My Turn: No 'sweetheart deals' here

Tour company has straight-forward business arrangement with cruise lines

Posted: Thursday, April 19, 2007

My wife and I take offense with the statement in the Juneau Empire's April 5 editorial that shore excursion operators who have contracts with cruise lines have a "sweetheart deal."

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We have owned and operated our family business for 21 years in Skagway. It's an independent, unaffiliated company that negotiates its wholesale tour prices each year with the cruise lines. The cruise lines in turn sell our tours at a retail price.

If our pricing is too high, or the quality of our tour is not up to the customer's expectations, or our tour is no longer selling well enough to justify its inclusion on the cruise line's tour menu, the cruise lines can opt not to include our tours. There is no guarantee that we will keep our contract, or continue to be sold. And there certainly is no "kickback" or "under-the-table" deal that gets us on the tour menu.

Nothing is "under the table," and nobody gets a "kickback." To insinuate these things is a cheap shot being made by people who either, 1) don't know the shore excursion business and how it works, or 2) have their own agenda and are trying to promote that agenda at our expense.

These words in this context are completely derogatory and are being used to smear a standard business contract into something unseemly or even illegal.

We are exactly the same as a carton of eggs at a grocery store. The grocery store buys the eggs from the farmer (in our case the tour operator), and the grocery store (or cruise line) sells them with a retail markup.

The drafters of the initiative have had this whole thing wrong. It is the customer who decides whether the eggs are going to sell or not, or whether they want a different quality of eggs, or whether the eggs are appropriately priced. If they aren't, the customer will go somewhere else and the eggs will not sell.

The people who drafted this initiative say the disclosure provision is "for the customer" and to "protect the public" by improving "transparency." But it's not.

Maybe 25 years ago there were a few unsophisticated travelers on ships who didn't realize that there might be alternative tour offerings available on shore. But in today's Internet world, the customer is sophisticated and has access to all competing information. Who among us doesn't search for lower priced or alternative travel options whenever we consider a trip? It's ridiculous to act is if the public is so stupid that they have to be protected from retailers selling shore excursions.

Everybody needs to stop and think about this for a minute. Government has no business being involved in the markup of wholesale shore excursions unless the government is going to intervene in what the public pays for a retail-priced 2X4, a head of lettuce or a pair of shoes. And if the government tries to do that, there will be a lot more people than just us speaking out against it. The disclosure provision in the initiative is unconstitutional.

There are no "sweetheart deals" in the pre-sold shore excursion business. There is a straight-forward business arrangement between two parties. We have to perform, work hard and keep on the cutting edge of what the customer wants, or we're out of business.

The Juneau Empire's personal bias here is obvious. Its statement is, however, not true, not factual and not good reporting. A retraction is in order.

• Steve and Gayla Hites are owners of Street Car Co. in Skagway.

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