Impacts of Nonresident Sportfishing on the …2016/01/01 · Impacts of Nonresident Sportfishing on the Ketchikan Economy McDowell Group, Inc. • Page 4 Telephone interviews were

Impacts of Nonresident Sportfishing

on the Ketchikan Economy

Prepared for:

Ketchikan Visitors Bureau

February 2010

Impacts of Nonresident Sportfishing

on the Ketchikan Economy

Prepared for:

Ketchikan Visitors Bureau

PREPARED BY:

Juneau Anchorage

February 2010

Table of Contents

Key Findings ............................................................................................................................ 1 Introduction and Methodology .............................................................................................. 3

Introduction ........................................................................................................................... 3 Methodology ......................................................................................................................... 3

Ketchikan Visitor Market Overview ........................................................................................ 5 Visitor Volume and Spending ................................................................................................. 5 Visitor Industry Employment and Payroll ................................................................................. 5 Ketchikan Sportfishing Visitor Profile ....................................................................................... 6

Nonresident Sportfishing Industry Profile ............................................................................. 8 Guided Sportfishing Industry .................................................................................................. 9 Unguided Sportfishing ......................................................................................................... 13 Sportfishing Industry Direct Employment and Payroll ............................................................ 13

Direct Spending .................................................................................................................... 15 Ketchikan Nonresident Sportfishing Spending ...................................................................... 15 Total Direct Spending ........................................................................................................... 16 Industry Spending Patterns ................................................................................................... 18 Prince of Wales Island Nonresident Sportfishing-Related Spending ........................................ 19

Economic Impacts ................................................................................................................. 21 Sportfishing Industry 2009 ................................................................................................... 23 Appendix ............................................................................................................................... 24

Statewide Harvest Area A and B maps ................................................................................... 24

Impacts of Nonresident Sportfishing on the Ketchikan Economy McDowell Group, Inc. • Page 1

Key Findings

The purpose of this study is to measure the direct and indirect economic impacts of nonresident sportfishing

visitors on the Ketchikan economy in 2008. In addition to guided and unguided visitors who fished out of

Ketchikan, this study also includes Ketchikan spending and employment impacts from sportfishing-related

businesses that operated on Prince of Wales Island (POW), as well as the impacts of POW nonresident

sportfishing visitors passing through Ketchikan. Data was gathered from multiple sources including previous

McDowell Group studies, Alaska Department of Fish and Game, and a series of interviews with Ketchikan and

Prince of Wales Island sportfishing business owner/operators.

The Ketchikan nonresident sportfishing industry, while seasonal in nature, is a significant contributor to the

Ketchikan economy. Based on the results of this study and a review of the Economic Impacts of the Visitor

Industry in Ketchikan, Summer 2006 the study team estimated that nonresident sportfishing-related direct

spending accounted for roughly 8 to 10 percent of all visitor industry spending in 2008.1

Direct spending by the nonresident sportfishing market impacts many Ketchikan business sectors including

guided fishing operations, transportation (especially floatplane operations), accommodations, restaurants and

lounges, and a variety of retailers including those selling fuel, fishing gear, gifts, souvenirs, and clothing.

Statistics show that the industry contracted somewhat from 2007 to 2008, and based on industry interviews,

suffered more significant declines in 2009. Owner/operators expressed guarded optimism that business

volume would stabilize in 2010, but as of the date of this report, no conclusions could be drawn from

reservation volume to date.

Key findings from the study are presented below. All figures are for 2008 unless otherwise noted.

Size of the Industry

• Ketchikan hosted an estimated 30,400 nonresident sportfishermen, of which two-thirds used the

services of a registered guide.

• An estimated 3,300 unguided nonresident sportfishermen either stayed at a lodge/resort or rented a

boat in Ketchikan.

• There were 87 sportfishing guide businesses with 141 vessels active in the Ketchikan area and 76

businesses with 184 vessels active on POW.

• There were nearly 21,000 half-day and 6,700 full-day Ketchikan guided nonresident sportfishing

trips.

• Ketchikan ranks fourth among major saltwater fishing areas around the state based on the number of

active vessels in 2008. The Cook Inlet area (Kenai/Homer), Sitka, and Prince of Wales Island are the

top three areas.

1 The most recent estimate of the overall impacts of Ketchikan’s visitor industry was in Economic Impacts of the Visitor Industry in Ketchikan, Summer 2006, McDowell Group. The rough estimates are based on a comparison of 2006 study results with the results of this study.


Direct Economic Impacts

• Direct spending in Ketchikan related to the nonresident sportfishing industry was estimated at $15.6

million.

• Estimated direct spending for guided sportfishing in Ketchikan (combined half-day and full-day) was

about $7.3 million and accounted for 46 percent of nonresident sportfish-related spending in

Ketchikan. The Ketchikan unguided, nonresident sportfishing sector, which included lodges that

feature unguided fishing and businesses that rent boats, accounted for 30 percent of estimated

spending at $4.6 million. An additional $3.7 million in Ketchikan spending (24 percent) was

generated by POW sportfishing visitors and the businesses that served them.

• Total direct nonresident sportfishing-related employment was estimated at 340 (mostly seasonal) jobs

with direct payroll of $5.2 million.

• Ketchikan sportfishing industry businesses reported a local hire rate of 87 percent and a local

business-related spending rate of 85 percent.

• POW sportfishing businesses had direct spending of at least $3.5 million in Ketchikan, including $1.1

million for floatplane services, $861,000 for fuel, and $480,000 in payroll.

• POW sportfishing visitors spent at least $200,000 while passing through Ketchikan on their way to or

from their POW guided fishing trips.

Total Economic Impacts

• The total (direct, indirect, and induced) economic impact of nonresident sportfishing was estimated

at $20 million. This included direct spending of $15.5 million with nearly $4.5 million in indirect and

induced impacts.

• Included in the total spending impacts was sportfishing industry-related direct payroll of $5.2 million,

which resulted in an additional $1.5 million in indirect and induced wages.

• Total (direct, indirect, and induced) employment was estimated at slightly more than 400 (mostly

seasonal) jobs.


Introduction and Methodology

Introduction

The purpose of this study is to measure the impact of nonresident sportfishing visitors on the Ketchikan

economy. Research for this study was conducted in the fourth quarter of 2009, a time when sportfishing

industry participants were more available to provide information than during their busy season. The most

recent data on license sales and guided sportfishing activity available from the Alaska Department of Fish and

Game (ADF&G) was for 2008. Therefore, the primary focus of this study is on the 2008 sportfishing season.

To illustrate year-to-year changes, trend data comparing 2007 and 2008 was included where possible.

Over the course of the study, it became clear that most sportfishing industry businesses had suffered a decline

in visitor volume and revenue from 2008 to 2009 due to difficulties in the national economy, as well as new

sportfishing bag limits. Due to the significant shift in the business climate, several questions concerning the

2009 season were included in the sportfishing business owner/operator interviews. A brief review of

comments pertaining to the 2009 season is included at the end of this report.

In addition to guided and unguided visitors who fished Ketchikan’s waters, this study also includes Ketchikan

spending and employment impacts from sportfishing-related businesses that operated on Prince of Wales

Island (POW) in 2008, as well as the impacts of POW nonresident sportfishing visitors passing through

Ketchikan.

Methodology

Because of the complexity of the sportfishing industry in the Ketchikan area, McDowell Group utilized

multiple sources of information in the development of this report. First, previous McDowell Group visitor

studies were summarized to establish an overview of the visitor industry in Ketchikan. The most recent studies

available were the Alaska Travelers Survey, Ketchikan Visitor Profile, 2006 and 2008, and Economic Impacts of the

Visitor Industry in Ketchikan, Summer 2006. The 2008 Ketchikan Visitor Profile included a sample of 230 air

visitors who sportfished in the Ketchikan or POW areas.

Sources of quantifiable data included ADF&G and the Alaska Department of Labor and Workforce

Development (DOLWD). Beginning in 1998, ADF&G required all fresh and saltwater guides to be registered

and to collect information via logbooks on sportfishing participation, effort and harvest by clients. The

Division of Sport Fish Research and Technical Services compiles the data. Records from fishing license sales in

Ketchikan and on POW were acquired from the ADF&G Licensing Division. A review of DOLWD 2007 and

2008 employment data was conducted to assist in estimating employment.

The McDowell Group study team conducted telephone interviews with 20 Ketchikan business

owner/operators that offered guided and/or unguided sportfishing. They represented a mix of business sizes

and types. The operations represented 52 percent of the 141 active charter vessels and a sizable majority of

boat rentals in the Ketchikan area in 2008.


Telephone interviews were also conducted with 10 POW sportfishing businesses. The businesses represent 50

charter vessels (27 percent of the POW fleet) that hosted 3,900 guided and 600 unguided nonresident

sportfishermen (representing about half of the estimated 9,100 nonresidents who sportfished on POW in

2008).

Multipliers used in estimating total economic impacts were derived from a widely used input/output model,

IMPLAN2, along with McDowell Group’s project experience and analysis. IMPLAN multipliers were modified,

in some cases based on McDowell Group experience in measuring multipliers in Alaska rural and urban

economies.

2 Minnesota IMPLAN Group, Inc., IMPLAN Professional version 2.0


Ketchikan Visitor Market Overview

Before describing nonresident sportfishing impacts, the following section presents a brief review of the most

recent McDowell Group studies on Ketchikan’s visitor industry. This review is intended to provide the reader

with a greater context in which to view the nonresident sportfishing industry.

Visitor Volume and Spending

The vast majority of Ketchikan’s visitor industry volume is comprised of cruise ship passengers. According to

Cruise Line Agencies of Alaska, Ketchikan received 937,400 cruise passengers in 2009, just slightly below the

2008 total of 941,900. The most recent estimate of Ketchikan air visitors was 34,880 in summer 2006 and

ferry visitors were estimated at 15,733 for the same year (these figures do not include business travelers).

In summer 2006, per trip visitor spending in Ketchikan was estimated at $159 per person among cruise

passengers; $408 per person among air visitors; and $278 per person among ferry passengers. The table

below shows total spending by market. In total, visitors spent nearly $150 million in Ketchikan in summer

2006.

Ketchikan Visitor Volume and Spending, Summer 2006

Total Volume Total Spending Cruise passengers 780,158 $124.0 million Air visitors 34,880 15.2 million Ferry visitors 15,773 4.4 million Total visitor volume and spending 830,811 $143.6 million Cruise ship crew members 22,323 5.7 million Total visitor/crew volume and spending 853,134 $149.3 million

Source: Economic Impacts of the Visitor Industry in Ketchikan, Summer 2006, McDowell Group.

Visitor Industry Employment and Payroll

The visitor industry accounted for 1,150 direct jobs and a total of 1,500 (direct and indirect) jobs in summer

2006. In terms of payroll, the industry accounted for $40 million in direct payroll and $50 million in total

payroll in summer 2006. In the context of the overall economy, these total figures represented 14 percent of

all Ketchikan employment, and 12 percent of all Ketchikan payroll in calendar year 2006.

Visitor Industry Employment and Labor Income in Ketchikan, Summer 2006

Direct Total % of Ketchikan Total

Employment1 1,150 1,500 14%

Labor Income $40 million $50 million 12

Source: Economic Impacts of the Visitor Industry in Ketchikan, Summer 2006, McDowell Group. 1 Annual average employment, which includes full-time and part-time employment.


Ketchikan Sportfishing Visitor Profile

In summer 2008 McDowell Group conducted the Alaska Travelers Survey, Ketchikan Visitors Profile which

targeted visitors departing via the Ketchikan International Airport. The airport surveys focused on two groups

of visitors: sportfishing visitors and other pleasure-related visitors. Sportfishing visitors may have fished in the

immediate Ketchikan area or in an outlying area such as Prince of Wales Island.

Using statistical sampling procedures to randomly select flights and passengers throughout the season,

McDowell Group surveyors intercepted a total of 444 visitors departing Ketchikan by air. The sample included

230 who were traveling primarily for sportfishing and 214 who were traveling for other pleasure-related

purposes. (Alaska residents and business-only travelers were excluded from the sample.) The maximum

margin of error for the sportfishing sample is ±6.4 percent, at the 95 percent confidence level. Visitors were

asked where they lived, their trip purpose, travel party size, household income, and if they overnighted in

Ketchikan. Gender was also recorded. The following tables profile Ketchikan’s sportfishing visitors.

• Sportfishing visitors were overwhelmingly from Western states with California and Washington the top

two states. International visitors accounted for just 3 percent of sportfishing participants.

Ketchikan Sportfishing Air Visitors Origin

Origin % of Sportfishing Visitors

West 71%

California 23

Washington 15

Other Western States 33

South 14

Midwest 8

East 5

International 3

• Sportfishing visitors reported an average party size of 4.7 people. Nearly one-quarter of these visitors

were traveling in parties of six or more.

Party Size Ketchikan Air Visitors

% of Sportfishing Visitors

One 15%

Two 24

Three 10

Four 18

Five 10

Six or more 23

Average party size 4.7 people


• Nearly nine out of ten sportfishing visitors were male. The average age was 51 years old.

Gender and Age of Sportfishing Party Members Ketchikan Air Visitors


Gender

Male 87%

Female 13

Age

Under 18 5%

18 to 34 11

35 to 44 13

45 to 54 26

55 to 64 24

65 to 74 14

75 and over 7

Average age 51.3 years

• Sportfishing visitors reported high incomes, with 38 percent above $150,000 and another 27 percent

falling between $95,000 and $150,000.

Household Income Ketchikan Air Visitors


Under $65,000 10%

$65,001 to $80,000 5

$80,001 to $95,000 5

$95,001 to $110,000 10

$110,001 to $125,000 9

$125,001 to $150,000 8

Over $150,000 38

Don’t know 1

Refused 12

Average $130,000


Nonresident Sportfishing Industry Profile

This section profiles Ketchikan’s sportfishing industry in terms of types of businesses, market segments, and

employment, and visitor participation rates.

Business Models

There is a diverse variety of business models that comprise the Ketchikan sportfishing industry. The list below

provides examples of some of the businesses models typical in the industry.

• A single owner/operator with one boat who manages reservations and accounting, guides the guests,

and cleans the fish.

• Single owner/operator who runs one boat, but manages multiple boats as one business.

• A family operation with one spouse or family member who manages the reservations and accounting

while the other takes care of the vessel and guiding.

• Operations that work exclusively or partially through brokers who wholesale fishing trips to cruise

passengers and other visitors.

• Operations that cater almost exclusively to the half-day cruise passenger market, while others offer

full-day charters.

• Operators that may provide only fishing, leaving the visitor responsible for finding their own

accommodations and meals.

• Businesses that offer sportfishing packages that include accommodations, meals, and fish processing.

• Larger, more complex operations that offer guided or unguided fishing packages that may include

accommodations, meals, bait, tackle, fuel and fish processing. Additional activities may include RV

park rentals and sundry sales. All of these services are also available individually for visitors who chose

to rent their own boats.

• Businesses that provide services to local residents such as sales of fuel, bait, moorage, meals, and the

occasional guided or unguided fishing trip.

Markets

There are four major market segments that contribute to the impacts of the Ketchikan sportfishing industry:

guided sportfishing (fresh and saltwater), unguided sportfishing, POW sportfishing businesses that have staff

and make purchases in Ketchikan, and POW sportfishing visitors who pass through Ketchikan.


Guided Sportfishing Industry

The following analysis of guided nonresident sportfishermen was extracted from data provided by ADF&G

Division of Sport Fish – Research and Technical Services. Information concerning businesses, vessels, and trips,

is segmented by Statewide Harvest Survey (SWHS) areas. The Ketchikan and Prince of Wales areas (A and B)

are further segmented by nonresidents participation and trip length in the next section of this report.

2008 Number of Active Saltwater Businesses, Vessels and Trips by SWHS Area, 2008

SWHS Area Description # of Active Businesses

# of Active Vessels # of Trips

P Cook Inlet (Kenai/Homer) 223 280 13,332

D Sitka 135 222 11,399

B Prince of Wales Island 76 184 8,086

A Ketchikan 87 141 7,220

Q Kodiak 86 114 3,357

E Juneau 72 112 3,942

J Prince William Sound (Valdez/Cordova)

79 93 2,375

C Kake/Petersburg/Wrangell 45 53 1,333

Of the areas reviewed, Prince of Wales Island and Ketchikan were the third and fourth largest based on the

number of active vessels. Ketchikan had half the number of vessels as Cook Inlet area P and about two-thirds

the number of vessels active in Sitka area D.

Area A Ketchikan is comprised of all Alaska waters in the Ketchikan area, including drainages from Portland

Inlet to, but not including, Ernest Sound. Area A also includes Duke, Annette, and Gravina Islands. Area B

Prince of Wales Island, includes all Alaska waters and drainages from Cape Chacon to Sumner Strait, and from

Clarence Island westward, including Forester Island. Maps of area A and B provided by ADF&G are included

in the Appendix of this report.

A list of nonresident license sales by vendor was obtained from the ADF&G Licensing Division and was

grouped by Ketchikan and POW businesses. These lists were used to estimate the total number of

nonresident licenses sold in each area. These estimates were used as a proxy for the total number of

nonresident sportfishermen in each area. Even though a few visitors may have purchased multiple licenses,

duplicate licenses, or may have purchased their license elsewhere in the state before they arrived in area A or

B, this methodology provides a reasonably accurate count of the total number of nonresident sportfishermen.


Saltwater Businesses and Vessels

ADF&G data shows there were 87 fishing guide businesses operating 141 boats in the Ketchikan area in

2008. This represented a decline of 4 percent in businesses and 8 percent in vessels from the previous year.

POW businesses and boats were relatively stable from 2007 to 2008 with a 1 percent decline in businesses

and a 1 percent increase in vessels.

Sportfishing Guide Businesses and Vessels 2007-2008

2007 2008 % Change

Ketchikan

Businesses 91 87 -4%

Vessels 154 141 -8

Prince of Wales Island

Businesses 77 76 -1%

Vessels 182 184 +1

Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services. Note: The Ketchikan area is defined as Statewide Harvest Area (SWHA) area A, and POW is area B. Counts are based on ports of offloading and are unduplicated.

Estimated Nonresident Sportfishing Volume

According to ADF&G sportfish license vendor data, there were an estimated 30,400 nonresident licenses sold

in Ketchikan and 9,500 sold on POW in 2008. These estimates include all license types as well as guided and

unguided fishermen. Using guide logbook data, ADF&G estimates the unduplicated number of nonresident

guided sport fishermen was about 20,000 in Ketchikan and about 9,100 on POW in 2008.

This data suggests the vast majority of nonresidents who purchased sportfishing licenses on POW fished with

a guide, and two-thirds of nonresidents who purchased a license in Ketchikan fished with a guide, in 2008.

For further analysis ADF&G logbook data was segmented by guided half-day and full-day saltwater trips, and

guided freshwater trips.

Ketchikan and POW License Sales and Guided Sportfishermen, 2008

POW Ketchikan

Estimated total nonresident license sales 9,500 30,400

Estimated nonresident guided sportfishermen 9,100 20,000

Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services and Alaska Department of Fish and Game, Licensing Division.

Guided Saltwater Fishing Trips

HALF-DAY GUIDED TRIPS

Half-day Ketchikan guided trips declined by 8 percent between 2007 and 2008, from 5,710 trips to 5,244

trips. The number of nonresidents on those trips declined by 10 percent, from 23,357 to 20,972. There were

an average of four guests per trip in 2008. A majority of these half-day trips were taken by cruise visitors.

POW half-day trips declined by 10 percent, from 2,769 trips to 2,479 trips. The number of nonresidents on


those trips declined by 12 percent, from 9,801 to 8,596. There were an average of 3.5 guests per trip in

2008. Most of the half-day trips by visitors to POW were likely taken by package visitors on the first or last day

of their visit.

Guided Nonresident, Half-Day Saltwater Fishing Trips, 2007-2008

2007 2008 % Change

Ketchikan area

Half-day trips 5,710 5,244 -8%

Nonresidents 23,357 20,972 -10


Half-day trips 2,769 2,479 -10%


Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services. The Ketchikan area is defined as Statewide Harvest Area (SWHA) area A, and POW is area B. Counts are based on ports of offloading and are unduplicated. Note: Half-day trips were defined as trips with a duration of less than five hours. Counts are based on ports of offloading and are unduplicated.

FULL-DAY GUIDED TRIPS

Ketchikan area full-day guided fishing trips declined by 11 percent from 2007 to 2008, from 2,215 to 1,976.

There were 11 percent fewer nonresident anglers in 2008. There were 3.2 guests per trip in 2008. Full-day

guided trips on POW increased by 3 percent over the same time period, from 5,455 to 5,607. The number of

nonresidents on those trips declined by 2 percent, from 20,185 to 19,824. The were an average of 3.5 guests

per trip in 2008.

Guided Nonresident, Full-Day Saltwater Fishing Trips, 2007-2008

2007 2008 % Change

Ketchikan area

Full-day trips 2,215 1,976 -11%



Full-day trips 5,455 5,607 +3%


Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services. The Ketchikan area is defined as Statewide Harvest Area (SWHA) area A, and POW is area B. Counts are based on ports of offloading and are unduplicated. Note: Full-day trips were defined as trips with a duration of five hours or more. Counts are based on ports of offloading and are unduplicated.


Guided Freshwater Fishing

When compared to the volume of guided saltwater trips, the number of guided freshwater trips taken by

nonresidents was small. In 2007, 931 nonresidents participated in 251 guided trips. In 2008, the number of

trips declined by 31 percent to 173, and participants declined by 41 percent to 548. There were an average

of 3.2 guests per trip in 2008.

Ketchikan Area Guided Freshwater Fishing, 2007-2008

2007 2008 % change

Businesses 6 6 -%

Trips 251 173 -31

Nonresident participants 931 548 -41

Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services.

The number of trips and nonresident visitors participating in local guided freshwater fishing on the Ketchikan

road system increased slightly in 2008. The number of fly-out trips declined by 78 percent from 2007 to

2008. Guided fly-out trips are relatively expensive due to the cost of chartering an airplane on top of paying

for guide services. One freshwater guide stated that “the economy was becoming an issue in 2008 and high-

end trips were the first to go.”

Ketchikan Area Guided Freshwater Fishing Trips, 2007-2008

2007 2008 % Change

Local trips* 143 149 +5%

Fly-out trips 108 24 -78

Total trips 251 173 -31%

Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services. *Ward Cove Creek, Ward Lake, and White River are all accessible from the Ketchikan road system.

Overall, the volume of guided freshwater fishing trips on POW was more than double that reported in area A.

While the number of businesses engaging in freshwater fishing on POW increased from 13 to 16 between

2007 and 2008, the number of trips declined 13 percent and the number of nonresident participants

declined by 19 percent. There were an average of 2.9 guests per trip in 2008.

POW Guided Freshwater Fishing, 2007-2008

2007 2008 % Change

Businesses 13 16 +23%

Trips 496 433 -13

Nonresident participants 1,542 1,250 -19

Source: Alaska Department of Fish and Game, Division of Sport Fish – Research and Technical Services.


Unguided Sportfishing

Quantifying the impacts of all nonresidents who participated in unguided sporfishing in the Ketchikan area is

beyond the scope of this study. However, the study team was able to estimate the impacts of two segments

of unguided fishermen that contribute significantly to the Ketchikan economy: those who visit lodges and

other accommodation providers that feature unguided fishing packages, and those who rent boats for self-

guided fishing (“bare-boat” rentals). It is likely that these two market segments represent a majority of

spending by unguided, nonresident sportfishing.

There are typically two types of unguided boats: 14- to 18-foot open skiffs and 20- to 23-foot covered boats

with center steering consoles and larger engines. Five Ketchikan area businesses that either rented bare-boats

or offered unguided packages were interviewed for this study, including the three largest businesses in this

market segment. The study team feels that these interviews represent a sizeable majority of unguided fishing

package sales and bare-boat rentals in Ketchikan, and are representative of this segment of the market. In

order to preserve the confidentially of individual businesses, this study examines the unguided lodge/package

and bare-boat rental segments as a whole.

Combined, the business owner/operators interviewed represented a total of 92 unguided boats in 2008 and

provided about 1,650 boat-use days to nonresident anglers. For purposes of this study, it is assumed an

average of two people per boat; therefore these boat-use days represent an estimated 3,300 nonresident

anglers. Unguided sportfishermen spent an average of about 4.5 nights while in Ketchikan.

Sportfishing Industry Direct Employment and Payroll

Employment

There were an estimated 340 direct jobs related to the nonresident sportfishing industry in Ketchikan in

2008. For the most part these jobs were seasonal; they include a mix of part-time and full-time employment.

As stated earlier in this report, there are a variety of business types in the sportfishing industry. Some

businesses are operated by a single person, while others may also employ staff for administrative support,

sales and marketing, meal preparation, housekeeping, maintenance, and fish processing. Due to the

complexity of business types and because not every sportfish industry business was interviewed for this study,

a ratio was developed to identify the level of employment per vessel for those businesses interviewed. The

ratio was based on data from multiple business types and sizes and is considered reasonably representative of

the industry as a whole.

In 2008, there was an average of 1.7 employees per guided vessel during peak season (May-September).

With 141 guided vessels in the Ketchikan area, this results in direct employment of about 240 full-time and

part-time people. Based on owner/operator interview data, there were also at least an additional 45 people

employed with businesses that cater to unguided fishermen.


There were 20 Ketchikan-based jobs related to POW sportfishing operations in 2008. Several remote POW

operations are based out of Ketchikan. These operations employ administrative, sales and marketing, and

maintenance personnel. Some staff were based in Ketchikan in the off-season and on POW during the fishing

season.

Using an estimated average of 15 jobs per million dollars in sales3 for retail businesses, the study team

estimates that total direct retail spending of about $2.5 million4 by nonresident sportfishing participants

accounted for about 35 retail sector jobs in Ketchikan in 2008.

Estimated Sportfishing-Related Ketchikan Employment, 2008

Guided sportfishing employment 240

Unguided sportfishing employment 45

POW businesses Ketchikan-based employees 20

Retail sector employment 35

Total 340

Source: Ketchikan and POW business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded

During the interviews, business owner/operators were asked about their level of local employment.

Owner/operators reported an average Ketchikan resident hire rate of 87 percent. In general, smaller

operations reported higher rates of local hire than larger operations.

Payroll

Businesses owners were asked how much they spent on payroll in 2008. In some cases, the owner’s wages

are the profit left over at the end of the season rather than a regular paycheck. Payroll averaged about

$15,250 per Ketchikan employee (combined average for year-round and seasonal employees). In addition to

payroll, many sportfishing industry participants receive significant income in the form of cash tips.

The vast majority of employees in this industry work a four to five month season. Wages for those employed

in the industry year-round are likely to be much higher. Multiplying employment and average wage results in

an estimated payroll of $5.2 million for Ketchikan-based sportfishing industry employees.

Estimated Payroll for Ketchikan-Based Employment, 2008

Estimated Employment

Average Payroll Estimated Total Payroll

340 $15,250 $5,185,000

Source: Ketchikan and POW business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded

3 IMPLAN estimate. 4 The $2.5 million is the amount of total direct nonresident sportfishing-related spending that was allocated to the retail sector.


Direct Spending

Ketchikan Nonresident Sportfishing Spending

Data Sources

In order to identify nonresident spending related to sportfishing, the study team reviewed several sources of

data.

An initial review of Ketchikan Gateway Borough (KGB) gross sales and tax collection summary statements

yielded inconclusive data. When filing sales tax returns, Ketchikan businesses decide under which North

American Industry Classification System (NAICS) code they report sales. There are four categories in the KGB

records (transportation marine/charters, fishing lodges, hotels, and retail) related to nonresident spending

that are also related to sportfishing. While each of these categories contains sales related to the sportfishing

industry, none solely reflects nonresident sportfishing spending.

Due to the seasonal nature of Ketchikan’s sportfishing industry many businesses participate in different types

of activities in the off-season. For example, a company may offer guided sportfishing in the summer and

provide snow removal services in the winter. However, sales and taxes collected are filed under one NAICS

code, making it difficult to identify sales and taxes related to each business type. Due to confidentiality

restrictions, the KGB is unable to reveal gross sales or taxes collected by business, nor provide the names of

businesses reporting sales in each category.

The study team therefore decided the best methodology to identify direct spending by nonresident

sportfishermen was to estimate the number of participants, length of stay, and average expenditures. The

next section of this report estimates total Ketchikan area spending related to nonresident sportfishing and

summarizes the estimated impacts of each market segment.

This report excludes nonresident expenditures for sportfish licenses or King salmon stamps. It is beyond the

scope of this project to determine which combination of licenses and King salmon stamps visitors purchased.

Nonresident license costs range from $20 to $145 and King salmon stamps from $10 to $100. However,

assuming that each of the estimated 30,400 visitors purchased the minimum one day fishing license would

indicate license sales of $608,000.


Total Direct Spending

Total direct nonresident sportfishing-related spending in Ketchikan is estimated at $15.6 million for 2008.

The majority of expenditures ($11.9 million) were made by visitors who sportfished in the Ketchikan area. An

additional $3.7 million in Ketchikan spending was generated by POW sportfishing visitors and the businesses

that served them.

Total Sportfishing-Related Ketchikan Expenditures, 2008

Type of Expenditure Spending

Ketchikan sportfishing $11,893,000

POW sportfishing-related 3,732,000

Total $15,632,000

Source: Ketchikan business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded

Ketchikan Nonresident Sportfishermen

The study team was able to estimate spending for all Ketchikan guided sportfishermen and for a significant

portion of unguided fishermen. This study includes only spending related to the days nonresidents actually

engaged in sportfishing. An example would be a visitor who spent 14 days in Alaska, seven of the days in

Ketchikan. They participated in guided fishing for three full days and one half-day. The estimates in this study

would only include spending for the three and one-half days the participant was engaged in sportfishing.

In order to protect the confidentially of the businesses that generously provided information for this study,

business types have been grouped, and average spending per participant is reflective of the group rather

than any specific business type.

The table below does not include spending estimates for unguided nonresidents who did not purchase a

fishing package or rent a boat. This group would include nonresidents who fished from the shores of lakes,

rivers, or the ocean, and those fishing with friends and relatives. While visitors in these two categories may

engage in spending for transportation, fishing tackle, bait, accommodations, meals, beverages, gifts,

clothing, and souvenirs, the level of overall spending is likely small compared to spending for other market

segments.


This analysis estimates that nonresidents who participated in sportfishing in Ketchikan had direct

expenditures of at least $11.9 million in 2008. The methodology for estimating spending for each sector is

described in the text following the table.

Estimated Nonresident Sportfishing Spending in Ketchikan, 2008

Type of Fishing Average Daily Spending per

Participant

# of Participant

Days

Estimated Spending

% of Estimated Spending

Unguided (lodges and bare-boat rentals) $310 14,850 $4,631,000 39%

Half-day guided saltwater 170 20,972 3,565,000 30

Full-day guided saltwater 530 6,669 3,535,000 30

Guided freshwater 295 548 162,000 1

Total $11,893,000 100%

Source: Ketchikan business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded.

UNGUIDED FISHING

Unguided fishermen represented the highest percentage of estimated spending for nonresident sportfishing

at $4.6 million, 39 percent of total spending. This group includes lodges and resorts that offer unguided

sportfishing and operations that rent bare-boats. The average rate of $310 per person, per day reflects

spending for accommodations, boats, fuel, tackle, bait, meals, beverages, transportation, gifts, clothing and

souvenirs. Estimates were based on two people per room, and per boat. Generally, operators such as lodges

that offer unguided fishing provide the boat, fuel, tackle, bait, accommodations, meals, and sometimes fish

processing for a package price. Bare-boat rentals generally include normal operating and safety equipment

and one tank of fuel. The renter must provide all fishing-related gear (as well as their own accommodations

and meals). The estimated 14,850 participation days was derived from an estimated 3,300 fishermen staying

an average of 4.5 nights each.

HALF-DAY GUIDED SALTWATER FISHING

Estimated average spending for cruise and non-cruise half-day fishermen combined was $170 per day. With

20,972 half-day trips in 2008, spending in this category was estimated at nearly $3.6 million. Expenditures

for half-day guided fishing trips included cruise passengers who engaged in sportfishing. Spending for this

group was limited to the value of the half-day fishing excursion. Other spending by these visitors while in

port such as meals, gifts, clothing, souvenirs, tours, and attractions were not included because these

expenditures were not directly related to sportfishing. Also included in this category were overnight visitors

who chose to take a half-day fishing excursion as well as a significant number of resort/lodge package

fishermen who fished at least one half-day as part of a package (their full days are counted in the next

category). Per day spending for noncruise half-day fishermen reflects expenditures for accommodations,

fishing, meals, beverages, transportation, gifts, clothing, and souvenirs. For reasons of confidentiality, average

spending rates for the two groups were combined. This resulted in an estimated average spending per

person, per day of $170.


FULL-DAY GUIDED SALTWATER FISHING

Based on published rates and interviews conducted for this study, the average rate for a full day of guided

sportfishing in 2008 was estimated at about $320 per person. This market segment was estimated to spend

approximately $80 per person, per day for accommodations (double occupancy) and an additional $130 per

person, per day on meals, beverages, transportation, gifts, clothing, souvenirs, bait, fish boxes, fish

processing, and tips. In total, spending was estimated at $530 per person, per day, for full-day fishermen.

This estimate was applied to all full-day fishermen whether they were on an all-inclusive package trip or

purchased charter fishing separately from accommodations, meals, etc. With 6,669 full-day fishermen, total

expenditures for this group are estimated at slightly more than $3.5 million.

GUIDED FRESHWATER FISHING

Guided freshwater fishing represented a small portion of overall sportfishing-related spending at $162,000.

The average daily rate reflects those who fished on guided tours to local streams (on the road system) and

those who participated in more expensive fly-out trips. A total of 548 participants (full and half day) spent an

average of just under $300 per trip, per day.

Industry Spending Patterns

Ketchikan-Based Sportfishing Business Expenditures

Ketchikan sportfishing-related business owner/operators were asked to estimate the percentage of their total

spending on goods, services, and labor that was spent locally. Responses were tallied and weighted based on

business size (client volume). Overall, business owner/operators reported that 85 percent of their spending

occurred in Ketchikan.

Nearly one-third of Ketchikan expenditures were for payroll, 29 percent for boats and equipment, 24 percent

for fuel, and 15 percent for other business-related expenses.

Ketchikan Sportfishing Business Expenditures by Percentage, 2008

% of Total Expenditures

Payroll 32%

Boats and equipment 29

Fuel 24

Other spending 15

Total 100%

Source: Ketchikan business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded.


Prince of Wales Island Nonresident Sportfishing-Related Spending

Telephone interviews were conducted with 10 Prince of Wales Island sportfishing businesses (including the

three largest operations on the Island). The businesses represent 50 charter vessels (27 percent of the POW

fleet) that hosted 3,900 guided and 600 unguided nonresident sportfishermen in 2008 (representing about

half of the estimated 9,100 nonresidents who sportfished on POW that year). The POW owner/operator

interviews revealed that POW sportfishing-related spending in Ketchikan totaled nearly $3.8 million in 2008.

This report includes only the estimated Ketchikan spending and employment for those POW businesses that

were interviewed for this study; therefore, the $3.7 million in spending is a conservative estimate of POW

sportfishing-related business spending in Ketchikan. Most of the operations that were not interviewed are

small and likely spent more locally (on POW) than larger operations with Ketchikan offices. The most likely

items that these smaller businesses would purchase in Ketchikan would include floatplane services, groceries,

equipment, and supplies.

Total POW Sportfishing-Related Ketchikan Expenditures, 2008

Spending

POW businesses $3,533,000

Visitor spending 199,000

Total $3,732,000

Source: POW business owner/operator interviews. Note: figures have been rounded.

POW BUSINESS SPENDING IN KETCHIKAN

The POW businesses interviewed reported total direct spending in Ketchikan of $3.5 million in 2008. The

most significant expenditures were for floatplanes at $1.1 million, followed by fuel at $861,000. Combined,

the 10 operations employed approximately 200 people in 2008. About 10 percent were Ketchikan residents

who received payroll and benefits valued at nearly $500,000. Other expenditures included goods and

services such as groceries, parts and equipment, hardware, tools, tackle, and beverages.

POW Sportfishing Businesses Ketchikan Expenditures, 2008

Floatplanes $1,121,000

Fuel 861,000

Payroll 480,000

Other expenditures 1,071,000

Total $3,533,000

Source: POW business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded.


POW SPORTFISHING VISITOR SPENDING IN KETCHIKAN

Of the 4,500 nonresident fishermen represented by the business interviews, about 40 percent spent at least

one night in Ketchikan either on their way to or from POW. These POW sportfishing visitors spent

approximately $200,000 while passing through Ketchikan in 2008. Based on double occupancy, this

represented about 900 room nights in Ketchikan in 2008. At an average 2008 summer rate of about $161,

these POW visitors had direct spending of about $145,000 for Ketchikan accommodations. It was estimated

that this group also spent $30 per person for transportation, meals, beverages, gifts, clothing, and souvenirs

while in Ketchikan.

Not included in this study are expenditures by POW sportfishermen who passed through Ketchikan

International Airport (KIA) but did not spend a night in Ketchikan. It is likely that most of the estimated 9,500

nonresidents who sportfished on POW passed through the airport and made some expenditures while there.

POW Sportfishing Visitor Estimated Ketchikan Expenditures, 2008

Average per Person Spending

# of Visitors

Total Spending

Accommodations (double occupancy) $80 1,800 $145,000

Other expenditures 30 1,800 54,000

Total $199,000

Source: POW business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded.


Economic Impacts

There are three types of economic impacts from nonresident sportfishing-related spending:

• Direct impacts: Include nonresident spending for fishing packages, boat rental, tackle,

accommodations, meals, beverages, transportation, gifts, clothing and souvenirs. Also included are

POW business expenditures in Ketchikan in direct support of nonresident sporfishing on the Island.

These include expenditures for fuel, floatplanes, payroll for Ketchikan based staff, groceries, parts,

and equipment, as well as other goods and services.

• Indirect impacts: Jobs and income in businesses providing goods and services to the Ketchikan

sportfishing industry. For example, vendors who conduct business with a charter operator in turn buy

fuel and other supplies, rent office space, and purchase services from other local providers in support

of their day-to-day business operations. This spending creates additional jobs and income in the

Ketchikan Gateway Borough.

• Induced impacts: Jobs and income created as a result of industry employees spending their payroll

dollars in the local economy.

Indirect and induced economic impacts, often described as multiplier effects, are important components of

the overall economic impact of the sportfishing industry in Ketchikan. In general, however, multiplier effects

for Alaska are limited, as few goods are actually produced in the state.

A model was constructed using IMPLAN multipliers for the following sectors: charter fishing boat operations,

hotel/motel, other accommodations, food and drinking establishments, miscellaneous retail businesses, and

other amusements and recreation. Multipliers were weighted based on estimated expenditures for each

sector.

Spending Impacts

The total estimated economic impact of nonresident sportfishing-related spending in the Ketchikan Gateway

borough was $20 million in 2008, with total estimated seasonal-equivalent employment of slightly more than

400 jobs and total estimated payroll of $6.7 million.

Economic Impacts of Nonresident Sportfishing-Related Spending in Ketchikan Gateway Borough, FY 2008

Direct Indirect & Induced

Total Impact

Employment 340 70 410 Labor income (payroll & benefits) $5,180,000 $1,534,000 $6,714,000 Total spending impact (includes labor income) $15,632,000 $4,446,000 $19,908,000

Source: McDowell Group estimates.

Readers are cautioned to keep in mind that the 410 jobs are for the most part seasonal in nature, and the

indirect and induced impacts would reflect the seasonal nature of this industry. While the study did not


gather data on seasonal versus year-round employment, it is estimated that perhaps 5 to 15 percent of

industry employment is year-round.

Estimated Spending on Accommodations

The accommodations segment of the visitor industry benefits significantly from the nonresident sportfishing

industry. These visitors spent an estimated 23,867 nights in Ketchikan in 2008. Assuming double occupancy,

this represents approximately 11,935 room nights. Based on an average 2008 accommodation rate of about

$161 for double occupancy, nonresident sportfishing visitors generated an estimated $1.9 million in

accommodations revenue.

Estimated Sportfishing Visitor Expenditures for Ketchikan Accommodations, 2008

Visitor Type Visitor Nights Room nights* Total Spending

Unguided visitors 14,850 7,425 $1,195,000

Full-day guided visitors 7,217 3,610 581,000

POW sportfishing visitors 1,800 900 145,000

Total 23,867 11,935 $1,922,000

Source: Ketchikan business owner/operator interviews and McDowell Group estimates. Note: figures have been rounded. *Based on double occupancy.

Taxes

Sportfishing-related spending may be subject to the City’s 4 percent sales tax, the Borough’s 2 percent sales

tax, or both. Spending on accommodations may be subject to the City’s 3 percent bed tax, the Borough’s 4

percent bed tax, or both.

It was not possible to calculate precisely total sales and bed tax revenue collected from nonresident

sportfishing because some of the spending may have been subject to Borough taxes only, and sales by

location is unknown. However, total sales taxes collected from nonresident sportfishermen were likely in the

range of one-half million to $1 million and bed taxes collected in the range of $75,000 to $125,000.

Ketchikan Sales and Bed Tax Rates, 2008

City Borough

Sales tax 6% 2%

Bed tax 7 4

Source: Ketchikan Gateway Borough.


Sportfishing Industry 2009

Business owners and operators were asked if their 2009 visitor volume and total revenues were higher, lower,

or about the same as 2008. Responses were tallied and weighted based on market share.

Ketchikan

Nearly all owners reported a decline in client volume in 2009, with an average decline of 19 percent, while

revenues were down an average of 15 percent. All but one business reported serving fewer clients in 2009.

Ketchikan Sportfishing Business Revenue and Clients, 2009

Avg. % Change 2008 to 2009

Revenue -15%

Guests -19

Source: Ketchikan business owner/operator interviews.

Those who reported declines were asked what they thought were the main reasons. Almost unanimously

owners stated that the severe downturn in the national economy was the most significant factor and that

visitor concerns over sportfish bag limits were also a factor. When referring to the difficult economic

conditions one owner stated “We have had a group of 18 coming to our facility for 10 years; they called and

said they just could not afford it in 2009. They are construction workers from California and they stated they

were basically unemployed.” For the most part, bag limit issues did not affect the unguided nonresident

market or the half-day cruise market as much as the full-day guided markets. In general, these businesses

reported smaller declines than operations offering full-day guided services.


Sportfishing businesses on POW reported much greater declines than Ketchikan businesses. Owners reported

an average decline of 30 percent in guests and 32 percent in revenue. As a group, the larger operations on

the Island reported greater declines than smaller operations. Owners stated that the severe downturn in the

national economy was the most significant factor. According to one lodge operator, “Even people who had

money were reluctant to spend it in 2009.” Owner/operators also stated that visitor concerns over sportfish

bag limits had resulted in cancellations. One owner mentioned that he has delayed the opening date of his

season because of bag limit issues: “I used to open in early June, last year I opened June 24. In early June, my

guests can only keep one king, one halibut, and one ling. They just don’t see the cost of a package in early

June as a value anymore”.

POW Sportfishing Business Revenue and Clients, 2009

Avg. % Change 2008 to 2009

Revenue -32%

Guests -30

Source: POW business owner/operator interviews.


Appendix

Statewide Harvest Area A and B maps

The following maps were provided courtesy of the Alaska Department of Fish and Game.

Jennings, G. B., K. Sundet, and A. E. Bingham. In prep. Estimates of participation, catch, and harvest in Alaska

sport fisheries during 2008. Alaska Department of Fish and Game, Fishery Data Series, Anchorage.

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Documents

Impacts of Nonresident Sportfishing on the …2016/01/01 · Impacts of Nonresident Sportfishing on the Ketchikan Economy McDowell Group, Inc. • Page 4 Telephone interviews were