Potential Economic Effects - Tourism

During the 1990's the tourist industry of Alaska has grown significantly. Tourists are drawn to the State for a variety of reasons including unrivalled natural beauty, dramatic landscapes and wildlife (including the opportunity to go whale watching). Revenue derived from tourism now ranks as the second most important industry in Alaska.

In the fiscal year 1999-2000, tourism is expected to generate US$1.5 billion or 5.3% of Alaska's GSP. In 1998-1999, 69% of the revenue and taxes raised from the tourist industry came from tourists whose holidays were spent on cruise ships sailing up and down the Gulf of Alaska. The majority of these tourist ships dock at the ice free, deep-water ports of Homer and Seaward for refueling and stocking. In 1964, very significant damage was caused to the dock and ship handling facilities of these ports and a similar magnitude tsunami in 1999-2000 would probably have similar negative impacts. Consequently, it is highly probable that in the event of a major tsunami, very significant negative impacts would be incurred by the Alaskan tourist industry. For example, ships moored at dock could be sunk and destroyed, handling facilities could be lost and holidays booked to the State are likely to be cancelled. An additional problem might relate to the public's perception about the danger they face by visiting the State. As such, it would be expected that there would a decline in bookings to the region. Such a decline could see insurance claims for loss of business and business interruption. The actual economic consequences are not easy to predict and would depend on such factors as number of ships in port when the tsunami struck, severity of damage, public perceptions and level of insurance cover.

The potential losses that could be incurred by the tourist industry following a major disaster can be illustrated by examining the consequences of hurricanes Luis and Marilyn to the Caribbean island of Anguilla in 1995. Whilst this was not related to tsunami damages, the example provides a good illustration since much of the damage sustained by the tourist sector in Anguilla related to the sea surge flooding associated with the hurricanes. In 1994, the island of Anguilla derived some 40% (or US$51 million) of its Gross Domestic Product (GDP) from tourism. Hurricanes Luis and Marilyn caused direct damage's totaling US$29.5 million to the tourist sector (that is to hotels, restaurants, shops and beach facilities). The subsequent calculated loss of tourist income because of the disaster was expected to result in a fall of Anguilla's GDP of 12% during the fiscal year 1995-1996. Therefore, this disaster had a significant macro-economic impact.

Consequences:

• Oil
  
• Fishing
  
• Insurance