Legislature(2011 - 2012)HOUSE FINANCE 519
01/26/2011 12:00 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska Travel Industry Association | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
January 26, 2011
12:00 p.m.
12:00:24 PM
CALL TO ORDER
Vice-Chair Fairclough called the House Finance Committee
meeting to order at 12:00 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
ALSO PRESENT
Representative Bob Herron; Representative Bob Millet;
Representative Scott Kawasaki; Representative Kyle
Johansen; Deb Hickok, Chairperson, Board of Directors,
Alaska Travel Industry Association; Patti Mackey,
Government Relations Chairperson, Alaska Travel Industry
Association; Ron Peck, President ATIA; John Binkley, Alaska
Cruise Association; Linda Anderson, ATIA.
SUMMARY
^Overview: Alaska Travel Industry Association
12:00:35 PM
Co-Chair Stoltze stated that he and Co-Chair Thomas would
be absent from the meeting as they had a leadership
meeting.
12:02:19 PM
Vice-chair Fairclough stated that many members of the
senate and house staff were present.
DEB HICKOK, CHAIRPERSON, BOARD OF DIRECTORS, ALASKA TRAVEL
INDUSTRY ASSOCIATION, expressed appreciation for the
additional funding appropriated by the legislature last
year. She distinguished the "thank you" as separate from
those in the past. She continued with a budget overview.
12:04:41 PM
Ms. Hickok introduced the presentation "Alaska Beyond Your
Dreams. Within Your Reach." (copy on file). She noted that
in past years the Alaska Travel Industry Association (ATIA)
had an $11.7 million budget which increased to $18.7 million
this year. The past few years were made possible with
private sector investments of $2.7 million. Funding from the
operating and capital grants totaled an additional $7
million in contributions to the program. The funding
approved by the legislature last session, dictated a report
presented by ATIA to the legislators by January 30, 2011.
Ms. Hickok introduced Slide 2: "Budget Expenditures." The
pie charts exhibit the expenditure and investment of the
funds. She focused on the segments of consumer marketing.
She explained that 61 percent of the budget from the core
marketing budget is spent directly in the consumer market
place, while 80 percent of the additional funding is spent
directly in the market place.
Representative Doogan asked a question about the Slide 1:
"FY 11 Budget Overview." He asked about the source of the
operating and capital grants. Ms. Hickok replied general
fund. Representative Doogan asked if the remainder of the
funding was state money. Ms. Hickok responded that the core
budget was traditionally an allotted portion of the vehicle
rental tax. The addition $7 million came from the general
fund.
Representative Wilson asked if the capital and operating
grants were one or multiyear grants. Ms. Hickok replied one
year.
12:07:36 PM
Ms. Hickok discussed Slide 3: "Consumer Marketing
Expenditures." She noted that $1 million was spent in
television advertising from the core budget. With the
additional funding, ATIA was able to spend $5 million in
television advertising leading to a powerful impact in the
market place.
Ms. Hickok discussed Slide 4: "Consumer Planning," and the
process of vetting the marketing program. She mentioned a 30
member marketing committee. She credited her program as
research based. She pointed out that 750 businesses invest
cash into the program including the Alaska Seafood Marketing
Institute (ASMI) and the National Park Service.
Representative Costello asked about coordination of ATIA
marketing with ASMI.
PATTI MACKEY, GOVERNMENT RELATIONS CHAIRPERSON, ALASKA
TRAVEL INDUSTRY ASSOCIATION, responded yes. She recalled a
number of co-promotional events between ATIA and ASMI. She
noted one example of a public relations event called the
Alaska Media Road Show.
12:10:39 PM
Ms. Hickok pointed out a document that describes all of the
marketing programs coordinated with ASMI. Representative
Costello asked for the document.
Ms. Mackey discussed Slide 5: "Science of ATIA Tourism
Marketing."
• Results from Conversion Study, conducted by national
research firm
- Assess influence of marketing efforts on
consumers that provide contact information and
receive additional trip planning information
• 12% of respondents visit the year they
respond
th
• 27% of respondents visit by the 4 year
12:12:20 PM
Ms. Mackey detailed Slide 6: "Science of ATIA Tourism
Marketing."
• Results from Advertising Effectiveness Study,
conducted by national research firm
- Assess influence of marketing efforts on
consumers that don't request additional travel
information from the state
Ms. Mackey described Slide 7: "Advertising Effectiveness
Study."
• Consumers were asked unprompted what travel ads they
remembered seeing in the past 6 months
- New TV spots moved Alaska from #10 in October
to #6 in January
- Alaska ranked ahead of brands such as
California, Orlando, Jamaica and the Bahamas
Vice-chair Fairclough asked about the second quarter report
and the responses generated. She asked how the results were
tallied. Ms. Mackey responded that both magazine and
television advertising allow mechanisms for tracking of the
results.
Vice-chair Fairclough clarified that the count listed on
"Boosting Alaska's Economy" was tallied via the ATIA web
site. Ms. Mackey offered to provide the information at a
later date.
12:15:01 PM
Representative Herron asked about the viewer's memory
following the advertisements. Ms. Mackey responded that the
destination of Alaska was the reported memory.
Ms. Mackey addressed Slide 8: "Advertising Effectiveness
Study" She stressed the effectiveness of the advertising as
cited by the study. The advertising campaign in 2011 has a
significant and positive impact on awareness among
travelers nationwide. The television slots generated a 34
percent increase in intent to visit. Overall awareness of
travel advertising has increased from 27 to 41 percent.
Representative Wilson noted that many new television shows
exist including those starring Sarah Palin. She wondered
how ATIA distinguishes between the interest generated by
the increased advertising and the popular reality
television shows. Ms. Mackey responded that the questions
asked in the study were specific to ATIA's television
advertising.
Representative Wilson asked how the viewers who visit
Alaska are measured. Ms. Mackey stated that the requested
information is provided later in the presentation.
12:17:54 PM
Ms. Mackey discussed Slide 9: "Advertising Effectiveness
Study."
• Awareness is important, but so is perception
- 79% of respondents had a positive
opinion of Alaska's advertising
• Ads did a good job of communicating:
- Breathtaking scenery, wildlife in its natural
habitat, illustrated state's variety of
activities, positioned Alaska as an appealing
destination
Ms. Mackey detailed Slide 10: "Consumer Marketing."
• Television Ads
• Direct Mail campaign
• Pay-per-click online campaigns
• Magazine ads
• Vacation Planners
• TravelAlaska.com
Ms. Mackey detailed Slide 11: "Promoting Tourism in
Alaska."
• Top 3 producing markets:
- United Kingdom
- Australia
- German Speaking Europe
• Partner with tour operators to increase awareness of
Alaska and drive sales
Ms. Mackey discussed Slide 12: "Alaska Trade Show."
· Educated travel agents on the lure of Alaska,
highlighting communities and activities
· Focused on key gateway cities with direct flights to
Alaska
o Seattle, Denver, Chicago
o New York, Philadelphia
12:20:01 PM
Ms. Mackey discussed Slide 13: "Promoting Tourism in
Alaska." She informed that ATIA's television advertising
was recreated this year with the help of new high
definition technology. She pointed out that in addition to
film and video, new methods of photography are used in the
website, magazine ads and brochures. She reported that 100
percent of the work was performed by Alaskan businesses.
Ms. Mackey discussed Slide 14: "Promoting Tourism in
Alaska" She mentioned the additional funding used to
feature Alaska in the magazine "Cooking With Paula Deen"
She noted that Alaska scored 16 full pages in the popular
magazine's January/February 2011 edition. Ms. Deen's
magazine had upward of seven million readers. The
magazine's interest in food provided a promotion
opportunity for the Alaska Seafood Industry.
Ms. Mackey discussed Slide 15: "Promoting Tourism in
Alaska." She mentioned another media event that resulted in
great coverage and was made possible by the appropriation.
She informed that Dave Price from the CBS Early Show
conducted an on-air contest to select a city to visit this
winter, and Anchorage was the winner. She stated that the
show featured Dave's efforts to return to New York City
within one week while relying on temporary offers of
employment and the good will of people. The Early Show
reaches 2.56 million audience and generated great exposure
for Alaska through both television and the web site and
social media outlets. The exposure was valued at $17
million.
12:23:21 PM
Ms. Mackey detailed Slide 16: "Promoting Tourism in Alaska"
She advocated for presenting the state on television. She
displayed a short video clip from the advertising
effectiveness study mentioned earlier.
12:26:37 PM
Ms. Mackey explained that many of the popular programs
portraying Alaska are not always accurate.
Ms. Mackey stated that ATIA was able to run television
spots on only one cable network with a core budget of $11.7
million. With the increased budget of $18.7 million, ATIA
is able to run television spots on 7 national cable
networks. "Impressions" is a television term for the impact
that a commercial has on a viewer. Many additional
impressions have been documented as a result of the newly
appropriated funding.
12:29:13 PM
Ms. Mackey displayed the new ATIA advertisements to the
committee.
12:30:54 PM
Ms. Hickok continued with Slide 17: "Measurement."
• Alaska Visitor Statistics Program (AVSP), administered
by DCCED
- Number of visitors to Alaska
- How much visitors spend instate
- What communities visitors travel to instate
Ms. Hickok detailed Slide 17: "Measurement."
• In November, results from Travel Intentions Research,
conducted by a national research firm, projected for
Summer 2011:
• 4.3% increase = 777,000 visitors = $72 million in
state spending
Ms. Hickok stated results from Travel Intentions Research,
conducted by a national research firm, which were projected
for summer 2011. Travel intentions are incurred by phone
survey and provide a good barometer for the future. She
added that the United State's Travel Association projects a
2.6 percent increase nationally for travel. She claimed
that ATIA can continue to document the effectiveness of the
funding approved during the last legislative session.
12:35:11 PM
Ms. Hickok thanked the ATIA team, the marketing committee
and the board. She appreciated the investment in Alaska
tourism.
12:36:00 PM
Representative Costello expressed appreciation for the
advertising efforts of ATIA. She asked about the sunset of
the funding match. She understood that the match
percentages will change. She asked how ATIA's plans would
change if the fifty/fifty match was reinstated.
Ms. Hickok responded that the match translates into
approximately $4.5 million dollars. The $2.7 match was
generated for years as a result of help from ATIA members.
She stated that it would prove quite difficult for ATIA to
return to the fifty/fifty match.
12:38:03 PM
Representative Costello asked for figures regarding the
industry's contribution to the state's economy. Ms. Hickok
responded $180 million in collected tax revenue.
RON PECK, PRESIDENT ATIA, estimated the state industry fees
as $120 million, which does include marine highway fees,
nonresident fishing licenses, corporate income tax from the
visitor industry, casino gaming tax from the cruise
industry, and the head tax. The $180 million is the
increase or additional municipal spending. He mentioned an
additional $30 million in local hotel lodging taxes that
are contributed to the various local municipalities. He
added that direct expenditures on an annualized basis equal
$2 billion and indirect expenditures are estimated at $2.3
billion.
12:40:41 PM
Representative Doogan asked about ATIA's current budget
request. Ms. Hickok responded that the governor had $16
million in his proposed budget, which remains consistent
with last year's budget. She reminded that ATIA was
counting on the additional $2.7 from the industry.
Representative Doogan asked about the budget request. Ms.
Hickok responded $16 million.
Vice-chair Fairclough clarified the question. Ms. Hickok
responded that the $2.7 million includes the match raised
by the industry.
12:42:02 PM
Representative Herron expressed appreciation for the
update.
Ms. Hickok clarified the ultimate budget goal of $20
million. She expressed great appreciation for the $18.7
million budget.
12:43:29 PM
Representative Herron clarified that tourism is important
for every legislator's constituents. He invited two old
friends from the audience to testify to the importance of
tourism in Alaska.
12:44:29 PM
JOHN BINKLEY, PRESIDENT, ALASKA CRUISE ASSOCIATION,
discussed the history of his family run business. He stated
that his own children now run the business. He stated that
many Alaskans benefit from the tourism industry. He noted
that he loves the industry and enjoys being a part of it.
He expressed excitement regarding the generosity of the
legislature. He noted that the increase in advertising
allows for an increase in tourism and in jobs.
12:47:25 PM
Representative Herron acknowledged Mr. Binkley's new
grandchild.
Representative Herron asked how the trends in tourism have
changed since the economic downfall.
Mr. Binkley answered that his family business was down 30
percent in 2009. He stated that the business endured some
tough times. He expressed optimism regarding the policy
decisions of both the governor and the legislature. The
governor and the legislature made the economic climate
better for cruise ships in Alaska. The reduction in the
cruise ship head tax along with altering the regulatory
regime and improved marketing have proven effective means
of turning the tide for Alaskan tourism.
12:50:34 PM
LINDA ANDERSON, ATIA, expressed appreciation for the
additional funding. She noted that every segment of the
industry has united to create a more effective marketing
system for tourism in Alaska. She opined that the money
coming to the treasury has created a better partnership in
Alaska.
12:53:44 PM
Representative Costello asked Mr. Binkley about the value
of a sustainable marketing program for tourism in Alaska.
Mr. Binkley responded that a marketing program must be
sustained to allow the best value for the money spent. He
opined that a steady level of funding over time allows for
increased awareness. He compared marketing to a campaign.
ADJOURNMENT
The meeting was adjourned at 12:55 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| ATIA Report Overview 012611 PDF.pdf |
HFIN 1/26/2011 12:00:00 PM |
|
| ATIA Letter 012611.pdf |
HFIN 1/26/2011 12:00:00 PM |