Legislature(1995 - 1996)
03/16/1995 02:35 PM House ITT
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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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