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Economics & Social Sciences Research Program

Baseline Economic Information about the Alaska Saltwater Sport Fishing Charter Sector, 2011-2013

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As discussed in the Oct-Dec 2013 AFSC Quarterly Report , AFSC researchers developed and implemented an economic survey that collected information on costs, revenues, employment, and services offered from saltwater sport fishing charter businesses in Alaska.  The Alaska Saltwater Sport Fishing Charter Business Survey was conducted jointly with the Pacific States Marine Fisheries Commission (PSMFC) for three consecutive years—2012, 2013, and 2014—to collect data for the previous year’s activities.  A NOAA Technical Memorandum (Lew et al. 2015) that describes the data collection efforts, summarizes the data, and estimates population-level estimates is currently underway, but some of the principal results are reported here.

Since overall response rates were lower than expected in each of the 3 years of the survey1, several adjustments were made to the sample data to generate reliable population-level estimates of costs, revenues, and employment.  These adjustments were made using well-established statistical techniques, namely, sample weighting and data imputation methods.  In this work, auxiliary information on species targeted, fishing effort, location and timing of fishing, and other information collected from the population of charter businesses as part of the mandatory Alaska charter halibut permit (CHP) logbook program were used to adjust the sample data to better reflect the population (sample weighting).  In addition, missing data were replaced with responses from individuals identified as similar according to their fishing activity profiles using the same data (data imputation).  Details about the specific methods used are described in detail in Lew, Himes-Cornell, and Lee (2015).

In the forthcoming NOAA Technical Memorandum, descriptive statistics of the samples of respondents of key variables are presented.  However, comparisons of sample totals and means (averages) across years have limited value due to the different sample sizes each year (174 in 2012, 141 in 2013, and 125 in 2014)2, the low overall response rates, and missing data, making it difficult to draw conclusions regarding year-to-year changes in the charter fishery overall looking solely at sample statistics.

Thus, the analysis focused on generating estimates of the population totals and means for variables related to annual revenues, expenditures, and employment.  To this end, sample weighting and data imputation were applied to associated variables to adjust the sample for population representativeness.  This analysis, which looked at sector-level trends, is a first attempt to provide a basic understanding of the economic conditions in the charter sector leading up to the implementation of the Alaska Halibut Catch Sharing Plan (CSP) implemented in 2014.

Results

  refer to caption
  Figure 1.  Mean total revenues and total expenditures by year forAlaska saltwater sport fishing charter sector, 2011-13.
  refer to capton
Figure 2.  Mean ependitures on labor expenses, charter trip-related expenses, general overhead expenses, and cash payments by year. Between 22% and 27% of active charter businesses completed the survey each year.
Figure 3.  Estimated number of total employee positions (full- and part-time) hired by season.

The adjusted population-level results suggest that in 2011 the Alaska saltwater sport fishing charter sector as a whole operated at a loss, but in 2012 and 2013, as the population of charter businesses shrank, the sector yielded an overall profit.  The 3-year period leading up to the CSP implementation saw slight changes in employment and spending patterns by charter businesses that remained in the fishery.  This includes a shift to using proportionately more part-time employees for on-shore work and decreasing the amount spent on charter trip expenses and cash investments in vehicles, machinery, equipment, buildings and real estate.  At the same time, average revenues increased.

  • Revenue and Cost:  Total estimated revenues for the population of charter businesses ranged from a low of $125 million in 2012 to a high of $172 million in 2013. It is estimated that the charter fishing sector, as a whole, operated at a loss during the 2011 fishing year. During the 2012 and 2013 fishing years, however, estimates suggest the charter fishing sector operated profitably in aggregate as well as on an average basis.  Statistically speaking, there is no significant difference between 2011 and 2012 mean revenues. However, there was a large and statistically significant increase in total revenues for the 2013 fishing year relative to 2011 and 2012. Mean estimated revenues ranged from a low of $208,321 in 2011 to a high of $292,535 in 2013 (see Fig. 1). For 2013, mean estimated revenues were statistically higher than both 2011 and 2012. Moreover, mean costs per business during the 2012 fishing year were statistically lower than the 2011 fishing year. Mean costs rebounded in 2013, but remained lower than they were in 2011. For both 2012 and 2013, mean revenues per business statistically exceeded mean costs per business, further supporting the notion that the charter business sector operated profitably during those years. Estimated overhead expenses were generally the largest category of expenditures for the charter business population and ranged from approximately $32 million in 2012 to $57 million in 2011, while estimated labor costs were generally the lowest expenditure category. Capital expenditures were also relatively small with the exception of 2011. Mean overhead expenditures ranged from $54,000 in 2012 to over $87,000 in 2011 (Fig. 2). Total labor expenditures, charter trip expenses, and capital expenses (e.g., loan payments) were estimated to generally range between $20 million and $30 million per year across the sector. Mean values for these expenditures generally ranged between $35,000 and $85,000 per year per business.

  • Employment:  The fishing year is divided into four seasons:  the early shoulder season (April 1 to mid-June); the main season (mid-June to mid-August); the late shoulder season (mid-August to the end of September); and the off season (October through March). Total employment estimates were highest across all personnel categories (guides and operators, crew, and on-shore workers) during the main season (Fig. 3), and as expected, employment estimates were lowest in the off-season.

The population-level estimates generated from these surveys provide baseline information about the economic conditions of the charter boat sector and provide the data necessary to analyze the economic contribution of the charter boat sector to the economy.  The survey data also provide insights about trends in charter trip prices, off-season activities by charter business operators, and types of clientele that are summarized in Lew et al. (2015).

 

1Between 22% and 27% of active charter businesses completed the survey each year.

2The charter sector decreased in size between the 2012 and 2014 surveys.  In 2011, the population of charter businesses was 650.  In 2012, it declined to 592, and in 2013 further decreased to 572.

 

By Dan Lew, Amber Himes-Cornell, Jean Lee, and Brian Garber-Yonts

 

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