Tour industry, state feud over marketing money

Dispute over goals bogs down negotiations

Posted: Wednesday, February 16, 2000

Tourism's ``new millennium plan'' is in a troubled infancy, judging from testimony before a legislative committee today.

The question of how much promotional money should be used to support the independent travel market is fueling a clash between visitor industry leaders and state officials.

Ann Campbell, chairwoman of the new Alaska Travel Industry Association, told the Senate Finance Committee that negotiations between ATIA and the state Division of Tourism have been fraught with disputes about what was really intended by last year's ``new millennium'' legislation.

The legislation, which abolishes the public-private Alaska Tourism Marketing Council on June 30, paved the way for all state-sponsored tourism marketing to be carried out by the private sector with a mix of private and public funds.

ATIA formed as the successor to the Alaska Visitors Association, and the new group has been holding weekly teleconferences with the Division of Tourism about marketing goals.

Campbell said there is disagreement about how much state money is supposed to be appropriated for marketing this session and about the marketing goals.

``There has been a fair amount of frustration on both sides,'' she told the committee, referring to ``fundamental, philosophical'' differences. ``I think we believed we would have a little more to say about what the components of the program would be.''

Finance Co-Chairman Sean Parnell, an Anchorage Republican, said it was not the first time he's heard ``a lot of grumbling from businesses in the visitor industry about the implementation of the legislation.'' Parnell added that he had expected a staff reduction in the Division of Tourism as a result of last year's legislation, which hasn't happened.

But in an interview following the hearing, Division of Tourism Director Ginny Fay said Campbell's testimony was misleading.

In expecting a state appropriation of more than $5 million for marketing in Fiscal Year 2001, Campbell was relying on an old fiscal analysis of a bill that didn't pass, according to Fay.

The Legislature in 1999 appropriated $5.1 million to the division, including about $1 million to provide technical assistance to businesses and communities trying to develop tourism, Fay said.

Democratic Gov. Tony Knowles hasn't recommended a budgetary increase for the division. So to get $5 million for marketing without cutting elsewhere, the Legislature would have to end all of the division's outreach programs, Fay said. And the existing $1 million for those programs is much too small for a state the size of Alaska, she added.

Campbell said the new Alaska Travel Industry Association wants a marketing approach that benefits all regions of the state, all sectors of the visitor industry and all sizes of businesses, emphasizing that 44 percent of the group's 1,056 members have five or fewer employees. The Division of Tourism has been pushing for ``a much more narrowly focused'' approach, she said, without elaborating.

``I don't understand that comment,'' Fay said afterward. ``I don't think it was very constructive for our working relationship. ...

``They've had trouble with some of our broad goals. They aren't as happy with the notion of increasing independent travel.''

In any case, ATIA had agreed to carry forward the current marketing strategy through 2001, contrary to Campbell's testimony, Fay said.

Juneau Sen. Kim Elton, a Democrat, also said he's worried the new travel association intends to give disproportionate support to industrial scale tourism through the statewide marketing plan.

Most of the ATIA governing board has connections to the cruise ship industry, Elton said in an interview. While ``a portion of what we do ought to benefit the cruise industry,'' the state has an interest in encouraging Alaska entrepreneurs in underutilized destinations, he said.

Campbell said the ATIA is anxious to get a marketing contract signed with the state, preferably by April.

But Fay said that she doesn't have the legal authority to sign a contract until July 1, and that the ATIA would have to put its 30 percent funding match on the table before that could happen.

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