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Taking the high road.

Boosted by the Alaska Highway's golden anniversary, Alaska tourism is expected to log new peak visitor statistics.

Partly because the rest of the nation is suffering from an economic recession with high unemployment rates, employee layoffs and large corporate losses, tourism industry officials in Alaska are cautious about predicting this summer's visitor season. Most, however, are optimistic that 1992 will equal or surpass last year's banner season.

Among the reasons for optimism, this year marks the much-awaited 50th anniversary of the Alaska Highway -- the 1,422-mile road from Dawson Creek in British Columbia through the Yukon Territory to Delta Junction, 98 miles south of Fairbanks. Last year, about 77,000 vacationers drove the two-lane route. The Great Alaska Highways Society, an organization formed in 1988 to promote the highway's 50th year, estimates an increase this summer to 100,000 Alaska Highway travelers.

"I think that we're going to see a lot more Canadians this year. We've gotten a lot of inquiries from Canadian folks who want to travel the highway," says Karen Lane, community and public relations manager for the non-profit society, headquartered in Fairbanks. "I'm sure that a lot of parts of the state will see more tourists, whether they stay in Fairbanks or take a left at Tok, but I'm sure the numbers will be up everywhere."

The society has received more than $800,000 in state Division of Tourism grants over the past three years to promote the highway's anniversary through advertising, public relations and promotional campaigns. Many of those campaigns have been coordinated with British Columbia and the Yukon Territory through an international effort, explains Wendy Wolf, deputy director of the tourism division.

According to Wolf, the grants are an investment that the division expects to pay off. "We hear it's going to be busy. People are coming from May through September," she says.

The division normally receives 120,000 to 130,000 inquiries annually from people wanting information on Alaska. By early spring, requests already had exceeded traditional volumes by more than 8,000 inquiries -- a good indicator that more people are planning an Alaska trip this year, Wolf says.

Ken Morris, public relations coordinator for the Anchorage Convention and Visitors Bureau, predicts, "We'll get a lot of rubber-tire traffic. ... Even if they don't come this summer, the idea has been planted in their heads." The promotional efforts, though specific to the highway, have a positive domino effect on the rest of the state's regions, Morris notes.

The highway celebration involves 26 Alaska communities that are either planning new events or extending some of their traditional activities to tie into the highway festivities. The highway's lure includes beautiful vistas and natural scenic wonders, but almost equally important is its interesting background.

In February 1942, President Franklin Roosevelt ordered construction of an emergency highway to Alaska to secure an overland route to West Coast military bases during World War II. The United States provided labor and Canada provided materials and rights-of-way for the road, sometimes called the Alcan, at a cost of $138 million.

Soldiers from seven U.S. Army Corps of Engineer regiments helped to build the road in only eight months and 11 days. A grand total of 11,500 military-troop workers and 7,500 civilians labored on the highway during peak construction.

Banking on Bookings. Another indicator that tourism will fare well this season is bookings by tour operators, hotels and cruise companies. Company officials say the industry is buzzing with reservations and bookings higher than those of last year's record season, which brought 651,700 people to Alaska during the summer of 1991 and 257,000 people during the fall, winter and spring seasons of 1990-91.

Both statistics, compiled by the state Division of Tourism, reflect a more than 3 percent increase over total figures from the prior year. Several areas, including Southeast Alaska, boasted improvements of as much as 10 percent over 1990 summer visits.

Both Holland America Line Westours Inc. and Princess Cruises -- which together dominate the Alaska cruise ship market with 10 luxury liners -- report solid bookings. Holland America's land-tour bookings in March were running 10 percent above 1991 levels, while cruise bookings were 7 percent ahead of last year.

"Our bookings for this season continue to be exceptionally strong," says Gary Odle, Alaska marketing director for Seattle-based Holland America. "The results of our primary early booking period give us every indication that we're on track for our fifth consecutive record season."

Princess Cruises of Los Angeles reports similar findings. "At this point, everything looks real solid for the Alaska market," says company spokeswoman Delaine Follows. "We feel that we will have, once again, another increase."

The company's expansion plans illustrate its confidence in Alaska's visitor industry. Princess is constructing a 200-room hotel in Fairbanks, slated for completion in June of next year, and is building an addition to its Harper Lodge Princess hotel in Denali National Park and Preserve that will increase capacity from 193 rooms to 280 by 1993.

The company's newest "Love Boat" is the Regal Princess, built last year for more than $200 million. The largest-capacity ship to sail Alaska waters, the vessel accommodates 1,590 passengers, in addition to 696 crew members. It replaces the Star Princess in the Alaska trade.

Princess also will introduce the Regal's sister ship, the Crown Princess, for the 1993 season -- putting the company well ahead of the competition with seven ships deployed in Alaska.

Follows calls bookings on other Princess packages -- new "ecology tours" of Katmai National Monument on the Alaska Peninsula and the Pribilof Islands off the state's west coast, as well as a third established tour incorporating Nome and Kotzebue -- steady. "We weren't sure how they'd sell, but they are popular," she says.

The tours' popularity reflects the overall growth of what has been labeled "ecotourism." The industry's new buzzword describes travel that capitalizes on the public's demand for minimal impact to the earth's environment, explains Karen Cowart, executive director of the Alaska Visitors Association, a 700-member non-profit trade organization.

"These days people hike, they kayak, they fish, they take photographs; they're more active," Cowart says. "So I think what the visitor industry has seen is a younger, more active traveler who wants an education from their visitor experiences, not just beauty." She also says visitors increasingly are interested in learning about Native culture as well as Alaska's pristine wilderness and bountiful wildlife.

Still, the traditional cruise-ship business is as strong as ever. Although overall port calls for the summer are about the same as those scheduled last year, capacity has increased. Larger ships are replacing smaller ships, says Kris Geldaker, operations manager for Cruise Line Agencies of Alaska in Ketchikan. Cruise Line Agencies serves as port manager for many of the large cruise ships visiting the state.

For instance, Costa Cruises of Miami, Fla., switched ships in its Alaska service, with the almost 1,300-passenger Costa Riviera replacing the 450-passenger Daphne. Several other ships slated to visit Alaska this summer offer a few hundred extra berths more than their predecessors.

Meanwhile, Alaska Airlines, which is beginning its second season of service to the Russian Far East in June, also is enjoying a steady flow of early bookings for the flights, says corporate communications director Greg Witter. "We're on par with what we had forecasted for the year and slightly ahead of last year at this point," he notes. "But the real push comes between March and June."

Alaska is a natural jumping-off point from the United States into Russia, Witter explains. The Seattle-based air carrier will offer three flights a week, at least through September, using Boeing 727 aircraft non-stop from Anchorage to Magadan and continuing to Khabarovsk. Tour packages are expanding for the 1992 season to include options for travel to Vladivostok and the northern Chinese city of Harbin as well.

Interest in the Russian Far East, the most eastern outpost of the Soviet Union, has increased dramatically with the country's move to a market economy and decentralization of power, Witter says. "Every time (the trips) are mentioned in a newspaper article or a magazine article, no matter what part of the country, we always see a little spike in the phone calls."

Purse Power. Despite positive indicators for a high-volume season, one question is whether visitors, once they get to Alaska, will spend a lot of money. "We just may not see the kind of increases that may have been possible" during better economic times, says Tina Lindgren, executive director of the Alaska Tourism Marketing Council, a statewide marketing organization. The marketing council receives 85 percent of its funding from the state, along with a 15 percent match from private enterprise through the Alaska Visitors Association.

"We're hoping that all of the promotion of the highway will help bolster that market," Lindgren says. "The recession has to have some effect. Our travelers do tend to be older. They have higher income and are maybe a little less affected than some of the other people. But when discretionary income goes down, it affects everyone, and travel is discretionary. To what extent it will affect us, I don't know. However, if you look at last year, we're one of the few destinations that showed increases while a lot of them were static or actually went down."

Conn Murray, director of the state Division of Tourism, says Alaska benefited from the Persian Gulf war because several cruise lines diverted ships from foreign destinations to locations closer to home. Murray adds that even though the recession looms overhead, Alaska ironically could benefit again from economic factors.

"A lot of Americans have come to feel that a vacation is an absolute necessity," he notes. "The recession probably has hit the bottom. If people are still employed, chances are they are going to stay employed, and now it's time to escape from the grind a little bit. There seems to be that kind of prevailing attitude among a lot of the public."

In addition, Alaska has the appeal internationally of an exotic vacation. "We're still anticipating record numbers coming from overseas, and increasingly those people are looking to Alaska as sort of a bargain vacation. As anybody would attest, it is a bargain vacation. Compared to Tokyo or Rome, Paris or London -- Alaska you can see on the cheap," he says.

Tom Garrett, president of the non-profit Southeast Alaska Tourism Council, which promotes visitor travel to the Panhandle, says so far, the U.S. recession isn't affecting travel to Alaska as much as it is to other places. He characterizes Alaska as a "value destination."

The Caribbean, for instance, is a "price destination," he explains. The industry there is overbuilt, and vacations are offered at a relatively low cost to sun-seekers. Alaska, meanwhile, has relatively limited capacity and often is viewed as an educational opportunity for affluent people age 45 or older.

"In theory, we sort of take the cream off the top," says Garrett, a former Juneau Convention and Visitors Bureau president and now general manager and chief executive officer of Alaska Discovery Wilderness Tours in Juneau. "You're basically talking about people who are wealthy, and they tend to be a little bit recession-proof."

Spending by visitors has not increased as much as overall volume. According to the marketing council's Lindgren, visitor spending has increased from $603 per person per trip in 1986 to $619 in 1991.

"In the mid-1980s people spent more money because they had more money, and that's one of the areas in which you see the recession impacting travel to Alaska," notes Garrett. "Once they arrive, they spend less money than they did before. They still come, but they're just a little less free with their credit cards."

Budget Battles. One factor clouding Murray's enthusiasm for the coming season is the state's funding picture in light of falling oil revenues. Though the Division of Tourism would have received $3.8 million under Gov. Walter Hickel's proposed budget for the 1993 fiscal year, the Office of Management and Budget and the Legislature requested in March that officials cut at least $350,000 from that figure. Further budget wrangling was expected.

The division received $3.4 million for the present fiscal year (ending June 30), after the governor vetoed $300,000 in 1991.

The Alaska Tourism and Marketing Council, which provides most of the state's marketing using annual grants from the Legislature, would have received $10.2 million under Gov. Hickel's proposal. But in March, the council's funding request was cut to $7.1 million, according to Lindgren. The council's current (1991) budget is $6.2 million, one of the lowest appropriations the council ever has had, she notes.

Adding insult to the tourism promotional injury is the absence of several Outside grants used during FY 1991: a $9 million grant from Exxon Corp. for positive advertising to ward off potential negative effects from the 1989 Exxon Valdez oil spill and an $800,000 grant from the U.S. Travel and Tourism Administration, a federal program under the Department of Commerce. That money was specifically earmarked for international tourism marketing, explains Tourism's Wolf. "Our voice overseas is going to shrink," she notes.

According to Murray, even if the cuts cause only a year's interruption of significant overseas marketing, past efforts taken to develop those markets will suffer as a result. "I'm hoping we don't have Draconian cuts because we have in the past spent a lot of money in developing these markets, and these markets are starting to pay off handsomely for Alaska. Once you've lost it, it takes several years to rebuild (an international presence) again," he says.

Industry Investment. While state agencies worry about stable funding, several private-sector developments may help bolster the state's tourism industry. One is a proposal for Alyeska Ski Resort. Seibu Alaska, a Japanese company that owns the resort, started site preparation and foundation work last fall for a 311-room hotel and 60-passenger tramway facility to the top of Mount Alyeska. Also, at the top of the mountain, Seibu is constructing a two-story facility with a skiers' day cafe and fine-dining restaurant for nighttime entertainment.

The Seibu facility, scheduled for completion in time for the 1993-94 winter season, was 10 years in the making following Seibu's purchase of the ski area, says Laurie Hite, Alyeska's sales manager. "This will be like nothing Girdwood or Anchorage has ever seen before," she adds.

"This will be Alaska's first year-round internationally marketed destination hotel, and that's an important distinction, because right now Alaska primarily markets in the summer time. ... The biggest area for growth is in the winter season, and with the Alyeska Prince Hotel coming on board, we hope to get the ball rolling."

Developing Alaska's fall, winter and spring tourism is a major priority for the Alaska Visitors Association, Cowart says. "I think that we have just begun to tap the resources that are available in Alaska for tourism," she says. "Our industry is in its infancy compared to other destinations -- like Hawaii, for instance."

Morris of Anchorage's convention and visitors bureau agrees: "The Seibu project is going to have a real draw-in power. Our goal is developing fall-winter-spring tourism -- that's where we see the future is at. Summer is kind of taking care of itself."

Seibu's development also includes three other restaurants, in addition to the skiers' cafe and mountaintop dining room, a swimming pool, Jacuzzi, and ice-skating lake, Hite says. The new facility is expected to employ 400 people.

Tourism industry analysts repeatedly have stressed the need for more first-class facilities to host visitors. Asian travelers, especially, have proven an inclination for travel to locations that offer top-notch services and accommodations.

Murray says, "Plans for the Alyeska operation are absolutely top-drawer. I've looked at the schematics on their program and it is world-class. It has the capacity to attract full charter-plane loads of people from the Orient. For the first time, that facility will permit us to compete.
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Title Annotation:Alaska Highway helps tourism grow
Author:Ripley, Kate
Publication:Alaska Business Monthly
Article Type:Cover Story
Date:May 1, 1992
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