Businesses fight cruise ship law

Lawmakers mull bill to 'correct' disclosure section of initiative

Posted: Wednesday, April 11, 2007

Alaska tour operators on Tuesday blasted part of a cruise ship initiative passed by voters last year, saying it threatens to diminish competition by forcing prices to be revealed on tours sold to passengers.

"It kind of goes against free enterprise," said Eric Schultz, the tour manager for TEMSCO Helicopters.

"This shuts down the American way of being competitive in a marketplace. It creates a new precedent and is basically un-American," said Stan Stevens, who operates a glacier cruise and wildlife tour business out of Valdez.

Lawmakers are considering House Bill 217, which supporters say would help "correct" the disclosure section of the cruise ship initiative, or Measure 2, that voters approved in August. As part of the measure, cruise companies are required to disclose the commission they receive or the percentage of the total sale when the cruise line promotes a tour.

"My impression on this initiative was that it was to protect the small businesses," said Rep. Andrea Doll, D-Juneau, at a hearing of the new bill during a House Special Committee on Economic Development, Trade, and Tourism.

Tour companies say that stripping this number off the price then reveals the wholesale price of tours to competitors.

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"Right now you have to give your bottom line to your competitors. That isn't normal business practice," said Jeremy Gieser of Gastineau Guiding Co.

The disclosure section of Measure 2 was partially designed to help tour companies not associated with cruise lines to access cruise ship passengers.

"There are some people who could not get exposure to the thousands of people (on the cruise ships)," Rep. Carl Gatto, R-Palmer. "They felt somewhat disenfranchised."

"We felt that for consumer protection, there should be some disclosure of the commissions. That was what we were thinking," said Joe Geldhof, a Juneau attorney and initiative sponsor.

"We have said OK. It would be OK to amend the law so that the cruise ships don't have to disclose either the commissions or the percentage that they take, so long as there is a reasonable device that allows consumers to know when the commission exceeds a fairly large sum," he said.

The proposed bill also could change the law to require cruise companies to clearly disclose other tours are available elsewhere, possibly at lesser rates.

"If we are going to say that other alternatives may be available at a lower price, I think we should also say they are available at a lesser quality, higher price," said Robert Jacobsen, chairman, president and CEO of Wings of Alaska Airlines, a Southeast Alaska charter flight company.

"I think we need to be reasonable to the people who have made millions of investments around here," he said.

The bill sponsor, Rep. Lindsey Holmes, D-Anchorage, plans to change some aspects of the bill before the next meeting.

Some lawmakers questioned how much the voter-approved initiative could be tweaked before it infringed upon the intent of voters.

"Don't we have to assume that the voters knew exactly what they were doing and voted for this on purpose?" asked Rep. Mike Doogan., D-Anchorage. "Can't we assume that they meant to do just this?

"This is not, in my view, a particularly discretionary matter for us. We start making arguments like that, and we start making the argument that they didn't know what they were doing for anything else on the ballot," Doogan said.

"Nobody knows the answers to these things. I don't want to simply object to the people's wishes," Gatto said.

He said a multimillion dollar campaign by the tour industry educated people on the various aspects of the initiative.

"There was no shortage of advertisements. I don't know how I could possibly sit here and say they didn't know. But the bill is pretty explicit, however, we will work with you," Gatto said.

Discussion of the bill will be continued at the next committee meeting at 5 p.m. April 17.

• E-mail Brittany Retherford at

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