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Legal concerns over a $50 head tax and future tourism marketing were among the topics discussed at the 2009 Southcentral Tourism Summit in Anchorage Aug. 20.
Summit seeks to bring cruises back to Alaska towns 090909 BUSINESS 1 Alaska Journal of Commerce Legal concerns over a $50 head tax and future tourism marketing were among the topics discussed at the 2009 Southcentral Tourism Summit in Anchorage Aug. 20.
Wednesday, September 09, 2009

Story last updated at 9/9/2009 - 11:37 am

Summit seeks to bring cruises back to Alaska towns

Legal concerns over a $50 head tax and future tourism marketing were among the topics discussed at the 2009 Southcentral Tourism Summit in Anchorage Aug. 20.

The goal of the summit was to find solutions to the decline in visitors to the state, and to discuss the resulting economic impacts caused by fewer cruise passengers expected during the 2010 season.

The summit started off with questions about the legality of cruise ship taxes and the need for an immediate full blown marketing campaign to ensure travelers and cruise ships return to the state after the 2010 season.

Gov. Sean Parnell set the stage for the event by announcing that the attorney general would research the legality of cruise ship passenger head taxes.

Parnell said at a similar tourism summit in Southeast Alaska that he did not support the repeal of the $50 head tax on cruise passengers, but talked about the need to maintain and stabilize the cruise ship environment.

A panel of speakers from the industry spoke at the event. They were Ron Peck, Alaska Travel Industry Association; Stan Stephens, Stan Stephens Glacier and Wildlife Cruises; Rick Erickson, Cruise Line Agencies of Alaska; Susan Bell, McDowell Group; Julie Saupe, Anchorage Convention and Visitors Bureau; and Deb Hickok, Fairbanks Convention and Visitors Bureau.

The panel urged support for bills in the House and Senate that would offer corporate tax credits. The two bills, introduced in the last legislative session, would redirect cruise lines' corporate income taxes into a tourism marketing campaign that would be led by the Alaska Travel Industry Association. Cruise lines that contribute to the marketing effort would receive tax credits against the contribution.

"Alaska has to send a message to the cruise operators that Alaska is open for business," said Rick Erickson with the Cruise Line Agencies of Alaska in Ketchikan.

A reduction in cruise ship passenger traffic is projected, as cruise companies have redeployed four ships to other destinations. Figures from the economists at the McDowell Group and the Alaska Travel Industry Association expect 150,000 fewer visitors to the state in 2010 season.

Changes in cruise ship deployments for the 2009-2010 season will reduce passengers to Juneau by 16 percent, or 150,000 fewer tourists.

Sitka and Whittier will see a drop of 41 percent, while Haines passengers would decline by 32 percent. Ketchikan, Skagway, Seward, and Icy Strait also will see double-digit declines. No ships will stop in Wrangell.

Some 600,000 passengers cruised the Inside Passage in 2009. That is expected to drop to 580,000 in 2010. Gulf trips are expected to drop from 400,000 in 2009 to 280,000 in 2010.

Valdez tourism businessman Stan Stephen of Stan Stephens Cruises Inc. said if tour companies are going to make money, they have to spend some, and that can be done through supporting the bills for the marketing campaigns.

"ATIA desperately needs an increase in funds for marketing," he said. "I believe that the state should give back at least $20 million of the $200 million paid into the general fund by cruise ship passenger head tax."

ATIA's Peck said he needed at least $20 million to promote Alaska, up from the $12 million currently budgeted.

Erickson said that once cruise companies change ship destinations, it is unlikely that they will return.

"It is likely that if we don't do something, that cruise lines will not come back," said Erickson.

Pie charts showing the impacts to the Alaska tourism industry were dramatic, displaying a reduction in visitor spending, which results in a loss of hotel lodging tax revenues, which, in turn, will have a negative impact on the Railbelt communities. It is projected that some tourism businesses will not survive the downturn.

The 1.1 million passengers to Alaska spent an estimated $636 to $934 each, according to figures from the McDowell Group. Tourists spend a total of $1.6 billion a year on various forms of transportation.

At the end of the discussion, Rep. Jay Ramras, who represents Fairbanks and is the owner of a hotel, answered questions about legislative support for the House and Senate bills.

"HB 167 has good bi-partisan support, and I hear that SB 138 has similar support in the Senate," said Ramras. "Wearing my other hat, you can be sure that this is important to both my businesses and to Fairbanks. I hired fewer workers this season that represent young people going to college or by those that use their jobs as a safety net to survival. You can be sure that these numbers will have a direct impact to local economies."


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