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PUBLISHED: 5:42 PM on Wednesday, February 27, 2008
New funding for tourism marketing is smart investment
Tourism is big business in Alaska.

How big? Visitors spend more than $1.5 billion in Alaska each tourism season. And that is the money spent once they reach Alaska, and does not include the cost of getting here!

It's also a growing business, with the total number of visitors to Alaska increasing 5.1 percent in 2007, to more than 1.7 million people. One in three are return visitors. And on average they spent $934 each.

More than one of eight jobs in Alaska - more than 40,000 - is created by or linked to tourism. But beyond the direct employment, most Alaska businesses and workers are affected in one way or another by tourism, benefiting from the ripple effect in the state economy.

As a promotional item the Alaska Travel Industry Association reminds "Tourism is everybody's business."

It's big business in the Southeast, too. Juneau is a hub of local tourism, hosting almost one million cruise ship visitors in 2007. Many of our other Southeast communities, from the charter fleet of Sitka to the shops of Skagway to the lodges from Ketchikan to Gustavus, are far more dependent than the state Capital on tourism.

And most of the companies in our travel industry are small ones, often family businesses working long and hard to make our visitors welcome, while providing for their loves ones.

That's the good news.

Now the bad news.

A substantial portion of the funding for marketing to draw those visitors to Alaska could disappear 2009, as a byproduct of the head tax put on the cruise ship industry last year.

"Where we are right now is still operating under the Millennium plan, put together in 1999, basically a way to privatize Alaska tourism marketing," said Dave Worrell of the Alaska Travel Industry Association. Under that plan, the State matches whatever funds 50/50 the industry generates on its own.

In round numbers, the total budget for 2008 is $10 million. Of that, the ATIA generates about $2.4 million through cooperative ad programs and the cruise industry has traditionally voluntarily contributed another $2 million. With contributions from convention bureaus throughout the state, there's about $5 million which the state will match.

Another grant geared to attracting more independent travelers added another $893,000 for 2008.

"In 2009 what is happening is passage of the cruise ship ballot initiative leveled new taxes on the cruise lines," Worrell said. "Since they had been paying voluntary in past, and now they are taxed, they are not making those voluntary contributions."

That's a net loss of $2 million to tourism marketing, which with the 50/50 match from the state, equals a $4 million loss in marketing funds.

The cruise lines are expected to only contribute $1 million voluntarily in 2008 as well, he said.

That loss, needless to say, has both ATIA and tourism officials in every Alaska community fearful.

"That is the big concern," Worrell said. "Once that money is gone, with our coop marketing program able to raise $2.4 million or so, that's our only source of revenue."

ATIA is leading a concerted campaign to maintain or expand state's funding for tourism marketing. The industry is asking for the state to contribute $9 million in 2009 - $8 million of it for overall marketing and another $1 million in state funds directed toward attracting independent travelers.

House Bill 147, sponsored by Speaker John Harris, R-Valdez, would address the shortfall by changing the matching funds formula, from the current 50/50 match to the 70/30 match that was used when the program began. At 70/30, the current $2.4 million ATIA generates would generate $8 million in matching funds for 2009.

"We are not asking for new funding per se," Worrell said. "What we are asking for is the proceeds of the vehicle rental tax. When that tax passed originally the language of that tax suggested it be used to fund tourism marketing."

The vehicle rental tax has gone into the General Fund each year, but only last year was it used for tourism marketing.

Is $10 million a lot of money? Yes - except in marketing circles.

In a world where 30 seconds on the Super Bowl costs $3 million and presidential candidates are raising that much daily, the competition among both media and messages continues to escalate at an exponential rate, and cost.

"Our buying power has eroded," said Lorene Palmer, executive director of the Juneau Convention and Visitors Bureau. "It's a pretty basic business fundamental. If you don't market your business, you won't get customers.

"We have been totally relying on the cruise industry to market Alaska in the (tourism) marketplace. The amount of money we are working with, by comparison, is not competitive.

"It's trickle-down marketing. Small businesses don't have the kind of budget to reach into the national marketplace. They have to leverage the efforts of their local CVBs and of the state marketing. We (at the CVBs) have to leverage the investment ATIA makes."

The majority of the state marketing budget goes to direct mail programs, based around the state vacation planner and website, Worrell said. There's limited advertising in travel press, some cable television advertising and some travel media public relations.

The marketing budget has now increased while advertising rates in all media have, he added.

There doesn't seem to be many wasted dollars - for each dollar spent on marketing Alaska tourism, tourists return $168 to the state.

Would they all take their money somewhere else if we quit inviting them?

Probably not, at least this year. But tourism is a grossly competitive industry, as competition in air travel has driven down fares, opening up more of the world to both American and international visitors. Alaska is competing with the rest of the tourism world. At the same time, there are cheaper destinations than Alaska.

As other industries are challenged or declining, it's important we continue and expand our investment in Alaska tourism.

If you're interested in adding your voice to support more funding for to market Alaska tourism, call or email your state officials. You can learn more at www.alaskatia.org/.

Lee Leschper is general manager of the Capital City Weekly and advertising director of the Juneau Empire. Email him at lee.leschper@morris.com.


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