Legislature(1995 - 1996)
02/07/1995 03:02 PM House ITT
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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.
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