Luring visitors to Alaska increasingly expensive

Two million tourists spend nearly $2 billion a year in the state

Posted: Friday, October 05, 2007

Visitors spend $1.8 billion dollars in Alaska each year, but it's becoming increasingly more expensive to market the state and fetch those tourists from other destinations, according to the Alaska Travel Industry Association.

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The group is holding its annual convention at Centennial Hall this week, which is expected to bring half a million dollars to Juneau's economy.

"The bottom line is this: The cost of marketing, to get our name in the marketplace, has gone up dramatically since the early '90s, just (through) inflation, whether it's direct mail, television advertising, magazine, postage. They've all gone up," said Ron Peck, president and chief operating officer of ATIA. Adjusting for inflation, the group has a third of the money it had a decade ago.

The group's budget has dropped from $11.35 million last year to $9.7 million this year because of shrinking contributions from the cruise industry. In past years, that industry has given up to $2 million to the marketing group. This year, it gave $600,000.

"It's not that the cruise industry hasn't been hugely supportive of us in the past, but there's a new tax model out there that impacts them dramatically," Peck said.

The cruise industry is expected to pay an estimated $50 million in new fees, or about $46 per passenger, because of a ballot initiative passed last fall. The state Tax Division already has collected $26.6 million from the first part of the season.

Almost two million people visit Alaska each year, but the number of people visiting via a cruise is rising a lot faster than the number of independent travelers. A special portion of marketing dollars this year will be focused on attracting more independent travelers, Peck said.

About 560 are attending the convention, from small and large tourism businesses throughout the state.

Convention attendees from out of town, about 450 people, are expected to spend about half a million dollars here, according to estimates by the Juneau Convention and Visitors Bureau. That doesn't include the money spent by convention organizers on renting space, catering and other services, which can also add up to tens of thousands of dollars, said Lorene Palmer, the bureau's president.

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