ANCHORAGE, Alaska – Facing a potentially record-breaking tourism season, hospitality companies in Alaska say they’re struggling to find enough workers, even as they try to lure them in with higher pay and bonuses.
Their struggle is part of the national labor shortage tied to the pandemic. But Alaska employers face unique challenges, such as finding a massive, temporary workforce that’s in high demand across the U.S., industry observers say.
As it is, some Alaska tour operators are coming to grips with the possibility of scaling back their schedules, forgoing potential profits to avoid overworking employees while keeping quality high, they said.
“It’s been really hard finding applicants, let alone qualified applicants,” said Frankie Dashiell, co-owner of Alaska Trail Guides. “It’s definitely keeping us up at night, that’s for sure.”
Demand for bookings is stronger than last year, when the bicycle tour company had its best season ever, whisking tourists down Anchorage’s Coastal Trail or on mountain bike rides.
But the company is short on van drivers and other needed workers, even after bumping most starting wages to $17 an hour – about $7 above Alaska’s minimum wage. They get bonuses and great tips too, she said.
Unless things turn around, she’s looking at cutting tour schedules by 50%. “We’ll make it work, but it will be sad if we have to leave opportunity on the table,” she said.
A record tourism season looms
The tourism season is just weeks away.
Cruise lines are set to fully return to Alaska for the first time since the pandemic started, with unprecedented capacity for 1.5 million guests. Airlines plan more flights to Alaska too, with record seating space.
Alaska should benefit this summer from factors that supported independent tourism last year, said Jack Bonney with Visit Anchorage, referring to Alaska travelers unbound by a cruise itinerary.
People still want to travel to less-populated areas to feel safe during the pandemic, he said. And many Americans are sticking with domestic travel.
Fewer people are going to Europe this year, whether it’s the war in Ukraine, or COVID-19 protocols in different countries, he said.
Visit Anchorage and the Alaska Travel Industry Association are helping to market tourism companies, including with more online job postings.
On May 9, major cruise ships will begin returning to South-central Alaska for the first time since 2019.
That same day, Holland America Line plans to reopen its 14-story Westmark Hotel in downtown Anchorage, said Dave McGlothlin, a vice president with the company. It’s been closed the last two years.
Holland America, which also owns rail and coach operations in Alaska and hotels near Denali National Park and Preserve, is still trying to hire the roughly 3,000 summer workers it usually employs in Alaska, he said.
“I’m quite concerned,” he said. “We’ll open the doors as expected, but we know we’ll be recruiting throughout the season, and that’s not necessarily a historical practice.”
“We’re giving housing incentives, we’ve increased seasonal wages, we’re providing longevity bonuses,” he said. “We’re throwing a lot at it. It’s a kitchen sink approach.”
Fewer workers returning
Grizzly’s Gifts shop in downtown Anchorage has seven employees, one-third of what it needs, said owner Bob Neumann.
“Our season begins in about two weeks, so it’s terrible,” he said. “I don’t know what we’re going to do.”
His pay starts at $15 an hour for workers with no experience, such as high school students, up 36% from 2019. “We go up from there for any experience at all, life history, time on the planet,” he said.
He’s increasingly looking for Lower 48 workers, but that can mean providing housing, he said. In the off-season, he tried buying a place near downtown to house 18 employees. He was outbid.
Neumann also provides glacier cruises out of Whittier with Phillips Cruises and Tours. He offers low-cost employee housing there, and had no problem finding out-of-state workers, he said.
“It’s sad in a way, because we want to hire Alaska workers,” he said.
Before the pandemic, Alaska tourism companies could rehire a large number of returning workers each summer, tour operators said.
But businesses forced to shut down or reduce operations the last two years have lost the connection with many workers, they said.
Josh Howes, owner of Premier Alaska Tours, said his company traditionally employs about 600 people each summer. Operations include shuttling cruise visitors in motor coaches and buses.
But Premier’s returning workers are down significantly because the company hasn’t operated much since 2019.
“We have a lot of people having to start from ground zero this year,” Howes said. “So we’re doing more training and getting people up to speed.”
He’s looking for about 30 employees who can get commercial driver’s licenses, to increase his driver numbers before things get really busy in June. They start at $20 an hour with tips, up $4 since before the pandemic, he said
“We’ll keep advertising and working on it and spreading the word,” he said.
Recovering national economy isn’t helping
COVID-19 led to unprecedented layoffs and surging government aid, helping create the labor shortage as many Americans pursued new careers and better pay.
But Alaska, with huge seasonal swings in employment, has unusually strong summer demand for temporary, out-of-state workers, observers say.
That demand comes at a difficult time because the Lower 48 economy is recovering faster than Alaska’s economy, increasing competition for workers, said Neal Fried, an economist with the state.
“We’ve had labor shortages before, like the beginning of the pipeline era (in the 1970s), but they were filled in quickly because the rest of country was in recession,” Fried said. “That’s not the case this year. We’re in an environment we’ve never seen before.”
Thousands of Alaskans have also left the workforce during the pandemic, according to the state’s latest economic trends report. They’re likely taking early retirement, leaving the state, or still face challenges finding child care, among other factors.
The U.S. State Department’s J-1 Summer Work Travel cultural exchange program, once a reliable pipeline of foreign workers, has also not returned to its pre-pandemic strength, employers said.
Newly reopened Orso restaurant and sister establishment Glacier Brewhouse, both in downtown Anchorage, usually employ more than 20 foreign workers, said Robert McCormick, an owner of the restaurants.
This year, it should receive 13, he said.
Potential participants pay to join the program, he said. Some aren’t joining because they’re afraid of losing that money if, say, a new COVID variant arises or the war in Ukraine grows, restricting travel, he said.
McCormick said Orso has stayed closed for two years because of the labor shortage. It reopened last week but needs 20 more workers, he said. For now, it will operate five days weekly instead of seven, until it’s fully staffed, he said.
The Glacier Brewhouse needs 40 more employees, he said.
“Normally, we’d have a stack of applications,” he said. “We’re just not getting that.”
The restaurants have boosted pay in the back of the house, such as offering $15 an hour for entry-level dishwashers, up $3 from 2019, he said. It’s also providing a $1,000 longevity bonus for those workers after six months, which is bringing in more applicants.
“I have confidence we’ll get to where we need to be eventually,” he said.