Juneau commissioned McKinley Research Group Economic Impact Study

• Economic Impact Study: The City and Borough of Juneau (CBJ) commissioned McKinley Research Group to assess the economic impacts of the cruise industry in 2023.
• Cruise Volume: Over 700 cruise ship calls brought nearly 1.7 million passengers and 36,000 crew members to Juneau, marking a 74% increase from a decade ago and a 28% rise from 2019.
• Direct Spending: The cruise industry contributed approximately $375 million in direct spending:
• Cruise passengers: $320 million
• Cruise lines: $39 million
• Crew members: $16 million
• Spending Distribution:
• Tours/activities: $152 million
• Retail: $144 million
• Restaurants/bars: $31 million
• Transportation: $14 million
• Total Economic Impact:
• Combined direct and indirect impacts resulted in approximately 3,850 jobs and a total spending activity of about $490 million.
• Total labor income associated with the cruise industry was estimated at $196 million.
• Municipal Revenues: CBJ collected around $22 million in cruise-related fees, including:
• Marine Passenger Fees: $8.2 million
• Commercial Passenger Vessel Tax Revenue: $5.7 million
• Sales Tax Revenue: Estimated sales tax revenues generated from cruise industry spending were approximately $17.7 million, with additional contributions from hotel/motel taxes due to overnight stays.

Based on the economic impact study, the cruise industry has a significant impact on local employment in Juneau:

Direct Employment

The cruise industry directly created an estimated 3,150 jobs in Juneau in 2023. These direct jobs are primarily in sectors that serve cruise passengers and cruise lines, including:

• Retail shops
• Restaurants and bars
• Tour operators and attractions
• Transportation providers

Indirect Employment

In addition to direct jobs, the cruise industry supported an estimated 700 indirect jobs in Juneau. These indirect jobs result from:

• Tourism businesses making local purchases (e.g. a whale watching company buying fuel)
• Employees of tourism businesses spending their wages in the local economy

Total Employment Impact

Combining direct and indirect jobs, the total employment impact of Juneau’s cruise industry in 2023 was approximately 3,850 jobs.

Labor Income

The cruise industry generated substantial labor income for Juneau residents:

• Direct labor income: $154 million
• Indirect labor income: $42 million
• Total labor income: $196 million

This employment impact demonstrates the cruise industry’s crucial role in Juneau’s economy, supporting a significant portion of the local workforce across various sectors. The industry not only creates jobs directly related to tourism but also stimulates employment in supporting industries and through the spending of tourism workers in the local economy.

Initiatives in place to help mitigate the strain

Based on the information provided in the economic impact report, there are several initiatives in place to help mitigate the strain on Juneau’s infrastructure due to cruise ships:

1. Port Development Fees:
   Juneau collected $4.9 million in Port Development Fees from cruise lines in 2023. These fees are likely used to fund improvements and expansions to port infrastructure to accommodate cruise ships and passengers.
2. Port Maintenance Fees:
   The city collected $1.4 million in Port Maintenance Fees. These funds are presumably used for ongoing upkeep and repairs of port facilities used by cruise ships.
3. Marine Passenger Fees:
   Juneau received $8.2 million in Marine Passenger Fees. While not specified, these fees are often used by port cities to offset impacts of cruise tourism on local infrastructure and services.
4. Commercial Passenger Vessel (CPV) Tax:
   $5.7 million in CPV tax revenue was allocated to Juneau. This state-administered tax is typically used to fund infrastructure and services in port communities.
5. Water Resource Management:
   The collection of $126,000 in Potable Water Fees suggests Juneau is managing water resources used by cruise ships.
6. Traffic Management:
   The city issues Downtown Loading Zone Permits ($118,000) and Statter Harbor Loading Zone Permits ($30,000), indicating efforts to manage traffic and transportation impacts.
7. Regulation of Commercial Activities:
   Juneau issues permits for passenger-for-hire services ($457,000) and waterfront vendor booths ($270,000), allowing for some control over tourism-related commercial activities.

While the report doesn’t provide extensive details on specific infrastructure projects or initiatives, it’s clear that Juneau has implemented a system of fees and permits that generate substantial revenue. These funds are likely used, at least in part, to mitigate the strain on local infrastructure caused by the influx of cruise ships and passengers.

Source Juneau McKinley Research Report