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10/5/2019
Tourism interests discuss cruise ship myths

By SAM ALLEN
Daily News Staff Writer

Segments of the Ketchikan tourism economy intersected Wednesday night at a Ketchikan Visitor's Bureau "Myth-busters" event.

The talk at the Landing Hotel was put on in conjunction with the Greater Ketchikan Chamber of Commerce. About 80 people listened to half a dozen speakers from throughout the community share their truths about the tourism industry.

"The purpose of the event is just to set the record straight on some things that I repeatedly have heard," said Patti Mackey, president and CEO of the KVB. "If we're going to have a conversation about the industry, let's try to get the facts right and make sure that we're all speaking from the same page."

Some of the misinformation tackled was whether cruise lines own tours and jewelry stores.

"I'm here to set it straight that we're not owned by the tours, we're not owned by the cruise ships," said Jay Ellis of Julie's Fine Jewelry & Gifts.

Ellis said the store does pay cruise lines for advertising, but that doesn't mean those lines own them.

"Without the advertising on the cruise ships, we wouldn't be here today," he said.

Ellis said $2,000 is the cheapest advertising option; it gets a business placed on the cruise line's map. For more money, the cruise line will highlight your store. And the options only increase from there.

He said the cruise lines rolled out their advertising program in 1995.

"A lot of people disagreed with it, and unfortunately I don't see those businesses around anymore. That's the scary thing about it, is you pay, and you hope you get your money's worth out of it," he said.

While Ellis couldn't speak for other business owners he said, "It could be policed better."

He looked around the room and noted about 60 business owners were missing.

"These people are gone," said Ellis. "They've taken their money, they've run."

"Are those the people who care about our community, are those the people who are providing money to our community, I don't believe so," he said.

Of the remaining business owners, Ellis said, "Nobody's making millions and millions of dollars here; we're all trying to make it year to year. And it's a tough fight."

He said there are a lot people taking advantage of the system.

 "A lot of systems we put in place to protect people, and they laugh at it, they take advantage of it, and they run on with our money," said Ellis, regarding nonpayment of taxes by some businesses.

Mackey added there were a lot of businesses in the Caribbean that lost their visitors and they opted to go where their visitors went. She attributes jewelry store growth to this.

"Some of them put the cruise line logos in their windows, that probably makes it misleading, but they're, to my knowledge, not owned by the cruise lines," said Mackey.

Mackey said another rumor was that the cruise lines own all the tours.

Christa Hagan, Vice President of Operations for Kawanti Adventures and Taquan Air addressed her company's relationship with the cruise ship industry. The companies, which are owned 100% by the Brien Salazar family, include flight-seeing, zip-lining and kart-driving tours.

"The cruise lines appreciate what we have to offer," said Hagan. She said her businesses own the capital and operating investments and are responsible for the people they hire.

According to Hagan, partnerships with the cruise lines deal with insurance minimums and mutual liability. The business also negotiates net rates with the cruise lines and will dedicate inventories to those companies as far out as six months in advance, said Hagan.

"What we get in return is the sales and marketing efforts, that is priceless — the exposure that they give to us," said Hagan.

She said her company also "leverages contracts" with other businesses with existing agreements with the cruise lines.

Hagan called Ketchikan a "one-tour town" because of its short port calls. She said working with other tours helps "provide a diverse experience for visitors who come to Ketchikan, the First City, so they don't forget us."

She said she was proud to work with the Salazar family.

"We share a value in the quality of tour experiences we provide our visitors because we are locals, and we are proud of what Ketchikan has to offer," she said.

In closing, Hagan wanted to debunk transportation myths.

"The cruise lines do have transportation components," said Hagan. She said her companies work with them to provide transportation to their tours and also for point-to-point transportation.

She said those costs are reimbursed or negotiated depending on the situation.

"It's definitely a business relationship," she said.

HAP Alaska Yukon, is owned by Holland America, according to an online search database. Alaska Coach Tours is a stakeholder in the cruise lines, according to Hagan.

Hagan and Chris Parks, who is president of Tongass Trading, spoke to the direct and indirect effects their respective businesses have on Ketchikan.

Parks said within the last four quarters, Tongass Trading Company has paid nearly $1 million in taxes. He also said it employs 50 employees year round, and up to 120 in the summer.

Susan Bell of the Alaska-based consulting firm, the McDowell Group, highlighted a 2017 study on the economic effects of tourism in Ketchikan. The study, which can be found on the group's website, finds that tourism is responsible for nearly 1,800 jobs in the community either directly and/or indirectly.

Summer visitors, cruise lines and crew members spend about $229 million in Ketchikan, resulting in sales tax revenues totaling $5.1 million, the study states.

Wharfage fees, commercial passenger vessel taxes and other fees resulted in an additional $13.6 million, according to the study.

Ketchikan City Mayor Bob Sivertsen said Wednesday night that money has been used to support the community, helping pay for hospital expansion, and it's also been reinvested in the port.

Rick Erikson was the last speaker. He works for Cruise Lines Association of Alaska and helps schedule the ports of call for the cruise ships.

Erikson cautioned the community that charging too much in fees could deter cruise ships from porting in Ketchikan.

"If we exceed their expectation of what they think they want to pay to come to this community, you know what, they may look at their revenues and decide ,you know what, we'll do the Tracy Arm, we'll do the Glacier Bay, we'll spend the day at sea and arrive to Victoria, British Columbia earlier," he said.

He finished by saying, "So that's something else to keep in mind as we go forward and through this process as the city has elected to do with the RFP."

The Ketchikan City Council is preparing to release a request for proposals aimed at partnering with the cruise industry for port expansion and upgrades.