The Cost of Tourism: How Cruise Ships Are Reshaping Life in Skagway, Alaska

Skagway faces a housing crisis as cruise tourism surges

More than 1.35 million tourists arrived in the Alaska coastal town of Skagway via cruise ships in 2025, according to reporting by The Guardian.

This influx, accompanied by more than half a million crew members, represents a massive scale of movement for a community that maintains a year-round population of roughly 1,100 people. The sheer volume of seasonal visitors is fundamentally reshaping the town’s infrastructure, shifting its economy from a balanced local community to one heavily reliant on a single, volatile industry.

As the summer season ends, the streets of Skagway transition from crowded thoroughfares to quiet corridors. The bustling shops reduce their hours, the bunkhouses once filled with seasonal employees empty out, and the massive crowds wearing cruise ship lanyards dwindle to a trickle. However, the impact of those months of heavy traffic is visible in the town's changing topography and its dwindling permanent services.

The disappearing year-round economy

The economic shift is most visible in the loss of essential local amenities. Skagway's mayor, Orion Hanson, said he is worried about whether a year-round community can survive. He noted that the town is losing the very places that allow residents to congregate and live a normal life.

“What does Skagway do without a coffee shop to congregate in or without a restaurant open all the time? We don’t have a diner any more,” Hanson said.

The Sweet Tooth cafe, a longstanding local diner, has already been replaced. It now operates as a storefront for Diamonds International, a tax-free jewelry retailer that partners with cruise lines. While such businesses thrive on seasonal retail, they do little to serve the needs of the 1,100 people who call Skagway home during the long Alaskan winter.

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This volatility creates a precarious environment for local leadership. Hanson said the town is highly vulnerable to external shocks; if the economy relies entirely on cruise ships, the community faces high risk, as the pandemic showed.

The scale of this growth is staggering when viewed through a historical lens. In 1900, Skagway became Alaska’s first official city during the Klondike gold rush, boasting a population of 10,000. By 1910, as the gold rush faded, that number plummeted to 600. Today, the town is seeing a population boom that can occur in a single day as thousands of passengers disembark, only to depart by sunset.

Housing shortages and the squeeze on residents

Skagway’s geography exacerbates its growing pains. The town is tucked into a narrow valley at the northern end of the Inside Passage, surrounded by rugged mountains and forests. With no room for outward expansion and no realistic commuting options, the town is physically trapped.

A 2023 report commissioned by the Skagway Development Corporation identified only 644 housing units in the town. While more units have been added since that study, the supply remains insufficient to meet the demands of permanent residents, seasonal workers, and the families required to maintain essential services.

The shortage has forced the community into unconventional living arrangements. Al Wall, director of the town’s Dahl Memorial Clinic, observed that seasonal workers are increasingly turning to “congregate living and couch surfing.” In some cases, individuals have resorted to sleeping in hammocks in the woods to avoid the crowded conditions of shared housing.

The crisis has been worsened by local policy changes. Janilyn Heger, a longtime resident and owner of Skagway Spirits, noted that a decision by the city to abandon certain types of seasonal housing created a “domino effect” that has been disastrous for the community. She explained that employers have begun purchasing buildings to house staff, which displaces the housing previously available to year-round residents.

The displacement has reached the hospitality sector as well. Mike Healy, a local business owner, eventually converted Sergeant Preston’s—the town’s only year-round hotel—into seasonal housing after being unable to find land to build employee accommodations.

This shift is changing the demographic of who visits Skagway. Jonathan Hillis, a member of the town assembly and owner of the Mountain Shop, suggested that the lack of traditional lodging is creating a cycle that favors cruise passengers over independent travelers.

The following table illustrates the scale of the passenger influx over the last decade:

Year	Cruise Passenger Arrivals
2013	820,000
2025	Over 1,350,000

As the 2026 season concludes, local officials are already looking toward 2027 and 2028. While some nearby towns, such as Juneau, have attempted to implement voluntary limits on daily ship arrivals, Skagway remains in a delicate position. Mayor Hanson emphasized the difficulty of the situation, stating that the town must be “incredibly careful about not rocking the boat” given its economic dependence on the industry.

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