Legislature(2001 - 2002)
01/24/2001 02:08 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 24, 2001
2:08 PM
TAPE HFC 01 - 18, Side A
TAPE HFC 01 - 18, Side B
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 2:08 PM.
MEMBERS PRESENT
Representative Eldon Mulder, Co-Chair
Representative Bill Williams, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
Representative Carl Moses
ALSO PRESENT
Tina Lindgren, President & Chief Operating Officer, Alaska
Travel Industry Association, Anchorage; Ann Campbell, Chair,
Alaska Travel Industry Association, Anchorage.
PRESENT VIA TELECONFERENCE
None
GENERAL SUBJECT(S):
ALASKA TRAVEL INDUSTRY ASSOCIATION (ATIA)
PERFORMANCE REPORT ON TOURISM MARKETING FOR ALASKA
TRANSITION FROM ATMC AND DIVISION OF TOURISM TO ATIA
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 22nd Legislative Session, contact 465-
2156. After the 22nd Legislative Session they will be
available through the Legislative Library at 465-3808.
LOG SPEAKER DISCUSSION
TAPE HFC 00 - 18
SIDE A
000 Co-Chair Mulder Convened the meeting with the Alaska
Travel Industry Association (ATIA).
092 ANN CAMPBELL, CHAIR, Noted the handouts that had been
ALASKA TRAVEL distributed. [Copy on File]. She
INDUSTRY provided a brief historical overview of
ASSOCIATION, the agency. She stated that the
ANCHORAGE organization was managed by a 23-member
elected Board of Directors, representing
various sectors of the Alaska visitor
industry and various regions of the
State. Marketing programs are developed
and implemented through an extensive
committee structure, including advisory
committees with the active participation
of 40 members. As managers of the
contract, Department of Community &
Economic Development must approve the
marketing plan prior to implementation.
280 Ms. Campbell ATIA currently has just over 900 small
businesses. She noted the percentage of
business per number of employees.
Regular membership levels start as low as
$100 for small businesses; and marketing
partner investment rates increase
depending on the number of people
employed during the peak season.
365 Ms. Campbell Noted that ATIA provides advantages to
the small businesses. Additionally, they
are making good head way in marketing and
strength. ATIA is moving forward into
the future. Listed the fund raising
events to date.
434 Ms. Campbell Clarified that the total contracting
amount was $6.928 million dollars. The
State of Alaska contributed $4.850
million dollars. The Alaska Marine
highway will not be transferring funds
into the fund. The private sector is
expected to contribute 30% in matching
funds. To date, the cruise partners have
contributed $819 thousand dollars.
537 Co-Chair Mulder Asked what the "play to pay" partners
were.
557 Ms. Campbell Responded that they are the cooperative
advertising programs.
579 Ms. Campbell The partners have made two payment
allowances. The money to date has been
committed only. She added that 83% cash
had already been collected.
630 Ms. Campbell She expected that the remaining 15% would
be collected in the next several months.
622 TINA LINDGREN, Referenced the handout specifics and
PRESIDENT, CHIEF details.
OPERATING OFFICIER,
ALASKA TRAVEL
INDUSTRY
ASSOCIATION,
ANCHORAGE
681 Ms. Lindgren Addressed the missions and measures of
ATIA.
695 Ms. Lindgren It is important to market Alaska as a
visitor destination. The State is
attempting to attract a diverse mix of
visitors.
· maintain or increase the average
length of stay in Alaska
· increase year round employment
· attract a diverse mix of visitors
who travel to and within Alaska by a
variety of travel modes
· endeavor to position Alaska as a
year round destination
· increase total visitor expenditures
statewide
· increase independent visitation to
Alaska
· increase the rate of repeat visits
· increase interest in Alaska as a
visitor destination
· increase awareness and participation
of business in the marketing program
· increase private sector funding of
state tourism marketing programs.
772 Ms. Lindgren Spoke to what is doing well - ATIA is
creating an opportunity for those
interested in marketing to have one
destination with marketing concerns.
That could be an advantage., while
creating greater efficiency in having all
businesses "dove-tail" together. She
reiterated that would create greater
efficiency.
852 Ms. Lindgren Touched upon some new additions to the
program:
*Public relations (Martha Stewart)
*Advertising - 2 million direct mail
pieces mailed which hopefully will
generate inquiry. Magazine advertising.
Trip planning information pieces being
sent with a total of 450 thousand pieces
produced
* Trade, including international - she
listed the current overseas offices,
including Japan, UK, Germany and
Australia.
* Developing an on-line travel-training
program.
* Maintaining the "Travel Alaska.com" web
page.
1222 Ms. Lindgren She noted that ATIA employs 9.5 people,
working on the contract. She interjected
that ATIA is being efficient
investigating additional marketing
partnership opportunities beyond basic
listings and links.
1250 Ms. Lindgren Monitoring the investment. Following up
with telephone interviews indicates that
nearly 20% of people that request info
come to visit within two years.
1292 Co-Chair Mulder Asked if there had been a follow up with
those who visit and intend a continual
return to the State.
1316 Ms. Lindgren She noted that ATIA buys the most
efficient media first. She acknowledged
that there has not been recent television
advertising. She agreed that could have
an effect on those that might act
impulsively.
1354 Co-Chair Mulder Questioned why there was no television
advertising.
1363 Ms. Lindgren Stressed that had been a budget managing
decision. The hope is to get back to
television advertising.
1379 Co-Chair Mulder Referenced the idea of a conversion
matrix system?
1400 Ms. Lindgren Offered to provide the conversion study
and the breakdowns that accompany that
study.
1428 Co-Chair Mulder Asked what greater funding would provide
the State. He requested real numbers and
how they would translate to numbers of
people.
1453 Representative Inquired if there had been entry or exit
Hudson surveys done.
1468 Ms. Lindgren Explained that there had been a draft
research undertaken recently to identify
such a concern and identify the
maintained Alaskan visitor's habits.
1510 Representative Asked if that information would include
Hudson what entices visitors to come to Alaska.
1529 Ms. Lindgren Responded that there is less information
available from those persons that receive
their information from word of mouth.
1558 Representative Asked if this had been the 1st year
Hudson without television advertising.
1570 Ms. Lindgren Responded that last year, there was small
television funding. She acknowledged
that it had been a few years since there
was real television advertising.
1601 Representative Acknowledged that television advertising
Hudson was advantageous and very expensive.
1626 Co-Chair Mulder Referenced the cruise ship marketing
television ads.
1651 Vice-Chair Bunde Requested a comparison to other western
states tourism activity and how it
relates to that in Alaska. He suggested
that perhaps tourism is down because of
the gas price increase.
1670 Co-Chair Mulder Asked what would be a healthy rate of
growth in tourism in Alaska.
1683 Ms. Lindgren Commented that there is not one rate of
growth that affects each community the
same. The national average is 2.5%
increase. Last year Alaska was at 3%
growth. Currently, there are more people
entering the tourism industry, which
creates tremendous competition.
1733 Ms. Lindgren In the tourism market worldwide, the
cruise rate percentage has increased
substantially. The Alaska cruise rate
has maintained a 10% growth.
1768 Ms. Lindgren Explained that a target that the State
expects to achieve is not available. She
commented that what would be enough would
be when business owners are happy and
full. 6% increase would keep tourism
healthy for the State. She acknowledged
that at 3%, Alaska is falling behind and
that some of the State's marketing
budgets have declined.
1870 Vice-Chair Bunde Suggested that there are places in Alaska
that tourism is maxed out, such as
Juneau. He commented that the Alaska
tourism market was too focused on the
high volume areas.
1907 Ms. Campbell By definition, an average tourist is in
Alaska 10+ days. They are spending more
than the average visiting days. These
tourist tend to be "better and bigger"
spenders than most visitors to other
states.
1953 Representative Commented on the average numbers being
Whitaker provided. He spoke to the goals
established by ATIA, which he did not
believe measured success. He recommended
that ATIA provide a percentage number.
2054 Co-Chair Mulder Agreed that there should be an
encompassing number, which could provide
a measurement for the Legislature to
identify.
2080 Ms. Lindgren Explained that last year, the state
increased the budget by 12.7%. One goal
is to increase visitation by 3% in the
next year, a target set by ATIA. She
commented that to achieve that goal with
the current budget would be unreasonable.
She added that ATIA lacks the measurement
tool of the State's statistics program.
She reminded the Committee that the
program is only 6 months old.
2141 Co-Chair Mulder Noted that it would make better sense to
formulate a more focused groundwork for
policy amounts. He understood that 3%
was what had already been received. He
challenged the Board to isolate a number,
which would sustain a healthy rate of
growth.
2184 Ms. Lindgren agreed that made sense.
2190 Representative Asked if ATIA targeted summers only.
Lancaster
2197 Ms. Lindgren Explained that the entire program was a
year-round marketing program. The entire
program is meant to market Alaska as a
year-round destination.
2222 Representative Croft Asked what it would cost for ATIA to
create sustainable goals. He referenced
Page 9 of the handout, which highlighted
the outlined goals. He commented that
they had been well defined. He inquired
what a budget with a 4-5% growth would
look like. He questioned if industry
would be willing to step up to that.
2268 Representative Echoed sentiments of Representative
Davies Croft. He recommended that discussion
should be regarding market shares and the
sustained increase.
TAPE HFC 01 - 18,
Side B
007 Co-Chair Mulder Commented that it would be a good point
to debate the market shares. If a 5%
growth were attained, then what other
considerations should be made.
111 Ms. Campbell Replied that at present time, ATIA is
focused on the transitioning programs.
170 Co-Chair Mulder Commented that ATIA had a much more
defensible budget.
217 Ms. Lindgren Noted that ATIA has both a pro-active and
re-active media-advertising program.
ATIA proactively goes out and seeks
national publications and that media
story ideas are continually distributed
throughout the nation.
334 Representative Commented that the marketing campaign has
Hudson to have consistency. There must be long-
term goals established. Everything,
which is planted, must be given the
opportunity to grow. He recommended that
public relation advertising be
encouraged. He recommended that there
should be people from the trade going out
and speaking about the trade.
Additionally, he suggested that
legislators give talks about Alaska
tourism destination when out of State and
abroad.
466 Ms. Lindgren Advised that ATIA is now in the planning
stages for FY02. She noted that by the
beginning of March, there would be a
draft plan and contract, which then
should be negotiated on April 1st. To
date, the marketing committee has met.
One of their plans that they have
discussed is the increased public
relations.
532 Ms. Lindgren Interjected that ATIA has to date, only
had six months to merge all programs.
577 Representative Asked about ATIA's funding goals.
Davies
596 Ms. Campbell Replied that in three years, they intend
to reach the goals of the working plan.
621 Ms. Lindgren Next year, the goal continues to be 30%.
641 Representative Asked if the total request amount was
Davies expected to increase.
660 Ms. Campbell Replied that ATIA is currently planning a
$7.6 million dollar budget.
700 Co-Chair Mulder Questioned if there was a good business
plan.
708 Ms. Lindgren Replied that ATIA is working on that. At
this time, ATIA is encouraging businesses
to pay more if they can. She
acknowledged that it is difficult to get
people to pay more out of their pocket.
737 Co-Chair Mulder Commented that all of Alaska enjoys the
services, yet none want to pay.
760 Co-Chair Mulder ADJOURNED: 3:05 PM
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