Attacks taking toll on tourism

Posted: Monday, December 10, 2001

The results of a travel industry poll released this month paint a discouraging picture of the state of Alaska tourism this year.

"It's bleak for us up here, there's no two ways about it," said Charlene Spadafore Vassar, cooperative marketing manager for Alaska Travel Industry Associa-tions, a nonprofit organization that conducts marketing on behalf of the state of Alaska.

Vassar spoke at a Resource Development Council meeting Friday at noon at the Kenai Merit Inn to a crowd of listeners representing private tourism-related businesses, offices of the Kenai Peninsula Borough and other entities. In her presentation, Vassar gave the results of the poll conducted by GMA Research on behalf of ATIA, which surveyed 29 sectors of Alaska's travel and tourism industry and tracked both travel inquiries and actual bookings.

The news was not heartening. Many of the poll's statistics reflected the drop in the tourism and travel industries since the terrorist attacks of Sept. 11.

"(The events of Sept. 11) had a tremendous impact on the industry throughout the world," Vassar said. "One million tourism-related jobs could be lost."

Interest in leisure travel and vacationing has declined in the past three months. And those who are still taking vacations are doing so much closer to home. People would rather visit destinations that are accessible by car or short plane trip than farther away locations, Vassar said, which has obvious repercussions for Alaska.

According to Vassar, Alaska tourism suffers from the perception that Alaska is a far-off location that requires money and time to visit.

"We're almost an international destination," Vassar said. "It takes a long time to come up here for most people. We need to get out there and tell them it doesn't take that long. It's not like going to Europe."

The reason for this stay-at-home mentality is two-fold: fear of traveling and the downturn in the economy, Vassar said. In a recession, people are less likely to travel when the destination is one that is considered a luxury.

"Unfortunately we're one of the ones cut back on," Vassar said.

Judging by the ATIA poll, Alaska already is feeling the cut. Bookings for the upcoming 2002 tourism season have dropped 23 percent in the travel and tourism industry, including plane travel, cruises, hotels and motels, restaurants, fish and wildlife information and other sectors. The transportation industry reported the largest drop in bookings -- airlines by 30 percent, car rentals by 46 percent, cruise ships by 39 percent, RV and motor home rentals by 46 percent and trains by 50 percent.

Alaska and Horizon Airlines have responded to this drop by cutting back flights, Vassar said, Alaska by 15 percent and Horizon by 25 percent.

This drop in bookings in the airline industry can have consequences for Alaska tourism because more than half -- 54 percent -- of Alaska visitors come by plane, the ATIA survey found.

But things may not be quite as bad as they seem.

The hope is that when the situation in Afghanistan gets resolved, tourism will pick up, said Borough Mayor Dale Bagley. And Bagley spoke of an economist that said the recession might be resolved by the third or even second quarter next year.

"But we will have to just wait and see," Bagley said.

ATIA has initiated a crisis plan to compensate for the effects Sept. 11 has had on tourism. It has asked for an additional $12.5 million from the state to fund increased marketing efforts. This money would be added to the state's current $7.8 million budget. According to Vassar, the extra money will bring an estimated 182,850 visitors to the state in the upcoming tourism season. Each visitor generally spends about $726 on the trip, Vassar said, which would translate into $132 million for the state travel and tourism industry.

The extra $12.5 million ATIA is asking for would put Alaska on a more even footing with other states as far as marketing budgets go. The average state tourism budget for all 50 states is $13.7 million; $5.9 million more than Alaska's budget, Vassar said.

Statistics Vassar presented listed Alaska 36th out of the 50 states in terms of state funding for tourism. Florida was listed as spending $59 million on tourism, Hawaii spent $49 million, Virginia spent $23 million and South Carolina spent $12 million.

Alaska's smaller tourism budget can mean less tourists and less revenue.

"We are competing for that same potential visitor that other states are," Vassar said. "There's only so many people in the world and we're all vying for the same body to come to our state. Obviously we need some help here, folks. "

The expected pinch in tourism revenue this year foretold by the ATIA poll could force some small businesses to close their doors. In order to keep that from happening, Vassar advised businesses to keep their debt ratio down, meaning avoid any big purchases or monetary expenditures, and keep advertising.

"I encourage small businesses to hang in there," Vassar said. "I'm a realist, we need to face the facts. That's the best advice I can give them. Don't do anything that can wait, but don't quit. We need our businesses to stay lucrative, we need to help each other through this time. Tourism effects everybody."

Business owners at the Friday meeting had their own strategies to face the upcoming season. Mike Flores of Ninilchik Charters was planning to put more money into advertising and upgrading his company's Web site. ReAnn and Woody McLay of Alaska Tailored 2-U Tours and Flores had both just changed Web masters to take greater advantage of Internet business.

"We're actively planning an attack," Flores said. "I hope things will turn around for people here. But we're not going to take it laying down."

That is just the type of attitude Vassar seemed to counsel for.

"We need to get the word out there of what we have to offer," Vassar said. "We have to be optimistic, but we have to be realistic, too, in this situation. It's not going to go away, the whole world is in it. Nobody's picking on Alaska."

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