Legislature(1995 - 1996)

02/07/1995 03:02 PM House ITT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   HOUSE SPECIAL COMMITTEE ON                                  
                 INTERNATIONAL TRADE & TOURISM                                 
 February 7, 1995                                                              
 3:02 p.m.                                                                     
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Beverly Masek, Chairman                                        
 Representative Alan Austerman, Vice Chairman                                  
 Representative Jeannette James                                                
 Representative Brian Porter                                                   
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Pete Kott                                                      
 Representative Irene Nicholia                                                 
 Representative Caren Robinson                                                 
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 Alaska Visitor's Association Overview                                         
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 JOHNE BINKLEY, President                                                      
 Alaska Visitor's Association                                                  
 1975 Discovery Drive                                                          
 Fairbanks, AK  99709                                                          
 Telephone:  479-6673                                                          
 POSITION STATEMENT: Gave an Overview of Alaska Visitors                       
     Association                                                               
                                                                               
 BRAD PHILLIPS, Chairman                                                       
 Alaska Tourism Marketing Council                                              
 Phillips Cruises and Tours                                                    
 P. O. Box 100034                                                              
 Anchorage, AK  99510-0034                                                     
 Telephone:  276-8023                                                          
 POSITION STATEMENT: Offered comment regarding wintertime tourism              
                                                                               
 ROD BRADLEY, Owner                                                            
 Bradley/Reid Communications                                                   
 1840 S. Bragaw                                                                
 Anchorage, AK  99508                                                          
 Telephone:  276-6353                                                          
 POSITION STATEMENT: Offered comment regarding winter scenes in                
     marketing                                                                 
                                                                               
 DENNIS BRANDON                                                                
 Westmark Hotels                                                               
 880 H Street, Suite 101                                                       
 Anchorage, AK  99501                                                          
 Telephone:  272-9403                                                          
 POSITION STATEMENT: Offered comment regarding task force results              
     on access issues in Denali                                                
                                                                               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE  95-1, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Special Committee on International Trade & Tourism was              
 called to order by Chairman Beverly Masek at 3:02 p.m.  Members               
 present at the call to order were Representatives Masek,                      
 Austerman, James, and Porter.  Members absent were                            
 Representatives Kott, Nicholia, and Robinson.  (The meeting was               
 not teleconferenced.)                                                         
                                                                               
 CHAIRMAN BEVERLY MASEK offered each of the committee members an               
 opportunity to present themselves to the speaker and audience                 
 beginning with Vice Chair, Representative Austerman.                          
                                                                               
 Number 023                                                                    
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN mentioned that he's from Kodiak                 
 Island, District 6, and he previously sat on the Alaska Tourism               
 Marketing Council (ATMC).                                                     
                                                                               
 REPRESENTATIVE JEANNETTE JAMES announced she's from North Pole                
 and is a strong proponent of tourism and associated activities.               
                                                                               
 Number 032                                                                    
                                                                               
 REPRESENTATIVE BRIAN PORTER stated he is from midtown Anchorage,              
 District 20, and he shares the views of the previous two                      
 speakers.                                                                     
                                                                               
 Number 034                                                                    
                                                                               
 CHAIRMAN MASEK asserted that she is trying to make this committee             
 as geographic as possible in order to have statewide                          
 representation.  One of the ideas on a format of how she'd like               
 to conduct this committee is to call in different agencies                    
 statewide to get testimony regarding their past accomplishments               
 and to bring up any goals or plans they have for the future.  She             
 would like a general overview of what they have done statewide                
 and what plans they have for tourism statewide coming up to date              
 for FY 95.  While acknowledging that planning is very hard, she               
 expects it to go really well.  She divulged today's agenda as                 
 being an overview by the Alaska Visitor's Association (AVA) and               
 if there are members of other agencies who would like to share                
 information with the committee, she would appreciate that.                    
                                                                               
 Number 097                                                                    
                                                                               
 CHAIRMAN MASEK thanked everyone for showing up and for their                  
 interest.  With tourism being one of the state's largest                      
 industries, she can foresee in the future leaning more and more               
 toward tourism, and she would like to get more input from other               
 people as well.  On that note, she turned the floor over to Johne             
 Binkley.                                                                      
                                                                               
 Number 112                                                                    
                                                                               
 JOHNE BINKLEY, President, Alaska Visitor's Association, voiced                
 his appreciation for the opportunity to come before the committee             
 and give an overview on the Alaska Visitor's Association.  He                 
 noted that some may be familiar with all the different aspects of             
 AVA, ATMC, and DOT and some may be new to that so, he'll overview             
 all those different aspects.  The AVA is a nonprofit organization             
 made up of people in the industry.  It is people who are                      
 interested in tourism, business people who contribute their own               
 money to the association to further the goals they have in                    
 promoting tourism in Alaska.  It was originally formed in the                 
 early 1950s, actually about 1950.  Some of the people who were                
 involved in the industry, including his parents at the time, felt             
 that it was important to have a statewide organization to start               
 working towards bringing more people up to Alaska rather than                 
 just promoting their own individual businesses so, they formed                
 the AVA.  It struggled along in the early years with a very                   
 minimal amount of marketing.  In the early 60s, after statehood,              
 the state got involved in marketing tourism and started to spend              
 some money on destination-marketing of marketing Alaska outside.              
 They formed a partnership in the 70s when they felt it was                    
 beneficial to have the input from the private sector and some of              
 the money from the private sector along with the state money--to              
 combine those efforts to market the state and bring people up to              
 Alaska.  That was really formalized in legislation in 1987 with               
 the formation of the Alaska Tourism Marketing Council (ATMC).                 
 That council is made up of 11 members basically who are appointed             
 by the governor and, 10 members that come from the private                    
 sector.  Those 21 members decide what the marketing plans should              
 be for the state of Alaska to generically market Alaska to bring              
 people up to the state and to get them interested in traveling to             
 Alaska.  There's public dollars, state dollars, associated with               
 that and private dollars.  Right now, the percentages are 75                  
 percent state dollars, 25 percent industry dollars and, spending              
 those monies is determined by that 21-member council that comes               
 from the private sector and the state government side.  It's been             
 extremely successful and it really has been a program that's been             
 the envy of other states around the country, because you have the             
 strength of the funding of the state but, you also have the                   
 participation of the private sector who has their own money                   
 involved in it and, who brings to the table, to the council,                  
 expertise in marketing.                                                       
                                                                               
 Number 163                                                                    
                                                                               
 MR. BINKLEY added they are driven by results unlike some                      
 government agencies where it's simply a question of getting your              
 annual appropriation and spending the money.  In the private                  
 sector side, if you don't produce results with your marketing                 
 dollars, you're not in business anymore.  And they're continually             
 looking at the results they get from the monies that are spent in             
 that program.  As a consequence, you get an efficient use of                  
 those dollars and how they are spent.  They're very, very proud               
 of the program; they think it's very successful.  Unfortunately,              
 the funding was dramatically cut this last year and, there are                
 several different ways they go about marketing the state.  But                
 one of the most important ones is the image advertising, where                
 they create in peoples' mind the desire to travel to Alaska.  And             
 there are other mechanisms that they go about to convert that                 
 desire or that image of Alaska, into an interest where they                   
 actually take an action to get some information about Alaska and              
 then where they actually sell them on coming to Alaska.  But what             
 they've had to do as the budget has been cut, is virtually                    
 eliminate all of that image marketing.  And the way they do that              
 primarily is through television--similar to probably how all of               
 you went through your campaigns last fall, you know how important             
 television is in reaching your constituents or your markets.                  
 This year for the first time in years and years they will                     
 virtually be off the television.  The screen will be blank when               
 it comes to people making their decision about where to travel.               
 It may not hurt them so much in the short run as it does in the               
 long run.  It's very similar to a farmer planting the seeds.  You             
 have to plant those seeds and nurture them before he actually can             
 harvest the product.  And the image advertising is what plants                
 the seeds in peoples' minds and gets them interested in traveling             
 to Alaska.  And when they stop doing that, pretty soon they don't             
 have a crop the next year that's going be coming up.  And so                  
 they're very, very concerned about that.                                      
                                                                               
 Number 201                                                                    
                                                                               
 MR. BINKLEY mentioned that they've spoken to the Governor.                    
 During the course of the campaign, he had indicated that he's                 
 going to introduce a supplemental to try and get some money back              
 into the budget so they can get back on the air this spring and               
 start planting some of those seeds in peoples' minds so they                  
 don't have that dip in the growth of tourism.  It's been growing              
 steadily, about 8.1 percent over the last five years has been the             
 rate of growth for the industry.  It produces a tremendous amount             
 of economic activity.  Like any other industry, a lot of that                 
 economic activity, the overall expenditure of it goes to areas                
 outside of Alaska.  When people buy a ticket in Des Moines, Iowa              
 to fly up to Alaska or they drive their motorhome up to Alaska                
 some of those expenses they expend in the course of that are                  
 spent in places outside of Alaska.  But it's an industry that                 
 brings a tremendous amount of the percentage of that into the                 
 state and, in the employment in the state.  They're proud of the              
 fact that 84 percent of the people that are hired in the industry             
 are Alaskans.  It provides job opportunities to young people,                 
 people who are working their way through college, in many cases               
 just getting started.  It gives them an entry into an industry in             
 which they can proceed up the ladder.  He related the example of              
 Ray Pederson who started as a baggage handler and is now                      
 president of Princess Tours.  There are many other such examples.             
 Also, it's an industry that offers a lot of opportunity for small             
 operations who don't have a lot of capital, that want to work for             
 themselves to get started in the business.  He mentioned the                  
 literally hundreds of bed & breakfast operations around the state             
 who have invested a little money in modifying their homes, taking             
 guests in - it's a family operation and income.                               
                                                                               
 Number 235                                                                    
                                                                               
 MR. BINKLEY informed the committee that in their family                       
 operation, they have 21 members in their family, 19 of which work             
 in the business.  They're proud of that; it's a family-oriented               
 business.  The two that don't work are less than five years old;              
 he anticipates they'll be joining the business.  It's a great                 
 industry, a lot of fun, it's growing and expanding.  It's also                
 fun because it's serving people.  They come up to see Alaska and              
 when you take the time to show them your home and what's                      
 beautiful about Alaska, they're very appreciative.  It makes it               
 very rewarding.                                                               
                                                                               
 Number 251                                                                    
                                                                               
 CHAIRMAN MASEK called a brief recess to accommodate the people                
 overflowing into the hall.                                                    
                                                                               
 CHAIRMAN MASEK asked if Mr. Binkley had concluded.                            
                                                                               
 MR. BINKLEY affirmed that he had and he'd entertain questions.                
                                                                               
 Number 259                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN thanked him for coming.  He supposed the             
 biggest question will come back again this year on the taxation               
 issues that they addressed last year.  Of course, he was on the               
 other side addressing it.  Is the AVA and the ATMC, or the                    
 industry still at the same position they were before, in that                 
 before they were willing to place taxes on the ATMC that they'd               
 need to look back to the constitution, the amendment?                         
                                                                               
 Number 265                                                                    
                                                                               
 MR. BINKLEY responded that the industry feels it contributes a                
 substantial amount to the general fund.  There are revenues that              
 have been estimated as high as 52 million that are                            
 (indisc.--coughing) back into the state coffers.  While some of               
 that goes to the Alaska Marine Highway System, some to the Alaska             
 Railroad, some to the airport funds but, there are significant                
 revenues that are generated as a result of the industry that go               
 back into the government, not only state but, particularly local              
 state, (i.e., bed taxes, city property taxes, sales taxes).  That             
 generates a tremendous amount of revenue for local governments.               
 Just  corporate income taxes alone from the visitor industry is               
 well over five million that comes back directly in the fund.                  
 There are revenues that are coming back into the state's general              
 fund.  Those revenues have been increasing over the years.  Every             
 year when the visitor industry grows, the amount of revenue that              
 comes back into the general fund grows as well.  Even though the              
 contribution back to the general fund is growing, the budget for              
 marketing is being cut back.  They're concerned if we speak of                
 additional revenues that they might generate from the industry                
 going to the general fund, those might not necessarily translate              
 into additional marketing dollars.  That's been their experience              
 in many local communities in dealing with our convention &                    
 visitor bureaus.  For example, in Fairbanks when the bed tax was              
 first initiated, the industry supported it because 100 percent of             
 those revenues were going to go back into marketing Fairbanks,                
 thereby bringing more people into Fairbanks.  What's happened is              
 that covenant with the city council has been lost, new members                
 come and go on the council and now they're down to about 55                   
 percent of the bed tax dollars going toward marketing.  So when               
 we start talking about taxes or raising revenues at the state                 
 level, they're concerned that they'll offer up or support a                   
 revenue proposal that will just go into the black hole of the                 
 general fund and won't translate into more marketing.  Their                  
 approach has been support of measures to raise additional revenue             
 but, they'd like to see some assurance that those monies would go             
 back into marketing.  The only real true mechanism there is for               
 such an assurance would be an amendment to the constitution.  The             
 reality of that is pretty tough.  People are very hesitant to                 
 dedicate revenues in this state.  He reiterated that their                    
 position has been that they'd be supportive of taxes but, they'd              
 have to have a constitutional amendment to be able to protect                 
 those to go into marketing.                                                   
                                                                               
 CHAIRMAN MASEK asked if there were any other questions.                       
                                                                               
 REPRESENTATIVE JAMES noted that despite the large amount of                   
 monies that go into the aforementioned AARC, marine highway and               
 airports, that is for services provided.  If you didn't need to               
 provide the services, you wouldn't need the money.  She doesn't               
 think that is an extra money; it is something that runs through               
 the coffers and they like that.  The corporate income taxes is                
 certainly an issue.  She expressed a concern about the services               
 they have to provide to tourism that are extended like road and               
 emergency services, public safety and those issues on our                     
 highways.  Last time they had an amendment, supposedly for the                
 constitution which would have set up a dedicated fund for                     
 transportation needs, and she would tend to support such an issue             
 though it would not be politically advisable to get involved now              
 but, in the future she might be willing to do that.  If there                 
 were dedicated funds for the highway issue, would he be opposed               
 to additional fuel taxes they might be able to impose that would              
 directly affect the visitor industry?                                         
                                                                               
 MR. BINKLEY asked if she meant fuel taxes that would go to                    
 highway maintenance?                                                          
                                                                               
 REPRESENTATIVE JAMES responded yes.                                           
                                                                               
 MR. BINKLEY stated he'd have to go back to the board and that                 
 would be a board position they'd have to come up with.  He felt               
 that it's important to the visitor industry that the highways are             
 well maintained and they're supportive of adequate maintenance in             
 upgrading of the highways and if that requires more money to be               
 able to do that, he thought they'd be willing to do that however              
 they could.  He said if that was through additional fuel taxes                
 you'd probably find the visitor industry supportive of that if                
 they knew that was going to go back into maintaining those                    
 highways.                                                                     
                                                                               
 Number 346                                                                    
                                                                               
 CHAIRMAN MASEK asked if the AVA is happy with the direction the               
 state has taken with the dollars into marketing so far.                       
                                                                               
 MR. BINKLEY reflected that an area he didn't really mention was               
 the Division of Tourism, a statement of the Department of                     
 Commerce, that has marketing responsibilities.  They market                   
 primarily the international market.  They do developmental                    
 markets and a lot of other functions that it would be better to               
 have them testify before you on their aspects that they work on.              
 The ATMC is the entity that AVA is directly involved with, and                
 they do the domestic marketing.  AVA is very happy with the                   
 direction that the ATMC is going.  Theyre supportive of them,                 
 they participate in that and they think theyre headed in the                  
 right direction.  They understand the Division of Tourism that                
 they have a vital role to play in bringing more visitors to                   
 Alaska from other destinations.  Theyre supportive of them and                
 the missions they have.  But they really dont have an                         
 opportunity to participate in how the Division of Tourism                     
 actually spends their money.  Thats a function of the Department              
 of Commerce, ultimately.  They dont get involved in how they                  
 decide to spend the money within the department but, theyre                   
 supportive of the things they do.                                             
                                                                               
 Number 369                                                                    
                                                                               
 CHAIRMAN MASEK related complaints from her district about foreign             
 and statewide investors who are using and selling Alaska but,                 
 theyre leaving with little income to the state in return.  Does               
 he have any idea how we can get them to pay their fair share in               
 Alaska?  For instance on the Deshka River out by Lake Clark area,             
 there are many foreign investors who have lodges put up and they              
 pay out of country to come to Alaska.  So when they come here                 
 they spend very little and they leave with practically                        
 everything, boxes and boxes of fish.  Are there any ideas he                  
 might be able to share with this committee on foreign people                  
 owning lodges, etc., in Alaska who travel here and they dont                  
 really pay in Alaska; they do all of their booking out of the                 
 country.                                                                      
                                                                               
 Number 383                                                                    
                                                                               
 MR. BINKLEY responded thats not an issue that theyve really                   
 looked at and it hasnt really come to AVAs attention and                      
 frankly, one he wasnt aware of until she mentioned it now.  But               
 he could understand the concern particularly of the people who                
 live in that area, if they see the good properties, the lodges                
 that are located in the right spots for fishing, are going to                 
 foreign investors and, people come in the summertime                          
 and run them and leave and theres not much left for the local                 
 community.  Its not an issue that hes really looked at that                   
 carefully or thought much about but, hell give it some thought.               
                                                                               
 CHAIRMAN MASEK would appreciate it.                                           
                                                                               
 MR. BINKLEY offered that there is an issue that some people raise             
 about foreign investment by larger companies.  For example, two               
 of the largest cruise ship companies that come to Alaska are                  
 Holland America Line Westours and Princess Tours.  Princess Tours             
 is owned by a British company and Holland America Line Westours               
 is owned by Carnival which is a Panamanian company.  So they are              
 both foreignly-held companies.  The capital investment thats                  
 necessary to offer the kind of product they have in Alaska is                 
 tremendous.  One of those cruise ships nowadays cost about $260               
 million.  There arent realistically any entities in Alaska, any               
 local companies that can afford that kind of a capital                        
 investment.  Anytime you buy one of the new motorcoaches, its a               
 quarter of a million dollars at least.  A hotel, the hotel that               
 Princess Tours just built in Fairbanks, $20 million.  There are               
 very few companies and people in Alaska that can afford that kind             
 of capital investment and have the infrastructure necessary to                
 bring those volumes of people up to Alaska and move them                      
 throughout Alaska.  Its probably like any other resource                      
 industry, whether it be the oil industry, mining, timber or even              
 fishing.  Theres a lot of foreign investment that comes in to                 
 provide the capital to be able to utilize those resources.  But               
 there is a tremendous benefit to the local economies from those               
 large cruise ship companies bringing people in.  When they build              
 a hotel in Fairbanks for $20 million, all local construction                  
 people who worked on that project, all the service staff that                 
 work in that hotel year-round are Fairbanks residents.  They                  
 bring people in.  Some of those people we're able to take out on              
 our river boat, some out to our gold mine operation.  Theres                  
 local people who drive the motorcoaches, who are mechanics, who               
 repair those motorcoaches, they buy their parts at the local auto             
 parts store in Fairbanks.  Theres a huge economic benefit that                
 is generated throughout our community by those people making that             
 capital investment.  Property taxes on their hotels pays a big                
 part of our property taxes in our community.  The utilities that              
 they utilize help support our utility system.                                 
                                                                               
 REPRESENTATIVE AUSTERMAN commented that the amount of foreign                 
 visitors that come to Alaska is about 6-8 percent compared to                 
 what the domestic market is.  The Division of Tourism, he doesnt              
 know what their budget figure is or how much money they spent for             
 those 6-8 percent that they actually are supposed to be or key in             
 on them rather than the domestic part...anyway, his question is               
 the benefit of the Division of Tourism for that percentage of                 
 visitors compared to money that was taken into ATMC and what AVA              
 does, does he (Mr. Binkley) have a feel for how effective the                 
 division is, whether that should be taken another look at?  And               
 if he feels awkward about answering the question, he understands.             
                                                                               
 Number 434                                                                    
                                                                               
 MR. BINKLEY advised that it would probably be best to have the                
 division come and speak to those....                                          
                                                                               
 REPRESENTATIVE AUSTERMAN replied that he knew what they would                 
 tell him, right off how well theyre doing.  Thats why he kind                 
 of wanted to get another feel for it.  He offered that they could             
 talk in private at some point in time.                                        
                                                                               
 MR. BINKLEY agreed.                                                           
                                                                               
 Number 438                                                                    
                                                                               
 REPRESENTATIVE PORTER suggested that maybe he could ask it                    
 another way.  With his (Mr. Binkley) background in this area from             
 different perspectives and recognizing what most of their                     
 constituents have asked them to do with government, would it not              
 be a likely candidate for consolidation to take the international             
 marketing, and domestic marketing...theyre not mutually                       
 exclusive.                                                                    
                                                                               
 Number 444                                                                    
                                                                               
 MR. BINKLEY thinks that the transition team the Governor had look             
 at the commerce area, that may have been one of the                           
 recommendations that they came forward with.                                  
                                                                               
 REPRESENTATIVE PORTER responded with son of a gun!                            
                                                                               
 Number 448                                                                    
                                                                               
 MR. BINKLEY further stated that they were some (observers) here               
 that participated [John Litton] in that transition team and they              
 may be able to speak to that.                                                 
                                                                               
 Number 451                                                                    
                                                                               
 CHAIRMAN MASEK inquired what commitments orally or in writing has             
 the Governor made to AVA in regards to tourism?                               
                                                                               
 MR. BINKLEY replied that most of the Governors commitments were               
 made during the campaign actually to the industry when he                     
 addressed their convention.  There is some question whether a                 
 commitment is actually a promise or (indisc.--laughter) in terms              
 of art but, they believe the Governor understands the industry.               
 Hes a restaurateur and a small businessperson, he was on the                  
 board of directors of the Anchorage Convention and Visitors                   
 Bureau (ACVB), hes been a member of the AVA for many years and                
 he understands the visitor industry.  He understands the value of             
 marketing and so theyre enthusiastic that they have somebody who              
 understands that and hopefully, that will translate into an                   
 increase in the budget for the ATMC that will get them at least               
 back to where they were in FY 94 so they can get back in their                
 image advertising and get out in front of the people when theyre              
 making their decisions on where to spend their travel dollars.                
                                                                               
 Number 467                                                                    
                                                                               
 CHAIRMAN MASEK queried what spaces or gaps in the tourism                     
 industry does he see that need attention statewide?                           
                                                                               
 MR. BINKLEY declared that from the marketing standpoint, its the              
 television advertising,.  When they made the reduction in the                 
 ATMC budget, they basically cut out the television; theres still              
 a very small amount thats out there but, its really very, very                
 slight.  It would be like you in your campaign being on                       
 television once a week and your opponent being on television ten              
 times a day.  You just dont get your message out there very                   
 well.  On another side, apart from the funding and marketing                  
 issues, one of the greatest challenges they face in the industry              
 is access to public lands.  A vast majority of Alaska is owned                
 and controlled by state, federal and local governments and when               
 you have a growth in the number of visitors coming up to Alaska               
 and you have a very limited amount of area that you can bring                 
 those people into the state and show them because the rest of it              
 is all closed up to access, pretty soon as those numbers grow the             
 quality of that vacation to Alaska will start to drop because                 
 youre simply pushing too many people into too small of an area.               
 For this industry to grow to its potential over the years, they               
 have to have more access to the public lands and they have to be              
 able to maintain the high quality of the visitor experience to                
 Alaska that theyve enjoyed for so long and that gets them such a              
 good reputation throughout the world really as a world-class                  
 destination.  And so, their challenge really in the next ten                  
 years and twenty years and beyond is to make sure theres                      
 adequate access in the public lands without jeopardizing the                  
 quality of that experience into those areas.                                  
                                                                               
 Number 488                                                                    
                                                                               
 CHAIRMAN MASEK asked if there were any more comments.  Hearing                
 none, she posed this question:  To what degree are AVA policy                 
 decisions driven by larger contributors to the state?                         
                                                                               
 MR. BINKLEY explained at AVAs level, theyre an industry                       
 organization; anybody can join the AVA.  They encourage people                
 to; they are always out trying to seek more members.  Everybody               
 gets a vote on who gets onto the board of directors of the AVA.               
 Thats how their organization is run.  They have large operators               
 who are represented on the board and, they have very small                    
 operators.  Their newest board member is from Tok Junction; he                
 and his family run an recreational vehicle park in Tok.  They                 
 also have some representatives from Holland America Lines or                  
 Princess Tours who also serve on the board.  They have a good                 
 cross-section.  The board members are elected by the membership,              
 the membership is open and everybody gets a vote.  But its                    
 usually those people who are willing to take the time and effort              
 to participate like any volunteer organization.  Theyre not paid              
 any salary or receive any compensation; they have to take care of             
 their own travel, donate their time.  And its the people who are              
 willing to contribute the time into the AVA that usually are the              
 ones that have the most affect on where the organization goes and             
 what their policies are, because theyre willing to put in the                 
 time and effort.                                                              
                                                                               
 Number 509                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN asked if theyve hired a new executive                
 director?                                                                     
                                                                               
 MR. BINKLEY replied yes and proceeded to introduce her, Tina                  
 Lindgren.   She worked as a staff member for many years and then              
 was hired by the ATMC to be their executive director.  Then when              
 their executive director left they were able to entice her to                 
 come back to work for the AVA and theyre pleased to have her.                 
                                                                               
 Number 515                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN commented on the drastic price change                
 for the advertising in the Destination Alaska and they raised                 
 quite a bit of hackles of a lot of the small industry people.  Is             
 that still an issue?  Has any of that still been resolved or is               
 it just continuing to (indisc.--noise).                                       
                                                                               
 Number 518                                                                    
                                                                               
 MR. BINKLEY allowed that is an issue, a tough one for them, a                 
 dilemma really.  The legislature over the years has raised the                
 amount that the industry needs to contribute to match the state's             
 portion; its gone from 15 percent up to 25 percent.  So as that               
 percentage has increased, their mechanism for raising money                   
 within the industry is selling space in the travel planner, its               
 like a large brochure that goes out to people that are interested             
 in traveling to Alaska.  Theyve had to raise the advertising                  
 rates in order to generate the revenue to meet the state mandated             
 match.  Its been a burden on a lot of small businesses; a lot of              
 small businesses dont have a big advertising budget and this is               
 the only mechanism they really have to reach a national audience.             
 You can have your own brochure, you can put it on a brochure rack             
 with your local convention and visitor's bureau or you can have a             
 little budget to work around your area to try and get people to               
 try and come into your business but, theres no way a small                    
 business, even like their business can go out and have any kind               
 of meaningful exposure on a national level.  But that vacation                
 planner allows them to do that.  Unfortunately, theyve had to                 
 raise the rates in that in order to meet the mandate by the                   
 state, of the percentage of match.   Now one thing that theyre                
 planning on doing this year is having a listing and, by the way,              
 former Senator Brad Phillips is here--hes the chairman of the                 
 ATMC and he maybe able to testify to some of this more accurately             
 than Mr. Binkley could and more in depth but, theyve established              
 a listing which is $275 for a three line listing in the vacation              
 planner.  Theyre hopeful that will allow a lot of the smaller                 
 operators, when they raised the rates, who couldnt afford to                  
 advertise anymore to come back in and advertise and at least get              
 a very small message out about their product.                                 
                                                                               
 Number 541                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN asked if the legislature approves the                
 Governors increase $5 million-$10 million back to the ATMC is                 
 that going to drive the rates back down?                                      
                                                                               
 MR. BINKLEY responded that it actually wont.  He shouldnt be                  
 speaking on behalf of ATMC because hes not even a member of that              
 organization.  The difficulty, the challenge, for the industry                
 will then be in raising $2.5 million to match that $7.5 million               
 which would be from the states portion.  Thats going to be a                  
 real challenge, a significant challenge and he doesnt see the                 
 council being able to cut the rates and increase the revenue to               
 meet that match.                                                              
                                                                               
 Number 549                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN stated that it was a big concern.                    
                                                                               
 MR. BINKLEY said thats a tough one.  Already the rates in the                 
 vacation planner are inverse from what they would be in a normal              
 publication.  In a normal publication, the larger your ad is the              
 cheaper it is per column inch.  If you buy a full page, you get a             
 cheaper price than if you buy one-eighth of a page ad.  In the                
 vacation planner they do it the other way around.  If you buy a               
 full page ad, you pay far more per column inch than if you buy                
 one column inch.  That is so that the larger advertisers pay                  
 proportionally more than the smaller advertisers.  That was a way             
 to, in effect, subsidize the smaller operator so they could still             
 afford to get a small amount of space but, not have to pay a pro              
 rata share.                                                                   
                                                                               
 Number 559                                                                    
                                                                               
 REPRESENTATIVE JAMES remarked that this is interesting the way                
 this conversation is moving, and shes not sure this is the way                
 they ought to be moving but, she has a couple comments relating               
 to herself.  She has a little seven room motel and when it comes              
 time to for her to determine what she can pay for advertising,                
 its very small.  The reason its very small is because she has                 
 to find a direct relationship to that money that shes spent on                
 advertising to someone to stay in her place.   If she were to                 
 spend $270 for three lines in the vacation planner maybe once                 
 every three years, shed get another person to stay overnight in               
 her motel.  So that is not a decision that shes going to make.                
 She thinks probably those people who are making that decision are             
 not looking at it that seriously and they are contributing to the             
 overall thing thats going to bring people into the state and                  
 they have to feel some connection to that.  In that whole process             
 they cant believe that its going to help them but, its going                  
 to help the industry and by the industry being helped, its going              
 to be helping them.  But for those people that cant afford it,                
 that doesnt even make any difference.  Just for the concern that              
 Representative Austerman has represented of people out there who              
 would like to be part of the vacation planner, a lot of people                
 just cant and somebody else has got to carry the ball on that                 
 because there just isnt enough money.  She doesnt even have                   
 very much in the phone book either because she doesnt think that              
 a bigger ad in the phone book gets her any more people, either.               
 Shes measured who comes and who doesnt come.  So those are the                
 decisions that small businesses have to make.  You could pay                  
 everything out in advertising and probably not--where is the                  
 balance?  Just for the information of the people, I can                       
 understand Representative Austermans concern because it is a                  
 real spendy thing for not much personal benefit.                              
                                                                               
 Number 577                                                                    
                                                                               
 MR. BINKLEY related that its an excellent point that shes                     
 brought up about the fact that $275 goes for more than just the               
 three lines you get in the vacation planner, that really is the               
 match for the television advertising, the public relations, all               
 of the things that really drive more people coming up to Alaska.              
 They may not see your three line ad in the vacation planner, but              
 they may be in Alaska because they saw a television ad.                       
                                                                               
 REPRESENTATIVE JAMES suggests then maybe its a donation.                      
                                                                               
 TAPE 95-1, SIDE B                                                             
 Number 004                                                                    
                                                                               
 CHAIRMAN MASEK asked is the AVA open to ideas this committee will             
 present to explore new direction, techniques and strategies in                
 order to fully benefit all sectors of the visitors economies?                 
                                                                               
 MR. BINKLEY said you bet.                                                     
                                                                               
 CHAIRMAN MASEK related that this is one of the first meetings to              
 get people to come in to testify and theyre just beginning this               
 process.  Theyll be reaching out to more agencies statewide.                  
 She notes her appreciation for his time and coming in to share                
 with the committee.  She asked for further questions or comments              
 from the committee members.                                                   
                                                                               
 Number 020                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN inquired about in-kind versus cash                   
 contributions; what percentage is basically cash, like through                
 the book, versus in-kind contribution, or is this all cash                    
 matched towards the...                                                        
                                                                               
 MR. BINKLEY answered that the travel planner generates cash.  It              
 goes towards the entire program.  There is a tremendous that is               
 raised in products and services that are contributed by the                   
 industry to promoting Alaska that were not recognized for in that             
 25 percent.                                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN confirmed that its strictly cash thats               
 recognized for the 25 percent.                                                
                                                                               
 MR. BINKLEY affirmed thats correct.  But there is a great                     
 benefit that comes from the entire state from the industry                    
 contributing products and services to get more exposure for                   
 everybody in the state.  And also the expertise thats brought to              
 the council level on a volunteer basis for many of them on the                
 industry side.                                                                
                                                                               
 Number 039                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN remarked that he knew there were some                
 forms sent out each year to try to figure out exactly what that               
 percentage is of in-kind as compared to the cash and compared to              
 what the state puts in.   Does he have those figures?                         
                                                                               
 MR. BINKLEY is given the figure $3.5 million in-kind.                         
                                                                               
 Number 045                                                                    
                                                                               
 CHAIRMAN MASEK gave opportunity to the observers to ask                       
 questions.                                                                    
                                                                               
 MR. BINKLEY asked permission to introduce John Litton, with the               
 AVA in charge of government relations on their executive                      
 committee and so they probably will be seeing a lot of him down               
 here and will help out with any testimony that they have and Tina             
 Lindgren who he introduced as their executive director and also               
 Senator Brad Phillips the chairman of the ATMC.  Dennis Brandon               
 who is the past president with Westmark Hotels and Laurie Herman              
 who is their executive secretary and serves on their executive                
 board at the AVA as well.  He thanked the chair for the                       
 opportunity to testify before their committee and noted                       
 appreciation for her interest in tourism and the impact that it               
 has on the state.                                                             
                                                                               
 Number 065                                                                    
                                                                               
 CHAIRMAN MASEK thanked him.  She reiterated her feeling that its              
 what the state will be leaning toward more in the future as far               
 as generating revenue.  She knows a lot of the tourism is focused             
 on summer mostly and shed like to hear more ideas on what AVA                 
 does for off-summer season, as well as going into the winter part             
 activities since our state has approximately six months of winter             
 here and it does carry out pretty long for some of the business               
 owners in the state who cater to tourism in the winter and shed               
 really would like to hear more on that subject sometime.  She                 
 appreciated him having all the AVA members here and thanked him               
 for his time.  She then asked if any observers would like to                  
 share any overview, opinion, or comments regarding Alaska                     
 tourism?                                                                      
                                                                               
 Number 082                                                                    
                                                                               
 MR. BRAD PHILLIPS, Chairman, Alaska Tourism Marketing Council,                
 recommended that she might talk to somebody from the ATMC.  As an             
 example, she just mentioned about the wintertime.  They have a                
 fall/winter/spring committee and they have a budget for promoting             
 wintertime traffic to Alaska .  They bring travel riders and tour             
 operators in the wintertime and at tremendous response for the                
 Iditarod, for any of the activities in the wintertime.  So they               
 are not unaware of that and theyre trying their very best to                  
 expand tourism year-round because that would be better for all of             
 us.  Its hell trying to make a living in 100 days, as she                     
 probably knows.  So theyre as anxious as anybody.  One of the                 
 problems they have is a perception; most people dont think of                 
 Alaska as a vacation in the wintertime.  There are few places                 
 that compete with that, like Mexico, Hawaii and Palm Springs but,             
 theyre doing their damndest to get the adventurous person who                 
 wants to experience Alaska in the wintertime.  He thinks theyre               
 making some real headway on it; their agency has been really                  
 working on that program.  For the advertising that they do, they              
 put out a special section of their travel planner for winter                  
 which has never been done in the past two years.  Maybe before                
 the committee finishes their work here, theyll have an                        
 opportunity to lay out what their program is on the ATMC.  He                 
 mentioned that hes heard a member of the committee knows pretty               
 well what it is who has been pretty quiet but, he does know it                
 because he served on the ATMC.  Hed be glad to lay that out for               
 them sometime to give them a little more depth of understanding               
 in and maybe a little more confidence in whats happening in the               
 marketing program.                                                            
                                                                               
 Number 121                                                                    
                                                                               
 ROD BRADLEY, Owner of Bradley Reid Communications introduced                  
 himself and spoke about how a year and a half ago they changed                
 some of their television commercials as well as added to the pool             
 of television commercials fall/winter/spring scenes in their                  
 television commercial and theyre running that about one-third of              
 the schedule of television commercials or one-fourth was that                 
 commercial showing scenes of fall/winter/spring activities.  So               
 they had some facts and figures how many tens of millions of                  
 impressions going out to the public.  Of course, its kind of a                
 moot question right now because with the budget cuts they dont                
 have any television running.  But when they get more money and                
 they have television running there will be images of fall, winter             
 and spring of Alaska out there to the vast public.                            
                                                                               
 Number 135                                                                    
                                                                               
 CHAIRMAN MASEK inquired since they have shown the commercial is               
 there any impact on the visitors coming into the state during the             
 fall/winter portion?                                                          
                                                                               
 MR. BRADLEY declared yes, he thinks there is.  He thinks theyre               
 seeing an increase; theyre not dramatic numbers because a lot of              
 the problems they have and this is something the fall, winter and             
 spring committee would have to speak to but, a lot of the                     
 problems that they have is an inventory problem that they didnt               
 have a lot of things to sell in the fall/winter/spring and more               
 of those--its kind of like a chicken or the egg; they get a                   
 little bit more visitors they have a few more people who decide               
 to stay open all winter and then more visitors and more stay open             
 and then you get an Alyeska resort that builds a nice first-class             
 facility for the winter.  So he thinks youre seeing this come                 
 along and will continue to come along as long as they have the                
 marketing going thats going to drive the demand.  What you have               
 to do is drive the demand before people start staying open in the             
 winter and so on.  And the only way youre going to drive the                  
 demand is to get the television commercials going and that way                
 you need more budget.  And here we are back at budget.                        
                                                                               
 Number 152                                                                    
                                                                               
 CHAIRMAN MASEK indicated back to the budget that we have to learn             
 how to do more for the dollar.                                                
                                                                               
 REPRESENTATIVE JAMES inserted that even though she is open and                
 supportive of wintertime tourism activities in the state, she                 
 likes to remind people that our highways are very dangerous in                
 the winter and the people that would rent the cars and so forth               
 that would drive on our roads and are not familiar with the kinds             
 of icy conditions that we have, shes extremely concerned about                
 the Parks Highway as an example because its a great part of her               
 district--the people that come to Mount Denali and the serious                
 accidents that they have on that highway traveling with the truck             
 traffic and everything and so, she just wants to keep reminding               
 everyone that while were planning on winter tourism lets be                   
 sure that we have some way for these people to get around and                 
 make it safe for our population and also safe for those tourists.             
                                                                               
 Number 167                                                                    
                                                                               
 CHAIRMAN MASEK pointed out that she lives near Anchorage area and             
 that when we do get the snowfall you have numbers of accidents as             
 Representative Porter may well know having served on the police               
 department and how we can tell when new people are coming to the              
 state who dont understand how to drive but, then again we also                
 have many Alaskans who also have the same problem.  Shed like to              
 just share a few things from her own perspective as shes                      
 traveled over to Europe many times and she knows we focus a lot               
 on the Orient for people coming to Alaska to visit.  But we do                
 have a great interest in Europe for Europeans to come to Alaska.              
 Shes made many trips herself personally and traveled to many big              
 tourism trade shows.  She went to one in Italy and they had nine              
 football stadiums that were full of people from all over the                  
 world and she was there in the U.S. booth and during one day they             
 had over 300,000 people coming through.  They were very                       
 interested in learning more but they said its so cold, that they              
 cannot come to Alaska in the winter and theyre even afraid to                 
 come during the summer because they think people live in igloos               
 up here all year-round.  And she thinks thats a turn that we                  
 must try to work on because the European customers are traveling              
 and they do have the money to come to Alaska and she thinks we                
 can offer them more year-round, which many of the small business              
 owners here really can rely on and use not just for three months              
 of the year but try to make it a 12 month availability for a                  
 visit or a plan for a vacation.  Those are just some of the                   
 details that have been going through her mind for a long time and             
 she thinks we really need to do more in the European side.                    
                                                                               
 Number 202                                                                    
                                                                               
 REPRESENTATIVE PORTER offered a wrap-up statement.  Dont give up              
 any idea that has any kind of merit.  Weve mentioned that Palm                
 Springs has got such a natural environment that can induce people             
 there that we cant compete with.  Well one of the things that                 
 Palm Springs uses to draw people to Palm Springs, albeit a                    
 certain small segment, is dog racing.  He means--mushing!  Twenty             
 minutes out of Palm Springs on the tram they have dog mushing; a              
 ride on a dog sled.  Maybe we should induce people to get a                   
 suntan at Lake Spenard.                                                       
                                                                               
 Number 214                                                                    
                                                                               
 DENNIS BRANDON, Westmark Hotels, mentioned that he served on the              
 Denali's task force which was a task force put together by the                
 National Park Service to take a look at access issues or issues               
 surrounding Denali.  And out of 14 day-long meetings came a                   
 report that addressed in part access today and some of the                    
 problems that exist because of the single road going into this                
 enormous area that we call Mount McKinley or Denali.  Part of the             
 recommendation was to, in the long-term, look at a potential new              
 venue which would be the Tokasitna region or south Denali area to             
 develop because it was noticed by the entire committee that we do             
 have a real problem with access into the park.  Thats only going              
 to compound itself over years if we dont look at not only Denali              
 but other areas in terms of infrastructure development and                    
 basically a strategic planning process thats going to                         
 incorporate more product, for people to come to visit Alaska, to              
 enable them to use.  So the recommendations that came out of the              
 report were favorable.  The access issue itself was not dealt                 
 with as in-depth as much as the National Park Service Board would             
 have liked to have seen so, they did offer an amendment to the                
 report itself to look at favorably a northern route access into               
 the park which was adopted by the National Park Service Board and             
 he went back to Washington to testify in favor of opening that                
 access.  It is he thinks a two-fold problem as Rod had indicated              
 too, the product--the chicken and the egg--they in combination                
 with promoting the state need to look at the infrastructure                   
 development of the state and encourage whatever they can to work              
 with the department working with the Department of Divisions                  
 working with divisions to look at what would be proactive                     
 development in this tourism industry to make certain of that                  
 infrastructure that it does suit the long-term need for this                  
 growth that were anticipating.  So he thought it might be at                  
 least worthwhile to look at that in your plans as well as the                 
 marketing plan.                                                               
                                                                               
 Number 249                                                                    
                                                                               
 CHAIRMAN MASEK thanked him for bringing that forth to the                     
 committee.  She knows it came up the year before when they had                
 some people contesting to going in and driving into Mount                     
 McKinley or the Denali area.  I would really like to encourage                
 him to share the information with the committee members on his                
 trips and updates as to the access problem.                                   
                                                                               
 Number 256                                                                    
                                                                               
 REPRESENTATIVE JAMES is glad that she brought up that point                   
 because she has been a real strong supporter of the Kantishna                 
 group and the rail among northern access thats going in there                 
 and as she understands it currently theyre having some success                
 in Washington, D.C. to get the attention of the National Park                 
 Services to be able to get access through that for the rail and               
 the interesting thing about that rail access is that it would be              
 all funded with private funds so, it wouldnt be anything wed                  
 have to do and certainly give us twice as much access to a park               
 that is totally inundated with people that dont always go away                
 with a good experience.  So if were going to keep tourism coming              
 to our state we do need to be sure that those tourists come here              
 and go home happy.  And we cant do that right now.  Any kind of               
 support that you would get out from the people in this room                   
 and/or people in the committee to support that issue of that                  
 additional access into there or anyone who has any questions                  
 about it shed be happy to provide them with the information                   
 regarding that light rail that wed be putting in there.                       
                                                                               
 MR. BRANDON added that there was also one recommendation that did             
 get carried forward that was a road improvement into Taklameka                
 which is an extension of the natural history tour by about                    
 another eleven or twelve miles which could be done immediately                
 and that one could very well move forward rapidly with support                
 from the state.  He does have a full report that he could make                
 available to each and every one of the committee members if                   
 theyd like outlining not only the recommendations but the                     
 amendments that included the recommendations for that and other               
 (indisc.) access.                                                             
                                                                               
 Number 279                                                                    
                                                                               
 CHAIRMAN MASEK announced that would be really great.  She would               
 appreciate it if he can share it with the committee.  Are there               
 any further comments from other agencies?                                     
                                                                               
 Number 282                                                                    
                                                                               
 MR. BINKLEY asked for another allowance to reintroduce Linda                  
 Anderson, she is doing the lobbying work for the AVA as well as               
 Sam Kito.  Theyre two individuals they can rely on or call on if              
 none of the others are around to get information about the                    
 association or be updated on whats going on and theyre very                   
 pleased to have Linda join them this year to help in the lobbying             
 effort.  They have a small business as well and theyre glad to                
 see them help out.                                                            
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 CHAIRMAN MASEK thanked Mr. Binkley.  She then adjourned the                   
 meeting at 4:10 p.m.                                                          
                                                                               

Document Name Date/Time Subjects