Industry group takes over tourism marketing

Posted: Tuesday, May 09, 2000

Small communities and struggling businesses could still get some state assistance with tourism marketing plans that target the independent travel sector, under legislation awaiting the signature of Gov. Tony Knowles.

But whether state officials and a new tourism industry group can agree on goals for a major marketing grant remains to be seen.

The Legislature has approved a $4.85 million grant for a trade association to conduct tourism marketing for the state in fiscal year 2001, which begins July 1.

At the same time, the Alaska Division of Community and Business Development was appropriated $844,000 for tourism planning and development.

Early in the legislative session, it appeared that only $280,000 would be approved for the division's tourism programs, down from $1 million. That would have ended staff travel and thus the outreach to communities trying to get a foothold in the tourism market. Groups and businesses with a stake in increased independent travel saw that as a power play by major cruise lines.

Also awaiting action by Knowles is a bill approved by the Legislature moving up the date by which state officials must contract with a trade association to conduct marketing. The marketing contract must be in place July 1, rather than Aug. 1, under the bill.

Ginny Fay, director of what was formerly known as the Division of Tourism, said she does not know if the governor will sign either bill. Knowles spokesman Bob King said the governor has not yet considered whether to sign or veto the tourism legislation, given the attention he had to give to the recently concluded special session on state employee contracts.

The funding levels approved by the Legislature were a compromise between what was being sought by the Alaska Travel Industry Association and by the administration.

They disagreed about what was intended by last year's ``new millennium plan'' approved by the Legislature, which abolished the state's public-private tourism marketing council and set the stage for a private group to take over most state-sponsored marketing.

Officials of the new ATIA, and its forerunner, the Alaska Visitors Association, insisted that they had been promised a $5 million grant this year.

But Fay said that would have the effect of gutting her division, unless there was an overall funding increase for tourism.

A philosophical conflict was cited by both sides, as well.

ATIA officials said Fay's division had been intransigent in discussions about a marketing contract, while Fay said the industry wasn't interested in supporting independent travel, a key concern of her division. Juneau Sen. Kim Elton, a Democrat, said the ATIA was controlled by major cruise lines, while the association said its 1,000-plus membership was proof of a broad base.

In the end, the Legislature found an extra $559,300, Fay said. As to where it came from, she said: ``No specific trail has been left.''

The administration got $240,000 less than it sought for tourism activities in the state's new Division of Community and Business Development, and the ATIA was $150,000 shy of its goal. Six state positions are being cut, leaving 11.5 tourism jobs in state government, Fay said.

House Finance Co-Chairman Eldon Mulder, an Anchorage Republican, said the appropriation for the state is ``probably higher than what I think is justifiable.''

Co-Chairman Gene Therriault, a North Pole Republican, said the Legislature's intent always was to move all marketing personnel off of the state payroll and over to ATIA. But the administration argued successfully that it needed to maintain a presence at highway waysides and other points of contact with tourists, he said.

The conflict is not necessarily over, however.

ATIA, the only organization that appears capable of coming up with the required $2.1 million in matching funds to win the state marketing contract, still must submit a marketing plan to the state by June 15. The contract can't be signed until the plan is approved.

Fay said recent negotiations have left her feeling more confident that the ATIA will make an effort to promote independent travel. But she said the July 1 deadline for a marketing contract would give the industry some leverage over her, because the onus is on the administration to execute a contract by then.

``We're trusting them to be working in good faith,'' Fay said. ``No one has the luxury to argue about things at this point.''

ATIA Executive Director Tina Lindgren did not return phone calls from Anchorage.

ATIA board member Bob Engelbrecht, owner of NorthStar Trekking in Juneau, said that as a member of the organization and as a businessman he is interested in seeing more independent travel.

``My understanding is that the administration and ATIA are sitting down and negotiating,'' Engelbrecht said. ``It's my sense that there's -- more than a desire -- a commitment to get that done.''

A draft of the proposed marketing plan, posted on ATIA's Website, lists eight goals, including an increase in independent travel.

Because of concern about the marketing of independent travel, some local convention and visitor bureaus (CVBs) and eco-tourism groups had been alarmed at mid-session by the prospect of bare bones funding for state government tourism functions.

Last week, Buckwheat Donohue, head of the CVB in Skagway, said that he sees a slight improvement in what came out of the legislative session.

``I guess it's acceptable, as far as I'm concerned,'' Donohue said. ``It's adequate; that's all I'm going to say.''

In Juneau, CVB President John Mazor said he considers the new industry and state roles ``still in flux.''

``I'm feeling a little more optimistic,'' said Mazor, whose bureau is dependent upon the city bed tax, which is driven by independent and convention travel. There has been specific discussion recently within ATIA of making special brochures for wilderness lodges and bed and breakfast establishments, which is a good sign, he said.

But Mazor said he wouldn't rule out some small operators leaving ATIA.

Therriault noted that each member of ATIA has one vote, so a small entrepreneur has the same formal clout as a cruise line.

If there's any change in marketing strategy, it won't become apparent until the 2002 season, Therriault said. The transitional year will be largely a status quo effort, he said.

The new millennium plan was designed to cut state spending and leverage a larger private sector contribution to tourism marketing. Now, the association that contracts with the state must supply 30 percent of marketing dollars, but that goes up to 60 percent in two years.

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