Marketing is key to Alaska's millennium plan By Jerry Brown / November 10, 1998 Share 1 -- ANCHORAGE -- New Millennium Plan. These three words represent the most vital task facing Alaska tourism interests in the years ahead. The plan is an effort to streamline the state's promotional effort and provide a framework for stable funding. In essence, it would bring under one nonprofit umbrella the activities of the publicly funded Division of Tourism (DOT), the trade association known as the Alaska Visitors Association (AVA) and the Alaska Tourism Marketing Council (ATMC), which oversees the domestic promotional programs jointly agreed to by the other two, while the DOT retains control of international marketing.The challenge now facing the industry is to persuade the Republican-majority Legislature and the administration of Gov. Tony Knowles, a Democrat, to approve the plan.An attempt this year failed; a bill to implement it never got out of the Legislature. The opposition is rooted in the issue of who should have the right to make marketing decisions. Specifically, the Knowles administration wants to retain many of the state's marketing (and, therefore, spending) functions within the DOT; the private sector, while still expecting some state funding for at least the first five years of the program, wants the DOT to become a planning, development, liaison and advocacy agency, with no marketing responsibilities.That sticking point was a major reason that the plan did not get the legislative green light in 1998; some now wonder if a compromise can be reached in time for a revised version of it to be approved in the 1999 session.One past AVA president, speaking on condition that he not be identified said, "There's no great sentiment in the private sector for us to pay more money if we have no control over how it's to be spent."Some history of the marketing effort in Alaska might help explain how tourism arrived at its current impasse. Cooperative marketing really began in Alaska in 1950, when the private sector, through what was then known as the Alaska Travel Promotion Association (it became the AVA in 1970) began to turn the contributions of its members not simply to running the trade organization but also to implementing a relatively low-cost, generic advertising and promotional program.In the 1960s, this was enlarged upon informally when the association -- still using only its members' money -- began to coordinate its marketing programs with those of the newly formed DOT. And in 1976, the AVA went one step further, proposing a bill, which the Legislature approved, to comingle the funds of the state's official tourism agency with the talent and financial contributions of private business, the AVA to supply the ideas and the DOT to implement them.A dozen years later, the public and private sectors were more tightly bound together when the Legislature approved the formation of the ATMC to implement the domestic programs of the AVA/DOT. The ATMC produces the state's official Annual Vacation Planner, sales literature and other marketing materials.The cooperative effort, although openly envied by many other states through the years, led to duplication of efforts -- and some personality clashes -- among the three entities involved. Over the years, the private sector's share of the total budget was considerably lower than the state's.And, with the state's contribution dropping sharply in recent years -- from $10 million in 1991 to around $4 million in 1998 -- the private sector has been asked to pick up an increased portion of the tab. It is paying more now than it ever did, but it has been unable to come anywhere near replacing the lost state revenues, and Alaska has continued to lose ground to other tourism destinations.In 1991, for instance, the combined DOT-ATMC budget was in excess of $12 million; in 1998 it was half of that. Decreasing oil revenues that caused a budget deficit forced the Legislature to make spending cuts across the board -- in education, in welfare programs and, of course, in tourism.Generic Alaska tourism promotion, some in the House and Senate felt, was a private sector matter and ought not to use up vital public funds. If the private sector would not finance it, they figured, new taxes would.In an effort to develop a mechanism to produce a reliable and constant source of funding and to head off additional tourism taxes, the AVA devised the New Millennium Plan. It would create the Alaska Travel Industry Association (ATIA) to which visitor-related companies would contribute on a sliding scale, depending on number of employees and, in the case of the cruise lines, an additional voluntary levy, based on the number of passenger berths each offers.The cruise assessment alone, the planners say, would raise $2 million a year within three years of implementation. Destination marketing organizations and local communities would also be asked to contribute on the basis of visitor spending -- a quarter of 1% taken in is the amount mentioned in the plan."Pay to play" programs such as buying ads in the Vacation Planner; buying mailing lists and promotional film footage; having the new organization distribute brochures; buying research, etc., are also seen as ways to generate revenue for ATIA.The New Millennium Plan also would attempt to raise more money by offering "affiliate" memberships to such entities as insurance companies, printers, advertising and public relations firms and others that might derive less than 10% of their income from tourism. Their participation would be in four support levels -- those at bronze level would pay $500; silver, $1,000; gold, $5,000, and patrons, $10,000.Through the methods mentioned, ATIA's sponsors expect to raise at least $6 million a year within three years, which, combined with an anticipated infusion of $4 million from the state, would give the tourism effort a $10 million budget.Even at that, Alaska would rank no better than 18th among states in tourism spending; it currently is in 27th place.