HOUSE SPECIAL COMMITTEE ON INTERNATIONAL TRADE & TOURISM February 14, 1995 3:05 p.m. MEMBERS PRESENT Representative Beverly Masek, Chairman Representative Alan Austerman, Vice Chairman Representative Jeannette James Representative Brian Porter MEMBERS ABSENT Representative Pete Kott Representative Irene Nicholia Representative Caren Robinson COMMITTEE CALENDAR Overview - Division of Tourism, Department of Community and Regional Affairs WITNESS REGISTER MARY PIGNALBERI, Director Division of Tourism Department of Community and Regional Affairs P.O. Box 110801 Juneau, Alaska 99801-0801 Telephone: 465-2012 POSITION STATEMENT: Gave an Overview of Division of Tourism SHARON GAIPTMAN, Tourism Development Specialist Division of Tourism Department of Community and Regional Affairs P.O. Box 110801 Juneau, Alaska 99801-0801 Telephone: 465-5478 POSITION STATEMENT: Related marketing details JOHN BEILER, Tourism Development Specialist Division of Tourism Department of Community and Regional Affairs P.O. Box 110801 Juneau, Alaska 99801-0801 Telephone: 465-5475 POSITION STATEMENT: Offered job-specific comments WENDY WOLF, Manager, Tourism Programs Division of Tourism Department of Community and Regional Affairs P.O. Box 110801 Juneau, Alaska 99801-0801 Telephone: 465-5471 POSITION STATEMENT: Elaborated on highways issues PETE CARLSON, Tourism Development Specialist Division of Tourism Department of Community and Regional Affairs P.O. Box 110801 Juneau, Alaska 99801-0801 Telephone: 465-5476 POSITION STATEMENT: Offered job-specific comments ACTION NARRATIVE TAPE 95-2, SIDE A Number 003 The House Special Committee on International Trade and Tourism was called to order by Chairman Beverly Masek at 3:05 p.m. Members present at the call to order were Representatives Masek, Austerman, James, and Porter. Members absent were Representatives Kott, Nicholia, and Robinson. Number 038 MARY PIGNALBERI introduced her staff and explained their areas of responsibility. Sharon Gaiptman's primary function is the international marketing area for German-speaking Europe and Mexico. She also provides business and technical assistance covering Southeast Alaska. John Beiler, the other international marketing person, handles primarily the Asian countries, Japan, Korea and Australia. On the business and technical assistance side, he covers the Interior and the Northern part of the state. MS. PIGNALBERI said Wendy Wolf oversees different programs of the division but, her primary responsibilities are the highway development marketing plan that the division implements and the Alaska Host Program. She also deals with projects that have to do with state and federal lands that the division is involved in. Pete Carlson oversees their program of the visitor research and statistical programs. He also does business and technical assistance for many of the Native communities about requests on how to develop a tourism business. He services the Prince William Sound, Valdez and Southwest Alaska areas. MS. PIGNALBERI explained in addition to the Film Office and the development function that's located in Anchorage, those are the primary programs that the division is involved in. The division has an inquiry fulfillment section that handles all of the incoming mail and sending out the vacation planner and visitor information. They have an administrative assistant that handles the budget and requirements for bills, (i.e. analysis and fiscal notes, et cetra.). Number 130 REPRESENTATIVE BRIAN PORTER asked if the division had a game plan for the money allocated for tourism in the latest supplemental. Number 144 MS. PIGNALBERI responded that isn't the Division of Tourism. She explained the Alaska Marketing Tourism Council (ATMC) didn't exist before 1988. There was a marketing council advisory board as part of the Alaska Visitor's Association (AVA) to the division. All the functions that the ATMC now performs were within the Division of Tourism. In 1988, when the ATMC was formed, it removed the Domestic and Canadian Marketing Program out of the Division of Tourism and under the ATMC. The bulk of the marketing budget is what the legislature allocates to the ATMC for the Domestic and Canadian Program. The supplemental was the result of the cuts that the ATMC took last session, and in the additional veto. They're attempting to reinstate those funds this fiscal year to play catch up. They're intending to use the bulk of those monies for television placement. Number 185 REPRESENTATIVE JEANNETTE JAMES commented that in the tourism industry, people don't even agree amongst themselves. Some get their income from the cruise ships, some from the tours, some from the road traffic, then there's Southeast and the Interior, et cetra. As the ATMC proceeds to market Alaska, there is always someone dissatisfied and those are the loudest voices when it comes time to fund the ATMC. What can the Division of Tourism do to pull these people together to work as a team? Number 213 MS. PIGNALBERI replied that the industry has become more segmented with special interest groups, among tourism, that all want their share of the pie. With the current structure that exists between the division and the ATMC, it's very difficult to accomplish what Representative James has suggested. The way the state has set this up with the private sector match, it's very difficult to keep the groups unified. That structure should be looked into. Number 241 REPRESENTATIVE JAMES mentioned that Southeast, as a regional group, has been able to pull in resources from various different places and focus on Southeast to supplant what the statewide effort is. She feels that regional areas across the state should do likewise and not depend on the state to provide for them. What suggestions can the division offer that she can take to her people in the Interior that they can do to help get more tourists in conjunction with what the Division of Tourism and the ATMC are doing? Number 259 MS. PIGNALBERI noted there are other regional groups (i.e. Kenai Peninsula and Prince William Sound) and there is even talk of one in Fairbanks. She noted attempts in the past have failed for the Interior. There are many other ways that they can get involved. Number 273 SHARON GAIPTMAN, Tourism Development Specialist, Division of Tourism, Department of Commerce and Economic Development, explained that the division takes all the leads from trade shows and write up specific requests from tour operators and travel agents. The division mails those out to every Convention and Visitors Bureau (CVB), every regional marketing organization, and their private sector partners. She said the division hopes that the CVBs and the regionals are sharing those leads with their members in getting the word out that this is what people are looking for. They blanket the state with whatever they do. People need to follow up on those leads. Number 290 JOHN BEILER, Tourism Development Specialist, Division of Tourism, Department of Commerce and Economic Development, added the division invites the private sector and CVBs along on their trade missions and trade shows. They try to involve as many businesses, statewide, into their efforts. Number 297 WENDY WOLF, Manager, Tourism Program, Division of Tourism, Department of Commerce and Economic Development, added that it's easy for Southeast, being such a concise area, to consolidate efforts in a regional group. Whereas, if a tourist is traveling the highways, the roads will take them to the Interior, to Southcentral, to the Kenai, et cetra. It's difficult to develop a highway group. The division goes after the international visitors and the highway traveler. Within the division's Highway Marketing Program, they're joint-marketing with Yukon and British Columbia since road travelers have to go through either of those territories to get to Alaska. Fairbanks and Haines also participates in that program. The division identified this as a way to have a regional presence without having a regional marketing program. Number 315 REPRESENTATIVE JAMES related that visitors come into her district to see Denali and then the complaint is they go back to Anchorage. She tells the travel people in her district that they need to take the initiative to provide an interest to get those visitors to stay once they come. She said she doesn't feel that's the state's responsibility to do that. Representative James said they're not getting the message. Number 327 PETE CARLSON said he handles a lot of itinerary planning for motor coach and tour groups. They work very hard at getting them into all outlying areas of the state, not just Anchorage. They work closely with Fairbanks. Fairbanks is trying but, does have a way to go. Number 341 CHAIRMAN MASEK asked if Ms. Pignalberi could go over their new tourism programs and initiatives. Number 351 MS. PIGNALBERI responded that the division is participating in the American Bus Association (ABA) and the American Society of Travel Agents (ASTA) to explore new avenues of marketing the state and educating outside agencies. They've also expanded into the United Kingdom with a contract representative that will handle public relations, meeting with press, trade activities and escorting groups of press and trade to Alaska. They are also doing the symposium at the end of March on tourism on public lands with respect to access. They're efforts are aimed at bringing state and federal land agencies to work closer with the division when it involves tourism issues. Number 388 CHAIRMAN MASEK asked what the process is in determining which new projects the division will take on. Number 391 MS. PIGNALBERI felt it was a combination of things. They get input and feedback from constituents and business owners. They learn about some of the problems and successes that other states are having that relate to Alaska. The division also responds to requests for advice and help. They try to get more involved in relatively underdeveloped areas that need development. In some cases, there's a duplication of effort with other state agencies. In an attempt to unify it they are investigating working with the Alaska Village Initiatives (AVI), a non-profit organization. They do have the support of eight or nine of the regional native corporations contributing to their efforts. There's not a clean, step by step process that they have in determining which projects to undertake. Number 439 CHAIRMAN MASEK asked what would a joint project with the AVI cost? Number 441 MS. PIGNALBERI stated $120,000 for a pilot project involving one full-time person zeroing in on one or two areas with projects that have potential. They did include that figure in their budget request for FY 96. Number 460 CHAIRMAN MASEK inquired about the selection process of their representatives. Number 471 MS. GAIPTMAN replied that for the big contracts, they go through a formal bid process. The United Kingdom representative is a small contract. They wanted someone who understood the trade and the press and was willing to do it for next to nothing. She said was chosen from an informal interview. Number 480 MS. PIGNALBERI elaborated on the number of the division's international employees; one in the United Kingdom, one in Japan, one in Germany and one in Australia. The Australia contract is fairly new, since 1990; Germany and Japan since 1983. Number 488 CHAIRMAN MASEK asked how the selection process was made in choosing those individuals. Number 489 MS. WOLF clarified that these people are contractors, not employees, who specialize in travel from their countries. They are not Alaskans who live in those countries. These are established companies that are fluent in the language, know the media and have the connections. Number 498 MS. PIGNALBERI added that those representatives understand those cultures. They know what will or won't work for those individual cultures and can offer the division that insight and guidance. Number 505 CHAIRMAN MASEK asked about their targeted national programs for repeat and new visitors to the state. Number 520 MS. GAIPTMAN explained that they try to do different things with new tour operators to dispel the perception that Alaska is similar to other cold-climate countries. For example, the division showed a Norwegian marketer the Inside Passage and now he sells a program to Alaska. They try to suggest and sell tour operators on other areas of the state when their particular section is sold out on any given day. Number 545 CHAIRMAN MASEK brought up their plans to place ads in leading trade publications in German-speaking Europe, to select ten agents to come for an education of tourism in Alaska. She feels they need to expose more visitors to the smaller business tour operators in the Interior, on the Kenai and along the rail belt as there is always a guaranteed number of people that come up on the ferry system. She asked how the division plans to put together the itinerary for these ten agents to see what Alaska has to offer them? Number 565 MS. GAIPTMAN responded that they have a week in Alaska. Their standard routine is to spend a night in Anchorage, go up to Eklutna, Wasilla and then overnight in Talkeetna. Then they will try to fly or rail them into the Denali, then up to Fairbanks and then bring them back down. They also have Prince William sound route. That's also where the flights come in. They might take a group to Kodiak, Wrangell-St. Elias. There is no formula. The division does try to highlight new areas. Number 584 MS. WOLF mentioned that in an effort to reach the highway consumer, they sent a box of information to every American Automobile Association and Canadian Automobile Associations. TAPE 95-2, SIDE B Number 002 MS. WOLF said the division works with the CVBs and the highway communities in deciding what should be in those mailings in targeting the highway markets. Number 008 CHAIRMAN MASEK commented that there are so many people involved in tourism in too many different directions. She feels we need a joint effort to create one centralized outlet for tourism information dissemination. Number 032 MS. PIGNALBERI said the division used to be that centralized place. The industry was much smaller and there was a standard route that tourists visited. It's exploded with special interest entities. CVBs were non-existent before 1975. In encouraging people who are interested in getting involved in tourism, she stressed approaching it as a business year-round. She advises them to look at the programs of the ATMC, their regional marketing councils and their local CVB. To be successful, they need to be involved with these programs. She agreed that the current structure is fragmented. Number 085 REPRESENTATIVE JAMES charged that with the size of our state and the diversity of the land and the people, the challenge to centralize tourism efforts is unattainable. The only way for that challenge to be met is for the people, across the state, in the industry to take an active role and participate. She feels that the state needs to listen to small business people and give advice and direction. The only focus of the Division of Tourism and the ATMC should be to get people to Alaska. What those visitors do when they get here should be up to the individual businesses to figure out. Number 127 CHAIRMAN MASEK asked how the division is involved the promotion of film and talent in the state. Number 132 MS. PIGNALBERI replied they have a marketing program that involves print advertising, direct mail, a sales piece that has information on statewide locations and a directory listing of people who have services for film makers. The division responds to the inquiries that come in from the trade shows, direct mail and print advertising. The film program has done an excellent job of providing work It's helped to support a formation of a chapter of the commercial producers in Alaska. A new technical production-type crew-based group membership called the Alaska Film Group has started up. For the money spent in that budget, it's a $93 to one return to the state. It's a good spin-off for tourism in getting people excited about visiting Alaska. Number 166 CHAIRMAN MASEK inquired how the lists of contracts or scouts are compiled? Number 168 MS. PIGNALBERI responded the division only asks them to submit a resume showing they have experience in the areas they are requesting to be referred in. That's the crew list that goes out to inquiries about filming here. For the directory, they must have an Alaska business license. Number 196 CHAIRMAN MASEK questioned who makes the decision on who is used? Number 197 MS. PIGNALBERI answered the production company. All the division does is provide them with the crew list and they're on their own. However, on two occasions, with "White Fang" and "On Deadly Ground," as is the national standard, the film office was asked to be the receptacle for rsums for people interested in working on the film. When the cutoff date was reached, they just handed the whole file over to the production company. Number 211 CHAIRMAN MASEK queried is the Alaska Film Group separate from the Division of Tourism? Number 215 MS. PIGNALBERI affirmed that it has nothing to do with the state. She said she thinks they're a non-profit corporation and call themselves a film trade association. It's a membership-based entity that was formed out of the private sector. She does keep them informed of projects. Number 229 CHAIRMAN MASEK asked if they're comfortable with the level of involvement and influence by the division into the private sector area decision-making process of the crew people? Number 234 MS. PIGNALBERI felt she had to say "yes." To have much more involvement from the film group would put the state in a position she doesn't think they need to be in. She feels that as a state agency, they have to remain neutral and fair. NUMBER 275 MS. PIGNALBERI offered that she would like some feedback from the committee, whether they're satisfied with the division, before the session ends. Number 280 CHAIRMAN MASEK stated that currently they're gathering information on the various agencies to understand the current status and future expectations. Number 300 MS. PIGNALBERI felt that there is a perception of duplication of effort between the division and the ATMC and that they're competing against each other. As the committee gathers input, they may find more efficient means and the division is open to such suggestions. Number 308 CHAIRMAN MASEK reminded them of their next scheduled meeting on Tuesday, February 21, in which the ATMC will be giving an overview . ADJOURNMENT Number 326 There being no further business before the committee, CHAIRMAN MASEK adjourned the meeting at 4:15 p.m.