Legislature(1995 - 1996)
10/06/1995 01:10 PM House ITT
| Audio | Topic |
|---|
* 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 AND TOURISM
October 6, 1995
1:10 p.m.
Fairbanks Legislative Information Office
MEMBERS PRESENT
Representative Beverly Masek, Chairman
Representative Jeannette James
Representative Pete Kott
Representative Caren Robinson
MEMBERS ABSENT
Representative Alan Austerman, Vice Chairman
Representative Brian Porter
Representative Irene Nicholia
COMMITTEE CALENDAR
Regional report from local tourism
International report from Representative James
Report from Hank Phillips, President, National Tour Association
Discussion: Promoting Cottage Industries in Alaska
WITNESS REGISTER
AMY REED GEIGER, Manager
Visitor Services - Museum
University of Alaska
P.O. Box
Fairbanks, Alaska 99775
Telephone: (907) 474-7505
POSITION STATEMENT: Discussed tourism issues
PAUL WELTON
Arctic Seven Tours
P.O. Box 80488
Fairbanks, Alaska 99708
Telephone: (907) 479-0751
POSITION STATEMENT: Discussed tourism issues
DEBBIE EBERHARDT, Owner/Operator
A Taste of Alaska Lodge
551 Eberhardt Road
Fairbanks, Alaska 99712
Telephone: (907) 488-7855
POSITION STATEMENT: Discussed tourism issues
HANK PHILLIPS, Senior Vice President
National Tour Association
546 East Main Street
P.O. Box 3071
Lexington, Kentucky 40597-3071
Telephone: (606) 226-4255
POSITION STATEMENT: Discussed tourism issues
WENDY WOLF, Programs Manager
Division of Tourism
Department of Commerce and
Economic Development
P.O. Box 110801
Juneau, Alaska 99811-0801
Telephone: (907) 465-5471
POSITION STATEMENT: Discussed tourism issues
SHARON GAIPTMAN, Development Specialist
Division of Tourism
Department of Commerce and
Economic Development
P.O. Box 110801
Juneau, Alaska 99811-0801
Telephone: (907) 465-5478
POSITION STATEMENT: Discussed tourism issues
DAVE CARP, Executive Director
Alaska Tourism Marketing Council
3601 C Street, Suite 700
Anchorage, Alaska 99503-5935
Telephone: (907) 563-2289
POSITION STATEMENT: Discussed tourism issues
ACTION NARRATIVE
TAPE 95-8, SIDE A
Number 004
The House Special Committee on International Trade and Tourism
was called to order by Chairman Masek at 1:10 p.m.
CHAIRMAN BEVERLY MASEK announced the meeting would be
teleconferenced. Members present at the call to order were
Representatives Masek, Kott and James. Staff for Representatives
Austerman and Porter were in attendance via teleconference.
Representative Robinson was in attendance via teleconference from
Juneau.
Number 116
CHAIRMAN MASEK informed the committee the Alaska Visitor's
Association (AVA) is currently having a international trade and
tourism meeting in Fairbanks and she thought it would be an
excellent time to hear from some of the small businesses
throughout the state.
CHAIRMAN MASEK said the meeting is one of a series of meetings
she is planning on holding until January. She encouraged anyone
who is related to the tourism industry to submit information as
she is planning to write a report regarding tourism for the
House, Senate and the Governor's Office.
Number 332
CHAIRMAN MASEK said the first item on the agenda includes
addressing regional reports from local tourism businesses on what
are: A. The existing opportunities for locally controlled
tourism in Fairbanks; B. What is the potential; and C. How to
achieve the potential. She said the committee would have a
discussion with people who will share ideas with the committee.
CHAIRMAN MASEK explained the second item on the agenda is
international reports. Chairman Masek noted there would be a
report from Representative James on her recent trade delegation
trip to China. She also noted there would be a report from Hank
Phillips, Senior Vice President, National Tours Association, on
the importance of the international market. The committee would
then take public testimony.
Number 624
CHAIRMAN MASEK invited Mr. Geiger to come before the committee.
AMY REED GEIGER, Manager, Visitor Services - Museum
University of Alaska, stated he deals with admissions, visitation
and daily operations at the museum. He said they are advocates
for all of the interior attractions and small business. They
encourage small tour groups and local residents to take advantage
of the gallery and the special exhibits. Mr. Geiger noted during
the summer months, they focus on very pertinent Alaskan topics
that would be attractive to the tourist industry. He explained
another interest is the museum store which does promote and
showcase many local artists and small business. They solicit
products from all over the state and a majority of the products
in the store are Alaskan products.
MR. GEIGER said the museum is in their third year of a
collaborative effort with the World Eskimo and Indian Olympics.
He noted this is a spectacular show which deals with endogenous
Alaskan Native games. It is a good opportunity for endogenous
Alaskan Natives to reveal their heritage.
Number 908
MR. GEIGER said the museum currently has a annual arts and crafts
fair entitled "Treat Yourself to a Toy," which is held in
December. They invite a variety of local artists to participate.
MR. GEIGER explained they are attempting to build on to the
museum in order to create an art gallery and potentially a
planetarium. He noted they don't look at this as competition
with other attractions. The more attractions that there are in
the area means there will be more reasons for visitors to come to
the Fairbanks area. Mr. Geiger said they hope to create this
phase two over the next seven or eight years in order to show
more art.
MR. GEIGER said they have realized during the months of May and
September there has been a 5 percent increase in visitation. He
said the museum is able to take advantage of the 5 percent
increase because they are still open whereas there are a lot of
local attractions that are only open in June, July and August.
Mr. Geiger said he feels that there are some small businesses and
locals that could be taking advantage of that shoulder season and
it might to something to look into. He noted they are
considering changing their summer hours to be from May 15 through
September 15.
Number 1158
REPRESENTATIVE JEANETTE JAMES indicated she is very interested in
the planetarium and asked if it is going to be a display.
MR. GEIGER explained the planetarium will be in collaboration
with the Geophysical Institute to some extent. He noted there
are a lot of Japanese tours in the winter months because of the
northern lights.
REPRESENTATIVE JAMES inquired as to what the winter hours are at
the museum. MR. GEIGER stated they are open year round. He said
if you come in June, July or August, there is almost total light
all night so there isn't an opportunity for someone from the
Lower 48 to view the lights. If they had a planetarium, it would
serve a function to be able to view the lights and consolations.
MR. GEIGER said he has learned from the meetings held by the
Alaska Visitor's Association (AVA) that visitors really like
educational programs. He said we might want to encourage other
small businesses, local attractions and entities to have
informational sources within their attractions of their small
business.
Number 1505
REPRESENTATIVE JAMES asked if there are guided tours through the
museum or is it visual and read as you go. MR. GEIGER indicated
currently there aren't guided tours. They have considered guided
tours but there are a couple of problems. One is that the floor
space isn't particularly large. If they were to provide guided
tours, they probably would like to charge a price. It would be
hard to try to filter out people that are just coming to the
gallery and aren't part of the tour. He noted they provide tours
for travel industry people.
REPRESENTATIVE JAMES referred to the museum in Juneau and said
when she visited, she had met a lady from the library and she
gave a personal tour. She said it was wonderful. One thing
about reading everything is it takes so long to get through and
you miss a lot of it.
MR. GEIGER said he agrees with Representative James. He noted
one thing they have done in order to capture that feeling is they
have started to explain their program which has been very
popular.
REPRESENTATIVE JAMES noted she had just returned from a three
week trip to China and she had the privilege of a guided tour
through the Forbidden City. She said she watched other guided
tours going through there. The one on two experience they had
could not be repeated. Representative James noted she would pay
a lot of money for the one on one experience.
Number 1827
REPRESENTATIVE JAMES referred to when the tour people decided not
to go to the university but to go to the El Dorado and asked if
that was damaging to the museum. MR. GEIGER said they are
recovering. He noted what bothers him about that is when money
shrinks, the first thing that it shrinks in is offering public
services. He said the "Explainer Program" that he just
discussed, which was free to anybody that came to the museum, is
probably on the cutting block. The question is, "Can we still
afford to provide this service?" Mr. Geiger said in going over
the numbers, they went from 142,000 with Princess to 124,000
without Princess. They realized about a 2 percent increase if
you were to subtract the (indisc.) of Princess. He said he
wishes there were more options for people on tours. Sometimes he
believes it would be more equitable for everybody in Fairbanks if
people had more of an opportunity to pick and choose what
attractions they would partake in. Mr. Geiger noted they are
fortunate to still get Westours which brings great numbers to the
museum.
Number 2110
CHAIRMAN MASEK asked Mr. Geiger what approach the museum takes in
marketing to the individual tourist. She asked how they know the
museum exists. MR. GEIGER said they are fortunate to have a lot
of "word of mouth" in Fairbanks. He said he believes that is
probably the way the museum gets marketed the best. Mr. Geiger
said the museum does reach out to tour groups and other groups
via mailings and brochures. They have not pursued an aggressive
marketing. The public services end of the museum is only one
little part of it. He said the museum is a complex place and one
of the mandates is research. He noted other things go on there.
Mr. Geiger explained over the course of the past decade, the
museum has grown tremendously and the employees that deal with
the public sector have stayed the same. He noted he is the first
new employee added to the public sector realm of the museum since
its move in 1982.
Number 2327
CHAIRMAN MASEK asked how many people work in the museum's gift
shop. MR. GEIGER explained the gift shop is completely run by
University of Alaska - Fairbanks students. They are student jobs
and you would have to be a full-time student in order to have the
job. In the summer, they have approximately 15 museum
attendants. In the winter, the number drops to eight or nine.
He noted in the summer the attendants are full-time and the
winter there are less than 20 hours per week.
CHAIRMAN MASEK inquired if those people are part of the
educational part of the museum. MR. GEIGER indicated the
Explainer Program is handled by the Public Relations and
Education Department of the museum which is run by Terry Dickie.
He handles the docent programs for school kids which teaches more
about Alaskan history. Mr. Dickie also handles the Explainer
Program in which there are usually three explainers during the
summer. It runs from June through August 30.
CHAIRMAN MASEK referred to the university students and asked if
they have a real interest in tours and expanding to the tourist
industry. MR. GEIGER said often they do. He noted the good
thing about being a museum attendant is you can have a big
variety of interests and aptitudes and also be a wonderful museum
attendant. No only do they work in the store and with tourism,
but they also work in the gallery and have to have some knowledge
of natural and physical Alaskan history.
Number 2744
CHAIRMAN MASEK asked Mr. Geiger how he thinks the state can
improve on anything that would impact the museum. MR. GEIGER
said he thinks they are lucky to enjoy a legislature and governor
that promotes tourism. He explained he is relatively naive of
exactly what the legislature and the state does in order to
promote tourism directly. There definitely is a need for the
state to provide an overview of Alaska. Mr. Geiger referred to
an issue talked about in the AVA meeting earlier in the day which
was how roadways and campsites were getting exploited by people
throwing trash out, et cetera, and how the people of Alaska find
that very offensive. He said the AVA talked about efforts of how
to perhaps get the state to make an organized effort to clean it
up. In addition to that, he believes it would be really good if
the state or legislature provided a list of expectations for
tourists and Alaskans using the roadways and facilities
explaining mandates of what they shouldn't do while using the
facilities, et cetera.
CHAIRMAN MASEK noted Gail Phillips, Speaker of the House,
appointed her to serve on the Marketing Alaska Group which is
made up of members from the private sector, the House and the
Senate. She noted the litter problem is being talked about.
Hopefully, there will be something done because it is really a
big problem.
Number 3201
The next person to address the committee was Paul Welton
PAUL WELTON, Arctic Seven Tours, informed the committee members
he is representing a number of small companies including Alaska's
Seven Gables which is one of the larger bed and breakfasts in the
state of Alaska. It is marketed nationally and internationally.
Another is Arctic Seven Tours which has boat, bike, snow machine
rentals and reservation services. He said they have a rather
aggressive marketing campaign and one of the reasons is that 50
percent of their business comes from overseas.
REPRESENTATIVE MASEK said she would like the committee to hear
what the existing opportunities are for locally controlled
tourism in Fairbanks, what the potential is and how to achieve
the potential. She referred to marketing and asked how he feels
the state can help smaller businesses.
MR. WELTON referred to the question of "What are the present
existing opportunities," and said his organization is in its
infancy. The first part of any tourism is package tours. A lot
of people are afraid to go to places like Russia. They like to
go in with a group as you have protection and security. Mr.
Welton said after the market continues to mature, then you have
the individual travelers making their own reservations. He noted
the large tour companies tend to dominate the market and he is
very thankful because they do much of his company's marketing for
them. They are able to bring in people by the thousands with
ship, airplanes, et cetera. Many times the infrastructure cannot
hold the number of people they are bringing in. Therefore, it
spreads out in to the small economy such as the bed and
breakfasts catching the overflow of the larger tour companies.
MR. WELTON referred to the question of how to achieve the
potential and said one thing that has been very successful is the
Alaska Tourism Marketing Council (ATMC). He said the smaller
businesses are sorry to hear about the cuts occurring with the
ATMC. That affects the small companies because in the beginning,
he thought the advertising was free. Currently, for a couple of
lines of advertising is $500. He noted he believes the $500 fee
is a very good fee when you consider that it is being printed in
terms of 700,000 copies which is being distributed throughout the
nation and other parts of the world. For people just beginning,
$500 is a major cost.
MR. WELTON said another area to enhance achievement would be the
product Alaska. One of the problems in Alaska is the
bottlenecks. This is a major problem in Fairbanks, particularly
with the federal controlled and managed Denali State Park. Along
with that is the word "access." Access to more of Alaska really
needs to be opened up rather than being restricted to predefined
areas.
MR. WELTON explained a major problem is an identity crises. He
showed the committee a brochure from Germany which had a map of
Alaska and didn't show the city of Fairbanks.
Number 3949
CHAIRMAN MASEK indicated Fairbanks is Alaska's second largest
city. She said the state does have an office in Germany and
there is a representative who does represent the state of Alaska
on tourism. She suggested that the committee may find out from
the representative why there aren't more details as it is a big
concern.
MR. WELTON explained one of the reasons his company had to spend
thousands of dollars to go internationally. The mentor of this
was Dale Fox who runs marketing and consulting out of Anchorage
for large companies that can afford his fees. Mr. Welton
explained he had contacted Mr. Fox because he had contacted the
Division of Tourism in Juneau numerous times to try and get
information on travel guides in Germany. He said he didn't want
to spend thousands of dollars to go to Germany to get the travel
guides. He said he wasn't getting anywhere with requesting
information on the travel guides. Mr. Welton explained that what
it came down to is Mr. Fox said either we can pay him a couple of
thousand dollars to get the information for him or Mr. Welton
could get on a plane and fly to Germany to get their own
information. Mr. Welton said he and his wife decided to go to
Germany. He showed the committee some clandestine photographs he
smuggled out of Germany, which showed the building that the
Division of Tourism occupies. He informed the committee there
are some plaques on the outside of the building in which there
are some misspellings. You'll also notice Alaska isn't the only
state being represented but also Miami, Florida. Nobody seems to
be aware of the fact that it is Miami and Alaska. Mr. Welton
said he was prohibited on more than one occasion by more than one
person at the Division of Tourism to take any photographs in
Germany. He explained he took the photographs to show what he
had found. He was told on two occasions by the Edeltraud Sommer,
the director, and the assistant director in Germany, that no
photos would be taken under any circumstances.
CHAIRMAN MASEK asked if Ms. Sommer explained why. MR. WELTON
informed the committee Ms. Sommer reversed the question by
saying, "Well why would you want to take photographs?" Mr.
Welton said if it is the state's office and he is paying money as
a tourist visiting Germany, why can't he take pictures.
CHAIRMAN MASEK asked if he was allowed to go into the office.
MR. WELTON explained he was allowed to go into the office but
wasn't allowed to take photographs inside the office.
Number 4419
CHAIRMAN MASEK said there were some people who came to her
personally regarding the issue. She referred to a meeting she
held in Juneau who brought those same concerns to her. Chairman
Masek said she understands Mr. Welton's concerns. They really
should be advertising for our state. She noted she would ask a
representative from the Division of Tourism to testify after Mr.
Welton. Chairman Masek asked Mr. Welton when he made the trip to
Germany.
MR. WELTON said he couldn't give the exact date but he thought it
could be last November.
TAPE 95-8, SIDE B
Number 110
MR. WELTON showed the committee a book from Great Britain that
the travel agencies in Great Britain use to book clients to the
United States. He noted the book costs hundreds of dollars. He
said the book has about 50 pages of advertising on Florida. Mr.
Welton said he looked for Alaska and it wasn't listed. He noted
there were three pages of fine print on Ohio which he didn't
realize was a major tourist destination. Mr. Welton said how can
a travel agent in Great Britain reference Alaska if it isn't in
the book. He noted the book has information provided by the
states and it doesn't cost anything to advertise in the book.
CHAIRMAN MASEK noted the state has other offices besides the ones
in Germany and Great Britain. There is an office in Australia
where there are trade specialists who are contracted through the
state to do the marketing for Alaska.
MR. WELTON said he thinks that is the problem. There aren't
Alaskans representing Alaska. Imagine if a Japanese corporation
came to the United States and didn't have a Japanese
representative. Mr. Welton said he finds it ironic that the
state can contract with Japan or Germany and never have an
Alaskan represent us. He believes it should be an Alaskan
representing Alaska rather than other people whose interests are
quite divided as they are representing other states.
Number 628
CHAIRMAN MASEK said she has traveled extensively throughout
Europe several times. She explained she attended a trade show in
Italy in 1993. Alaska had no representation. She said Florida
had good representation. Chairman Masek said Alaska has to
become more competitive. We need to see changes. She referred
to budgets being cut and said it has to be done to where there is
a positive impact on tourism in our state. We must do everything
we can to improve tourism. She asked Mr. Welton if he had
additional comments.
MR. WELTON referred to the ATMC and said in terms of state money,
everyone will agree that the ATMC has done a very good job and
has been very effective. He referred to the Division of Tourism
and said he believes their budget is $4 million or $5 million.
He believes half of that is going to the contractors. Mr. Welton
said he would like to point out that when you go to an
international contractor's office, they don't give out Alaskan
information in terms of tourism. Instead, they are giving out
their own lists. He showed the committee some information in
which advertised German tour operators but no Alaskan tour
operators. He said we're taking our Alaskan money, giving it to
a non Alaskan who is representing 77 German tour operators. He
indicated this also occurring in Japan.
MR. WELTON said the Division of Tourism puts out a generic
publication, that is paid for with taxpayers dollars. He said
there are lots of beautiful photos in it but there isn't
advertising from a particular company. It is very generic. Mr.
Welton noted he would like to see the Alaska Milepost Magazine in
the Division of Tourism's office in Germany. Most Germans that
come to Alaska come for 30 days, rent recreational vehicles and
travel. He noted there is also a lot of advertising in the
Milepost.
Number 1357
REPRESENTATIVE JAMES referred to access and said in Anchorage she
attended an all day Joint House and Senate State Affairs
Committee meeting regarding RS 2477 trails throughout the state
with the interest of being able to provide legal access. One of
the discussions is that because of federal regulations, do we
allow trails as trails for what they're being used as now.
Later, if they are to be used as something else, public input
should be allowed. Representative James said we are going to
need some help in addressing trails on federal lands. She said
the legislature is very concerned about access in the state. She
asked that if there is any input on that issue, they should be
given to the committee.
Number 1532
CHAIRMAN MASEK asked if there were questions to be asked via
teleconference. REPRESENTATIVE KAREN ROBINSON indicated she
didn't have any questions. CHAIRMAN MASEK asked if
Representative Austerman was available in Kodiak. A Cliff Stone,
staff member to Representative Austerman, indicated the
representative hadn't arrived yet.
Number 1600
CHAIRMAN MASEK announced the committee would take a five minute
break at 2:15 p.m.
CHAIRMAN MASEK called the meeting back to order at 2:34 p.m. She
noted Daniella Loper from Representative Porter's office was
connected via teleconference.
Number 1710
DEBBIE EBERHARDT, Owner/Operator, A Taste of Alaska Lodge, was
next to testify before the committee. She noted her business is
considered a bed and breakfast and is located in Fairbanks. Ms.
Eberhardt said her and Mr. Welton do share a lot of the same
ideas but her comments are kind of opposite of what Mr. Welton
has said. She mentioned she advertises with the Alaska State
Planner and said she bought one of the first display adds that
was bought by a bed and breakfast. Ms. Eberhardt said 99.9
percent of the business that her business generates comes
directly from that advertisement. She noted she isn't a member
of the AVA but hopes to joint in the future. Currently, she
feels her efforts seem to be directed through her own marketing
division and not through an organization. Ms. Eberhardt referred
to the Division of Tourism and said she has attended several
workshops and seminars put on by the division. She discussed a
European travel fair she attended at the Wedgewood Resort the
previous Tuesday. Ms. Eberhardt said the fair was very well
organized by the division. She said she can't say that any of
the state's opportunities which have directly affected her have
been bad. She said it upsets her that the budgets are being cut.
If the ATMC budget is cut, the Vacation Planner is out the
window. Ms. Eberhardt said she has been in business over the
past four years and has found some things work and some things
don't. She indicated that budget cuts won't hurt the larger
companies but will hurt the small business.
MS. EBERHARDT said her biggest complaint is that the state of
Alaska is she is in direct competition with them. Her business
is located at 5.3 mile of the Chena Hot Springs Road. She is 53
miles from the Chena Hot Springs Resort which is currently owned
by the state of Alaska. She said the state is controlling her
business as they are involved in tourism in the wrong areas. The
railroad is owned by the state of Alaska and the state dictates
when the train runs and when it doesn't.
Number 2305
CHAIRMAN MASEK asked Ms. Eberhardt if she has any thoughts or
ideas as far as the opportunities in Fairbanks for the local
controlled tourism and as far as the state being involved. MS.
EBERHARDT said the state needs to continue funding and assist the
small operators. She indicated there should be more financial
support from the state in getting more business going. She
suggested that when there are state conferences in Fairbanks,
employees should start picking some of the smaller business to
use as their overnight lodging and small conferences.
MS. EBERHARDT said she thinks there are enough bed and breakfasts
in the Fairbanks area but probably not in the state as a whole.
She noted dog mushing is very popular but she isn't sure there
are any programs to assist a dog musher in getting a program off
the ground.
Number 2638
CHAIRMAN MASEK said the most concern is with budgets and we will
continue to see more cuts. She said that is one of the reasons
she is holding hearings and she plans to have several more before
session begins. She would like to hear from the small business
people who are struggling. Chairman Masek said we need to look
for positive ways to spend the money as there probably won't be
much more funding.
MS. EBERHARDT said if the budgets are going to be cut, those cuts
need to be redirected. There is very little money, if any, that
is directed towards winter tourism. Everybody says they have to
make their money in four or five months. On the contrary for
her, she does a lot of tourism in the winter. She stated she
survives in the winter on the local and tourism markets. Ms.
Eberhardt urged that marketing include the winter months. She
stated not enough money is being spent on the winter market.
Number 2820
CHAIRMAN MASEK asked if that is individual tours. MS. EBERHARDT
said not enough money is being spent for any type of tours
whether it is individual or larger companies. She asked why
would anyone come to Alaska if they don't hear anything about
winter markets. If they just hear about the summer markets,
they're only going to come in the summer. She said July in
Fairbanks seems to be heavily marketed. In her opinion, May,
June, August and September are the premium months for the
Fairbanks area. Chairman Masek thanked Ms. Eberhardt for her
testimony.
Number 3153
CHAIRMAN MASEK noted for the record that Dave Harp, Executive
Director, ATMC, was in attendance. She also noted there were
several other people present from the Alaska tourism industry and
the Governor's office.
Number 3234
HANK PHILLIPS, Senior Vice President, National Tour Association
(NTA), stated his company is located in Lexington, Kentucky. Mr.
Phillips said in preparing for his trip to Fairbanks, he was
amazed at the reaction of people that he told he was traveling to
Alaska. He said Alaska is blessed as it has a mystic and a
magnificent majesty that is all its own. He said he has come to
love the people of Alaska. They offer their own special brand of
hospitality and have fun and a friendly approach to visitors.
MR. PHILLIPS informed the committee the NTA is the largest North
American trade association in the package travel industry. NTA
has 4,000 corporate members. That membership represents a cross
section of the travel industry. Their membership includes more
than 600 tour operators who develop, sell, and operate travel
packages to destinations in the U.S., Canada, Mexico and around
the word. Other categories of membership include 800 destination
marketing organizations representing local, regional, state and
providential travel promotion offices and more than 2,300
suppliers representing attractions, hotels, restaurants, bus
companies, airlines, receptive operators and many others. Mr.
Phillips informed the committee there are 36 members of NTA who
are based in Alaska. There are a number of others that are very
active in the Alaskan industry but aren't necessarily based in
the state. He noted that out of the 600 tour companies that are
members of the NTA, 290 have told him that they bring groups,
tours or packages to the state of Alaska.
MR. PHILLIPS said he would comment on how NTA relates to some of
the small companies and suppliers like small hotels or
restaurants. He said many of those are part of the 2,300
membership. The NTA often tells people that they may not be for
them because of the cost of joining the association and
participating in the activities of the association. Mr. Phillips
said the NTA strongly encourages them to work closely with their
local convention and visitor's bureaus (CVB) as there are
approximately 700 that are members of NTA. He said they also
encourage them work closely with their state tourism offices. He
noted all 50 states and all Canadian provinces are members of
NTA.
MR. PHILLIPS explained NTA has recognized inbound international
tourism as an important market segment to the travel industry and
NTA's members and is one that will continue to grow as the
world's emerging economies produce more and more travelers.
Recognizing this, in 1987 NTA established an international
committee to develop a comprehensive plan to increase the
capabilities of the NTA membership to access and serve the
inbound international market. To achieve this, the committee has
since focused its work on developing programs in two areas,
education and marketing. Through this dual programming effort,
NTA educates their members about the overseas markets and also
promotes members to the international tour and travel producers.
Each year, NTA is represented at various international trade
shows to promote the products and services of their members. He
noted that the board of directors has approved participation at
seven international shows. Three of those will be offered to
tour operators to come in and operate under NTA's umbrella.
MR. PHILLIPS said we all know that travel and tourism is good
business in America and is also very good business for America.
The travel and tourism industry is the third largest industry in
the U.S. and is the second largest employer with a $417 billion
annual impact on our nation's economy. The overseas market
currently generates nearly one-sixth of all tourism dollars or
$77.6 billion annually. The U.S. travelers spend $22 billion
overseas.
MR. PHILLIPS informed the committee members during the last ten
years, Alaska has seen a steady increase in its overseas market.
According to a 1993 AVA survey conducted by the McDowell Group,
the number of international visitors has increased 57 percent and
overseas spending in the state has increased more than five fold.
Although the overseas market represented just six percent of
Alaska's total visitation in 1993, it produced $55.4 million in
tourism spending during the summer tourist season. The overseas
visitor to Alaska spends nearly $1 thousand per day on lodging,
transportation, tourism recreation, food and souvenirs. Mr.
Phillips said those numbers were gathered from research which was
supported by state funding. He noted that same research
represents a project that is envy of several other states.
MR. PHILLIPS said Alaska is a new frontier of foreign travelers.
We are seeing a trend in the overseas markets that could put
Alaska high on the list of key destinations. Mr. Phillips said
the traditional big cities and major tourist attractions in the
Lower 48 are still going to attract foreign visitors but many of
the repeat travelers are now looking for new destinations and
unique travel experiences. They want to see the wilderness areas
and native habitat that is entirely different from their own
countries. He noted that adventure travel is becoming
increasingly popular. Mr. Phillips said at the international
travel shows that the NTA attends, buyers frequently ask for more
information about Alaska.
Number 4234
MR. PHILLIPS explained the international market is an important
tourism marketing segment and is rapidly growing. He referred to
Japan and said the forecast indicates substantial growth ahead
with over 20 million outbound departures by the year 2000.
Currently, over four million Japanese visit the U.S. each year
and this is expected to double by the turn of the century. Japan
represented 11 percent of all of Alaska's inbound tourism in
1993. Clearly, there is great potential of growth from the
Japanese market and this is only one example of Alaska's bright
future. There is a challenge and that is effective promotion
which is essential for the success of travel and tourism. If you
promote, the tourist will come and they will spend.
MR. PHILLIPS referred to hearing the Governor speak the previous
day and said he made reference to Alaska being a land of dreams,
but he pointed out that it is not a field of dreams. Just
because it is here and just because it is as great as it is, that
doesn't mean people are going to automatically come to Alaska.
It is going to take hard aggressive promotion. Mr. Phillips
explained the dollars spent on tourism promotion is a good
investment that results in a stronger economy.
MR. PHILLIPS said traditional methods of marketing to the
international market include international trade shows, trade
missions, brochures, advertisements and trade consumer
publications. Another tried and true marketing method is
familiarization tours. He said he learned upon his arrival in
Alaska that 20 German and United Kingdom travel producers were in
Alaska on a familiarization tour. They saw all the regions of
the state and visited Fairbanks where 60 businesses put together
a trade show to show their services and products to the travel
producers.
Number 4601
MR. PHILLIPS said another point is that there are some emerging
methods of marketing. One important emerging marketing tool is
the information super highway. Automated marketing, just like
the other methods of marketing, deserve the committee's awareness
and support. He said NTA is convinced that automation is a
importance and they have invested large sums in developing two
networks called NTA On-Line and NTA Tour and Travel Shop to
assist with marketing both domestically and internationally. He
said NTA members, including the Alaska members, are able to go
on-line.
TAPE 95-9, SIDE A
Number 013
MR. PHILLIPS said another suggestion he would offer as a part of
international marketing is to recognize that it is not just a
function of being out there promoting and marketing but that it
is critical and essential. Knowing what to do with the business
once it arrives is also critical and involves education. It
involves educating the travel industry and related businesses so
that they understand how to service the international traveler.
Once you have the business, you also need to remove barriers.
Those who have traveled abroad know how important your comfort
level and piece of mind is to an enjoyable travel experience when
you visit a foreign country. He suggested there be important
international signage. See how able foreign visitors are to
exchange their currency or to utilize multilingual services or
information.
MR. PHILLIPS said another important ingredient is partnerships.
The cost of international marketing and the consumer demand are
both too high for anyone to try to go at it alone. Here again,
Alaska is a standout. He said he doesn't know of any other state
where the tourism industry is more united than it is in Alaska.
He said in other states unity and partnerships are sometimes the
exception more than they are the rule. He commended the
legislature and the Division of Tourism, Department of Commerce
and Economic Development, for the support that has been provided
to the industry.
Number 344
MR. PHILLIPS said if Alaska is truly interested in the
international market, then he would encourage that everything
possible be done to encourage and promote cooperative and
mutually supported relations with the different pipelines to the
international visitor. He referred to pipelines and said what he
is talking about are the airlines that serve Alaska, the cruise
lines, key gateway cities such as Seattle and Vancouver, also
regions like Vancouver.
MR. PHILLIPS noted the Division of Tourism and the entire Alaskan
tourism industry has been very helpful to the NTA. He thanked
the committee for listening to him.
Number 543
CHAIRMAN MASEK thanked Mr. Phillips for his testimony and asked
if there were any questions from the committee members.
Number 606
REPRESENTATIVE PETE KOTT said there are some people in the state
who would suggest a partnership has developed between the state
and the private sector to market Alaska. There are some people
in the state that would suggest that really the state doesn't
benefit directly because we have a very small tax base and there
isn't a state income tax or sales tax. If you look beyond that
scope, you'll find there are additional benefits. Representative
Kott said if the state were to pursue an income or sales tax on
statewide bases, would that affect our domestic traveler.
MR. PHILLIPS said any increase in traveler's costs will have an
impact on the ability of those travelers and those who bring them
here. He said anything like a sales tax that would generate
higher costs for travelers would not be helpful to Alaska's
tourism interests.
Number 1002
REPRESENTATIVE JAMES pointed out one issue we have to solve is
that tourism cannot pay for the infrastructure that is needed for
tourism at this point such as utilities, emergency services, et
cetera. She said we need to figure out how tourism can pay its
share of our expense to provide a place for tourism to be.
REPRESENTATIVE JAMES referred to eco-tourism having a real future
and said there is a limit as to what traffic it will bear and not
lose the eco that came to seed. She said we're facing lots of
dilemmas and we have to plan this or we could have terrible
disasters in the state.
Number 1613
CHAIRMAN MASEK said she would like to hear from Representative
James regarding her trip to China
REPRESENTATIVE JAMES told the committee she enjoyed her trip to
China and would like to go again but before she does, she would
like to learn to speak the Chinese language. She informed
committee members there were three who went on the trip, herself,
Dr. Jennifer McBeth and Dr. Yoal Wang (Sp.?) from the University
of Alaska, Division of Agriculture. She said their main purpose
of the trip was to get acquainted with the Chinese and to sell
virus reseed potatoes as China is the largest nation of producer
potatoes in the world now that the Soviet Union has broken apart.
She noted they do use a lot of pesticides and commercial
fertilizers. They use their land and they use it and use it.
There are a lot of people in China. Representative James said
the trip was prepared by Dr. Wang. She said he was sent to China
to establish the trip and to be sure there was somebody to meet
them at the airport, take them to hotels, et cetera.
Representative James said they spent most of their time in
Benshie (Sp.?) County which is the area Dr. Wang is from. She
explained that is where they eventually did get an order of
40,000 pounds virus reseed potatoes to be shipped after the first
of the year. Representative James said they spent most of their
time there because before the Chinese are ready to do business
with you, they have to know you. She noted this was her first
international trip aside from going to Canada. The Chinese
really didn't want to business until they had been there about a
week.
REPRESENTATIVE JAMES informed the committee that 150 pounds of
reseed potatoes had been sent to China which they used for a
test. The test wasn't very successful but the one thing about
the test that convinced them to buy the 40,000 pounds is that our
potatoes were disease resistant. Also, their potatoes are more
wet and they aren't available to make chips. She said what they
would really like to do is exchange one of our varieties with a
variety that is currently being grown in China.
REPRESENTATIVE JAMES said within three years, they will probably
open their port. Their port is currently closed. She noted the
Netherlands have been trying to get in. She said China is trying
to move into a market economy so they have created little
businesses that operate on their own but are owned by the
government. An example of this is the Alaska Railroad
Corporation. Part of the reason for doing that is to get a
market economy going and also to put their people to work.
Number 2236
REPRESENTATIVE JAMES said she has a much better attitude about
China since she has been there. She said she really has sympathy
for the position they're in as they are trying to move out of
pure socialism.
REPRESENTATIVE JAMES said another goal was to bring back some
Chinese ginseng to see if it would grow in Alaska. It is a very
sensitive plant and takes three to four years for it to be large
enough to use for production. She noted ginseng is a very
expensive product and if we could grow it in Alaska, that would
be another industry for Alaska and it could put us on the map.
REPRESENTATIVE JAMES said the Chinese are interested in growing
the potatoes and are also interested in technology to make chips.
She noted they are begging for somebody to bring them technology
as they don't have technology. Representative James said she
went to hot springs at a resort that was built recently. The
workmanship was very poor but they are doing the best they can.
Number 2656
REPRESENTATIVE JAMES said the Chinese are very interested in
sending tourist to Alaska. There are a lot of Chinese who have
money and are interested in getting something started but the
problem is it is very difficult to get a visa to come to the U.S.
REPRESENTATIVE JAMES concluded by saying the trip wasn't all work
and play, it was very entertaining and good experience.
Number 3110
CHAIRMAN MASEK said the committee would take a break at 3:35 p.m.
The meeting was called back to order at 3:50 p.m. Chairman
Masked asked the next witness to come forward
Number 3149
WENDY WOLF, Programs Manager, Division of Tourism, Department of
Commerce and Economic Development, came before the committee and
introduced Sharon Gaiptman, Development Specialist. She
explained Ms. Gaiptman is charged with reading our international
marketing efforts in the United Kingdom and in German speaking
Europe.
MS. WOLF said she didn't have any prepared testimony but would
like to clarify and react to some things she heard from people
testifying earlier in the meeting.
Number 3224
MS. WOLF explained the purposes of their offices overseas needs
to be clarified. It is the normal in trade of international
trade that you don't actually send your own people to sit in
offices. She said it is very much like Representative James had
said in that people need to know you in order to do business with
you. Ms. Wolf said they hire a person that knows the trade.
There are representatives like this all over the world and they
take on several destinations as long as they're not competing
destinations. Their job is not to be a consumer office.
Consumers do not walk into these offices and they are not present
as a place where consumers come and get information. Their job
is to get a foreign entry for us into the trade to find the
people who send people out of Germany on airplanes, tours, et
cetera. They are really there to link us to the trade. An
independent traveler will find the Alaska Division of Tourism and
get information from them directly. Ms. Wolf explained they have
been very successful and the trade is very comfortable with the
operation at Aero Traffic. That is the purpose they serve there.
The representation in the United Kingdom is brand new. It is
about $25,000. Jackie Todd is basically volunteering her time to
talk about Alaska. It is not a money maker for her. She is so
fascinated about Alaska that her company is letting her be a
spokesperson for us in making sure there is a source of
information about Alaska. She said when somebody really wants to
travel, they use the same collateral that the Marketing Council
does.
Number 3445
REPRESENTATIVE JAMES asked how much money is spent.
SHARON GAIPTMAN, Development Specialist, Division of Tourism,
Department of Commerce and Economic Development, said the amount
is $425,000. REPRESENTATIVE JAMES asked if the amount includes
money for space.
MS. GAIPTMAN said it provides part of the space and some of the
money goes towards the administration of the contract, but the
majority of those dollars go towards trade relations, advertising
fam support. She noted they are in the process of securing a
third weekly charter from Frankfurt to Anchorage which will begin
next summer. Ms. Gaiptman noted that takes a lot of money and
time in order to support the operator that is going to be
guaranteeing those seats. Most of the money goes into actual
trade and some consumer relations.
Number 3543
REPRESENTATIVE JAMES asked what kind of record keeping there is
in the success of the operation. MS. GAIPTMAN explained she has
a great deal of record keeping. She said she would be happy to
put together information explaining what they do throughout
Europe.
REPRESENTATIVE JAMES indicated she would rather spend some time
talking with Ms. Gaiptman. MS. GAIPTMAN indicated they would
find some time to talk.
Number 3625
MS. WOLF said the decisions they make to go into markets are
based on lots of things. She indicated in Ms. Gaiptman's moving
around through the trade contacts that were made for her in
Europe, it became very apparent that there was an interest in the
United Kingdom. That is why they decided to move a small effort
there. The same happened when they expanded in Japan. They had
a lot going on in Japan, but then Australia started to show an
incredible increase.
MS. GAIPTMAN referred to the information given by Mr. Welton
which listed the German tour operators and said she was happy he
brought that list because that goes out to somebody in Germany
who requests information about Alaska. They get the list of who
those tour operators are in German speaking Europe who have
Alaska programs. The part that is missing on that sheet is those
Alaska programs that are made up of Alaska product. It is only
Alaska suppliers with whom those tour operators are working. It
is just not listed as to whom each of those are. She noted the
division has the brochure that can show whose product it being
sold where. Ms. Gaiptman noted there is another brochure they
mail out that includes ways that people can get the Milepost.
Ms. Gaiptman explained that because they are a state agency, they
don't push one persons business over another. Their job is to
represent the entire industry in the state.
MS. WOLF noted they also had the state highway map translated
into German.
Number 4002
REPRESENTATIVE JAMES said Alaska couldn't ever compete dollar
wise with Miami.
MS. WOLF referred to the German office and said there are several
staff people in that office. There is one staff person that is
dedicated to working on nothing but Alaska, she knows the
businesses here, has been to Alaska, met the people here who are
the suppliers and worked with the operators.
Number 4043
CHAIRMAN MASEK said the intent of having the hearings is to hear
from the small business people as to how they feel about the
tourism and what can be done to make it better. By bringing
everyone views and opinions to the table, it is only going to
help with the recommendations that the committee will be putting
fourth in coming sessions. It is important the committee hears
from all sides of the industry. She said we need to broaden the
scope of tourism so it will be based on winter months and not
just summer months.
MS. GAIPTMAN said she thinks the committee will discover
throughout the year that both the Alaska Tourism Marketing
Council and the Department of Commerce are both working really
hard to increase shoulders and winter tourism into the state.
Number 4201
REPRESENTATIVE JAMES referred to winter tourism and its potential
and said she agrees that particularly in the southern part of the
state that there is real potential for winter tourism. She said
her problem in Interior Alaska is she doesn't want these people
driving on our roads if they don't know how. She said the only
way she feels we can have winter tourism is if we provide
transportation and other things for them. The only other thing
she sees as a real negative is the ability to get winter tourism
if our weather is not dependable. Representative James said if
she spent all her money to come and spend two weeks in Fairbanks
and it was 60 degrees below zero the whole time, she doesn't
think she would give a recommendation to come to Alaska. To just
say winter tourism without having some sort of plan turns her
off. She said she doesn't want these people driving and causing
more accidents on the highways than we're having now.
MS. GAIPTMAN said they are looking at primarily focusing on
special events like the Yukon Quest or Iditarod.
MS. WOLF referred to highway marketing said they don't do any of
their highway marketing targeted it towards winter but they do
for spring and fall. She referred to the Alaska Railroad and
said in the winter it is the Japanese who are riding the
railroads.
Number 4543
MS. WOLF said referred to the issue of revenues to the general
fund and said there is an attachment in the Marketing Alaska
Report that they will be submitting to their executive committee
the following Wednesday. She said the group looked at several
things. The infrastructure was the first issue to be discussed.
The funding for infrastructure was a very big topic and they are
building some recommendations on that. There is a hugh section
on rural and small tourism development. Ms. Wolf noted the
Governor had mentioned in his speech the previous day that we are
going to create a world tourism development center which will be
a joint venture with Alaska village initiatives in which they
create a one stop shopping situation...
TAPE 95-9, SIDE B
Number 001
MS. WOLF informed the committee they are also working on visitor
education and visitor industry awareness so that the public can
understand the role of the visitor and also learn how to train
Alaskans to work in the industry. Ms. Wolf said the final
recommendation deals with doing some comprehensive planning.
Everybody has a plan but this would bring them all together to
look at them on a regional basis. They would take all the land
management, community and marketing plans and try to build some
sort of picture of what tourism in that region is all about and
then figure out where to best use the resources.
MS. WOLF said attached to the recommendations is a study that AVA
sponsored by McDowell in 1992. It is the total of the revenues
to the state of Alaska general fund. Ms. Wolf said it is revenue
generated by visitors. The thing that is interesting about it is
the visitors spend money on a lot of things and the agency, like
state parks who takes in those receipts, would also like to claim
credit for these receipts. It is a controversy as to who these
belong to. The fact is this is nonresident use. There are state
parks, fish and game tags and out of state licenses. Ms. Wolf
noted Holland America and Princess pay major dollars to the
Alaska Railroad Corporation to haul those cars on the tracks. So
that is money which comes into the railroad which, of course, is
a state entity.
Number 150
REPRESENTATIVE JAMES said she had heard they are losing money.
MS. WOLF said if they are, then they need to look at it.
REPRESENTATIVE JAMES said they lose money on the passengers but
make money on the freight. MS. WOLF said she thinks they charge
the cars a pullage fee plus a percentage of the passenger. She
said according to data from 1992, the industry is putting about
$7 million into the Alaska Railroad for haulage fees plus a
percentage of the ticket receipts.
MS. WOLF said one thing that was talked about was taxing, such as
fuel tax, to pay for the infrastructure. Visitors come, they
drive, they use the roads and they use the parks. That does have
an impact.
Number 309
MS. WOLF referred to the European travel fair and said Ms.
Gaiptman has been working on it. She said it was a lot of work.
Operators met with people all over the state and ended up in
Fairbanks where they met with different businesses. She
indicated this worked very well and was a very successful effort.
Number 426
REPRESENTATIVE PETE KOTT said he seems to recall some type of
reorganization which affected the Division of Tourism.
MS. WOLF explained a new assistant commissioner, Debbie Sedwick
was hired. Ms. Wolf said she would call her the assistant
commissioner for Tourism, Trade and Economic Development.
Currently, in her bailiwick there is a Division of Trade and
Development that took the Office of International Trade and
Economic Development and consolidated them. The division still
sets there separately. Ms. Wolf said what they did do in the
process was lower the (indisc.) for the Division of Tourism to
make it more part of the scheme of working together more. They
have talked about submitting an executive order to have them as
one. There would still be a person called the director of the
Office of Tourism or the Division of Tourism. Ms. Wolf said they
hired Tom Garrett to be director of the Division of Tourism. She
explained what the Administration is trying to do with the
structure is say, "Lets find opportunities to work together."
Ms. Wolf discussed marketing techniques in relation to the
Ketchikan Pulp Company and the Alaska Bowl Company. She said it
is important for connections to be made between companies. When
they go out to promote tourism, they are also thinking seafood.
Ms. Wolf noted they put on a lot of events where salmon is sold.
When they go to implement the recommendations of marketing
Alaska, they take the people who are really good at what they do
and they can work on a variety of projects. There will still be
a Division of Tourism focused on doing the things they do best.
Number 637
CHAIRMAN MASEK asked if there were questions or comments. Mr.
Stone and Ms. Loper indicated they didn't have any comments.
CHAIRMAN MASEK thanked everyone for attending the hearing. She
asked if there was any further testimony.
Number 836
DAVE CARP, Executive Director, Alaska Tourism Marketing Council,
referred to ways to get visitors to visit Alaska during the
winter months and said he would like to throw consideration into
the mix and that is the activities of the local convention and
visitor's bureaus. Mr. Carp said all too often he thinks we
overlook the word "convention" and go right to "visitors." Even
though conventions are visitors, that market and those efforts
are certainly an essential focus point for drawing visitors to
Alaska in the winter. One change the ATMC is faced with in terms
of the ATMC is that with the limited resources that we have, we
have a responsibility to go out and try to bring the maximum
number of visitors with those resources. At this state of the
game and development in the Alaska visitor industry, they find a
good portion of that comes during the summer months. He noted
they have been able to modify the program and incorporate aspects
of winter and year round visitation to the state and the program.
Mr. Carp said what he would like to point out to the committee is
that as they deliberate, please consider the notion of convention
marketing. He said he isn't just speaking of domestic convention
marketing but international convention marketing as well. One
thing they find with meetings and conventions is the cost per
conversion in terms of what it takes you to go out there and get
a group of people to come up. It is far greater when you look at
conventions. It is all a crucial part of the mix in terms of the
overall cost for conversion in terms of investment.
Number 1100
CHAIRMAN MASEK thanked Mr. Carp for his testimony. She thanked
everyone for attending the meeting and adjourned at 4:25 p.m.
| Document Name | Date/Time | Subjects |
|---|