With cruise season all but gone, Ketchikan businesses work to adapt

Canada’s recent announcement that its ports will remain closed to large cruise ships through the end of October means nearly all of this summer’s Alaska cruises will be cancelled. Most have been scrubbed already due to the federal no-sail order in effect until late July. When it comes to big ships, only Norwegian Cruise Line and its subsidiaries remain on the schedule for 2020 — and even that’s uncertain.

In this first installment in a two-part series, we take a closer look at what the scuttled season means for Ketchikan-area businesses.

This was supposed to be a season of recovery in Ketchikan. A record 1.2 million passengers were projected this year and as Ketchikan Visitors Bureau president and CEO Patti Mackey  explains, the town had been working to prepare for this influx.

“Last summer, we had our entire downtown area under construction,” she said in an interview last month. Crews repaved downtown’s main thoroughfares.

“And there were chain link fences up that were barriers for retail stores along that route. Traffic was slowed down as a result of it,” Mackey continued. “So there were those kinds of issues that our businesses faced in the downtown area.”

That meant a tough summer for many Ketchikan businesses.

“Just in general, 2019 was a bit of a tougher year,” said Vinay Khemani in a phone interview Thursday. He’s the owner of Monarch Jewels, a seasonal retailer on the docks. He’s a local — he first came to Ketchikan in 2005, opened his shop a decade or so later, and now lives here year-round. He also runs stores in Juneau and Skagway.

“Alaska’s a great place. We’ve loved operating over here,” he said.

Cruise ship tourists make up nearly all of Khemani’s business.  But with no — or very few — tourists this summer, he’s in for a much leaner season.

Khemani says his store is open by appointment. He says he’s not sure whether he’ll be able to keep regular hours at all this summer.

“There is something that we are considering that we could open up for certain hours to locals, but we would not be able to carry the whole strength of inventory that we normally would,” he said.

Khemani got a loan-slash-grant under the Paycheck Protection Program. That’s a federal program providing short-term cash infusions to help keep businesses afloat.

“It only helps a very small amount, if you can understand, eight weeks doesn’t go very far,” Khemani said.

And though Congress passed legislation that would triple the loan forgiveness period, Khemani’s seasonal business is facing a much longer struggle.

“It’s a 19 month impact … with no revenue,” he said.

And the fact that he got a federal forgivable loan makes Khemani ineligible for a state grant program organized to fill the gaps.

That’s also a concern for Jamie Palmer. She runs the Captain’s Lady, a boutique on Ketchikan’s historic Creek Street.

“So you have to rely on these loans, but now it’s like, ‘oh my god, there might not be any income to pay back loans in the future,'” she told Ketchikan’s borough assembly Monday. “People are struggling, everybody’s treading water. It’s spooky.”

She asked the assembly to keep the exclusions of the so-named AK CARES program in mind as it considers how to disperse federal relief funds.

On Ketchikan’s north side, Jared Gross manages Southeast Exposure. It’s a kayak and zipline tour company

“Usually this time of the year, the tour buses are pulling up right here,” he said in a May interview.

He usually hires some 16 seasonal guides, plus maintenance and tour sales staff.

“We’ve had to tell our guides that you know, we don’t have any work for them, so we don’t have any summer seasonals coming in,” he said. “We just have a kind of reduced staff with three locals that are here — and my mom, who owns the business, and my wife and I.”

This summer, he’s planning to focus on facility maintenance and offerings for locals — residents can buy a $200 membership that allows them to use Southeast Exposure’s plastic kayaks all summer. But it won’t come close to replacing revenue from kayak tours, which net around $100 per person per day.

Visitors Bureau president Mackey says an survey she conducted in April and May showed a pretty grim picture of the tourism sector in Ketchikan. Mackey asked businesses how long they could hang on without tourists in town. Their response?

“Yeah, it was kind of bleak,” she said.

Only about a quarter of the 75 businesses surveyed said they could ride out the shutdown until next summer.