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Tourism bill introduced
By Journal Staff
Responding to declines in non-cruise ship visitors to Alaska, state Senate President Gene Therriault, R-North Pole, Jan. 9 filed tourism marketing legislation that may allow Alaska to increase its marketing budget.
The Alaska Travel Industry Association requested the measure.
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Modeled largely after the Alaska Seafood Marketing Institute, Senate Bill 254 allows the industry to impose a 2 percent assessment on tourism-related goods and services in the state. Those services range from day tours to overnight accommodations. The assessment will generate an estimated $18 million.
"I support marketing Alaska as a tourism destination because of the benefits it brings to Alaskan owned and operated businesses," Therriault said in a statement. "These benefits include jobs, increased property tax base for local governments, and increased sales tax revenues for those communities that have them."
More than 1.5 million people visit Alaska each year, spending more than $1.8 billion in the state. Surveys conducted by the Department of Community and Economic Development found visitors coming to Alaska by domestic air, highway, and ferry declined 2 percent over 2002 arrivals.
Other studies done for ATIA have shown that small adventure-based businesses and those in the Interior have been hit the hardest by the downturn in tourism.
Many businesses experiencing declines are located along the Richardson Highway corridor, which Therriault represents.
Said Therriault: "For years, legislators have been asking the tourism industry to identify a way to pay for increased marketing efforts. Now that they have come forward with such a proposal, I want to make sure they have an opportunity to make their case to other legislators."
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The Alaska Travel Industry Association supports a 2 percent statewide seasonal tourism tax in Alaska.
"We believe this self assessment will double our marketing budget and allow us to regain growth for all sectors of the industry - small and large," said Ron Peck, president and CEO of the ATIA.
Peck presented an update on Alaska tourism marketing to about 50 members of the Alaska chapter of the American Marketing Association Jan. 8 at the Anchorage Hilton Hotel.
The ATIA has about 850 members and a $10 million budget. Peck said the 2 percent tax on land-based activities could increase its budget to $20 million and help promote Alaska tourism.
"Bottom line, we are very important to the economy and we're too important to be short-changed," Peck said.
Pending legislation in Juneau includes a 5 percent hotel tax and a $5 per head cruise tax. As lawmakers hash out the state budget and the chunk allocated for tourism, Peck said the ATIA wants to "be at the table, not under the table."
Tourism is a big part of the Alaska economy.
It provides 1 in 8 jobs in the private sector, with a 78 percent local hire rate, Peck said.
Tourism generates about $125 million in state and local taxes and fees each year, and it is the leading industry in Southcentral Alaska, Southeast and the Interior, he said.
All told, about $1.8 billion is spent in annual Alaska visitor expenditures, or $1,260 per person visiting.
The cruise ship industry alone provide 16,455 jobs and generates $595 million in direct purchases, Peck said.
As Alaska tourism has grown, there have been 34 new hotels built in Alaska since 1997.
"We don't have an infrastructure problem," Peck said.
Currently, the ATIA gets about 40 percent of its budget from state contracts, or $4 million, 26 percent from partnership programs and 19 percent from cruise line contributions.
On the marketing front, Peck said the ATIA has produced new TV spots in 2004 for the first time in 10 years.
"We want to raise the image and awareness of Alaska as a great destination," he said.
The ATIA also has a new logo and motto for this year: "Alaska. Beyond Your Dreams. Within Your Reach."
Peck said that the three things that draw visitors to Alaska are mountains, glaciers and wildlife.
"The three reasons people come to Alaska hasn't changed in 25 years," Peck said. "And once they get here they discover our great Native cultures and our great people."
Peck reported that Internet hits are up at the ATIA Web site, TravelAlaska.com.
"People are using the Internet to make travel decisions," Peck said.
The ATIA also will do direct mailing of 2.3 million piece of mail, including a letter from Gov. Frank Murkowski that has proved very effective.
To promote Alaska internationally, the ATIA has representation in five countries: Australia, Japan, German-speaking Europe, the United Kingdom and Korea.
Peck also expressed pleasure at seeing Japan Airlines offer summer flights to Alaska, and he hopes that JAL will eventually offer winter service.
On the public relations front, the ATIA is in its third year of hosting a media road show, and got good response from a two-day event when travel journalists were hosted. Press kits were updated last year and put online.
Summer remains the main tourist season, with 83 percent of tourists coming in the warmer months. Peck would like to change that figure but said challenges remain for winter.
Peck did express some concern about independent travel, which has flattened out in the last couple years.
