Legislature(1995 - 1996)

03/16/1995 02:35 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 AND TOURISM                                
                         March 16, 1995                                        
                           2:35 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Beverly Masek, Chairman                                        
 Representative Alan Austerman, Vice Chairman                                  
 Representative Jeannette James                                                
 Representative Pete Kott                                                      
 Representative Brian Porter                                                   
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Irene Nicholia                                                 
 Representative Caren Robinson                                                 
                                                                               
 OTHER HOUSE MEMBERS PRESENT                                                   
                                                                               
 Representative Ivan Ivan                                                      
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 Small Business Critique of State Tourism Marketing Programs                   
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 DAVE KLOSTERMAN, Co-owner                                                     
 Alaska Bush Carriers, Inc.                                                    
 4501 Aircraft Drive                                                           
 Anchorage, AK 99502                                                           
 Phone: 243-3127                                                               
 POSITION STATEMENT:  Offered Critique of Tourism                              
                                                                               
 NANCY LETHCOE, President                                                      
 Alaska Wilderness Recreation and Tourism Association                          
 P.O. Box 1353                                                                 
 Valdez, AK  99686                                                             
 Phone: 835-4300                                                               
 POSITION STATEMENT:  Offered Critique of Tourism                              
                                                                               
 DONNA TOLLMAN, Executive Director                                             
 Copper Valley Economic Development Council                                    
 P.O. Box 9                                                                    
 Glennallen, AK  99588                                                         
 Phone: 822-5001                                                               
 POSITION STATEMENT:  Offered Critique of Tourism                              
                                                                               
 PAUL SMITH, Owner                                                             
 Snowshoe Motel                                                                
 P.O. Box 559                                                                  
 Tok, AK  99780                                                                
 Phone: 883-4181                                                               
 POSITION STATEMENT:  Offered Critique of Tourism                              
                                                                               
 JERRY JERNIGAN                                                                
 Tok RV Village                                                                
 P.O. Box 741                                                                  
 Tok, AK  99780                                                                
 Phone: 883-5877                                                               
 POSITION STATEMENT:  Offered Critique of Tourism                              
                                                                               
 ALAN LEMASTER, Owner                                                          
 Gakona Junction Village                                                       
 P.O. Box 222                                                                  
 Gakona, AK  99586                                                             
 Phone: 822-3664                                                               
 POSITION STATEMENT:  Offered Critique of Tourism                              
                                                                               
 ROBERT DINDINGER, Vice Chair                                                  
 Alaska Tourism Marketing Council                                              
 Department of Commerce and Economic Development                               
 9085 Glacier Highway                                                          
 Juneau, AK   99801                                                            
 Phone: 789-0052                                                               
 POSITION STATEMENT:  Rebuttal of Tourism Critique                             
                                                                               
 JOHN LITTEN, General Manager                                                  
 Sitka Tours                                                                   
 Box 1001                                                                      
 Sitka, AK  99835                                                              
 Phone: 747-8443                                                               
 POSITION STATEMENT:  Support of Alaska Tourism Marketing Council              
                                                                               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE  95-5, SIDE A                                                            
 Number 005                                                                    
                                                                               
 The House Special Committee on International Trade & Tourism was              
 called to order by Chairman Beverly Masek at 2:35 p.m.  Members               
 present at the silent roll call were Representatives Masek, James             
 and Porter.  Members absent were Representatives Austerman, Kott,             
 Nicholia and Robinson.                                                        
                                                                               
 CHAIRMAN BEVERLY MASEK began the meeting, despite a quorum, as                
 there was no official action required from the committee; they were           
 hearing testimony only.  She announced the meeting was on                     
 teleconference with Anchorage, Tok, Glennallen and Valdez.                    
                                                                               
 Number 092                                                                    
                                                                               
 DAVE KLOSTERMAN, CO-OWNER, ALASKA BUSH CARRIERS, INC., testified              
 from Anchorage that he has been in the tourist business for over 25           
 years and has handled thousands of visitors.  He acknowledged that            
 a great deal of money is spent by the state in promoting tourism.             
 While that does bring a lot of people to the state, he feels that             
 the majority of the benefits accrue to a small group of large                 
 companies, many of which do not reside within the state.  He would            
 like to see a higher level of specific accountability for those               
 funds and an analysis of the benefits.                                        
                                                                               
 MR. KLOSTERMAN added that while money is spent to bring larger                
 numbers of tourists in, the state does little to improve the                  
 infrastructure throughout the state that is intended to serve                 
 tourism.  He feels that the state needs to analyze its approach to            
 promoting tourism and come up with more solid plans of alternative            
 destinations, infrastructure and activities other than the routine            
 programs the major tour companies are engaged in.                             
                                                                               
 Number 154                                                                    
                                                                               
 REPRESENTATIVE BRIAN PORTER asked once the committee develops this            
 information regarding the accounting for the expenditure of state             
 dollars, where is the most beneficial place to send it?                       
                                                                               
 MR. KLOSTERMAN replied that if it was sent to him, he would ensure            
 that it was distributed to each operator on the Lake Hood complex.            
                                                                               
 REPRESENTATIVE PORTER asked Mr. Klosterman if there was one thing             
 that the existing tourism structures could do to enhance his                  
 livelihood and his ability to provide services to tourists, what              
 would that be?                                                                
                                                                               
 MR. KLOSTERMAN responded that the state's attitude toward                     
 development, encouragement thereof and improvement on has been                
 severely lacking.  They get lost in the wash when it comes to                 
 expenditures.  There are areas on Lake Hood that have no sewer or             
 water.  He feels there's no valid reason or explanation for that.             
 He thinks the Lake Hood seaplane-based complex is unique.  It                 
 should be developed and treated as a jewel in the tourism crown of            
 the state of Alaska.                                                          
                                                                               
 Number 218                                                                    
                                                                               
 NANCY LETHCOE, PRESIDENT, ALASKA WILDERNESS RECREATION and TOURISM            
 ASSOCIATION (AWRTA), testified on teleconference from Valdez, and             
 expressed six points.  First, the current goal of the state                   
 marketing program is volume, the total number of people brought               
 into the state.  She suggested an alternative such as the type of             
 tourism promoted.  She pointed out that a cruise ship passenger               
 spends $252 in the state compared with an overseas visitor that               
 spends $1700.  Her organization believes that consideration should            
 be paid to the type of tourist brought into the state.                        
                                                                               
 MS. LETHCOE's second point questioned the practicality of a single            
 organization responsible for the marketing program of the state or            
 whether matching funds should be given to a variety of groups, as             
 is the case in the majority of other states.  AWRTA concluded that            
 they prefer the single marketing organization within Alaska as it             
 is now but, believe there could be some fine tuning to it.  She               
 lamented the fact that the Alaska Tourism Marketing Council (ATMC),           
 reauthorization legislation, HB 220, has not been heard before this           
 committee.  AWRTA would like to testify before that with                      
 suggestions that would make the ATMC more representative of                   
 airlines, bush pilots, hunting, sport fishing, bed and breakfasts,            
 lodges; the small groups that are not as well represented and lack            
 the expertise in marketing that ATMC could bring.                             
                                                                               
 MS. LETHCOE's third matter concerned the composition of the ATMC.             
 AWRTA feels there is a need to expand the type of expertise in                
 marketing on the council and that may need to be effected through             
 legislation.  She noted that 35 percent of the council currently is           
 from the cruise ship industry whereas sport fishing has no                    
 representation.  A cruise ship person cannot determine how best to            
 market for sport fishing and vice versa.                                      
                                                                               
 MS. LETHCOE related AWRTA's fourth issue as being the relationship            
 of tourism to other industries in the state.  The state needs to              
 ensure the future of tourism by not forsaking opportunities and               
 expansion now for short-term economic decisions made to benefit               
 other industries.  She cited the timber salvage bill that could               
 potentially have a significant adverse affect on the tourism                  
 industry.  It could clear-cut extensive parts of the highway system           
 and impact the highway traveler's experience.                                 
                                                                               
 MS. LETHCOE's fifth point is a need for rural training programs, so           
 that people in rural areas can have an opportunity to enter the               
 tourism industry.  Many people in Native villages or rural areas              
 are skilled at operating boats on rivers but they don't have the              
 opportunity to get a six-passenger Coast Guard license and cannot             
 be hired by companies or start their own companies.  Some attention           
 should be paid to providing courses in rural areas or bringing                
 people into communities where they can get the necessary training             
 to get certificates to enter the tourism industry.                            
                                                                               
 Number 292                                                                    
                                                                               
 Representative Austerman arrived at 2:55 p.m.                                 
                                                                               
 MS. LETHCOE expressed AWRTA's final concern is the impact of                  
 tourism on communities.  When a community becomes stressed, as some           
 already are, by the influx of tourists, the quality of the                    
 tourist's experience goes down.  As a state, we need to start                 
 asking what benefits does tourism bring to communities and what are           
 the limits of acceptable change for a community with these number             
 of tourists coming in.                                                        
                                                                               
 REPRESENTATIVE JEANNETTE JAMES asked how the salvage timber bill              
 will have an adverse reaction upon the highway traveler.  Would the           
 tourist rather see dead trees instead of new trees growing up?                
                                                                               
 MS. LETHCOE responded that they've posed the same question whether            
 regeneration would occur faster by clear-cutting the dead trees or            
 leaving them standing.  What their consultations with the foresters           
 revealed is that there are new trees already growing that will                
 likely be genetically immune to the diseases and insects that                 
 killed the other trees.  Clear-cutting now will remove not only the           
 dead trees, but all the living trees as well and it would set back            
 regeneration another 10 or 20 years.  Their market research                   
 indicates that tourists regard such areas as a natural part of the            
 forest cycle.                                                                 
                                                                               
 Representative Kott arrived at 2:58 p.m.                                      
                                                                               
 DONNA TOLLMAN, EXECUTIVE DIRECTOR, COPPER VALLEY ECONOMIC                     
 DEVELOPMENT COUNCIL (CVEDC), testifying from Glennallen, expressed            
 concern over the marketing effort on behalf of rural communities.             
 The effects of generic marketing need to be looked at as well as              
 the restructuring so everyone benefits and the tourist is given a             
 better opportunity.  The CVEDC maintains that a greater, more                 
 permanent economic growth will occur throughout Alaska with a                 
 program of year-round site and activity-specific tourism promotion            
 that identifies and encourages local tourist products and                     
 attractions.  Funding and implementation of site and                          
 activities-specific tourism promotion will not only balance and               
 complement the state's total marketing effort, it will stimulate              
 local enterprise and economic initiatives currently being held                
 stagnant by reliance on a one-dimensional generic tourism marketing           
 strategy.                                                                     
                                                                               
 Representative Ivan Ivan joined the meeting at 3:00 p.m.                      
                                                                               
 MS. TOLLMAN added that tourist exit polls show visitors are                   
 disappointed when their Alaska experience excludes interface with             
 individual Alaskans, the unique indigenous culture's geography and            
 resources.  A site-specific approach will attract visitors to                 
 destinations in rural and road-access communities to deliver the              
 Alaska experience that generic marketing cannot.  The Alaska                  
 Visitors Association (AVA), conclusions cite the lack of reliable             
 tourism products and limited options as obstacles to Alaska's                 
 tourism growth.  Site-specific promotion is the opposite of generic           
 marketing and is necessary for true Alaska tourism growth and                 
 permanence.  The small rural tourism business has a great                     
 difficulty competing for the marketing dollars available in the               
 state.  It's difficult for them to participate now with the                   
 advertising cost increases in the Vacation Planner.  The CVEDC is             
 not asking for additional money, just a small part of the Vacation            
 Planner and Milepost advertising funds to introduce the world to              
 what they have to offer in their rural communities.  They are                 
 seeing a positive impact on their own initial site-specific                   
 marketing regarding Wrangell-St. Elias.                                       
                                                                               
 Number 422                                                                    
                                                                               
 MS. TOLLMAN related the example of their organization's promotion             
 of The Nitty Gritty Dirt Band Travels Alaska which is being                 
 scheduled for its fifth showing.  That's five hours which cost                
 $180,000.  The last viewing was 1.3 million people.  In the show              
 they listed an address to write to for additional information.                
 Approximately 75 percent of the letters expressed surprise in                 
 learning that Alaska was accessible by road.  That's an example of            
 the opportunity through some of these other types of marketing that           
 we can give rural Alaska.                                                     
                                                                               
 PAUL SMITH, OWNER, SNOWSHOE MOTEL, via teleconference from Tok,               
 stated that all the avenues to come to Alaska are good, except for            
 the one weak link which is roads and road systems.  More                      
 information needs to be distributed in promoting the Alaska highway           
 and road access.  In addition, the recreational vehicle market has            
 been grossly neglected.  Lastly, development by the state for the             
 Wrangell-St. Elias park needs to happen immediately to provide an             
 alternative visitors attraction to the overcrowded Denali park.               
                                                                               
 JERRY JERNIGAN, OWNER, TOK RV VILLAGE, testified via Tok, stating             
 he can't emphasize enough the need for more work and development              
 for highways inside the state, (i.e.. frost-heaves).   He agrees              
 that we need to get some of the concentration off of Denali;                  
 develop other places to go and to do and develop.  He added there             
 is a serious need to disperse tourists and spread the concentration           
 of people across the state to avoid situations like the                       
 shoulder-to-shoulder fishing on the Kenai, which foster negative              
 vacation experiences.  He'd like to see some effort put forth for             
 the historic trails, cleaning them up and promoting them.                     
                                                                               
 ALAN LEMASTER, OWNER, GAKONA JUNCTION VILLAGE, testified via                  
 teleconference from Glennallen, and mentioned that because of the             
 matching fund requirement the legislature placed on the AVA to                
 participate in the Vacation Planner, that advertising is becoming             
 extremely expensive.  As a result of the increased prices they're             
 losing advertisers.  Last year they reported 400 advertisers                  
 dropped out of the program because they were unable to participate            
 financially.  He was one of those people.  Three years ago, he paid           
 $1300 for a display ad and a narrative ad, that now would cost him            
 $2850.  He can't afford it and has to defer to other avenues of               
 advertising.  The very people who need the Vacation Planner the               
 most are being excluded.  The reason is the 25 percent requirement            
 is so heavy on the AVA, they have no other means of raising that              
 money other than to raise the rates.                                          
                                                                               
 MR. LEMASTER reiterated the importance of the upgrading and                   
 maintenance of the highways.  He focused on the Taylor highway and            
 the Denali highway, both important to the Copper Valley area.  The            
 Denali highway took a back seat to an upgrade as a result of Bert             
 Sharp and Fairbanks folks.  He would like the committee to revisit            
 that issue.  The survey work of over $350,000 is complete, the bid            
 package is ready and it just needs the blessings of the legislature           
 and the Governor to put it back on the schedule.  The paving of the           
 Denali highway will greatly impact the communities from McKinley to           
 McCarthy, from Fairbanks to Valdez, from Tok to Homer.  It will               
 give the tourist an option to be able to come to east Alaska.                 
                                                                               
 MR. KLOSTERMAN offered over the last three to five years, the                 
 requests for information for potential tours into rural areas of              
 Alaska are increasing.  Tourists can experience the cultural                  
 history and heritage that the village areas have to offer.  There             
 is no single source to refer to, to see what's available out there.           
 We need to develop such a source.                                             
                                                                               
 CHAIRMAN MASEK volunteered that Alaska Village Initiatives (AVI),             
 which were under Community Economic Development Corporation (CEDC),           
 now are set up to work with rural areas to develop tourism, to get            
 rural Alaska involved in tourism.                                             
                                                                               
 REPRESENTATIVE IVAN IVAN commented that Akiak has been trying to              
 start up a guided fishing operation and the biggest obstacle has              
 been that the village doesn't have enough capable and aggressive              
 managers.  The other major obstacle is marketing.                             
                                                                               
 TAPE 95-5, SIDE B                                                             
 Number 016                                                                    
                                                                               
 ROBERT DINDINGER, VICE CHAIR, ALASKA TOURISM MARKETING COUNCIL                
 (ATMC), addressed the issues brought up so far.  Lack of                      
 information is the ATMC's worst adversary in terms of people                  
 understanding the state tourism marketing program.  He feels that             
 the concern over the need for a greater diversity of the                      
 representation on the ATMC is a reaction to the lack of funding               
 rather than the reality of the representation.  When they had $12             
 million in general fund money, they were able to do                           
 activity-specific targeted advertising that they are no longer able           
 to do with less than $4 million in general fund money now.                    
                                                                               
 MR. DINDINGER charged that the ATMC does currently do site-specific           
 advertising in the form of the Vacation Planner.  Where the                   
 television and print advertising are generic, the Planner is the              
 specific.  The matching contribution requirement increase from 15             
 percent to 25 percent the ATMC was compelled to raised the ad                 
 prices which forced many people out of that program.  However, the            
 cost of advertising is inverse to other publications.  The bigger             
 the ad, the more you pay.  That is the ATMC's effort to make it               
 affordable for smaller businesses.                                            
                                                                               
 MR. DINDINGER spoke of the matter of managing the volume of                   
 tourism.  While perhaps the state hasn't done enough development of           
 the infrastructure to adequately accommodate most communities look            
 forward to tourism as their best opportunity for future economic              
 development.  We can accommodate more people by being more creative           
 and aggressive in planning our infrastructure.  Opportunities have            
 to be provided in more areas of the state, which will cost more               
 money in advertising to explain more areas of the state.  Tourism             
 is expanding into rural Alaska with the Native Tourism Association            
 (NTA).  The NTA is very active in Alaska now in helping small                 
 villages with marketing.                                                      
                                                                               
 MR. DINDINGER concluded that with decreasing funding and increasing           
 numbers of people entering the tourism field, it's almost                     
 insurmountable to carry the messages of so many small Alaska                  
 businesses through the Vacation Planner.                                      
                                                                               
 Number 124                                                                    
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN inquired if the ATMC has tried to set           
 any kind of a statewide optimum level of how many people the state            
 can handle comfortably and still maintain the Alaska wilderness               
 experience.                                                                   
                                                                               
 MR. DINDINGER replied that the ATMC has not addressed that issue.             
 The ATMC is truly a marketing organization; it is not a planning or           
 policy board.  The Division of Tourism or the Department of                   
 Commerce is more apt to do that.                                              
                                                                               
 JOHN LITTEN, GENERAL MANAGER, SITKA TOURS, stated he feels that               
 tourism is working.  He personally invests his limited marketing              
 dollars into the Travel Planner and the state's program.  It's the            
 only affordable way he can do that.  He mentioned the ATMC's effort           
 to include more smaller businesses by creating a new level of                 
 participation in the planner where $275 will buy three column lines           
 to list their business name, address and numbers.  He feels that is           
 a very affordable way to be able to participate in the program and            
 was directly a response to those people that were forced out.  The            
 industry is responding in trying to make it affordable and include            
 as many people as possible.                                                   
                                                                               
 MR. LITTEN continued that the ATMC is having a more difficult time            
 with fewer dollars.  They depend on their research to ensure the              
 best value for the dollars they spend.  He feels that when there              
 are fewer dollars, it's detrimental to split it up into segments              
 among a few people because then the message wouldn't leave the                
 state.  The Division of Tourism should be doing developmental work            
 with the rural remote areas and the marketing people should be                
 telling the rest of the world about Alaska.  In response to the               
 capacity of visitors, he feels the individual communities are going           
 to decide those numbers.  The demand will be contingent upon the              
 desires of the communities.  Also, the AVA is actively working on             
 a federal level to try to find other areas like Wrangell-St. Elias            
 to spread out the visitors across the state and not find them                 
 congested on the major corridors.                                             
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business before the committee, CHAIRMAN                
 MASEK adjourned the meeting at 3:40 p.m.                                      
                                                                               

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