Governor's task force adopts call for $12.5 million for post-Sept. 11 tourism ads

JUNEAU -- Lacking its own independent analysis, a task force appointed by Gov. Tony Knowles recommended the Legislature approve a special interest group’s request to spend $12.5 million in promoting tourism in Alaska.

The 13-member panel tapped to study how terrorist attacks on the East Coast affected Alaska’s economy has adopted a call by the Alaska Travel Industry Association to spend state funds to target potential vacationers.

Debby Sedwick, commissioner for the state Department of Community and Economic Development and co-chairman of the panel, said tourism is one area where spending could have an immediate impact.

"The trickle-down effect from tourism is really pretty big," Sedwick said.

Sedwick said the panel lacked the time and resources to analyze the request by the Alaska Travel Industry Association, but she said it was important to act proactively to stave off potential losses in the industry.

The recommendation was not unanimous and some members opposed specifying a dollar amount for a marketing campaign, the report said.

Tourism accounts for 30,700 jobs in Alaska and is the state’s second largest private sector employer, the report said. A 1999 study by the McDowell Group showed 20,300 direct jobs are derived from the industry, including nearly 16,000 wage and salary jobs.

The tourism industry expects to lose about $223.8 million next year and 3,596 jobs if its initial forecasts hold true.

The tourism association said a recent poll showed a 30 percent drop in airline bookings and a 39 percent drop in cruise ship bookings.

Association members reported about a 23 percent decline in inquiries and bookings from the same time last year.

"If it’s a bad year this year, it’s likely to draw a lot of small businesses out of business," said Scott Goldsmith, an economist with the University of Alaska Anchorage and a member of the panel.

The panel recommended targeting advertising to West Coast markets through cable TV, direct mail and the Internet. It said the state could cut projected losses to tourism by as much as 57 percent, but Goldsmith conceded that "it’s very difficult to forecast consumer behavior in an area like this."

Knowles’ spokeswoman Claire Richardson said the governor has not read the report but will consider its recommendations. Republican leaders in the Legislature also have not read the report, a GOP spokesman said.

Elsewhere, the group concluded Alaskans will pay more in insurance and businesses will spend more on security costs in the short term.

In the long term, the forecast is unclear, the panel said. It recommended that the panel continue to meet next year.

Among its findings are:

The cost of insurance, including aviation insurance, is expected to continue to increase. Some quotes for reinsurance have been 300 percent to 1,900 percent above previous premium levels for the same coverage. The attacks on Sept. 11 had no effect on jobs in Alaska. The state’s unemployment rate actually dropped from September to October.
12/30/2001 - 8:00pm