company websites
13
14
10
10
15
4
13
Hotel/lodge/RV park
13
14
11
11
14
5
24
Expedia
13
14
11
5
13
14
7
Booking.com
6
B
4
9
7
4
4
Google
6
7
2
12
6
3
9
Hotels.com
6
7
2
4
6
4
6
Trip Advisor
4
5
3
7
5
2
3
AirBnB
4
6
1
3
4
3
6
Kayak.com
4
4
2
2
4
4
3
Priceline
3
3
2
1
3
1
4
Travelocity
3
3
2
2
2
4
3
VRBO
3
4
-
2
2
4
3
Orbitz
3
3
1
3
2
3
1
Alaska Marine Highway
2
2
1
11
2
1
1
AAA.com
2
2
1
4
2
1
-
Alaska App
1
2
<1
2
2
1
1
Hotwire
1
1
2
<1
2
<1
-
Costco
1
1
1
<1
1
2
-
APR
1
1
1
<1
1
<1
-
VacationsToGo
1
-
3
-
1
1
-
NPS
1
1
<1
2
1
-
-
CVB/Visitors Bureau
1
<1
1
2
1
<1
-
Yelp
1
1
-
-
1
-
-
Concur
<1
1
-
-
-
-
8
HotelTonight
<1
<1
<1
-
<1
1
-
CheapOAir
<1
<1
-
-
<1
1
-
CruiseCritic.com
<1
<1
1
-
<1
-
-
Facebook
<1
<1
-
-
<1
-
1
Hipmunk
<1
<1
-
<1
<1
-
-
LonelyPlanet.Com
<1
<1
-
1
<1
-
-
ADF&G
<1
<1
-
-
<1
<1
-
Alaska.org
<1
<1
-
-
<1
-
-
Instagram
<1
-
-
<1
<1
-
-
Other
3
4
3
3
3
4
4
Note. Caution is advised when interpreting highway/ferry results due to small sample sizes (58 respondents for trip booking)
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer7016 McDowell Group • Page 16
Travel Agent Usage
• Over one-quarter of Kenai visitors (28 percent) booked at least some portion of their trip through
a travel agent. Cruise visitors were much more likely to have used a travel agent (54 percent)
compared to air (12 percent) and highway/ferry (8 percent).
• Among those who did use an agent, cruise (70 percent) and airfare (68 percent) were the most
common travel components booked through an agent.
Table 20. Travel Agent Usage for Trip Booking (%)
Booked through travel agent
28
12
54
8
34
4
17
Cruise
70
5
93
*
74
Yes
17
Airfare
68
64
69
*
67
«
5
Lodging
55
65
53
«
56
«
«
Tours
51
58
50
«
53
«
Overnight packages
20
25
18
20
Vehicle rental
11
35
2
9
Ferry
3
7
1
*
2
Did not book through travel agent
70
86
43
89
63
96
81
Don't know
2
2
2
1
2
1
2
*Sample size of highway/ferry, visiting friends or relatives, and business visitors who used a travel agent for specific trip component booking
too small for analysis.
Usage of State of Alaska Information Sources
• One in four travelers (26 percent) visited the State of Alaska travel website. Fewer visitors (17
percent) received the State of Alaska Official Vacation Planner.
Table 21. Usage of State of Alaska Information Sources (%)
Did you visit the official State of Alaska travel website travelalaska.com?
Yes
26
29
22
No
68
65
72
Don't know
6
6
6
Did you receive the State of Alaska Official Vacation Planner?
19
Yes
17
16
17
No
77
80
77
Don't know
5
4
5
30
29
16
18
62
64
80
78
7
6
4
4
28
19
9
5
53
74
87
90
14
5
4
5
Kenai Peninsula Visitor Profile and Economic Impact Analysis Summer7016 McDowell Group • Page 17
Usage of Other Information Sources
• The most common information source, besides internet, travel agent, and State of Alaska sources,
was friends/family at 50 percent. Other common sources included prior experience (24 percent),
brochures (21 percent), cruise line (15 percent), other travel guide/book (11 percent).
• Sources differed significantly by market. Cruise visitors primarily relied on their cruise line and
friends/family. The number one source among highway/ferry visitors was the Milepost at 58
percent. Not surprisingly, VFRs showed a particularly high rate of friends/family usage (82 percent).
Table 22.
not including Online Sources (%)
Friends/family
50
55
43
39
43
82
47
Prior experience
24
28
16
29
19
42
32
Brochures (total)
21
23
15
35
23
13
13
Brochures
19
21
14
31
21
11
11
Community brochures
2
3
1
5
2
2
2
Ferry brochure/schedule
2
2
1
6
2
2
1
Cruise line
15
2
35
2
19
2
3
Other travel guide/book
11
11
10
17
13
3
4
AAA
9
7
9
22
11
4
3
Milepost
9
9
1
58
10
6
4
Tour company
6
5
9
2
8
1
3
Magazine
6
7
4
11
7
5
5
Hotel/lodge
6
7
4
3
6
3
12
Convention & Visitor Bureau(s)
5
5
3
19
6
5
5
Television
4
3
5
7
5
2
3
Library
3
3
4
1
4
1
-
North to Alaska Guide
2
1
2
10
3
<1
1
Newspaper
2
1
2
5
2
2
1
Club/organization/church
1
1
2
3
1
<1
3
Travel/recreation exhibitions
1
1
<1
3
1
1
2
Kenai Peninsula Visitor Profile and Economic Impact Analysis, 5ummer2016 McDowell Group • Page 18
Demographics
• Nearly nine out of ten Kenai visitors (87 percent) were U.S. residents, with 34 percent of visitors
coming from Western states. An additional 22 percent of visitors came from Southern states.
Of international visitors, the highest amount (5 percent) were European residents.
Table 23. Top Countries/States of
United States
87
90
83
87
84
97
94
Western US
34
44
20
37
29
51
61
California
10
12
7
10
10
10
15
Washington
8
11
4
5
5
15
22
Oregon
3
4
2
6
3
5
5
Colorado
3
4
1
3
2
5
7
Southern US
22
17
28
23
22
20
19
Texas
5
4
6
6
5
4
5
Florida
5
3
7
5
5
3
3
Midwestern US
19
19
19
20
20
38
8
Minnesota
3
4
3
1
4
2
2
Michigan
3
3
3
5
3
3
-
Illinois
3
2
3
3
3
3
<1
Eastern US
12
10
16
7
14
8
6
New York
3
3
3
<1
3
4
1
Canada
3
1
6
6
4
1
2
British Columbia
2
<1
3
2
2
<1
2
Ontario
1
<1
2
1
1
<1
-
International
30
9
11
7
12
2
4
Europe
5
6
4
6
6
1
2
Australia/New Zealand
2
1
4
1
2
1
-
Asia
1
2
1
<1
1
<1
1
Latin America
1
<1
2
<1
1
<1
1
Note: All states not shown represent 2 percent or less of visitors
Party and Group Size
• Kenai visitors reported an average party size of 2.5 people (party size refers to individuals traveling
together and sharing expenses).
• There were 4.1 people on average in each group that traveled together but did not necessarily
share expenses.
Kenai Peninsula Visitor Profile and Economic Impact Analysis Summer1016 McDowell Group • Page 19
Table 24. Party and Group Size (%)
Party Size
1
15
21
6
18
9
28
62
2
57
47
70
70
63
45
26
3
9
11
7
6
9
12
3
4
10
11
9
7
11
6
3
5+
9
10
8
0
9
8
7
Average party size
2.5
2.5
2.5
2.0
2.6
2.3
1.8
Group Size
9
11
6
4
8
11
13
1
12
17
3
15
6
23
53
2
46
40
52
65
50
36
23
3
9
11
6
5
9
11
4
4
15
14
16
10
16
13
4
5
4
4
3
1
4
4
2
6-10
9
9
10
3
9
10
6
11+
6
4
9
1
6
4
7
Average group size
4.1
3.6
4.9
2.5
4.2
3.3
4.6
Gender and Age
• The gender of Kenai Peninsula visitors was split evenly between men and women. Men comprised
a higher share of business travelers (66 percent).
• While the average age of all Kenai Peninsula visitors was 54 years, air travelers were on average
younger (50 years) than those using other transportation modes (58-59 years). Business travelers
were the youngest visitors to the Kenai Peninsula, at an average age of 47. .
Table 25. Gender and Age (%)
Gender
Male
51
55
45
56
51
50
66
Female
49
45
55
44
49
50
34
Age
Under 18
8
9
8
3
8
9
4
18 to 24
4
5
2
2
3
5
9
25 to 34
10
14
5
9
9
13
17
35 to 44
9
11
6
4
8
11
13
45 to 54
15
17
14
8
15
16
19
55 to 64
26
24
28
32
27
23
24
65+
28
19
38
42
30
22
14
Average age
54
50
59
58
55
50
47
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer 2016 McDowell Group • Page 20
Household Characteristics
Less than one-quarter of visitors (23 percent) report having children living in their household.
• Nearly half (44 percent) of visitors reported being retired or semi -retired. Retirement status varied
greatly between transportation modes. Highway/ferry travelers, who reported spending the highest
number of nights in Alaska, were the most likely to be retired or semi -retired (67 percent). This
group was followed by cruise travelers, more than half of whom (57 percent) reported being retired
or semi -retired.
Table 26. Household Characteristics (%)
Children living in household 23 25 23 10 22 22 36
Retired or semi -retired 44 32 57 67 48 36 13
• The average household income among Kenai Peninsula visitors was $113,000. VFRs had the lowest
average household income (among all submarkets) at $92,000, while cruise passengers reported
the highest average income at $119,000.
Table 27. Household Income (%)
Less than $25,000
2
3
1
4
1
5
2
$25,000 to $50,000
10
11
7
13
7
18
14
$50,000 to $75,000
12
14
10
11
12
14
10
$75,000 to $100,000
17
16
17
18
16
18
18
$100,000 to $125,000
11
13
9
12
12
7
18
$125,000 to $150,000
11
12
9
8
10
15
12
$150,000 to $200,000
8
7
10
3
9
5
8
Over $200,00
9
9
8
5
10
4
10
Refused
18
10
27
25
20
11
5
Average income
$113,000
$110,000
$119,000
$94,000
$118,000
$92,000
$111,000
Kenai Peninsula Visitor Profile and Economic ImpactAnalysis, Summer7016 McDowell Group • Page 21
• Two-thirds of Kenai Peninsula visitors (65 percent) have a college degree or higher level of
education. Highway/ferry travelers and VFRs were less likely to have a college degree or higher level
of education (50 and 52 percent, respectively).
Table 28. Education (%)
Some high school
2
1
2
1
1
2
5
High school diploma/GED
10
11
9
10
9
16
5
Associate/technical degree
8
8
7
11
7
9
15
Some college
15
14
15
26
14
21
14
Graduated from college
34
35
33
29
34
30
38
Master's/Doctorate
31
31
34
21
34
22
24
0
Kenai Peninsula Visitor Profile and Economic Impact Ana/ys/s, Summer2016 McDowell Group • Page 22
Expenditures
• Kenai visitors spent an average of $333 per person while in the region. Air visitors reported the
highest average spending at $518, followed by highway/ferry at $449, and cruise at $55. (Note that
cruise passenger spending on cruise and land tour packages is not included in these figures.)
• By trip purpose, business travelers reported the highest average spending at $451 per person,
followed by VFRs at $329, then vacation/pleasure at $326. Note that business travelers reported the
longest average length of stay in the Kenai at 9 nights, followed by VFRs at 6 nights, then
vacation/pleasure at 4 nights.
• In terms of spending category, tours/activities/entertainment showed the highest average per -
person spending at $100, followed by lodging at $78, and food/beverage at $70.
Gifts/souvenirs/clothing and rental cars/fuel/transportation each accounted for $26 on average.
The "other" category, which includes spending on packages based in one community (such as
fishing lodge packages), accounted for an average of $33 per person.
Table 29. Visitor
Per Person Per Trip (%)
Lodging
$78
$125
$10
$106
$72
$68
$179
Tours/activities/entertainment
$100
$149
$19
$144
$112
$75
$46
Gifts/souvenirs/clothing
$26
$40
$7
$26
$22
$41
$38
Food/beverage
$70
$106
$13
$95
$58
$99
$117
Rental cars/fuel/transportation
$26
$39
$5
$64
$25
$21
$56
Other
$33
$59
$1
$14
$37
$25
$15
Kenai Peninsula Visitor Profile and Economic Impact Analysis Summer 2016 McDowell Group • Page 23
Economic Impact Analysis
Spending on the Kenai Peninsula by visitors and by the businesses that serve those visitors creates jobs, income,
and secondary spending throughout the borough economy. Visitor spending createsjobs and payroll with tour
companies, hotels and lodges, retail establishments, transportation providers, and a range of other business.
Visitor industry businesses and their employees in turn re -spend a portion of that money with other borough
businesses (some is spent outside the borough), creating additional economic impacts.
This chapter describes the borough -wide employment and labor income effects of visitor industry -related
spending in summer 2016. The analysis includes direct employment and labor income, as well as indirect and
induced employment and labor income (the "multiplier effects").
Visitor Traffic
Visitor traffic helps determine the extent of visitor
spending impacts; average spending figures are applied
to volume estimates to arrive at total direct spending
estimates.
Visitor traffic to the Kenai Peninsula Borough in summer
2016 is estimated at 562,800. (This figure excludes Alaska
residents from outside the Kenai Peninsula traveling to
the borough for recreational purposes.) The chart at right
shows how visitors breakdown by transportation market
The air market, which includes visitors who entered and
exited the state (not necessarily the borough) by air and
excludes all cruise passengers, represented 58 percent of
visitors, while cruise passengers represented 36 percent
of visitors. The highway/ferry market, which includes all
visitors who entered and/or exited Alaska by highway or
ferry, represented 6 percent.
Visitor Volume to Kenai Peninsula Borough,
by Transportation Market, Summer 2016
Highway/
ferry,
31,100,
Kenai Peninsula Visitor Profile and Econornic Impact Analysis, Summer2016 McDowell Group • Page 24
Direct Spending and Impacts
Visitors' direct economic impacts include thejobs and
income created by visitor spending on all goods and
services purchased while in the Kenai Peninsula
Borough.
Direct visitor spending totaled an estimated $187
million in the five-month study period. Tours,
activities, and entertainment purchases accounted for
one-third (32 percent) of all spending at $61 million,
while lodging represented 28 percent ($53 million);
food/beverage represented 23 percent ($44 million);
and the remaining two categories (transportation/
rental cars/fuel and gifts/souvenirs/clothing) each
represented 8 percent ($15 million).
It is important to note that this spending excludes
cruise passenger spending on cruises and cruise/tour
packages, some of which accrue to Peninsula
businesses in the form of payments by cruise lines. For
example, if a cruise passenger purchases a land tour
that includes lodging on the Peninsula, that spending
would be funneled through the cruise lines to the
lodging property, and not included in this measure of
direct visitor spending. Similarly, impacts associated
with cruise ship docking and moorage are not
included as it does not result directly from cruise
passenger spending.
Visitor spending directly generated 2,500 full- and
part-timejobs in the borough, and $69 million in labor
income, based on McDowell Group's economic impact
modeling. Employment by sector is distributed
similarly to passenger spending, though economic
impact varies with the type of spending. For example,
spending on service has a greater employment and
wage impact than retail spending.
Total Visitor Spending in Kenai Peninsula
Borough, By Sector, Summer 2016
Transportation,
$15 m
clothing,
$15 m
TOTAL DIRECT SPENDING:
$187 million
Direct Employment Resulting from Visitor
Spending, By Sector, Summer 2016
b
7
Gifts/
clothinc
80 job!
Transportation,
130 iambs
TOTAL DIRECT EMPLOYMENT:
2,500jobs
TOTAL DIRECT LABOR INCOME:
Tours/activities accounted for 34 percent of $69 million
employment at 840 jobs; lodging accounted for 30
percent at 750jobs; food/beverage accounted for 28 percent at 700jobs; transportation accounted for 5 percent
at 180jobs; and gifts accounted for 3 percent at 80jobs.
KenaiPeninsula Visitor Profile and Economic Impact Analysis, Summer2016 McDowell Group • Page 25
Total Economic Impacts
Direct employment and labor income
estimates do not include multiplier
effects, i.e., those jobs and income
created in the Kenai Peninsula
Borough as the visitor dollar is re -
spent by visitor industry businesses
and their employees. This secondary
spending is estimated to result in 600
jobs and $26 million in labor income
during the summer 2016 study period.
Adding secondary impacts to the initial
direct impacts of 2,500 jobs and $69
million in labor income indicates total
Direct, Indirect, and Total Employment and
Labor Income Resulting from Visitor Spending,
Summer 2016
Employment
Labor Income
direct, indirect and induced impacts of 3,100 jobs
and $95 million in labor income.
This estimate is a tally of the total number of full -
and part-time jobs linked to non-resident visitor
travel to the Kenai Peninsula. It includes annual
average wage and salary employment, and total
proprietors' employment (the total number of sole
proprietorships or partnerships active at any time
during the year).
Economic output is another measure of economic
impacts, shown in the pie chart at right. It provides
a measure of total direct, indirect, and induced
spending in the borough related to non-resident
visitors.'
■Direct ■Indirect
TOTAL EMPLOYMENT: 3,100
TOTAL LABOR INCOME: $95 million
Total Economic Output Resulting from Visitor
Spending, By Sector, Summer 2016
Gifi
cloth
$8
Transportation,
TOTAL ECONOMIC OUTPUT: $218 million
Role in the Kenai Peninsula Borough Economy
The Bureau of Economic Analysis estimated total Kenai Peninsula Borough employment at 32,707 in 2015. Based
on the estimate of 3,100 total (direct and indirect)jobs resulting from visitor spending in summer 2016, visitor
spending -related employment represented 10 percent of Borough -wide employment. In terms of labor income,
visitor spending -related labor income represented 6 percent ($95 million) of total labor income reported in
2015 ($1.7 billion). (Visitor industry employment typically represents a greater share than labor income due to
lower -than -average wages in this sector.)
' Output related to purchases of gifts/clothing is lower than direct spending because it excludes cost of goods said, nearly all of which are
produced outside the borough.
Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer2016 McDowell Group • Page 26
m w� m L a w w e
�
C) E\ n e E /
2\ = $ $cu
\ / _ \ 0 g ¥ E @
§ c:
e
- - , -ET e
\ % rD &j \ » j
3
0 /
C F\\/
� ®
R « / 3
§ b Of= E 9 s
=�2=y®kms=
; E ° ! _ £ _ I
$ - 0 \ y L m � ±
C) \ 7 & , , q Rs
§ > / / /
7 D<-
2
L
� Q
\ 2
\ j
w w= w Nj m
0 0 0 0 0 0 0 0 o x
r1i m m NJ� w Nj w
woo -0o wrD
/ /
a
} �
0 � « � a � a #
w � a « w « »
= f a e® M 9 9®_
a ® m$$ wL� t o
w M o w« 0 e=
\ t 0 0 / / % 0 % `
$ 0
KODIAK ISLAND BOROUGH
Meeting Type: AsjewI611 i h -A SC15I,661 Date
li/l-�/►ff
Please PRINT your name legibly Please PRINT your name legibly